Legal Services Act 2007 (Appeals from Licensing Authority Decisions) Order 2011

Lord Hunt of Wirral Excerpts

Monday 27th June 2011 Grand Committee

[Baroness Hayter of Kentish Town]

My Lords, I declare an interest as chair of the Legal Services Consumer Panel. I welcome these two orders, which appear a little technical—as, indeed, they are. But they are also important milestones on the road to seeing a new form of company opening for business which will help clients get access to good legal advice and enable “one-stop shops” to serve the needs of consumers. The Legal Services Act 2007 is a key piece of legislation introduced by the previous Government. It set up the Legal Services Board and the consumer panel which I have the honour to chair. That Act established independent oversight of the regulation lawyers. The Act clearly requires that such regulations should be in the interests of access to justice and the rule of law, and also be consumer focused.

The Act, as we know, set up the new legal ombudsman, which came intro operation in October last year. What is pertinent to today’s discussion is that it allows a new form of business, as the Minister has set out, combining law with other services in ways that we hope will better serve the needs of some clients in accessing particular types of service. As has been stated, the orders are part of the preparation for the introduction of the new business structures and are intended to ensure that the licensing authorities, which are the specialist parts of the approved regulators, will be ready to accept applications from October this year.

I, too, will start with the second order: like the noble Lord, Lord Thomas, I had them originally in the other order. The second order deals with appeals that are turned down by the new licensing authorities. It gives the First-tier Tribunal the remit to hear appeals from the Council for Licensed Conveyancers. This is a sensible, proportionate and appropriate regime. The noble Lord, Lord Thomas, said that he was surprised that the solicitors were not similarly covered. I very much regret that absence, and the fact that the Solicitors Regulation Authority did not accept exactly the same system for appeals against its decisions as a licensing authority on the same issue: namely, rejections of applications to be allowed to operate the new business framework. As other noble Lords have been said, the SRA prefers its own Solicitors Disciplinary Tribunal, for which, as we have heard, a separate order will come here in due course. I regret this because it will risk causing a delay to the desired 6 October start date. It will also mean, perhaps more seriously in the longer term, that there will be two tribunals dealing with essentially identical cases. It is in the interest of consumers, and more widely in everyone’s interests, that a single, consistent body of case law should develop about legal services regulatory matters. Despite the absence of the SRA, I nevertheless welcome the order, which allows for an efficient and cost-effective solution to regulation completely independent of the CLC.

On the first order, I simply note and welcome the proposed change in membership of the Council for Licensed Conveyancers, which, as the noble Lord, Lord McNally, explained, will provide for a lay majority. This is in line with the Act’s requirement for the Legal Services Board and also with the LSB’s internal governance rules for all front-line, approved regulators.

[Lord Hunt of Wirral]

My Lords, I support my noble friend Lord Thomas of Gresford in his comments about the Rehabilitation of Offenders Act. I recollect that, with the noble Lord, Lord Bach, we spent considerable time not only in debating the Legal Services Bill, as it then was, but in the previous Select Committee. One basis on which we took forward the notion of alternative business structures was that there should be a level playing field. I explain that by reiterating the fact that the Solicitors Regulation Authority, which was established by the Law Society to discharge the society’s regulatory functions, should have exactly the same powers to regulate ABS firms as it has already to regulate existing firms. We made several commitments at the time to reassure people about the new structures and affirm that there would be a level playing field between ABS firms and existing law firms. That is why we see a problem with the implementation of alternative business structures that is not dealt with through these provisions. Those are the arrangements to ensure that the prospective owners of ABS firms are fit and proper persons. Indeed, I could quote myself, Jonathan Djanogly MP or the noble Lord, Lord Bach, in stressing the importance of this key issue.

Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill

Lord Hunt of Wirral Excerpts

Friday 13th May 2011 Lords Chamber

Moved By

[Lord Hunt of Wirral]

[Lord Hunt of Wirral]

My Lords, I declare an interest as a partner in the international commercial law firm Beachcroft LLP and the other interests recorded in the register.

