Courts: Modernisation

Lord Keen of Elie Excerpts

Wednesday 6th June 2018 Lords Chamber

[Lord Beith]

To ask Her Majesty’s Government when legislation to modernise the courts system will be introduced, as set out in the Queen’s Speech.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the Government introduced the Courts and Tribunals (Judiciary and Functions of Staff) Bill into the House of Lords on Wednesday 23 May of this year. This legislation is the first step in implementing the wider reform package and the Government remain committed to implementing further court reform legislation as soon as parliamentary time allows.

[Lord Beith (LD)]

My Lords, it was nice to have such a quick response after tabling my Question but it really is a little mouse of a Bill. It has some useful provisions but why has it been stripped of almost all the court modernisation measures which were promised in the Queen’s Speech? How is it that halfway through a two-year parliamentary Session the Government have not found time for urgently needed and relatively uncontroversial provisions to enable the courts to modernise and speed up processes which cause delay and distress to court users, and which cost money that could be better spent improving access to justice?

[Lord Keen of Elie]

My Lords, this is a mouse that roared. It may be a small Bill but it has extensive implications for the operation of our court system. Splitting the legislation originally set out in the Prison and Courts Bill will allow the Government to progress these vital reforms utilising the time available in both Houses.

[Lord Pannick (CB)]

My Lords, one matter that the Bill does not deal with is what was addressed in Clause 37 of the Prison and Courts Bill. It provided for rules for an online procedure in courts and tribunals in appropriate cases. The Lord Chief Justice, the noble and learned Lord, Lord Burnett of Maldon, has recently stated the urgent need for such procedures. When will the Government act on this much-needed reform?

[Lord Keen of Elie]

As I indicated to the noble Lord, Lord Beith, we intend to bring forward all of the reforms anticipated in the original Bill, which fell at the time of the general election, and we will do so as and when parliamentary time allows.

[Baroness Couttie (Con)]

My Lords, the Federation of Small Businesses is concerned that, with the online court system that has just been mentioned, there will be several disputes that small businesses will not be able to use the system to resolve. I would like to understand what the Government are doing for the offline dispute system to ensure that it is speedy, effective and cost effective in resolving some of these more difficult disputes.

[Lord Keen of Elie]

My Lords, first, with regard to the online system, which is being piloted in a number of areas, over 16,000 people have already engaged with the pilots relating to online matters such as divorce and minor pleas in road traffic cases. In addition, we have the online system with regard to payment claims. We appreciate that there are those who will continue to have to engage with the offline systems and we are of course concerned to ensure that we make further progress with regard to court reform. But as I indicated earlier, that will be brought forward as and when parliamentary time allows.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, what we need is accessibility: a set of proposals, properly financed, for court staff, in person and over the phone, court documents and online resources all to be committed to helping court users, particularly litigants in person, to navigate their way through the litigation process. This will mean court officers changing their traditional position that they are not there to give advice. What proposals do the Government have along these lines?

[Lord Keen of Elie]

My Lords, there is no reason why reallocated court staff will not be in a position to provide advice as they have in the past. We are at the commencement of an extensive reform of our court processes. Indeed, I quote the Lord Chief Justice and the Senior President of Tribunals:

“While there is still much work to do, the introduction of this Bill is a positive first step in legislation to deliver reform”.

[The Earl of Listowel (CB)]

My Lords, the recommendations of my noble friend Lord Carlile’s inquiry into youth justice were, in particular, to use youth courts, not adult courts, for young people, and more problem-solving courts. Does the Minister agree that we need to be more effective in dealing with young people in the courts so that we stop the revolving door into custody?

[Lord Keen of Elie]

My Lords, I entirely agree with the observations of the noble Earl.

[Lord Beecham (Lab)]

My Lords, the Government’s concept of modernisation of the court system seems to include court closures up and down the country and a reduction in the availability of legal aid, which has led to a growth in the number of litigants in person, causing great delays in the courts. In the circumstances, is it not the Government’s duty to ensure that any modernisation of the system is reflected in securing access to justice as opposed to making some fairly minor financial savings?

[Lord Keen of Elie]

My Lords, of course what is paramount in the context of this reform is access to justice. As the reform programme progresses, we expect that we will need fewer courts and we will continue to review our estate to make sure that it is able to maximise the benefits of the reformed courts and tribunal service.

[Lord Vinson (Con)]

My Lords, there is an associated problem: the high cost of litigation. With lawyers’ fees running at around £575 an hour and barristers’ fees at more than £1,000 an hour, people are priced out of justice. Is it not time that this cabal against the public is looked at and examined by the Competition Commission?

[Lord Keen of Elie]

My Lords, I cannot accept the estimates of counsels’ fees that have been advanced at either the lower end or the higher end. Of course we are taking steps to contain the cost of access to justice, and it is important that we do so.

Rape Trials

Lord Keen of Elie Excerpts

Wednesday 6th June 2018 Lords Chamber

[Lord Morris of Aberavon (Lab)]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the Government are clear that ensuring disclosure requirements are met is vital for a fair trial and public confidence. The Attorney-General is leading a wide-ranging review of disclosure practices and aims to report by the summer. The findings of the review of rape and serious sexual offence cases, published by the Director of Public Prosecutions yesterday, will feed into a wider operational response to delivering necessary improvements in the system.

[Lord Morris of Aberavon]

My Lords, the disclosure of unused material that assists the defence or undermines the prosecution is vital to a fair trial. Does the noble and learned Lord still stand by his earlier reply that we have not gone backwards? Would he like to comment on yesterday’s evidence by the Director of Public Prosecutions, which differs wholly from her bold assertion in January that she did not think disclosure failings would have led to people being wrongly jailed? Where is the failure to grip the situation: the police or the CPS?

[Lord Keen of Elie]

My Lords, the review that was undertaken involved consideration of 3,637 cases in the period between 1 January and 13 February this year. In respect of those cases, 47 were identified where there were concerns about the management of disclosure. However, that does not mean that this was the reason for the discontinuance of the prosecution in each and every one of those cases. There is of course concern that disclosure should be carried out fully and properly pursuant to the legal requirements of the Criminal Procedure and Investigations Act 1996. That obligation lies not only on the police and Crown Prosecution Service but on the defence, which is required within a certain period—28 days—to give a defence statement. That, in itself, indicates where there may or may not be room for further investigation of material that could pertain to the prosecution case or assist the defence. It is necessary for all parties involved in this process to engage in order that it can be properly discharged.

As I indicated earlier, further work is being undertaken by the Attorney-General to deal with this question, which we hope to report upon by the summer. I do not accept that we are going backwards. Technology is going forward, and very quickly indeed. We now live in an environment in which there are vast quantities of social media apps—Instagram, Facebook and the like—that can be contained on one or two mobile devices and which make demands upon the police service, the Crown Prosecution Service and indeed the defence. They did not exist 10 years ago. We are seeking to meet those demands; it is important that we do so.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, the number of recent cases collapsing following late disclosure—many of them well publicised—is frankly a disgrace. It is made even worse because it has often happened when defendants have been remanded in custody pending their trial. The Director of Public Prosecutions says that the prosecution is disclosing relevant evidence to the defence in the vast majority of cases, but it needs to be—so far as it can be achieved—invariable. I hear endless anecdotal reports from criminal lawyers that these failings are widespread and attributable largely to a lack of resources, often to download and go through smartphone records—as the noble and learned Lord’s last answer implicitly recognised. We accept that trawling through records harvested from confiscated smartphones is time-consuming and expensive, but fairness and justice require it. Can the noble and learned Lord guarantee that the Government will respond to recent failures by giving all necessary resources to be devoted to this work to ensure that we achieve full disclosure of relevant material to the defence?

[Lord Keen of Elie]

My Lords, we must always aspire to full disclosure in circumstances when material could otherwise undermine a prosecution or assist the defence to a criminal charge. No one would doubt that for a moment. As I understand it, there has been no complaint to date about a lack of resources as regards the police and the CPS. I go back to the point I made earlier, that these obligations with regard to disclosure extend beyond the police and the Crown Prosecution Service to the defence as well. I am not in the business of giving guarantees, but we will look clearly, unambiguously and carefully at the findings of the Attorney-General’s investigation in the summer and will respond appropriately to its conclusions.

[Lord Judge (CB)]

How can the obligations imposed on the defence by the 1996 Act excuse or explain failures by the prosecution to disclose relevant material?

[Lord Keen of Elie]

They do not necessarily explain such a situation. However, in circumstances where the defence actually obtempers its obligation to provide a defence statement, it is possible to identify further areas of inquiry for the disclosure of material. For example, if the defence statement discloses that that there was a pre-existing relationship between a complainer and the defendant, it will be possible to make further inquiries to ensure that material that might otherwise have gone unnoticed is disclosed to the defence. Therefore these matters are connected.

[Baroness McIntosh of Pickering (Con)]

Will my noble and learned friend clarify his comments on social media and the extent to which, in cases where the prosecution has information that is available on social media, it is disclosed to the defence counsel?

[Lord Keen of Elie]

In circumstances where it has been possible to download material that involves communications either between a complainer and the accused or between the complainer and third parties, that material will be analysed and all relevant material will be taken and disclosed to the defence. Of course, it is not always possible to access this material. We now live in an environment of encryption and of WhatsApp and Instagram, where sometimes this material is simply not accessible.

[Lord Campbell-Savours (Lab)]

What about those cases where men have been found guilty and are in prison, and there was inadequate disclosure during the course of their trial, whereas if there had been full disclosure they would have been found innocent? Are they simply to be left in prison and not have their cases reviewed?

[Lord Keen of Elie]

My Lords, I am not aware of any such cases. However, clearly, we have a series of filter mechanisms in our criminal justice system that includes the criminal cases review operation where there has already been a conviction and material comes to light.

[Lord Davies of Stamford (Lab)]

My Lords, the noble and learned Lord has referred several times to the obligations placed on the defence by the 1996 Act. Is he suggesting or is he aware of any evidence which indicates that some of these cases that have collapsed have done so as a result of a failure by the defence to meet its obligations under that Act?

[Lord Keen of Elie]

Recent inquiries indicated that in something like 25% of cases a defence statement was not produced or not produced timeously.

[Lord Paddick (LD)]

My Lords, the noble and learned Lord said that he had not heard that a lack of resources was to blame for these failures. He may not have heard my noble friend the former Director of Public Prosecutions say on “Newsnight” last night that he felt that it was as a result of a 25% reduction in funding for the CPS and the loss of hundreds of lawyers—and, I add to that, the loss of thousands of police officers and an ongoing 25% reduction in their resources could be to blame.

[Lord Keen of Elie]

I note the noble Lord’s careful use of “could”. That is why we will await the outcome of the present inquiries and investigations before we draw any conclusions.

[Lord Cormack (Con)]

My Lords, did my noble and learned friend see that rather disturbing programme about the Criminal Cases Review Commission? He referred to that commission. Is he entirely satisfied that it is working in a proper and seemly way?

[Lord Keen of Elie]

My Lords, I am not a regular viewer of the television and I am not aware of the programme to which my noble friend refers. However, at present there are no indications that the criminal cases review operation is not operating in accordance with its remit or that it is not capable of discharging its functions.

[Lord Beecham (Lab)]

My Lords, the chief constable of Surrey has described the situation as having had a “catastrophic effect”. It is two years since warnings were first given about this problem. Will the Government now ensure that further inquiries are made for the period before that time to see whether other cases need to be dealt with? Will he also ensure that a view will be taken not just in relation to sex offences, which have been the subject of the present findings, but across the field of criminal offences? Clearly, there is a risk that we will see the same kind of failings affecting other offences.

[Lord Keen of Elie]

My Lords, a joint justice systems inspectorate investigation on disclosure issues took place in 2016 and the report was published in July 2017. We were in the process of implementing a series of recommendations when a number of further cases arose in early 2018, and that is what has given rise to the Attorney-General’s determination that there should be a review. We will await the outcome of that review before taking further decisions with regard to disclosure. However, disclosure is not of course limited to cases of rape or other sexual assault. We appreciate that this issue has to be addressed across the board so far as the criminal justice system is concerned.

Proposed Media Mergers

Lord Keen of Elie Excerpts

Tuesday 5th June 2018 Lords Chamber

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, with the leave of the House, I will repeat a Statement made by my right honourable friend the Secretary of State for Digital, Culture, Media and Sport in the other place:

“Mr Speaker, with permission, I would like to make a Statement about the proposed merger between Comcast and Sky, and the proposed merger between 21st Century Fox and Sky.

In my quasi-judicial role I have considered these mergers separately, on their own merits, and want to set out my decisions taken on the basis of the relevant evidence. I would like, first, to update the House on Comcast’s proposed acquisition.

On 7 May, Comcast notified an intention to acquire Sky. As Secretary of State, I am required to consider whether the merger raises public interest concerns that meet the threshold for intervention, as set out in Section 58 of the Enterprise Act 2002. As required, I considered the need for a sufficient plurality of people with control of media enterprises, the need for a wide range of high-quality broadcasting and the need for a genuine commitment to broadcasting standards.

Last month I informed the House that I was minded not to intervene in the merger on the basis that it does not meet the threshold for intervention. I gave interested parties time to make representations and I received no further representations. As a result, I have concluded that the proposed merger does not raise public interest concerns and so I can confirm today that I will not be issuing an intervention notice.

Turning to Fox’s proposed acquisition of Sky, in March 2017 my predecessor issued an intervention notice on public interest grounds due to concerns about media plurality and the genuine commitment to broadcasting standards. The intervention notice triggered phase 1 investigations by Ofcom and the CMA. In September, having considered these reports, along with further advice from Ofcom, she referred the proposed merger to the CMA for a phase 2 investigation on both grounds. The CMA published its interim report in January and provided its final report to me on 1 May. I have today published this report and deposited a copy in the Libraries of both Houses.