First, I pay tribute to the Law Commission. The Law Commission was, in fact, created by the Law Commissions Act 1965, which was the year that I joined my present firm. It is a body, under the sponsorship of the Ministry of Justice, whose task is to keep the law under review and to recommend reform where needed. This Bill originated with the Law Commission. Secondly, I congratulate my right honourable friend Greg Knight, Member of the other place. He became a Member in 1983—I recall his introduction well—since when he has had a long and distinguished parliamentary and ministerial career. However, my links with him go back even further than that because we were both involved, in a very belligerent way, in the political youth movements of our parties. I commend him for his decision to introduce this Bill. He has dedicated much of his parliamentary life to the interests of people—consumers, clients, customers.

This Bill results from the law of unintended consequences. I am not going to go into a long explanation of Adam Smith, where the phrase apparently originated, although he called it “the invisible hand”. But let me explain. This Bill is made necessary by the interaction of the common law forfeiture rule and the intestacy rules, or the terms of a will, which combine to stop the children, the grandchildren, the great-grandchildren and further descendants inheriting their murdered relative’s estate. It is easy to explain in that way because that was the way in which my right honourable friend introduced the Bill.

Why are there these problems? The concerns arise from the decision of the Court of Appeal in the case of Re DWS (deceased) in 1995. In that case, the son murdered his parents, neither of whom had a will. He was an only child, and he had only one child—a son aged two at the time of the murder who, by the way, the evidence shows, was really close to his grandparents. Because the son had murdered his parents, that grandson was prohibited by the forfeiture rule from benefiting from the estate of either his grandmother or his grandfather. The court was asked to determine the correct distribution of the estate of the grandfather under the intestacy rules. In the High Court, Mr Justice Blackburne, sitting as Vice-Chancellor of the County Palatine of Lancaster, held that the estate did not pass to the grandson, who was the only grandchild, but instead passed to the sister of the murdered person. By the time of the hearing the sister had herself died and the estate therefore passed, rather remotely, to her estate. The Court of Appeal, by a two-to-one majority, confirmed that decision.

I must share with the House a fascinating exposé of what can, from time to time, be the deficiencies of this wonderful House and the other place. I have only to refer to the speech of Lord Justice Sedley, who, at page 592 of the report, referred to,

“sections 46 and 47 of the Administration of Estates Act 1925”—

which, by the way, was only a consolidating statute. But why did no one question the interaction? Mr Justice Sedley said:

“Had that useful analogue of the officious bystander, the alert backbencher, intervened in the debate to ask, the minister would have had to undertake to consider the matter and return with proposals”.

Sadly, no one did. Therefore, he concluded that it was a casus omissus. Speaking as chairman of the English-Speaking Union, I do not know why on earth the judiciary have to keep referring to Latin. But I think that we can all guess what that means—it is a gap in the Act.

The Law Commission then intervened; and as a result of the then Department for Constitutional Affairs asking the Law Commission to review the relationship between the forfeiture rule and the law of succession, in October 2003 it published a consultation paper that considered the problem which had arisen in that case and discussed whether a similar problem could arise in other contexts. Its consultation paper was then widely circulated and there was quite a series of submissions. It then published a report which discussed the responses to the consultation and set out recommendations together with a draft Bill. Its solution was a deemed predeceased rule whereby a beneficiary who had forfeited or disclaimed an inheritance would be deemed for these purposes only to have died before the person who had actually died. This would permit the killer’s children, grandchildren, great-grandchildren or remoter descendants to inherit. Of course this rule would be subject to any contrary intention expressed in a will, in line with the general policy of respecting testamentary wishes expressed in a valid will.

So we have the Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill. This Bill will in certain circumstances protect the inheritance rights of the descendants of people who have forfeited their inheritance by engaging in an act which kills the deceased or who have decided not to accept their own inheritance. That is where we are with this Bill.