The report confirms, as previously set out, that the proposed merger passes the threshold for a relevant merger situation and provides recommendations on both public interest tests. On broadcasting standards, the CMA carried out a thorough and systematic assessment, taking into account Fox’s and Sky’s approach to broadcasting standards, both in the UK and outside, and the approach of Fox and News Corp to wider regulatory compliance and corporate governance. The CMA concluded, in line with its interim findings, that the merger may not be expected to operate against the public interest on the grounds of a genuine commitment to broadcasting standards. I agree with this finding.

On the question of media plurality, the CMA’s final report confirms its interim findings that the proposed merger may be expected to operate against the public interest. The CMA found cause for concern in two areas: first, the potential erosion of Sky News’s editorial independence, which could in turn lead to a reduction in the diversity of viewpoints available to and consumed by the public; and secondly, the possibility of an increased influence of the Murdoch Family Trust over public opinion and the UK’s political agenda.

The CMA has used a clear and logical approach and taken into account Ofcom’s media plurality framework. It has taken great care to obtain a wide range of written and oral evidence and I agree with this finding too. Where the CMA makes a finding that a merger is likely to operate against the public interest, it is then required to consider what remedy would be appropriate.

To address the media plurality concerns, the CMA considered a range of options, including those proposed by the parties. Specifically, these were: first, a firewall of behavioural commitments to insulate Sky News from the influence of the Murdoch Family Trust; secondly, a ring fence, whereby Sky News would be separated structurally from Sky but still owned by Fox, along with the same behavioural commitments; thirdly, divesting Sky News to a suitable third party; and fourthly, prohibition of the transaction as a whole.

I have considered the CMA’s detailed assessment and its conclusions on how effective and proportionate the different remedies are. I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure that it is funded for at least 10 years, is likely to be the most proportionate and effective remedy for the public and for the public interest concerns that have been identified.

The CMA report sets out some draft terms for such a divestment, and Fox has written to me to offer undertakings on effectively the same terms. The proposals include significant commitments from Fox, but there are some important issues on the draft undertakings which still need to be addressed. I need to be confident that the final undertakings ensure that Sky News remains financially viable over the long-term, is able to operate as a major UK-based news provider and is able to take its editorial decisions independently, free from any potential outside influence. As a result, I have asked my officials to begin immediate discussions with the parties to finalise the details with a view to agreeing an acceptable form of the remedy, so that we can all be confident that Sky News can be divested in a way that works for the long term.

Under the legislation, I am required to consult formally for 15 days on the undertakings. Subject to the willingness of the parties to agree the details, I aim to publish this consultation within a fortnight. I am optimistic that we can achieve this goal, not least given the willingness that 21st Century Fox has shown in developing these credible proposals. However, if we cannot agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach.

We have followed a scrupulously fair and impartial process, based only on the relevant evidence and objectively justified by the facts. I would like to thank Ofcom, the CMA, the parties, my predecessor and my fantastic team at DCMS for all their hard work. I hope that we can reach a final agreement very soon. I want to see a broadcasting industry in Britain that is strong, effective and competitive, and I commend this Statement to the House”.

That concludes the Statement.

--- Later in debate ---

[Lord McNally (LD)]

My Lords, I thank the Minister for repeating the Statement. For someone who is not always clear on these great battles, where does this put the Comcast bid and the Fox-Disney bid? Are they now parallel bids and will Sky shareholders now decide which is the best deal? I read somewhere that Sky has advised its shareholders that it no longer stands by an earlier recommendation to accept the Fox bid. Once the procedure has been gone through, will it be a straight fight on price for Sky or are there other considerations?

I associate myself with what the noble Lord, Lord Stevenson, has just said: this keeps on happening. No other country in the world would allow important parts of its media industry to be fought over by foreign interests in such a way. We have here a battle between three massive American media conglomerates over a key part of our media industry. Moreover, as the noble Lord has just said, all this is being done in the long shadow of even bigger technology companies that may be coming in. We need a framework of defences for this key sector. As we said when we considered these issues 20 years ago, we are not talking about tins of beans. When these companies pass on to different control, we are talking about an essential part of a functioning democracy. There is a case for looking at the powers of Ofcom and the CMA and the Government’s responsibilities in this media area, which are badly in need of an overhaul.

The only other thing I have to say is that it is important that we get the decision right. I am always worried when the Secretary of State gives himself timetables of 15 days, or whatever. The important thing is making sure that we get it right. I also underline the importance of Parliament being kept fully informed and consulted on decisions that are taken.

[Lord Keen of Elie]

My Lords, I am obliged to the noble Lords, Lord Stevenson and Lord McNally, for their observations on the Statement. Clearly, the terms of any divestment, which will be a requirement of the Fox bid, must be sufficient to ensure the remedy’s effectiveness over the long term. That is why reference is made in the report to a period of 10 years.

The Secretary of State has already instructed officials to begin immediate discussions with Fox and its representatives on the detail of the proposals so that work can be done to take us towards an agreement—we hope—on the final form of any undertakings. Once that is in place and the undertakings are in a form that he is prepared to accept, the Secretary of State will be required to consult on them. He must allow a minimum of 15 calendar days for responses. Of course, Parliament will be kept informed of the consequences of that process.

Regarding the points raised about other platforms and their dominance—reference was made to Google, for example—we committed to reviewing the media public interest considerations during the passage of the then Digital Economy Bill. That can now be taken forward, as is our intention.

As far as Ofcom’s powers are concerned, it is important to maintain and understand the distinction between the role of Ofcom in the phase 1 stage of an inquiry and the role of the CMA in the more intensive phase 2 stage, where the CMA has greater powers than Ofcom. However, Ofcom has indicated that it is satisfied that it has the powers it needs to conduct the form of review required under the Act in respect of a phase 1 inquiry.

The competing bids of both Comcast and Fox can be taken forward. Where that process concludes will ultimately be a matter for the shareholders of the relevant companies. In a sense, this decision leaves them on a level playing field, commercially, as far as their respective bids are concerned.

[Lord Lansley (Con)]

My Lords, this issue reflects well on this House for inserting the media plurality public interest test into the Enterprise Act, by virtue of the Communications Act 2003. The value of that has been further demonstrated. However, to return to the point made by the noble Lord, Lord Stevenson, when one further amends the Enterprise Act definition of “media” in “media plurality”, it is important to do so before the point at which that issue might be engaged by some proposed merger activity. Therefore, I ask my noble and learned friend whether the department might now make some rapid progress with its review of the meaning of “media” in the media plurality public interest test.

[Lord Keen of Elie]

I am obliged to my noble friend. Clearly, the department is committed to taking its consideration of these matters forward. At this stage, I am not in a position to give him a timescale, but we seek to bring the matter forward as soon as we can. If there is what is perceived by this House to be undue delay, no doubt questions will be raised.

[Lord Robathan (Con)]

Could my noble and learned friend illuminate for me, if not for others, the implications for the future of Sky News? I do not quite understand.

[Lord Keen of Elie]

It appears that Sky News will be the subject of divestment and it appears that the intended party to acquire Sky News will be Disney. Of course, some have referred to that as the Mickey Mouse solution.

Special Immigration Appeals Commission (Procedure) (Amendment) Rules 2018

Lord Keen of Elie Excerpts

Wednesday 23rd May 2018 Lords Chamber

Moved by

[Lord Keen of Elie]

That the draft Rules laid before the House on 28 March be approved.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the statutory instrument before us today updates the procedure of the Special Immigration Appeals Commission so that it reflects new bail provisions in the Immigration Act 2016, which I had the opportunity to bring before this House on behalf of the Home Office in the then Immigration Bill. It also implements measures included in the Criminal Justice and Courts Act 2015 allowing appellants to appeal directly to the Supreme Court, bypassing the Court of Appeal. Related to the second point, it also makes changes to the time limits for applying for permission to appeal to make them consistent with the High Court.

For noble Lords who are not familiar with it, the Special Immigration Appeals Commission, more generally known as SIAC, is a specialist tribunal which deals with challenges to immigration and asylum decisions made by the Home Office, such as decisions to deport a person or to refuse them leave to remain. Challenges to such decisions are usually heard by the First-tier Tribunal, the Upper Tribunal, or the High Court. However, when a decision is made for reasons of national security or international relations, or is made relying on evidence which it would not be in the public interest to disclose, any challenge is heard instead by SIAC.

SIAC is different from other immigration tribunals in that it has the ability to operate a process known as the closed material procedure, which allows sensitive material that the Home Secretary intends to use in his response to the appeal to be protected. In the closed material procedure part of the hearings, appellants and their legal representatives are excluded from the court but are represented by special advocates. These are lawyers who have undergone strict security vetting and are of the highest integrity and ability. The system of special advocates is designed to provide a balance between the right to a fair hearing and the need to protect national security.

The first piece of legislation to which this rule amendment is designed to give effect is Schedule 10 to the Immigration Act 2016, which simplifies the previous framework with a single power of immigration bail. This allows for illegal immigrants, including foreign national offenders, who are awaiting removal to be released subject to conditions if detention is not appropriate. Financial conditions were also introduced to replace recognizances, which in this context are undertakings to pay a sum of money in the event that bail conditions are breached, in England and Wales and bail bonds in Scotland. This statutory instrument will bring the SIAC procedure rules in line with the new bail provisions in the Immigration Act 2016.

The other piece of legislation that we are concerned with is the Criminal Justice and Courts Act 2015 which, among other things, extended the concept of cases leap-frogging to the Supreme Court, extending it from just civil cases in the High Court to include cases in the Upper Tribunal, the Employment Appeal Tribunal and SIAC. Leap-frogging will allow SIAC appellants to apply for a certificate which will allow them to appeal SIAC’s decision directly to the Supreme Court without first going to the Court of Appeal, provided they can demonstrate that their case raises a point of law of general public importance. Leap-frogging is not a new concept; it has been allowed for civil cases in the High Court since the Administration of Justice Act 1969. This statutory instrument will bring SIAC into line with other courts on the same level of the appellate system.

The final change brought about by this statutory instrument is to increase the time limit for making an application for permission to appeal, which will bring it into line with time limits in the High Court.

To conclude, the draft rule amendment before us today makes technical but necessary changes to the procedures used by SIAC to make sure they are consistent with measures already set out in primary legislation, namely the Immigration Act 2016 and the Criminal Justice and Courts Act 2015. We have also taken the opportunity to make time limits for permission to appeal consistent with those in the High Court. I beg to move.

--- Later in debate ---

[Lord Beecham (Lab)]

My Lords, I am grateful to the Minister for a very clear explanation of the provisions of this statutory instrument. I note that in the House of Commons Delegated Legislation Committee, all of 11 minutes were spent on this matter. The Minister has provided us with somewhat more information than was provided on that occasion. Is he in a position to indicate the number of cases expected? The noble Lord, Lord Marks, referred to a very limited number, but is it anticipated that it will remain at a low level, or is there likely to be any growth?

Can the Minister also make some reference to the condition of the asylum centres where, presumably, some of these applicants will be held pending the outcome of their cases? Of course, great concern has been voiced about the management of some of these establishments. I confess that this issue is not directly related to the statutory instrument, but it is a matter of concern and I would be pleased if the Minister could say that the Government are looking seriously at the management of these places, whatever the outcome of the applications by the individuals involved.

[Lord Keen of Elie]

I am obliged to noble Lords for their contributions. We consider that this instrument is necessary to make sure that the SIAC procedure rules are consistent with the primary legislation, as has been acknowledged. SIAC does of course perform an essential function in dealing with appeals without compromising national security.

On the point made by the noble Lord, Lord Marks, and followed up by the noble Lord, Lord Beecham, there have indeed been about 14 cases before SIAC in the past year. There is only one party on bail from SIAC at present, pending a determination by the commission, so the use of these powers is extremely limited and I am not aware of any indication that that will increase in the foreseeable future.

On the point raised by my noble friend Lord Hodgson, I am not aware of the current position on re-interview by special advocates, but I will determine what the current procedural position is and write to him on that and place a copy of the letter in the Library. On the point about the condition of centres where persons are held pending determinations by the commission, I am not in a position to comment upon any adverse management issues at present, but I will inquire of the appropriate department as to what current work, if any, is ongoing with regard to that issue. Again, I will write to the noble Lord and place a copy of that letter in the Library.

Motion agreed.

Sexual Offences Legislation

Lord Keen of Elie Excerpts

Tuesday 22nd May 2018 Lords Chamber

[Lord Campbell-Savours]

To ask Her Majesty’s Government what plans they have, if any, to reform sexual offences legislation.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the Government recognise the importance of keeping sexual offences legislation under review. The Sexual Offences Act 2003 was amended in 2015 and again in 2017. We are currently reviewing the law around upskirting and considering the wider law on non-consensual photography.

[Lord Campbell-Savours (Lab)]

My Lords, given that Mr Harvey Proctor has launched a civil action in the High Court, revealing in his particulars of claim the full name and identity of the man “Nick” who trashed the international reputation of Sir Edward Heath and others, and in so far as the public interest provisions under court procedure rules, which deny anonymity in the Proctor action, are in conflict with anonymity provisions in sexual offences legislation, surely the cloak of lifetime anonymity should not be extended to false accusers such as “Nick”, whose full name is now plastered across the internet worldwide. This was never, never, never the intention of Parliament. Is it not about time that we reviewed the law on anonymity?

[Lord Keen of Elie]

My Lords, lifetime anonymity that is extended to complainants may be removed. Indeed, those complainants who are found to have made false and misleading claims regarding sexual conduct may be subject to prosecution.

[Lord Paddick (LD)]

My Lords, is the noble and learned Lord aware of the case, highlighted on Channel 4 last night and again in the Times this morning, of a defendant who was arrested for rape in 2015, charged 18 months later, suspended from his job without pay and whose case was dropped by the CPS yesterday? Are such cases the result of a failure in the law to protect the innocent—to uphold the principle of being innocent until proven guilty—or are they a failure of the police and the CPS properly to investigate such cases? What do the Government intend to do about it?