I hope that I have been able to explain the legislation, but I see that subsequent speakers are highly expert in this area of the law. Just before I entered the Chamber I was approached by a colleague who said, “Can you explain the Bill in simple terms?”. I have done my best, but I am sure that others will do it even better. I also look forward to hearing the speech of my noble friend Lord McNally, the Minister responsible for justice. I would like to say to him, to his colleagues and to the Law Commission that I pay tribute to them for initiating this reform, on which there has already been a great deal of consultation. As I have sought to explain, Consultation Paper 172, published in 2003, set out a draft Bill which was then included in the draft Civil Law Reform Bill. Now, thanks to my right honourable friend, we have this Bill which has taken out of the draft Civil Law Reform Bill the necessary provisions to deal with this injustice, in accordance with the Law Commission’s aim of ensuring that the law is as fair, modern, simple and cost-effective as possible.

With some trepidation, I understand that it is normal for the mover of a Bill to take everyone through the clauses in detail. I will do my best to do just that, but as briefly as possible. The Bill is accompanied by Explanatory Notes which explain its content in much more detail than I will attempt here.

Clause 1 inserts new Section 46A into Part 4 of the Administration of Estates Act 1925, where the intestacy rules are primarily to be found. This new section will operate whenever a person disclaims an inheritance arising under an intestacy or is disqualified from inheriting on intestacy because of the forfeiture rule. For the purpose of deciding who should inherit the interest in the deceased’s estate in these situations, the person disclaiming should be deemed to have died immediately before the intestate. This overcomes the requirement in the present law of intestacy that children cannot inherit if their parents are still alive, as set out in Section 47(1) of the 1925 Act.

Clause 2 makes analogous provision for disclaimers or forfeitures of gifts under wills. It inserts new Section 33A after Section 33 of the Wills Act 1837. The existing Section 33 provides that where a gift to a testator’s child or other direct descendant fails because the child has predeceased the testator, the gift should pass instead to any children, grandchildren and other direct descendants of the intended recipient of the gift, and they will benefit in place of the child. New Section 33A applies where a person either disclaims a gift under a will or is precluded from taking it by the forfeiture rule. In both of these situations, under Clause 2 the will is to be interpreted as if the person disclaiming or forfeiting had died immediately before the testator. The general rule does, however, give way to a contrary intention in the will.

Clause 3 inserts new subsections (4B), (4C) and (4D) into Section 47 of the Administration of Estates Act 1925 to address the situation in which a child of an intestate dies under the age of 18 without having married or formed a civil partnership, but leaves children. At present, on the child’s death, the child’s children will not inherit their father or mother’s estate—the intestate’s estate—because their parent did not attain a vested interest in the estate by reaching the age of 18 or by marrying or entering into a civil partnership. The subsections inserted by Clause 3 provide that the intestate’s estate is to be distributed as if the child had died immediately before the intestate. The children of that child who were therefore living at the death of the intestate will be able to inherit. Clause 4 sets out the short title, commencement, application and extent of the Bill.

I hope that I have been able to explain an admittedly technical Bill that, thanks to my right honourable friend, puts right an injustice. I commend the Bill to the House.

--- Later in debate ---

[Lord Hunt of Wirral]

My Lords, I thank everyone who has contributed to this debate, which has greatly enhanced the reputation of this House as the Chamber in which we can hear from experts in their field. Certainly, my noble friend Lord Marks of Henley on Thames is widely respected outside this House for the depth and width of his expertise in this area. I thank him the points that he made today, and I was pleased that he referred to the reform as sensible and sympathetic. I welcome that tribute.

My noble friend Lord Flight raised a series of important points, which Mr Knight raised and answered in some detail in the debates in the other place. First, I assure my noble friend that in those debates a whole series of points were raised about whether this Bill might open a loophole in inheritance tax. Other points were raised as to the cost. All those points were satisfactorily answered, but the point about mercy killings is a very important one.