[Lord Keen of Elie]

I am not going to comment on the particulars of an individual case. However, police guidance is clear that the name of a suspect should not be released before they are charged. The naming of people who have been charged with a sexual offence is consistent with the principle of open justice.

[Baroness Corston (Lab)]

My Lords, I draw the Minister’s attention to an item in today’s Times, which states:

“Google is helping its users to uncover the identity of rape victims whose anonymity is protected by law”.


What action will or could the Government take?

[Lord Keen of Elie]

Again, I am not in a position to say what action the Government will take with regard to such a matter, but clearly such conduct could potentially be regarded as a contempt of court.

[Lord Sherbourne of Didsbury (Con)]

My Lords, does my noble and learned friend agree that when, in cases such as those of Sir Edward Heath—there would be many others such as Cliff Richard and Paul Gambaccini—people’s names are leaked or made public because the police are on a public fishing expedition and no charge is made, there is no formal way in which they can be acquitted? Therefore, their reputation is permanently damaged.

--- Later in debate ---

[Lord Keen of Elie]

We quite recognise the danger to a person’s reputation where their name is leaked prior to charge. That should not occur, as I indicated before. That does not mean that they do not have civil means of redress. The noble Lord referred to the case of Cliff Richard, who I understand has undertaken a civil course for redress in these circumstances.

[Lord Lexden (Con)]

Further to my noble friend’s question, the noble Baroness, Lady Williams of Trafford, informed the House recently that the Government have the power to establish an inquiry into Operation Conifer. Since the hopeless Wiltshire chief commissioner has made it clear that he will not take any action, will the Government now establish this inquiry so that the reputation of Sir Edward is not left in intolerable limbo?

[Lord Keen of Elie]

My Lords, that would be a matter for the Home Office and not for the Ministry of Justice to consider. However, I am sure that Ministers in that department are listening.

[Baroness Smith of Basildon (Lab)]

My Lords, can I take the Minister back to the question asked by my noble friend Lady Corston? His answer seemed rather complacent. If on Google women who have been victims of rape can be identified and help is being offered to do that, surely the Minister would want the Government to take some action and not just accept it.

[Lord Keen of Elie]

With respect to the noble Baroness, there was no complacency in my previous answer. Clearly, we will look at the facts and circumstances of any complaint and then determine what action it is appropriate to take. However, it would not be appropriate to anticipate prosecution or other action without a proper investigation of the facts. Indeed, that underlies many of the complaints made here today.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, are there any positions on which the noble and learned Lord can take some action?

[Lord Keen of Elie]

Not at present.

[Lord Marlesford (Con)]

My Lords, will the Government make the change whereby, when people are not prosecuted, the police do not say “because of insufficient evidence” but use the phrase “a lack of evidence”? There is a very important distinction.

[Lord Keen of Elie]

I am not sure that I would necessarily draw a strict distinction between those two terms, but clearly no charge will made unless the police have an element of evidence. Where a case is not proceeded with by way of prosecution, that may be because of an absence of a sufficiency of evidence.

[Lord Hayward (Con)]

Further to the answer that I understood my noble and learned friend to give earlier on, will he recognise that many people who have faced such accusations have spent many hundreds of thousands of pounds dealing with lawyers and seeking representation to clear their name before any decision is taken about no further action? To suggest that they should then pursue redress implies that they have the resources to pursue that claim. For many of them, that is just not financially practicable.

[Lord Keen of Elie]

My Lords, I entirely agree with the observations of my noble friend: it may well be that some of those who are charged and indeed prosecuted and found not guilty of an offence do not have the means to take civil action in order to vindicate a complaint about the way in which they were treated.

Data Protection Bill [HL]

Lord Keen of Elie Excerpts

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

Moved by

[Lord Keen of Elie]

That this House do not insist on its Amendment 62B proposed instead of the words left out by Commons Amendment 62, to which the Commons have disagreed, and do agree with the Commons in their Amendments 62BZA to 62BA and 62BC to 62BF in lieu of Amendment 62B.

COMMONS DISAGREEMENT AND AMENDMENTS IN LIEU
The Commons disagree to Lords Amendment 62B proposed instead of the words left out of the Bill by Commons Amendment 62 but propose amendments 62BZA to 62BA to Clause (Review of processing of personal data for the purposes of journalism) inserted by Commons Amendment 109 and amendments 62BC to 62BF to the Bill in lieu of the Lords Amendment—

--- Later in debate ---

62BF: After Schedule 16, insert the following new Schedule—
“REVIEW OF PROCESSING OF PERSONAL DATA FOR THE PURPOSES OF JOURNALISM
Interpretation
1 In this Schedule—
“relevant period” means—
(a) the period of 18 months beginning when the Commissioner starts the first review under section (Review of processing of personal data for the purposes of journalism), and
(b) the period of 12 months beginning when the Commissioner starts a subsequent review under that section;
“the relevant review”, in relation to a relevant period, means the review under section (Review of processing of personal data for the purposes of journalism) which the Commissioner must produce a report about by the end of that period.
Information notices
2 (1) This paragraph applies where the Commissioner gives an information notice during a relevant period.
(2) If the information notice—
(a) states that, in the Commissioner’s opinion, the information is required for the purposes of the relevant review, and
(b) gives the Commissioner’s reasons for reaching that opinion, subsections (5) and (6) of section 143 do not apply but the notice must not require the information to be provided before the end of the period of 24 hours beginning when the notice is given.
Assessment notices
3 (1) Sub-paragraph (2) applies where the Commissioner gives an assessment notice to a person during a relevant period.
(2) If the assessment notice—
(a) states that, in the Commissioner’s opinion, it is necessary for the controller or processor to comply with a requirement in the notice for the purposes of the relevant review, and
(b) gives the Commissioner’s reasons for reaching that opinion, subsections (6) and (7) of section 146 do not apply but the notice must not require the controller or processor to comply with the requirement before the end of the period of 7 days beginning when the notice is given.
(3) During a relevant period, section 147 has effect as if for subsection (5) there were substituted—
“(5) The Commissioner may not give a controller or processor an assessment notice with respect to the processing of personal data for the special purposes unless a determination under section 174 with respect to the data or the processing has taken effect.”
Applications in respect of urgent notices
4 Section (Applications in respect of urgent notices) applies where an information notice or assessment notice contains a statement under paragraph 2(2)(a) or 3(2)(a) as it applies where such a notice contains a statement under section 143(7)(a) or 146(8)(a).”

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

Noble Lords will recall that Amendment 62B would require the establishment of an inquiry into allegations of data protection breaches committed by or on behalf of national news publishers and other media organisations. This House has debated the necessity and proportionality of such an inquiry on several occasions during the passage of the Bill. It has been an informative and sometimes impassioned debate as noble Lords from all sides of the House have brought their experiences to bear, and the Government have been listening throughout.

The last time that we debated this topic, the noble Lord, Lord Stevenson, and the noble Baroness, Lady Hollins, asked about the past. Before I get into the substance of my speech, I think I can offer some reassurance on that point. When the Information Commissioner undertakes the review described in Commons Amendment 108, she will be reviewing the extent to which the processing of personal data for the purposes of journalism complied with data protection law in the next four years; as my right honourable friend the Secretary of State has said, we must look forward, not back. Her hands are not tied, though, and the commissioner’s existing enforcement powers are not time-limited. Indeed, compliance with the new law and compliance with the old law are deeply intertwined. That is why the Commons sent us 20 pages of amendments on transitional provision.

Most of what we have heard about relates to wrongs in the past that were illegal. If at some future date new evidence came to light that showed that the press were acting in breach of the law, the Government would expect the relevant enforcement bodies, including the Information Commissioner’s Office, to investigate and possible sanctions to follow. The Government are clear that what was illegal then remains illegal now.

There is no lacuna and no amnesty. Anyone who thinks that that is what the Government are proposing is quite wrong. What we are doing, however, is providing the institutions we need for the challenges of the future. 

We have given the Bill a thorough examination. My noble friend Lord Ashton of Hyde has reminded us several times of the number of amendments that have been secured, not just on media regulation but on issues that impact on everyone. This is a good Bill, but we have now, I suggest, run out of road. The question now is whether the Bill is good enough to justify passing it into law.

To assess that requires two things. First, it requires knowledge of the Government’s proposed way forward on the issues we asked the other place to reconsider last week. Secondly, it requires knowledge of what would happen if this House did not pass the Bill which is before it today.

On the first point, I have already mentioned the Information Commissioner’s review of compliance with data protection law. Since we last debated the merits of having a review, the Government have further proposed that that should not be a one-off event but a recurring fixture. We have also given her additional powers to make sure that her review is as comprehensive and robust as it can be.

Between now and then, the commissioner will produce guidance for data subjects seeking redress and a code of practice for those who process data for the purposes of journalism. My right honourable friend the Secretary of State will report on the availability and effectiveness of alternative dispute resolution procedures, including IPSO’s new mandatory low-cost arbitration scheme, and Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services will report on police forces’ adherence to its guidance on how to interact with the media.

I am confident that, when these amendments are viewed alongside the improvements IPSO has already made to its processes and procedure, this country now has the most robust system of redress for press intrusion it has ever had, and it has achieved it without resorting to state regulation.

But noble Lords know all this already, especially if they, like the noble Lord, Lord Stevenson, watched last Wednesday’s debate in the other place. So I want to spend my remaining time on the subject of not media regulation but data protection.

The GDPR will take effect in the United Kingdom at midnight on Friday. It will do so irrespective of whether or not we are prepared for it. If we do not pass implementing legislation in the next three days, medical research will grind to a halt. The administration of justice will stutter as chambers attempt to work out whether it is preferable to breach court disclosure rules or data protection law. Sectoral regulators will have to tip off the people they are investigating. It will potentially be chaotic, and this House will be held responsible.

The noble Lord, Lord Paddick, said it well at Second Reading, when he welcomed the Bill:

“It provides the technical underpinnings that will allow the GDPR to operate in the UK both before and after Brexit … it is an enabling piece of legislation, together with the GDPR, which is absolutely necessary to allow the UK to continue to exchange data, whether it is done by businesses for commercial purposes or by law enforcement or for other reasons, once we are considered to be a third-party nation rather than a member of the European Union”.—[Official Report, 10/10/17; col. 205.]


The damage done by not passing this Bill today would be irreversible, and the only winner would be data protection lawyers.

As is quite proper, the House has asked the elected Chamber to think again about the detail of this Bill. It did so, and it has returned it to us as a Bill that is now ready to go to Her Majesty for signature. Two votes in the House of Commons in the past two weeks have come to the same conclusion. If we further delay this essential legislation, that decision will be on us.

Is this Bill good enough to pass? We are convinced that it is, and I therefore beg to move.

Motion A1 (as an amendment to Motion A)

Moved by

--- Later in debate ---

[Lord Keen of Elie]

My Lords, I am grateful for the contributions of noble Lords. The noble Lord, Lord McNally, referred to me making blood-curdling threats. I made no threats—blood curdling or otherwise—and what I did say was essentially true.

This Bill is about data protection. The primary concern of your Lordships’ House, which we have debated over recent months, is whether individuals have the ability to defend themselves against excessive press intrusion, and the Bill now provides a number of mechanisms to address this concern. These are all designed to maintain the freedom of the press and the independence of self-regulation, albeit in compliance with the law. For example, it was announced three weeks ago that IPSO will introduce a low-cost mandatory arbitration scheme. We are determined that there will be no backsliding on that kind of commitment, and Commons Amendment 62BC is designed to ensure that the use of such schemes is reported on—a point to which I will return in a moment—to reduce any temptation there might be to turn away from them once the heat of the Bill is off.

The noble and learned Lord, Lord Falconer, sought, with vim and vigour, to address two points. I was slightly taken aback because, a few minutes before we began this debate, I had endeavoured to explain to him the operation of Clause 174(3)(b) and its interrelationship with Clause 144, and thought I had done so quite well. However, clearly I failed to some extent in that regard. I had also sought to give him further assurances about the role of the Secretary of State.

On the first point—the operation of the Information Commissioner’s powers—as I had sought to explain to the noble and learned Lord, under his amendment the Information Commissioner would have had access to prepublication material gathered for journalistic purposes. It was acknowledged across the House, and by the noble Lord, Lord McNally, during earlier debates that that could not be tolerated given the intrusion it would involve upon press freedom and journalistic preparation. The interrelationship between Clauses 174 and 144 is complex, but I again make it clear that the effect is that the commissioner will not be able to access prepublication journalistic material but will be able to access material that has been processed for the purposes of journalism.

On the second point, about the power of the Secretary of State, one has to be clear that this is not actually a power but simply a duty to report. It is for the Secretary of State to report, and he could do so even without an express statutory power, but this is to underline it. We are making it a clear duty, to import transparency into the process. He will essentially be reporting on the metrics available with regard to the take-up of alternative dispute resolution. The effectiveness of dispute resolution will be determined by reference to its take-up and its resolution. It will then be for us—Parliament and the people—to determine in light of those facts whether we consider that further steps have to be taken.

Let us be absolutely clear: the Bill imports no power on the part of the Secretary of State to compel the media to act in any way on the report that he is putting in place. This is simply a mechanism by which he can ensure that the relevant facts and figures—if I can put it that way—are laid before Parliament at the appropriate time. I hope that I have been able to put both those reassurances with greater clarity than I did a few minutes earlier, and to reassure the noble and learned Lord on those points.

I am obliged to the noble Lord, Lord Stevenson, for the observations he has made, and I hope again that he is reassured by the position the Government have now adopted regarding the intent and consequences of the amendments from the House of Commons. As regards the observations from other noble Lords around the House, I recognise that there has been widespread concern about the way in which we have been able to address the past and the need to address the future, having regard to the fundamental requirement for freedom of the press—one of the foundations that underpins our democratic process. Before closing, I acknowledge the contributions of the noble Baroness, Lady Hollins, to this entire debate. I quite understand why she has maintained the need to bring these matters before the House on a number of occasions, and I do not seek to imply any criticism of her in that regard.

We have reached a point where the Bill should pass, however. It has to, really. It is in those circumstances that I invite the noble Lord to withdraw his amendment to Motion A.

[Lord McNally]

My Lords, when I studied the British constitution 50 years ago I read the books by Sir Ivor Jennings, who said that one of the only weapons that an Opposition have against a Government is time, and that an Opposition—and, indeed, critics on a Government’s own Benches—are perfectly entitled to use time to put pressure on Governments. My goodness, we have had a cascade of useful changes because we have used time to press the Government further on the issue.

As I said before, the line between the Daily Mail and the MailOnline is increasingly blurred. This legislation will be tested against that blurred background. At some stage, the old print media may regret not being in the comfortable protection of a royal charter, as my learned friends listening to this debate must think that there is a lot of work ahead for them as this Bill is tested.

We never wanted to stop the Bill coming into law, and I beg leave to withdraw Motion A1.

Civil Liability Bill [HL]

Lord Keen of Elie Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Tuesday 15th May 2018 Lords Chamber

[Lord Woolf]

There is an answer to the problem that the noble and learned Lord raises. It might have implications for the workload of the judiciary but I think that could be handled. We should get away from the idea that a judge should assess damages in appropriate cases only at one stage. There is no reason why you cannot have a system where the matter can be restored to a judge in a case of differences of opinion to take into account succeeding circumstances. If the power existed, the courts would find that in the majority of cases, litigants—properly advised, as they are in these big cases—would come back only when there was a real difficulty between the insurer in practice and the claimant. In that way, matters could be reviewed to reflect any differing circumstances. It was not a one-off assessment that I was advocating but the ability to change the assessment. That would apply to PPOs as it would to any other laws.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I am obliged to my noble friend Lord Hodgson for setting out the background to this matter. His Amendment 55 would require what he referred to as new rules of court to be made that highlight features of periodical payment orders which may make them a more appropriate way for a person with a long-term injury to receive an award for damages for future care costs. I understand that Amendment 55 and the other amendments in this group are essentially probing amendments.

“Rules of court” in Amendment 55 means the Civil Procedure Rules. The purpose of the Civil Procedure Rules—and, indeed, all rules of court—is to govern the practice and procedure of the court and the parties in court proceedings. This may be a technical issue but that does not detract from the importance of ensuring that claimants who have suffered long-term serious injuries are well informed as to the implications of their choice between a lump sum payment of damages and a PPO. I am conscious of the point made by the noble and learned Lord, Lord Mackay of Clashfern, about the care that the Executive must always exercise in circumstances where it may be perceived that they are giving directions to the judiciary. I will explain why the Government therefore take a more modest approach to this issue but one which they feel will be effective.

Of course, some Civil Procedure Rules have been made in relation to the exercise by the court of its powers under Section 2(1) of the Damages Act 1996 to order that all or part of an award of damages in respect of personal injury is to take the form of a periodical payment order. These rules already require the court to consider all the circumstances of the case, as well as the preferences of the claimant and defendant and the reasons for them. I appreciate that there are instances in which PPOs may not be available; for example, a mutual insurer such as the Medical Defence Union would not be considered sufficiently well reserved to meet future liabilities. I appreciate also that there have been reservations among insurers about the use of PPOs because of the way in which they are required to reserve for them and the capital requirements related to that.

PPOs are certainly in principle considered a better form of taking compensation for future loss than a lump sum because they provide strong protection for claimants who may be concerned about the return on a lump sum. This Government certainly support their use. At the same time, we must keep in mind that the person behind a claim has a choice and is entitled to make one in such circumstances. We consider it important that claimants making a choice in these circumstances should be properly informed, irrespective of whether their particular case reaches such a stage that the court has to consider whether to order a PPO. Of course, not every case will reach the court; many will be settled before that and, at an earlier stage, claimants have to be properly informed as to which option they should adopt.

I note the point made by the noble and learned Lord, Lord Judge, with which I entirely agree. It is perhaps moot to say that no estimate of life expectancy is ever precisely accurate because they are just that—estimates—and one takes that out of the equation where you have a PPO.

The Government remain fully committed to ensuring that appropriate advice is available to claimants in all cases and stand by the commitments they made to action in their response to the Justice Select Committee. To pick up on the points made by the noble and learned Lord, Lord Hope of Craighead, the point made in paragraph 50 of the response to the JSC was a concern to ensure that guidance was provided to individual claimants. It is our intention to put in place appropriate guidance and to ensure that it is available. We aim to do that by the end of 2018. In addition, we are investigating whether current advice received by claimants on the respective benefits of lump sums and PPOs is effective, and whether there are other ways in which the use of PPOs could be increased within the present system. At present, we intend to complete this work by the summer of 2019.

I hope that goes some way to meeting the concerns expressed by the noble Earl, Lord Kinnoull, on these matters. He raised a further question on indexing and I think the noble Lord, Lord Monks, touched on this. The reason that the ASHE 6115 index is taken is that it is the specific care costs index. It may be that wage costs have not increased at the same rate as the wider RPI, which may explain the discrepancy the noble Earl pointed out. However, the ASHE 6115 index is a specific care costs index, which is why that has been employed in the past.

Amendment 92 would require the Lord Chancellor to conduct a review of the impact of setting a new discount rate on the extent to which PPOs are made by the courts, but within six months of the provisions in Part 2 of the Bill coming into force, and then to publish a report of the results within 18 months of commencement. As the noble Lord, Lord Beecham, hinted, that may be far too tight a timescale to produce an effective report. We certainly do not consider that a requirement to carry out a review of this nature at the time proposed would be particularly informative. That is because the first review of the rate under the Bill would probably not have been completed by the time at which completing the review under this amendment would be required. Effectively, that would mean that the review would have to focus on any impact that had resulted from the setting of the rate as of March 2017 under the present law, which was a rate of minus 0.75%. I suppose that such a review may, however, be of limited use given that the legal framework for setting the rate would have changed but I suspect that it would tell us only something about the past, not the future.

I also observe that the settlement of major cases can take some years to agree, whether or not they arrive at the door of the court, so it might be some time before there is sufficient evidence to draw meaningful conclusions about changes in claimant behaviour. We do not yet have the statistical information about the effect of the March 2017 change in the discount rate on the use of PPOs. We therefore do not know whether the lowering of the rate has diminished the take-up of PPOs, although there is certainly some anecdotal evidence to that effect. It is logical to assume that this would occur, given the size of the change that took place in March 2017.

The evidence from the previous four years does, however, suggest that the use of PPOs is concentrated in the most serious and long-term cases, with the propensity to use them increasing with the size of awards up to about £5 million. They are not really employed in cases where the award of damages is lower than £1 million. That is largely because the use of PPOs is concentrated on provision for future care costs—long-term care costs, generally in cases of catastrophic injury. That is why there is a large percentage of cases in which PPOs are not considered appropriate. The National Health Service pays out PPOs in about 70% of awards over £1 million, while the equivalent figure for insurers is only about 36%, and there may be further work to be done. That is why we are going to look at the question of further guidance in order to encourage their use. Certainly, the take-up is far from negligible in serious cases.

On the comment of the noble Lord, Lord Beecham, this is not just about funding clinical negligence claims by the NHS. It goes far deeper than that; it is about ensuring fairness between claimants and defendants in the difficult process of assessing damages, particularly damages awarded for future care. I do not accept the noble Lord’s general point that we are simply trying to move the cost of future care from victims to somewhere else. That is not what we are about; this is concerned with ensuring fairness between claimants and defendants.

I have spoken about the way in which the amendments would require some sort of review. Amendment 92A would also require such a review to assess whether the fact that a PPO may be uprated by reference to an inflation index other than the retail prices index is having an impact on the relative merits of PPOs versus lump sums in the context of a revised discount rate. That would go beyond a consideration of the impact of the discount rate to the overall level of damages award, and how individual elements may be indexed for inflation. At present, the index used for PPOs is a very specific care cost index rather than the RPI.

We will, as I have indicated, be taking forward a range of initiatives to encourage the use of PPOs and to ensure that claimants are properly advised when choosing the form of their award. We hope to have the first part of that process completed by the end of 2018 and the wider investigation completed by the summer of 2019. We believe that those practical steps will encourage the use of PPOs where appropriate—we will, of course, monitor that—and create a situation in which a review requirement, such as that envisaged by the amendments, will not be necessary. Indeed, it would be more appropriate to move in this direction rather than find ourselves in the somewhat invidious position of the Executive sending out directions to the judiciary about how it should approach the award and determination of damages in such serious cases.

With that explanation of the Government’s position, I hope the Committee will be reassured that we are committed to effective action to encourage the use of PPOs. On that basis, I invite the noble Lord to withdraw the amendment.

[Lord Mackay of Clashfern]

Before my noble and learned friend sits down, I understood the noble and learned Lord, Lord Woolf, to have suggested that a PPO could be reviewed as the instalments were going ahead. That would be something of an innovation but it might be worth considering. I do not know whether my noble and learned friend has that in mind.

[Lord Keen of Elie]

We do not have that in mind. One of the concerns about such a proposal is the impact it would have on the insurers and their inclination to embrace PPOs. At present they are concerned about their reserving liability and their capital requirement on the basis of risk when it comes to a PPO. If we were to add to that equation the possibility of the PPO being revived at some indeterminate point in the future, I believe it would have a counteractive effect on the employment of PPOs by insurers. I have noted what the noble and learned Lord, Lord Woolf, said; I will take it away and consider it further, but my initial reaction is that it could act as a disincentive for the operation of PPOs.

[Lord Hodgson of Astley Abbotts]

My Lords, I thank my noble and learned friend for that extensive reply and other noble Lords for their contributions to this debate.

I take issue with my noble and learned friend on two matters. First, it is perfectly possible for us to deal with the question of PPOs for mutuals by setting up a proper reinsurance programme. That could be done quite easily. Therefore, to say that we would like to do this but we cannot because mutuals cannot provide it is inaccurate. We can sort that out with a certain amount of technical help.

Secondly, the noble Lord, Lord Sharkey, said that we were engaged in a nudge. Personally, I am engaged in a bit of a shove, and I hope that the noble Lord, Lord Monks, will join us in in that shove. I am not sure that my noble and learned friend has given a shove; I think it is a very delicate pressure on the arm of the industry, which I am not sure will be effective.

We heard from the noble Earl, Lord Kinnoull, about how PPOs are declining in use and from the noble and learned Lord, Lord Woolf, about the culture and question of fairness, which must be at the heart of all our discussions. I was encouraged to think that such an eminent jurist as him should think that the rules of court could provide the flexibility to enable the issues covered by my amendment to be incorporated. We are in an era where things are moving fast, and we do not want to find ourselves stuck in inflexibility.

My noble and learned friend Lord Mackay of Clashfern referred to the question of interference by the Executive with the judiciary. I made clear that I was concerned about that in my opening remarks. The amendment is designed so that Parliament, the legislature, makes its view clear. It is nothing to do with the Executive. It is giving judges a steer, but after that, it is over to them how they proceed. My worry about my noble and learned friend’s comments is that the best remains the enemy of the good. We have a system that is not working very well, but we are saying, “This is frightfully difficult, so we should not change it; we are likely to cause more trouble by changing it than we solve, let sleeping dogs lie”.

The system is not working very well. The transfer of investment and longevity risk away from the individual has to be a key part of making matters fair. It deals with important and difficult cases of the sort raised by the noble and learned Lord, Lord Judge. I hope that the Minister will agree to meet some of us between now and the Bill’s next stage, because I do not think we have got to the bottom of this. We are missing an opportunity to do something seriously helpful for people who suffer long-term, life-changing injuries. In the meantime, I beg leave to withdraw the amendment.

[Lord Keen of Elie]

In response to my noble friend Lord Hodgson, and a point raised by the noble Lord, Lord Sharkey, I would be perfectly content to meet them before the Bill’s next stage to discuss this. If they contact my private office, that can be arranged.

Amendment 55 withdrawn.

--- Later in debate ---

[Lord Beecham]

My Lords, I simply wish to confirm that we on this side agree with what noble Lords have suggested, so the quicker we can get things moving, the better for everyone.

[Lord Keen of Elie]

My Lords, I believe that we are as one in our desire to see these provisions brought into force as rapidly and as sensibly as possible, and all of these amendments stem from the entirely reasonable, and indeed strongly argued, wish for the review to be carried out in order to minimise the impact that the present discount rate is having—disproportionately, one would venture—on defendants and in particular on NHS Resolution.

As I explained in writing to noble Lords following Second Reading, to which the noble Lord, Lord Sharkey, referred, the Government remain fully committed to beginning the first review of the rate promptly after Royal Assent and to completing that first review as soon as is practicable in 2019. To that end, I indicated that although the expert panel cannot be appointed before the power to do so has been created, preparatory work on the setting up of the panel is already under way and the Government will progress the appointment process as far as they properly can before Royal Assent. I hope that that goes some way to meeting the point made by the noble and learned Lord, Lord Judge. As part of that preparatory work, the Government intend to publish the draft terms of reference for the expert panel in time for the Report stage of the Bill in this House. However, the appointment of the expert panel cannot take place until after Royal Assent and thus the completion of the appointment process cannot be predicted with absolute certainty.

The effect of Amendment 58 and its related Amendments 63 and 66 might be to force the Lord Chancellor to delay commencement or risk the time to conduct the review being eaten into, thereby reducing its effectiveness. We have in mind the stages that have to be gone through. Amendment 59 would reduce the period of time within which the first review of the discount rate must be started following commencement from within 90 days of commencement to 10 days of commencement, and other amendments specifying 30 days have been referred to as well.