In 1971, Lord Justice Salmon spoke in the case of Gray and Barr about what really lies behind all this, which is that,

“it would, in general, shock the public conscience if a man could use the courts to enforce a money claim either under a contract or a will by reason of his having committed”,

such an act—referring to murder. But there are some cases, as my right honourable friend in the other place, Mr Knight, said, where the public conscience would not want the full forfeiture provisions to apply. He specifically referred to mercy killings, but he pointed out that under the Forfeiture Act 1982, there is provision,

“for discretion to be applied by the courts in cases of manslaughter—I emphasise … manslaughter, because there is no discretion in cases of murder”.—[Official Report, Commons, 21/1/2011; col. 1128.]

That follows very much the views expressed by Lord Justice Salmon, which echo the public conscience in cases like this. It is very important that we keep this whole situation under review.

I was taken aback by the appearance of the noble and learned Lord, Lord Scott of Foscote, and the thought that he was sitting there listening to my pontificating, as I have spent most of my professional life reading his judgments. We even enacted one of his judgments word for word in Section 1 of the Compensation Act, so I pay particular attention to his learned words. We have to think of the consequences of causing death by dangerous driving. Perhaps he will permit me to reflect further on that point, because it is a very important one and covers this area that we have spent some time talking about it.

The noble Lord, Lord Bach, and I have worked together on many Law Commission Bills. It is right that we remind people all the time of what is set out at paragraph 8.44 of the Companion about the way in which we can deal with Law Commission Bills. I refer in particular to the second report of Session 2010-11 from the Procedure Committee, published on 27 July last year, which makes it clear that we are going to follow that procedure. It will do much to meet the point made by my noble friend Lord Marks of Henley on Thames. I participated in the previous Bill that went through the procedure, the Third Party (Rights Against Insurers) Act 2010. It is very important that the new procedure for scrutinising Law Commission Bills—undertaken on a trial basis—has, thanks to the noble Lord, Lord Bach, and other colleagues, come through its trial and is now to be adopted permanently.

I hope that the sort of problems instanced by my noble friend Lord Marks will now be historic. Once again, I pay tribute, as the noble Lord, Lord Bach, did, to the officials in the Law Commission and in the ministry who spend a tremendous amount of time and effort getting this legislation right. It is now an improvement on the first draft, and my noble friend Lord McNally comprehensively set out the areas in which it differs from that original Bill. It is now generally accepted that, thanks to the efforts of my right honourable friend Greg Knight, we now have a Bill that can move swiftly into legislation. I think it will work. It deals with the problem through a simple device thought up by the Law Commission.

There are other quirks that will need addressing. Several of us will go away from this debate determined to do something in that direction. However, with this Bill we can at least make an important start. That is why I have much pleasure in commending the Bill to the House.

Bill read a second time and committed to a Committee of the Whole House.

Defamation Bill [HL]

Lord Hunt of Wirral Excerpts

Friday 9th July 2010 Lords Chamber

[Lord Hunt of Wirral]

My Lords, I have much pleasure in congratulating my noble friend Lord Willis of Knaresborough on an outstandingly good maiden speech. We all found his historical analysis of Knaresborough fascinating. But most important is that he has put forward a number of compelling arguments about the importance of the medical and scientific community. I pay tribute to what he has already referred to as his career in teaching. Perhaps, as I understand it, his most rewarding period was spent at Primrose Hill High School in Leeds, where for seven years he was involved in multicultural education and outreach youth work. His subsequent leadership role in pressing for inclusive education was important, together with his support for the “family of schools” initiative. So many tributes could be paid to him, so we all greatly appreciate the fact that he is now in this Chamber and we look forward to hearing many contributions from him in future debates. Today, however, we honour particularly his leadership of the science community, which followed his election as the Liberal Democrat leader of Harrogate Borough Council, and his praiseworthy economic generating initiatives. My noble friend has outlined some important suggestions for the ways in which the Bill could be improved.

I should first declare an interest, although many of the lawyers do not seem to have done so. I am a partner in the national commercial law firm Beechcroft LLP, and I have a few other interests that I may mention in the course of what I hope will be a short speech. But I want particularly to say how much I welcome the opportunity to praise my noble friend Lord Lester of Herne Hill. He and I fought shoulder to shoulder—successfully—on the Racial and Religious Hatred Bill, and I am therefore particularly pleased to be able to refer to him as my noble friend for the first time in this new era of Liberal-Conservative Government.