What I would emphasise is the word “within”. These are outliers, but we are determined to carry out the process as swiftly as we reasonably can. Having regard to that, however, we have to make provision for any uncertainties that may emerge, and therefore to fix too stringent a period might impact adversely upon the whole process that we want to carry out. In other words, while it is important to move quickly, it is also important to ensure that any review is completed fully and properly and is not going to be the subject of untoward challenge.

As I have said, the appointment of the expert panel to advise the Lord Chancellor simply cannot take place until after Royal Assent and even then it may still take a little time, despite the preparations that are ongoing even now. If the review starts without the panel being ready to start work, the whole task is going to be thrown into some difficulty.

--- Later in debate ---

[Lord Mackay of Clashfern]

My Lords, I want to say just one thing about the nature of the Lord Chancellor’s judgment in this case. The noble Lord, Lord Cromwell, said that the Lord Chancellor is acting on behalf of the Government, but that is not the nature of the decision: it is the Lord Chancellor’s decision as representing the Lord Chancellor himself. He has the responsibility of a personal decision in this matter, in the way this Bill is drafted. Certainly, when I had responsibility for these matters, it never occurred to me that I should consult the Cabinet about it.

[Lord Keen of Elie]

My Lords, I begin by acknowledging the point made by my noble and learned friend Lord Mackay of Clashfern. The Bill makes perfectly clear that this is a decision of the Lord Chancellor as Lord Chancellor, and it is in that context that it has to be seen and understood.

Amendment 61 would replace the proposed three-year maximum review cycle for the second and subsequent reviews of the rate with a system under which the need for the rate to be reviewed would be determined by the expert panel by reference to changes in returns on investment. Of course, there are then consequential and supplementary amendments. The effect would be to add a new and distinct responsibility to the role of the panel. It would in effect, as I believe my noble friend Lord Hodgson acknowledged, require a standing panel to be created. If more than a year had passed since the rate was reviewed, the expert panel would be required to assess the need for a review and then to advise the Lord Chancellor to review the rate if it considered that the nature of return on investment had changed enough to justify a review. If the panel decided that this condition had not been satisfied, it would have to report its reasons for this view to the Lord Chancellor.

The concept of a review based on changes in investment returns was canvassed as an alternative to a fixed review period in the Government’s 2017 consultation on how the rate should be set, and it was supported, let me be clear. However, basing the review requirement on changes in investment returns would, we believe, create more uncertainty and be less predictable than a regular fixed-date review. The introduction of a requirement for the panel to consider the need for a full review annually could further fuel such uncertainty.

I appreciate the concerns raised by the noble Lord and others at Second Reading about the potential for a fixed review period to prompt undesirable litigation behaviour and the possibility of what is sometimes termed the gaming of the system in anticipation of a change to the rate. However, this problem would not be avoided by the system which the amendment proposes. Litigants would still know when the panel would be required to consider whether the rate required reviewing. Indeed, such occasions would be more frequent under the amendment than under the three-year cycle proposed in the Bill. One can imagine a stop-start mentality emerging leading up to the time when the panel was expected to report.

A further consequence of the amendment would be that the expert panel would have, in practice, to exist independently of the review of the rate, rather than being convened by the Lord Chancellor for each review, as the Bill currently provides. In effect, a standing panel would be required, which would have to exercise judgment as to the timing of reviews, rather than confining itself to the technical matter of advising the Lord Chancellor on the factors that might be considered in the setting of the rate, which is the purpose of the expert panel. The amendment would therefore make a very significant change to the proposals in the Bill regarding when the rate should be changed. The Government’s proposals for a fixed-period maximum cycle for the review of the rate have, as I say, been developed through consultation and been the subject of pre-legislative scrutiny, and we consider that they provide a simple and certain method by which reviews can largely be predicted.

Amendment 74 would require the Lord Chancellor to adopt any recommendation from the expert panel as to whether the rate should be changed and, if so, what the rate should be. Clearly, such a change would diminish significantly the responsibility and accountability of the Lord Chancellor for any review outcome—indeed, it would essentially remove it. Amendment 74 would also remove the requirements on the Lord Chancellor, the panel and the Treasury set out in paragraph 2(6) and (7) of new Schedule A1 to comply with or to take into account the duties of the Lord Chancellor in relation to the setting of the rate that are set out in paragraph 3 of new Schedule A1. What we would have is the elevation of the panel from an advisory role to essentially an executive role. That would be a major change and clearly greatly alter and increase the role of the panel.

The creation of the expert panel to advise the Lord Chancellor is, of course, one of the most important changes introduced by Clause 8. The panel is central to the Government’s proposals for the way in which the rate is set, introducing new expertise and transparency. The panel will play a very important role in providing assistance to the Lord Chancellor in setting the rate, but it would not in our view be appropriate for the panel’s recommendations to bind the Lord Chancellor in deciding whether the rate should change and what it should be. The setting of the discount rate requires the weighing of different potential outcomes for individuals in relation to a range of possible rates. An element of value judgment will ultimately be required. It is important, therefore, that the decision-maker should be politically and publicly accountable for decisions on the rate. That is why the Lord Chancellor is, in our view, the appropriate person to make that choice. Indeed, this was recognised by the Justice Select Committee, which stated in its report that:

“Setting the discount rate has repercussions on the taxpayer through Government expenditure and also consumers through its impact on insurance premiums and inflation; therefore we think it is right that the decision to set the discount rate lies with the Lord Chancellor”.


We agree with that assessment.

In addition to being influenced by the pre-legislative scrutiny carried out by the Justice Committee, the proposals we have put forward have been developed through the public consultation process. In response to the question of by whom the rate should be set, the largest single group of support was for the rate to be set by the Lord Chancellor following advice from an expert panel. I note the support for that which has been given, in particular, by my noble and learned friend Lord Mackay of Clashfern, expressing his experience as Lord Chancellor and underlining the distinct role of the Lord Chancellor in this context.

[Lord Sharkey]

The Minister talks about the consultation and the preferences expressed there. As I think I mentioned at Second Reading, there was no majority in favour of the Lord Chancellor being involved. There was a majority for other methods, not the Lord Chancellor.

[Lord Keen of Elie]

I acknowledge that. As I said, the greatest number of responses were in support of that particular proposal. I reiterate that.

I understand that Amendment 74 is a probing amendment but it would at a stroke remove many of the benefits that the proposed reforms in the Bill are seeking to achieve. This is because paragraph 3 of the new schedule governs how the Lord Chancellor is to decide what the rate should be, and Amendment 74 would remove paragraph 3 from the schedule. The essential change made by paragraph 3 to the present law is that in future the rate is to be assessed on returns reasonably expected to be achievable from a diversified low-risk portfolio of investments. This has regard to how claimants actually invest and the returns available to them. This evidence-based process of assessment will replace the hypothetical approach of the present law, which leads to the rate being set largely by reference only to returns from UK index-linked gilts.

Our evidence is clear that claimants simply do not invest all their awards in UK index-linked gilts; in other words, claimants do not pay Her Majesty’s Government to look after their money. Our research indicates that setting the rate on this basis leads to awards of compensation that are expected to produce on average around 135% of the funds anticipated to be necessary to meet the claimant’s losses, although this drops to 120% to 125% after taxation and the costs associated with the management of investments have been accounted for—a point that I will return to in a moment. The new system will put the setting of the rate on a far more realistic basis and bring the average closer to the target of 100%. This will be fairer for both claimants and defendants.

In support of this process, the paragraph sets out a number of key assumptions that the Lord Chancellor must adopt in deciding what the rate should be and a number of supporting factors he or she must take into account. It also enables the Lord Chancellor to identify and apply further assumptions and to take into account further factors in determining what the rate should be. Amendment 74 would remove the entire framework provided by the Bill for the basis of the setting of the rate. The effect would be that, unless the Supreme Court were to decide to adopt a different basis for the setting of the rate in a future case, the rate would continue to be set on the basis of the present case law, principally the 1998 decision of the House of Lords in Wells v Wells, which was referred to by the noble and learned Lord, Lord Hope, at Second Reading; it is a case on which I believe he sat. This would remove the central aim of the reforms to provide a fairer, more certain and more sustainable system for both claimants and defendants, and would remove any possibility of overcompensation and its impact on the National Health Service.

Clearly, we want seriously injured individuals to be fully compensated for all the losses caused by their injury. They should receive the full and fair compensation that is legally due to them. We do not seek to change the overriding objective of 100% compensation. The problem is that at present the rate has to be set largely by reference to UK index-linked gilts. But our evidence is that this is not how such claimants actually invest and therefore we have to move on.

I add that it might be a little odd to adopt the noble Lord’s Amendment 74 in light of his Amendment 71, which encourages us to have the Lord Chancellor fix the first rate without recourse to the panel at all. There seems to be a slight tension between the two amendments. I have expressed my view on Amendment 71, and we are going to look at that again, but I do not find it easily reconcilable with Amendment 74, albeit I acknowledge that it is a probing amendment.

[Lord Sharkey]

I simply observe that I do not think lawyers have an exclusive right to exercise and run conflicting arguments.

[Lord Keen of Elie]

Generally speaking, they are alternative arguments.

Amendment 77 would add an obligation on the Lord Chancellor to take into account the response of the expert panel in determining what the rate should be. Of course, that is exactly what the Lord Chancellor will do. Indeed, why would the legislation require the Lord Chancellor to consult the panel and require the panel to respond if the Lord Chancellor was not required to consider the panel’s response? Of course, there may sometimes be merit in stating every detail of a process in primary legislation but I suggest that it is not necessary in this case.

Amendments 82A, 85A, and 90A, spoken to by the noble Lord, Lord Cromwell, relate to the procedures and responsibilities governing the operation of the panel. Clearly, the expert panel has an important advisory role but it is not appropriate or desirable to load it with the additional responsibilities suggested in the amendments. Paragraph 2(7) of new Schedule A1 already requires the panel to take into account the duties of the Lord Chancellor under paragraph 3. Paragraph 4 requires the Lord Chancellor to give reasons for his or her decision and to publish information about the response of the panel. As the noble Lord, Lord Faulks, observed, ultimately the Lord Chancellor’s decision on the matter, as it is disclosed, will be amenable to judicial review. It is not a case of the Lord Chancellor receiving the expert panel’s views and simply ignoring them. Clearly, such a perverse course of action, which one would not anticipate, would leave his decision-making power amenable to review.

The obligations are expanded by the commitments that we gave to the Justice Select Committee to consult the panel about the allowances to be made for taxation, investment management charges and inflation in the setting of the rate and, over and above that, to publish the panel’s report to the Lord Chancellor at each review. It is not a case just of disclosing what the panel’s advice may have been but of undertaking to publish the panel’s report and then to give reasons for the decision that the Lord Chancellor has made.

As I touch upon that, I recollect that the noble Lord, Lord Sharkey, raised the question of the experts on the panel. I will come on to the question of a medical expert in a moment but I note that with regard to the position of someone concerned with consumer investments, one would be interested there in the context of someone who acted as a financial adviser to those who made investments as consumers at various levels. That, I understand, is what is contemplated at that point.

As I have sought to underline, the overall thrust of the amendments is that the panel should, in effect, carry out a pre-review of the rate. This is not the intended role of the panel. The panel’s role is advisory. It will be consulted by the Lord Chancellor and it will provide the Lord Chancellor with its views. The report of the panel and the Lord Chancellor’s decision and his reasons for the decision will be published. But the role of the expert panel is not to take away from the role of the Lord Chancellor. It is not the role of the panel to make a decision on what the rate should be. Its role is to provide expert support to the Lord Chancellor.

At the end of the day it is the Lord Chancellor who will make the necessary determination and will be publicly answerable for the determination he makes. Therefore, we consider that the decision must be for the Lord Chancellor, who will take that decision in his role as Lord Chancellor and be legally and politically accountable for it. The process of the setting of the rate is going to be transparent. The panel has been created for a very important purpose—namely, to bring new expertise to the process of setting the rate—but it is not its role to second-guess the outcome of the final review by the Lord Chancellor.

Amendment 84 would require the Lord Chancellor to base the allowances to be made for taxation, inflation and investment management costs on recommendations from the expert panel. The Lord Chancellor is already required by paragraph 3(5) of new Schedule A1 to make appropriate allowances for each of these three items. This will be an evidence-based exercise requiring judgment as to what the standard allowance should be against the range of possible individual circumstances that might be foreseen. The expert panel forms an integral part of the Government’s proposals. It will introduce additional expertise but, at the end of the day, the final decision must be for the Lord Chancellor. The amendments proposed by the noble Lord, Lord Cromwell, would in my submission take the role of the panel way beyond that of an expert consultative role.

I turn to Amendment 87, which was spoken to by the noble Lord, Lord Sharkey, and would extend the membership of the expert panel to include a medical representative. Here I concur with the view already expressed by my noble friend Lord Faulks. On one view, the effect of this amendment would be to broaden the general expertise within the panel, but I should explain that its role is intended to focus purely on matters relating to financial rates of return, in order to provide advice to the Lord Chancellor. The Bill therefore provides for the panel to be chaired by the Government Actuary and that the other members should have experience as an actuary, a manager of investments, an economist and, as I indicated earlier, in consumer matters relating to investment—for example, as a financial adviser.

The Government consider that this range of expertise is the most relevant for providing advice on what the relevant investments and rates of return are likely to be, and will be the most useful source in formulating advice for the Lord Chancellor. While medical expertise is relevant when determining a lump-sum amount of compensation to which the discount rate is to be applied, or in estimating the life expectancy of a claimant, these are separate issues to the setting of the discount rate and would be outside the remit of the panel, as an expert panel advising the Lord Chancellor. We do not see that a medical expert would contribute to the process of the expert panel.