This is in many ways a classic, radical, reforming Liberal-Conservative Bill, and I hope sincerely that it will win support right across the House. But my noble friend would be the first to admit—and, of course, on Second Reading we are talking about the general principles enshrined in the Bill—that while the Bill may go in the right direction, it is not necessarily perfect. Many people, notably those who have campaigned long and hard for free expression and libel reform, feel that as matters currently stand, the glass as represented by this Bill is not quite half full. I pay tribute to those campaigners, notably English PEN and the Index on Censorship for the contributions they have already made to us in preparing for this debate.

Throughout my time in this and the other place, now for 34 years altogether, libel reform has constantly been talked about, but has never really been properly delivered. In fairness, as several speakers have already pointed out, it is no simple matter. We have to balance our right to defend ourselves against being traduced by unfair and untruthful attacks with our strong presumption against any law that has a chilling effect on free expression—although in view of the earlier comment of the noble and learned Lord, Lord Hoffmann, perhaps I should say one that unnecessarily has a chilling effect on free expression. This conundrum is recognised in the European Convention on Human Rights, imported into domestic law by means of the Human Rights Act 1998, which attempts to achieve balance and internal harmony. Article 10 makes clear that,

“everyone has the right to freedom of expression”,

while acknowledging that rights and responsibilities must be carefully weighed against each other. This right to freedom of expression is therefore qualified by the need for the law to ensure,

“the protection of the reputation or rights of others”.

Article 8 also sets out the right of the citizen to respect for private and family life.

As the noble Lord has pointed out, the programme of the Liberal-Conservative Government sets out a clear direction of travel, asserting that the Government,

“will review libel laws to protect freedom of speech”.

Other noble Lords have already reminded the House of a number of recent cases that have intensified the need for change in the law. There is no time—and it would be inappropriate—in a Second Reading debate to go into detail about content. Suffice it to say that I welcome the proposals to introduce a public interest defence and to clarify the law on so-called fair comment.

I fervently welcome any measures that might serve to encourage the rapid settlement of disputes without recourse to costly—sometimes prohibitively costly—litigation. The one dog that has not quite barked in my noble friend’s Bill is the idea of introducing and encouraging pre-legal triage in cases of alleged libel. I am proud of being a fully accredited CEDR mediator and I believe strongly in alternative dispute resolution, or ADR. We use mediation in family law, arbitration in industrial disputes and tribunals in employment cases; why on earth can we not apply similar principles in libel cases?

[Lord Woolf]

We do.

[Lord Hunt of Wirral]

I would like to see it more extensively applied. Some are well known for their overall attitude towards the need for mediation, but I would like to see an early neutral evaluation of the merits of a case, ideally producing a non-binding recommendation. This would help to address the huge gulf that has grown up between the likely costs of a libel action and the ability to pay for the overwhelming majority of citizens.

In another outstandingly good maiden speech, the importance that the noble Baroness, Lady Hayter of Kentish Town, applied to access to justice lies at the heart of this debate. I declare an interest as one of the original assessors to Lord Justice Jackson’s review on costs. Ministers are now looking seriously at the conclusions of that excellent review of costs and I hope that libel reform will dovetail neatly with all the other reforms aimed at bringing costs under control.

In particular, Ministers will have to come to a view on the question of success fees after the previous botched and unilateral attempt to cap them, supposedly as an interim measure. My noble friend the Minister of State has already indicated, in response to a Question from my noble friend Lord Lester on 21 June, that he is fully aware of the crucial link. The state of the public finances has forced us all to concentrate on where economies can and must be made. However, in this instance, fiscal necessity and much needed principled reform coincide perfectly.

I hope the House today will put its weight clearly, firmly and decisively behind the principles of libel reform. Starting from first principles, our assumption must always be in favour of freedom of expression, and libel laws should not be an exclusive playground for the rich and powerful. However, let us not legislate in haste and repent at leisure. Experience tells us that libel law is not easy to reform, so let us resolve to build legislation that will last.