I turn next to Amendment 88, which was also spoken to by the noble Lord, Lord Sharkey, and would require the Lord Chancellor to use the power to appoint the four appointed panel members to secure that each of those members approaches the work of the panel as an expert with the object of recommending a rate of return that is fair to the interests of both claimants and defendants. The appointed panel members are indeed intended to be experts in their fields. The expertise that they will bring to the process of setting the rate is one of the most significant reforms introduced by the Bill. The Government made it clear in their response to the Justice Select Committee that they intend to recruit experts who will act as independent experts in providing their advice, not as representatives of specific interest groups. This is not a representative panel; it is, I emphasise, an expert panel.

The appointed panel members will be required to disclose potential conflicts of interest and, under paragraph 3(2) of new Schedule A1, to take account of the duties imposed on the Lord Chancellor as to how the rate is to be set in deciding what response to give to the Lord Chancellor’s consultation. The mix of expertise stated in the Bill strikes, we suggest, a correct and fair balance between the various areas of knowledge that would be required. The proposed additional requirements on the Lord Chancellor in Amendment 88 are therefore unnecessary.

This amendment, however, also seeks to indicate what the objective of the work of each of the appointed panel members should be. The panel as a whole will play a very important role in providing advice, as I say, to assist the Lord Chancellor in setting the rate. It is very important that this advice is fair, which is why the Bill sets out the range of expertise referred to. However, the role and objective of the panel is to advise the Lord Chancellor on matters relevant to the setting of the rate by the Lord Chancellor. The role of the individual appointed members will be framed accordingly. We consider that the requirements on the Lord Chancellor under the terms of the legal framework for the setting of the rate, coupled with the advice from the panel of experts, who will bring a balanced range of expertise, and the requirements in the Bill which provide that the Lord Chancellor will give reasons for his or her decision, underline the way in which the decision-making process will be accountable and transparent. It will also have the objective of being impartial.

Amendment 91, which I believe was spoken to by my noble friends Lord Hodgson and Lord Hunt, who is still with us, would remove the provisions in paragraph 8 of new Schedule A1, which interpret provisions in relation to the setting of the discount rate to cover the possibility of the Lord Chancellor deciding on the occasion of a review to set no rate or no rate for particular classes of case, on the one hand, and changes from that situation, on the other. In fact, that new paragraph would reproduce the provisions in the Damages Act 1996 which indicate that the court must take into account such rate of return—if any—as may from time to time be prescribed by an order made by the Lord Chancellor. This wording implies that the Lord Chancellor might decide to set no rate under the present law. The provisions in paragraph 8(2) to (4) are intended to clarify how this power would operate.

--- Later in debate ---

[Lord Hodgson of Astley Abbotts]

My Lords, I will briefly support the noble Baroness, Lady Bowles of Berkhamsted, in what she just said. It is easy for us to overlook what quantitative easing has done to the returns on savings and fixed interest. It has been a much longer-running saga than was anticipated, and it is still carrying on. If we are to set up a system that precludes people investing in equities, which gives some protection against that, we will be doing no service to the people who need this money as part of the way to recover from terrible injuries they received. The last line on page 9,

“who has different financial aims”,

does not add anything at all to the situation and will merely provide fuel and funds for lawyers to discuss exactly what that means in cases in future years.

[Lord Keen of Elie]

I am obliged to all noble Lords for their contributions. The noble Lord, Lord McKenzie of Luton, began by referring to the briefing from APIL—the Association of Personal Injury Lawyers. I am familiar with it, and indeed, the association invited me to speak at its annual conference, where I confirmed that we would take the Bill through Parliament. I have not cleared my diary for next year. Much of what they had to say, which was repeated by the noble Lord, was, as the noble Earl, Lord Kinnoull, pointed out, met by the need to encourage the uptake of periodical payment orders. We are committed to that and we will take it forward in various ways. They need to be embraced more thoroughly, not only by claimants but by defendants —insurers—as well. Nevertheless, I make that point.

The noble Lord referred to the case of Wells v Wells, which has been mentioned before. There we saw the reference to what was essentially construed as “very low risk investment in UK gilts”, and we are moving away from that. However, there is an additional element in that, which is volatility: you have an investment portfolio which may be subject to volatility, and you may find that it is at a low point at a stage when you need to withdraw capital funds. That has to be factored in as well, and we appreciate all that.

On the suggestion that we are somehow inviting people to invest their savings, or a majority of them, in hedge funds, that will not do at all. The portfolio A that was examined included 13% UK equities, 15% overseas equities, and 18% of alternative investments which could be modelled as hedge funds. We have to see all this in context. We took clear evidence on the nature of a low-risk portfolio, and there was reference, for example, to widows and orphans, but we are in a different climate in this context. We are not seeking to move away from the idea of 100% compensation. I will come on to the probing amendment of the noble Baroness, Lady Bowles, on setting the rate by reference to not only a floor but, I suggest, a ceiling—there are reasons for that—and the question of investment objectives, as distinct from different financial aims.

Amendment 78 seeks to amend paragraph 3(2) of new Schedule A1 by removing the words,

“in the opinion of the Lord Chancellor”,

from the requirement that the Lord Chancellor must decide the rate on the basis that,

“the rate of return should be the rate that, in the opinion of the Lord Chancellor, a recipient of relevant damages could reasonably be expected to achieve”,

if he invested the relevant damages for the purpose of the assumed objectives. The effect of the amendment would be to prevent the Lord Chancellor seeking to justify a rate on the basis that it seems perfectly reasonable in his subjective opinion when, by any objective assessment, the rate proposed is not supportable.

The noble Lord referred to an “unfettered discretion” and conflict with a political interest, but we are talking about the Lord Chancellor making the decision in his capacity as Lord Chancellor. He does not have an unfettered discretion. He is subject to public law duties in the exercise of his functions. Any decision of the Lord Chancellor as to what the rate should be must be rational, and any failure in rationality can be challenged by way of judicial review. I have already touched upon that and the question of disclosure, and I shall not repeat it.

It is necessary to have reference to the opinion of the Lord Chancellor in relation to setting the rate because the setting of the discount rate is not now, and will not under the proposed legislation, be a precise science—it cannot be. The decision to be made on the rate will require the weighing of different potential outcomes for individuals in relation to a range of possible rates. An inevitable degree of subjective assessment is involved in this process. That is why it is appropriate that, although there is an expert panel, that subjective assessment is made by the Lord Chancellor, albeit with the reasons being given and explained, with a rational analysis of the information submitted to him.

Amendment 78A would require the Lord Chancellor to assume, when considering the damages to which the discount rate would apply, that the relevant damages would be payable as a lump sum or partly as a lump sum. The current wording of the Bill requires the Lord Chancellor to assume that the relevant damages will be payable wholly as a lump sum. We do not consider that this amendment is necessary. The discount rate will only ever be applicable to damages payable as a lump sum, and in setting the rate the Lord Chancellor will have regard to that.

Amendment 79 would include the requirement to assume, among the assumptions which the Lord Chancellor must make under paragraph 3(3) of new Schedule A1 in determining the discount rate, that the cost to the claimant of investment advice shall not be recoverable by way of damages. I appreciate the point made by my noble friend Lord Faulks about the need to be clear about how investment management costs are to be treated in setting the rate, but we do not consider that this amendment is necessary.

Paragraph 3(5) of the schedule provides for the Lord Chancellor to make such allowance for “investment management costs” as he thinks appropriate. This provision has been included on the basis that under the current law the cost of investment advice is not, for the reasons explained by my noble friend Lord Faulks, recoverable as a head of damages and therefore needs to be taken into account as a factor in setting the discount rate. Should the law change, an allowance in the setting of the discount rate would then become unnecessary, as the claimant would already have the benefit of the compensation for the costs. However, we understand that paragraph 3(5) reflects the current law and can adapt to changes in the law. Therefore, we do not consider that it casts doubt on the present law regarding the unrecoverability of investment costs as a head of damage. That is a feature of fixing the discount rate.

Amendment 80, tabled by the noble Earl, Lord Kinnoull, seeks to change one of the assumptions that the Lord Chancellor is required to make under paragraph 3(3) of the new schedule. Under the amendment, the recipient of the relevant damages would be assumed to invest in a diversified portfolio of investment grade listed debt securities rather than a diversified portfolio of investments. The range of investments to be assumed to be made and included in the diversified portfolio under the amendment is clearly narrower than that under the proposed assumption in paragraph 3(3)(c) at present.

The Bill does not restrict the investments that are to be assumed, save that the overall investment approach must be assumed to fall within the range of risk described in paragraph 3(3)(d). We consider that this approach avoids the rigidity of tying the assumptions to a single type of investment. The Lord Chancellor and the panel can therefore assess what the appropriate investments should be in the circumstance of the review. In making their assessment, the Lord Chancellor and the panel will have to have regard to evidence of how claimants actually invest and the returns actually available to investors. We consider that to be a more sustainable system for the future.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I thank the Minister for that very detailed reply and all other noble Lords who have spoken in this debate. On a small point of detail, I think the noble and learned Lord referred to 80% hedge funds. I do not think that is the figure I mentioned, but even at 18% it seems surprisingly high—but there we are.

One outstanding issue is that of how those who are compensated actually make their investments. I draw a parallel with the pensions system. We have just spent quite a long time in this House and at the other end looking at default arrangements for people who have a pension pot and want to transfer it or cash it in on some basis. Encouragement to try to get those individuals to take advice of one sort or another is exercised quite extensively. I raised the same point in relation to people receiving compensation for injury and damages. What happens when they get the cheque? Is there any encouragement for them to get independent guidance on where they should get such advice from? That is still a bit of a mystery to me, even after the debate. I do not know whether there is anything more the Minister can say on that point. The presumption is that individuals will make their own arrangements with presumably regulated advisers. But what about those who do not? What is the process and system that encourages them to avail themselves of investment advice?

[Lord Keen of Elie]

I do not know whether the noble Lord wants me to respond to that but I will, very briefly, if I may, with the leave of the House. Where you have major claims for catastrophic injury, the lawyers involved for the claimants are highly sophisticated. One clear message that I received when discussing this with claimants’ lawyers was that they are concerned not only with the processing and pursuit of the claim itself but with establishing a framework within which the claimant will be able to live. I imagine that almost invariably involves the provision of suitable investment advice, albeit no one is obliged to accept it.

[Lord Faulks]

My Lords, in practice, when these cases come before a court, particularly where there is a party who lacks capacity, a judge, before approving one of these orders—they have the right to approve or disapprove a settlement—must be satisfied that appropriate advice has been taken on the split between periodical payments and a lump sum and that, generally, it is a satisfactory settlement from the court’s point of view. If they are subject to the Court of Protection, the court will then be able to manage investments according to the best interests of the protected party. If I may say so, the noble Lord has a good point on what happens to those who do not need the approval of the court or who are outside the protected party, and who are like anybody else who comes into a large sum of money in any other context. They will be well advised to take advice: some do; some, I fear, do not.

Grandparents: Legal Rights

Lord Keen of Elie Excerpts

Thursday 10th May 2018 Lords Chamber

[Lord Farmer]

To ask Her Majesty’s Government what plans they have to ensure grandparents have a more effective legal right to see their grandchildren after the parents’ divorce.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, in the first instance, it is for parents to decide what is in the best interests of their children. The Government recognise the important role that grandparents may play in children’s lives and the stability they can provide in families when parents separate. We are keeping the matter under review.

[Lord Farmer (Con)]

My Lords, I thank the Minister for his reply. The requirement for grandparents to apply for child arrangement orders is cumbersome, expensive and needs reforming. However, when grandparents need to go to court to maintain contact with their grandchildren, they typically have a relationship problem with one or both parents, rather than a legal problem. In Australia, where there is disharmony following divorce and separation, extended family members can access family relationship centres. Do the Government have plans to ensure that there is similar community-based help—sited, perhaps, in the family hubs slowly emerging across the country?

[Lord Keen of Elie]

My Lords, the requirement for non-parents first to seek leave of the court in order to apply for a child arrangement order is regarded as an important filter mechanism, and was the subject of review by an independent panel in 2011 which came to the same conclusion. With regard to means of alternative dispute resolution, we are of course anxious to see mediation employed in the situation to which the noble Lord refers. He may recollect that at a recent Westminster Hall debate, on 2 May, my honourable friend the Parliamentary Under-Secretary of State in the Ministry of Justice indicated that she was carefully considering the current position and provision. In doing so, we will of course be happy to look at international experience.

[Lord Beecham (Lab)]

Will the Government consider extending legal aid to grandparents, assuming that the law is changed to allow them to apply, because that would clearly be very helpful in many cases?

[Lord Keen of Elie]

The law does not require to be changed in order that grandparents can make an application in respect of an arrangement order for children. As regards legal aid, as the noble Lord is aware, that is currently the subject of a review within the Ministry of Justice.

[Baroness Butler-Sloss (CB)]

My Lords, with some family experience, I am concerned that a Minister of Her Majesty’s Government was talking about presumptions for grandparents to have contact with their grandchildren. I would hope that that would not go any further, because presumptions are highly undesirable in the law, but it would be useful to review whether grandparents are finding it unusually difficult to get access to the court when they wish to be in touch with their grandchildren.

[Lord Keen of Elie]

My Lords, with regard to access to the courts, the number of applications for child arrangement orders has generally been in the region of 2,000 over the period since 2011. They have varied slightly, and the number of applications has increased steadily from 2015 to the current year, where the figure is in excess of 2,000. I have certainly not referred to presumption, and various issues would of course arise if we were to consider such a move because, if you contemplate a presumption in favour of grandparents, you are in a sense intruding on the rights of the parent.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, is there really a justification for the two-stage process whereby grandparents have to apply for the right to make an application for a contact order and there is then a filtering system? Would it not be much easier for there to be a single application for a contact order with a filter system for non-parents built into that application, thus saving grandparents a great deal of time and trouble—all, as the noble Lord, Lord Beecham, points out, without the benefit of legal aid under the current arrangements, which require there to have been domestic violence or abuse?

[Lord Keen of Elie]

My Lords, the matter of seeking permission, whether it be by grandparents or other non-parent applicants for an arrangement order in respect of children, was the subject of independent review by the Family Justice Review panel in 2011. In its final report, published in November 2011, it concluded that the matter of an application for permission should continue.

[Lord Suri (Con)]

My Lords, respect for grandparents’ rights to see their grandchildren should be always in place. In the case of divorced parents, what strong, lawful action can be taken to restore this great and loving tradition?

[Lord Keen of Elie]

My Lords, we respect the right of grandparents to make an application for an arrangement order for children. Indeed, in the context of public law cases, local authorities are directed to consider placing children with relatives where it is not possible for the parents to continue with their care. It is open for grandparents to be appointed as special guardians in such situations.

[Baroness Altmann (Con)]

My Lords, I am sure the Minister agrees with me that grandparents often have a very special relationship in the life of any child, and I congratulate the Government on the recognition of grandparents’ rights, for example, in the crediting of national insurance contributions for grandparents who look after their grandchildren. May I also urge my noble and learned friend to encourage our honourable friend in the other place to reinforce the concerns expressed that denying rights of access for grandparents can often be like a living bereavement? If there is an opportunity to amend the Children Act to give grandparents more rights, I would very much welcome it.

[Lord Keen of Elie]

My Lords, of course we understand the concern of grandparents with regard to child arrangements. But, as I indicated earlier, this is a difficult field. It is easy to talk of a presumption in favour of grandparents, but if you do that, you are, in effect, intruding on the rights of the parents with respect to the care of the children.

Civil Liability Bill [HL]

Lord Keen of Elie Excerpts

Committee: 1st sitting (Hansard): House of Lords
Thursday 10th May 2018 Lords Chamber

[Lord Mackay of Clashfern (Con)]

My Lords, I thoroughly agree with the proposition that is highly desirable for the definition used as the basis for later provisions in this part of the Bill to be on the face of the Bill. The difficulty I have had so far is in identifying what we want to do. It is the area of exaggerated claims, or something of that sort, that underlies the Government’s proposals. I agree that it must be, ultimately, a medical definition, because a medical report saying that you have this injury is an essential requirement for you to come under this part of the Bill.

The difficulty, however, is that the doctors have to know where these exaggerations take place. I have been instructed by people who suggest that if you go for the back, and the rest, you are extending the thing beyond the real position. I have, therefore, some sympathy with the amendment restricting that, which I think is to be moved or spoken to later. I do not, however, profess to know exactly what the problem is, in the sense of the area of medical expertise that is being used by the claimant industry to exaggerate claims. That is their idea: to exaggerate these claims and ask for more than they are worth. As I said at Second Reading, I have some experience long past of the difficulty of actually quantifying the correct amount for these injuries, particularly if they are serious—and they can be quite serious, I think. This is my problem and I would be glad of help when the Minister comes to speak.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I am obliged for all the contributions that have been made so far this morning. I observe that it appears to be generally recognised that the Bill is addressing a very real issue about which policy decisions have to be made and implemented. I quite understand the question raised about where the definition of whiplash injury should appear. The definition in the Bill seeks to limit injuries to those soft tissue injuries that affect the neck, back or shoulder and arise from road traffic accidents. The vires in the Bill are tightly drawn to enable regulations to be made by the Lord Chancellor that would apply only to a discrete number and type of injury.

It is interesting to see the diversity of amendments that have come forward this morning. That may underline the particular challenge we face in arriving at a suitable definition, be it in the Bill or in regulation. We have sought to address an issue that involves reconciling a legal understanding of this matter with a medical definition—one which covers both injury and the symptoms of injury. That involves us engaging with not only medical expertise but a degree of legal expertise. In addition, while I am not going to go through the detail of every amendment, because I understand what lies behind them, I will note this much. The noble Earl, Lord Kinnoull, set out three points for consideration, and in doing so underlined the very real problem that we need to address here. It was emphasised by the suggestion that if you go to a particular claims management site you are encouraged to believe that even if you have no symptoms you may still have a claim.

I was reminded of an incident some years ago where I was acting for an American pharmaceutical company. The US attorneys showed me a photograph of a genuine roadside sign that had been erected in the state of Mississippi. It said, “If you’ve taken drug X and suffered a fatal heart attack, telephone this number”. The lengths to which we lawyers will go know no bounds, and our belief in the Almighty is always there. There is a very real industry out there. I do not use the term “racket”, but others have—and with some justification.

Looking to the current position, the noble Lord, Lord Sharkey, correctly observed that the regulations that we have produced in draft to elaborate the definition of whiplash injury have only just appeared. I quite understand the need for noble Lords to consider those regulations in more detail. In turn, I will consider in more detail whether we should incorporate a more precise definition in the Bill. But I stress that, even if we were to take that step, it would be necessary for us to bear in mind the ability of government to proceed by way of regulations to support any definition in the Bill. We are well aware that flexibility will be required with regard to any final definition so that we can meet the way in which claims development occurs—the way in which this sort of market develops—in order to put limitations on claims.

At the end of the day, the detailed definition of whiplash injury will need to reconcile the current legal understanding with an accurate medical definition covering both injury and symptoms. Our aim is to achieve that objective, but to what extent we achieve it by incorporating the definition in the Bill is not a matter on which I would take a final position. I quite understand the suggestion that we should consider further the extent to which the definition can appear on the face of the Bill, and also allow noble Lords the opportunity to consider the scope of the draft regulation that has only recently been made available. In the light of that, and understanding that these are essentially probing amendments, I invite noble Lords not to press them at this time.

[The Earl of Kinnoull]

My Lords, I am grateful for those last few sentences from the Minister, which were very helpful and reflect the strong mood of the House. I must say that if we had had a brief fee clock going, with the number of very expensive lawyers here, it would have been going round quite rapidly. I will make one point, following what the noble Baroness, Lady Berridge, said. I too am a non-practising barrister, but I would never do anything to suggest that advocacy was not valuable. Advocates are immensely valuable in our justice system.

I do, of course, have experience of sitting on the other side of the table from the “claims industry”, as I term it—and the last thing those people want is an advocate in the mix. Most of their companies do not employ that many lawyers: some companies have no lawyers at all, or just one on their writing paper. They want a paper-based or telephone-based operation, in order to process things as cheaply as possible. This would actually help advocacy, because it would try to push things back into the proper legal market and away from companies that have been commoditising the rather grubby process of grabbing money. But, on the basis of what the Minister has said, and knowing that we will be having discussions with a view to bringing forward some sort of amendment on the definition—no doubt several noble Lords who have spoken today will be involved—I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hodgson of Astley Abbotts]

My Lords, I intervene briefly, having put my name to the noble Earl’s amendments. I am not sure that the noble Lord, Lord Trevethin and Oaksey, quite followed the idea behind this, which is that psychological injuries are specifically identified at various places in this clause but minor injuries are not. The purpose of the amendments is therefore to remove psychological injuries as a specific category and reinsert them further down, through Amendment 22, with minor injuries, so that we sweep up everything concerned with a whiplash unless it is a serious injury, such as a fracture of a leg, which is clearly a different issue. However, the issue is picked up by the reinsertion by Amendment 22 of the words “minor injuries”, such as a bruised knee.

[Lord Keen of Elie]

I am obliged to noble Lords for their contributions to the Bill in Committee. I begin with Amendment 4, moved by the noble Lord, Lord Beecham, which would limit the definition of whiplash to soft tissue injuries of the neck. There is then a further amendment that would require the definition of whiplash to be set by the Chief Medical Officer of the Department of Health. The amendment to remove the back and shoulder from this definition would significantly reduce the number of claims subject to measures in the Bill, namely the tariff and the ban on settling claims without medical evidence. It would also encourage claims displacement into other areas to avoid them being subject to the tariff. That would be a serious issue.

The definition in the Bill has been adapted from that in the Prisons and Courts Bill following feedback from stakeholders that the definition in the latter Bill was not broad enough to capture the intended claims. The current definition, with the draft regulations that have now been produced, is intended to achieve that objective.

The amendment requiring the definition of whiplash to be set by the Chief Medical Officer of the Department of Health would provide an independent person who has responsibility for advising the Government on medical issues, but the definition of whiplash injury needs to reconcile the current legal understanding with an accurate medical definition that covers both injuries and their symptoms. This is why the Government have developed the definition of a whiplash injury with input not only from medical experts, but from other expert stakeholders, including claimant and defendant solicitors.

Amendments 8, 9 and 10 restrict the scope of the tariff provisions by reducing the injury duration of affected claims to 12 months from two years. As the noble Lord, Lord Faulks, observed, this would reduce the number of claims captured by these reforms, but have the negative effect of encouraging claims displacement or claims inflation. Having an injury duration of up to two years will ensure that genuinely injured claimants seek timely treatment for their injuries, as well as enabling the Government to reduce and control the level of compensation in whiplash claims and consequently—as is one of the objectives—reduce insurance premiums for consumers.

The noble Earl, Lord Kinnoull, spoke to Amendments 15 to 20 and 22, which would widen the types of injuries affected by both the tariff of damages and the ban on settling claims without medical evidence. It would remove the term “psychological” from the clause, so that the measures in the Bill would apply to all minor injuries related to road traffic accidents, regardless of whether they are psychological or physical in nature. Consequently, this would apply the single-figure tariff to all those injuries, irrespective of number and type, by reference to the duration of the whiplash injury alone. This would result in the reduction of damages for a substantial number of personal injury claims outside the scope of our proposed reforms. The proposed reforms are intended to reduce the number and cost of particular claims—“an industry”, some people have referred to; “a racket”, others have mentioned. We are committed to addressing the issues that arise with whiplash injury.

I understand the point made about the bruised knee. I respond to the noble Lord, Lord Trevethin and Oaksey, on the potential for discrepancies between awards made under the tariff for the whiplash injury itself and awards made for other minor injuries.

Clause 2(8) makes provision for the fact that the court will take into account other minor injuries and will make an award that is not related to the tariff itself. That is my understanding of the words in parentheses: that, in the context of the whiplash injury, regard will be had to the limits imposed by the tariff and the regulations but that, with respect to the other injuries, there will be no such limitation. That is why we do not consider it appropriate to delete the term “psychological” and extend these provisions to all minor injuries. Including minor psychological claims within the original tariff, as the noble Lord, Lord Trevethin and Oaksey, indicated, was done in order to meet the way in which claims develop in this area. Indeed, it is in line with the Judicial College guidelines for personal injury compensation, which indicate that minor psychological injuries such as travel anxiety are not in themselves separate injuries attracting compensation; they have to be linked to physical injury itself.

Turning to Amendment 21, moved by the noble Baroness, Lady Primarolo, if one considers Clause 2(6), persons who are unable to locate treatment for either their physical or psychological injuries are in fact only required to take appropriate steps to seek such treatment. There is no requirement for them to undertake it if it is not available for any number of practical reasons. I would therefore suggest that this amendment is unnecessary in the circumstances.

[Baroness Primarolo]

Can the Minister explain, then, what the point is of putting a subsection into a Bill that will have no effect, given that we know that psychological and physiotherapy services are under enormous strain and vary around the country? On the point he makes about people just adjusting how they make their claim, surely the answer would be, “We tried and it wasn’t available”. If it is to be a test, should it not be a test that is capable of being judged?

[Lord Keen of Elie]

With great respect, the relevant text can be judged, because the requirement is that a person should take reasonable steps to secure those services where they are required. If they are not available then that is an answer to the point.

May I move on to Amendments 27A and 49A, on the course of employment? I have to confess that, on this matter, I am inclined to side with the noble Lord, Lord Bassam. It appears to me, with due respect, that there is perhaps a misunderstanding here. If we look at Clause 1(3), we see that it is concerned with a situation in which a person suffers whiplash injury “because of driver negligence”. Whether a person is in the course of their employment or not, if they suffer a whiplash injury because of driver negligence, the third-party driver’s negligence will be responsible for the injury and, therefore, the insurer of the third-party driver will respond. If, on the other hand, the injury is the consequence of the driver himself, then he will have no claim, because you cannot claim in respect of your own negligence. In neither event would there be a legitimate basis for claim against the employer. It is for that reason that we do not consider it necessary to exclude a group to that extent.

[Lord Marks of Henley-on-Thames]

I am sorry to interrupt the Minister, but is that the point? The point of these amendments, as I understood them, was to exempt those who drive in the course of their employment from the rigour of the new provisions of this Bill when they are claimants, so that the claimant in the course of his employment has a legitimate claim. We may assume it is a legitimate claim because, as the noble Baroness, Lady Berridge, said, it would have to be backed up by the employer’s evidence saying, “This claimant, driving my lorry on a perfectly legitimate delivery, was injured”. It is the claimant who counts, not the defendant.

[Lord Keen of Elie]

With great respect, if the claimant is driving, his claim will be against the third-party driver whose negligence caused the claim. There is no reason why, in those circumstances, you should distinguish between a claimant who is in the course of his employment and a claimant who is not. They are both liable to suffer the same injury in the same circumstances as a result of the negligence of the same party. The distinction is one without a difference, with great respect. There is no justification for making such a distinction. I recollect discussing this with the noble Baroness, and she talked about the distinction between motor insurance and employers’ liability insurance, but there is no question of the claim being directed against the employer’s liability insurance in such circumstances.

[Baroness Berridge]

That is not the point that is being made here. I would be grateful if my noble and learned friend could address the question. We are all, I believe, in your Lordships’ House working on the assumption that the target of the Bill is fraud, not genuine claimants. So the specific question is, where is the evidence that people who are claimants when they drive in the course of their employment and are injured by a third party’s negligence—the claim is not against their employer but against the other driver—are fuelling any of the calls or the fraud that is the underlying principle of the Bill? Because that is an injustice.

[Lord Keen of Elie]

With the greatest respect to my noble friend, there is no basis for distinguishing between the cohort which is driving in the course of employment and the cohort which is not driving in the course of employment when an injury is suffered due to the negligence of a third-party driver. I am not aware of any examination, study or evidence that would seek to distinguish, or of any conceivable basis for distinguishing, between those two cohorts. So, with the greatest respect, I would suggest that it is a distinction without a difference.

[Lord Brown of Eaton-under-Heywood (CB)]

May I just try to assist—I hope—the noble and learned Lord? The fact that the employer can authenticate that the accident was caused while the driver, the claimant, was acting in the course of employment does not authenticate the fact that he suffered a whiplash injury, and that is the vice that this legislation is designed to attack. Why, in any event, exempt from these provisions that particular class of driver? Why not the man taking his wife to hospital to have a baby, or a whole host of perfectly legitimate drivers? I hope to have helped.

[Lord Keen of Elie]

I am grateful for the noble and learned Lord’s assistance. In the past his interventions have not always been of assistance, but they certainly are on this occasion. I would go further and suggest that it would make no more sense to exempt people who were driving red cars at the time of the accident. It is a distinction without a difference; it is as simple as that. That is why we do not consider this to be a helpful line of inquiry, and it is not one that we intend to pursue further.

With regard to the other amendments that were spoken to in this group, I have endeavoured to address the points made. I acknowledge the point made by the noble Earl, Lord Kinnoull, and indeed by the noble Lord, Lord Trevethin and Oaksey, about the potential for anomalies where someone suffers a whiplash injury and other forms of injury as a result of the same accident. That is there, and there is no obvious answer to that. Nevertheless, the Bill is structured with the intention of addressing the vice we are really concerned with here and which is generally acknowledged to exist. In these circumstances, I invite noble Lords not to press their amendments.

[Lord Beecham]

My Lords, I beg leave to withdraw the amendment.

Belhaj and Boudchar: Litigation Update

Lord Keen of Elie Excerpts

Thursday 10th May 2018 Lords Chamber

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, with the leave of the House I will repeat a Statement made in the other place by my right honourable friend the Attorney-General:

“Mr Speaker, I would like to make a Statement. In 2012, Mr Abdul Hakim Belhaj and his wife, Mrs Fatima Boudchar, brought a claim against the United Kingdom Government and two individuals, the former Foreign Secretary, the right honourable Jack Straw, and Sir Mark Allen, the former director at the Foreign Office. The claimants alleged that the United Kingdom Government were complicit in their abduction, detention and rendition to Libya in 2004 and for the treatment that they suffered at the hands of others. Mrs Boudchar was pregnant at the time.

The claimants’ case, in outline, is that in early 2004 they were detained and forcibly conveyed through a number of jurisdictions by others, ultimately to be handed over to the Libyan regime of which Mr Belhaj was an opponent. During this period, they were subjected to a harrowing ordeal which caused them significant distress. Mrs Boudchar was released from detention in Libya in June 2004, and gave birth shortly afterwards. Mr Belhaj was not released until March 2010.

On 3 May, the claims against Jack Straw and Sir Mark Allen were withdrawn. Today I can announce to this House that, following mediation, the United Kingdom Government have reached a full and final settlement of Mr Belhaj and Mrs Boudchar’s claims. I would like to pay tribute to the constructive way in which Mr Belhaj and Mrs Boudchar have approached the mediation. This has been a long-running and hugely complex piece of litigation which has been difficult for all the individuals involved as parties.

As we have seen in recent years, there remains a considerable international threat to the United Kingdom and our allies and it is important that the Government and the security and intelligence services are able to respond properly to that to keep our country safe, but it is also important that we should act in line with our values and in accordance with the rule of law. That means that, when we get things wrong, it is right and just that we should acknowledge it, compensate those affected and learn lessons. I believe this is such a case.

The settlement of this claim has been agreed out of court. The main elements of the agreement I can report to the House are as follows: first, no admissions of liability have been made by any of the defendants in settling these claims. Secondly, the claimants have now withdrawn their claims against all the defendants. Thirdly, the Government have agreed to pay Mrs Boudchar £500,000; Mr Belhaj did not seek, and has not been given, any compensation. Finally, I have met Mr Belhaj and Mrs Boudchar. Indeed, Mrs Boudchar was present in the Gallery to hear the Statement and the Prime Minister has now written to them both to apologise. I thought it right that I should set out to the House the terms of that apology in full. It reads as follows:

‘The Attorney-General and senior United Kingdom Government officials have heard directly from you both about your detention, rendition and the harrowing experiences you suffered. Your accounts were moving and what happened to you is deeply troubling. It is clear that you were both subjected to appalling treatment and that you suffered greatly, not least the affront to the dignity of Mrs Boudchar, who was pregnant at the time. The United Kingdom Government believe your accounts. Neither of you should have been treated in this way.


The United Kingdom Government’s actions contributed to your detention, rendition and suffering. The United Kingdom Government shared information about you with its international partners. We should have done more to reduce the risk that you would be mistreated. We accept this was a failing on our part.


Later, during your detention in Libya, we sought information about and from you. We wrongly missed opportunities to alleviate your plight: this should not have happened.


On behalf of Her Majesty’s Government, I apologise unreservedly. We are profoundly sorry for the ordeal that you both suffered and our role in it.


The United Kingdom Government has learned many lessons from this period. We should have understood much sooner the unacceptable practices of some of our international partners. And we sincerely regret our failures’.


I hope that the Government’s acknowledgment of these events in these unequivocal terms, and the apology they have each been given, will be of some comfort to Mr Belhaj and Mrs Boudchar. As the Prime Minister observed in her letter to Mr Belhaj and Mrs Boudchar, the Government have learned lessons from this period.

These events took place in the period after the 11 September 2001 attacks, which was one in which we and our international partners were suddenly adapting to a completely new scale and type of threat. It is clear with the benefit of hindsight that the Government, the agencies and their staff were, in some respects, not prepared for the extreme demands suddenly placed on them. The unacceptable practices of some of our international partners should have been understood much sooner.

The Government have enacted reforms to ensure that the problems of the past will not be repeated. We have made it clear that Ministers must be consulted whenever UK personnel involved in a planned operation believe a detainee is at serious risk of mistreatment by a foreign state. We have also improved Parliament’s ability to oversee the actions of the agencies through the Justice and Security Act 2013. The Intelligence and Security Committee is a committee of Parliament, fully independent of the Government. It has a statutory right to review past intelligence operations, and the committee and its staff have direct access to agency papers. These reforms mean that the framework within which the UK now operates is very different from that in the early 2000s.

I end by reiterating that vital work is done to keep us safe and we aspire to the highest ethical standards. When those standards are not met, it is right that we apologise, that we compensate those who have suffered as a result and that we make whatever changes we can to avoid the same thing happening again. This is the approach we have now taken in this case and, as such, I commend this Statement to the House”.

--- Later in debate ---

[Lord Thomas of Gresford (LD)]

My Lords, I too am grateful to the Minister for repeating the Attorney-General’s Statement.

On 21 February 2008, this House was concerned with the use of UK facilities and UK airspace by the United States for the purposes of extraordinary rendition. In answer to a Written Question from my right honourable friend Menzies Campbell, now my noble friend Lord Campbell of Pittenweem, assurances had been given by Mr Jack Straw in 2005, and later assurances were given by Mr Blair, the Prime Minister, in 2007, that these events had never occurred—that there had been no extraordinary rendition. A Statement in February 2008 was made by the noble Lord, Lord Malloch-Brown, in this House to the effect that this was incorrect and that extraordinary rendition had taken place through the British territory of Diego Garcia. Perhaps I may crave the House’s indulgence for quoting myself. I said on that occasion:

“We look for a public inquiry, as we have called for several times, which will investigate what extraordinary renditions have taken place not just to European countries but to places where we know that torture takes place—places such as Syria, Egypt, Morocco and Jordan, where it is thought that there are secret holes where United States detainees are held. We cannot be satisfied by assurances given by the Government today on this matter”.—[Official Report, 21/02/08; col. 351.]


Nothing was said in 2008 about the events of 2004—the abduction, detention and rendition to Libya of Mr Belhaj and Mrs Boudchar, who were opponents of the Gaddafi regime and could expect torture and imprisonment.

Today, the Prime Minister’s apology, as we have heard, contains the following:

“The UK Government’s actions contributed to your detention, rendition and suffering”.


We are entitled to know in what specific way. Mr Belhaj’s claim was that MI6 provided information to the CIA which led to his capture in Kuala Lumpur in 2004 and rendition via Bangkok to a Libyan jail. He further claimed that he was interrogated by British intelligence officers during his six years’ imprisonment and during the period of torture that he endured. All this was denied at the time. The Prime Minister says in her letter:

“The UK Government believes your accounts”.


Therefore, I take it that what Mr Belhaj said in his statement of claim is admitted, despite the fact that liability in the case is not admitted.

Another phrase used by the Prime Minister was that she was,

“profoundly sorry for the ordeal”,

of Mr Belhaj and Mrs Boudchar. If that is so, why did this Government try to quash these proceedings and argue a defence of state immunity and “foreign act of state” immunity all the way up to the Supreme Court as recently as January of last year? Do the Government now recognise that these defences must be subject to exceptions where there are violations of fundamental norms of international law and basic human rights, such as the prohibition of torture, which has been recognised in this country since Felton’s case in 1628?

A further point is that the costs of such a series of applications and appeals, which were unsuccessful, have no doubt fallen upon the public purse. What were those costs?

[Lord Keen of Elie]

I thank the noble Baroness, Lady Chakrabarti, for her observations and the noble Lord, Lord Thomas. As the Statement made clear, more could have been done to prevent the suffering of Mr Belhaj and Mrs Boudchar when the Government shared information with their international partners. Although the Government believed assurances that they sought in good faith about the treatment, with the benefit of hindsight they feel that they could have done more. Furthermore, after the detention of Mr Belhaj and Mrs Boudchar in Libya, it is now clear that the United Kingdom Government missed opportunities to alleviate their plight.

As regards future ministerial scrutiny, of course that will be all that is required to ensure that these events do not repeat themselves. Our vigilance will be clear and robust, and will reflect our core values, as outlined by the noble Baroness.

With regard to the queries from the noble Lord, Lord Thomas of Gresford, I will not make any comment on operational matters, but it is not the case that the Government tried to quash any decision. The case which was raised and which has now been settled without admission of liability raised complex issues of law, and we of course respect the decision of the United Kingdom Supreme Court handed down in January 2017. The costs were incurred by the Government Legal Department and were approximately £3 million.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I should like to draw the House’s attention to the fact that I am an officer of the All-Party Parliamentary Group on Extraordinary Rendition. I am extremely grateful to my noble and learned friend for repeating the Statement and to the Government for having taken the opportunity to draw a line under this very unhappy and unsatisfactory episode. They are to be congratulated on having grasped this particular nettle.

Perhaps I could ask my noble and learned friend to follow up on a couple of loose ends that are still lying around. The first relates to the press release put out by the Crown Prosecution Service on 9 June 2016 when it decided not to proceed with the case against Sir Mark Allen. The press release said that,

“there is sufficient evidence to support the contention that the suspect”—

that is, Sir Mark Allen—

“had … sought political authority for some of his actions albeit not within a formal written process nor in detail which covered all his communications and conduct”.

Will any further probing take place on what that political authority was and who gave it?

Secondly, there has been discussion in the Statement and elsewhere about the question of consolidated guidance and the review of consolidated guidance dealing with interviewing prisoners abroad when they are at risk of torture and ill treatment. There has been discussion about this being reviewed for some months, and tomorrow never seems to come for this. Will the Minister explain where we are with the review of consolidated guidance and when we might expect to see it published?

[Lord Keen of Elie]

I am obliged to the noble Lord. It is not for me to comment upon a press release from the Crown Prosecution Service, which is, of course, an independent body concerned with the consideration of criminal complaints and cases. Therefore, I cannot add to the comments that were made in that press release.

On the matter of guidance, the current consolidated guidance is from 2010. That sets out the principles consistent with both domestic and international law governing the interviewing of detainees overseas and the passing and receiving of intelligence-related matters and information. At the moment, I am not able to give any indication as to when a review of that guidance will be completed, but it might be informed—apart from anything else—by the work of Parliament’s Intelligence and Security Committee, which is due to publish its detainee report in the near future. In light of that, we will give attention to the 2010 guidance.

[Lord Campbell of Pittenweem (LD)]

My Lords, I had forgotten that it was a Question asked by me in the other place that initially produced the Answer that no such rendition had taken place. At the time, there was great speculation that airfields other than the principal airfields in the United Kingdom were being used for that purpose. It might help the House if I were to point out that I was subsequently given a public apology by the successor as Foreign Secretary, Mr David Miliband. Even by the standards of the time, what happened in this case was quite extraordinary and unacceptable. The strength of these new arrangements—some of which arose out of recommendations made by the Intelligence and Security Committee, of which I subsequently became a member—will be to ensure that nothing of this kind ever happens again in any circumstances.

On a technical note, I understood the Advocate-General to say—I may have misheard him—that there was no admission of liability when this settlement was made. Having listened very carefully to the terms of the letter written by the Prime Minister, it seems to me that on any view, that might not be a judicial admission of liability but it is most certainly, in the minds of any who hear it, an admission by the Prime Minister that a great wrongdoing was created in this case.

[Lord Keen of Elie]

As I indicated, the conclusion of the mediation was, among other things, that there was no admission of liability. However, the noble Lord will recognise the concern that the Prime Minister and the Government felt over the events that led to the detention of Mr Belhaj and Mrs Boudchar. I hope that the Prime Minister’s clear apology will speak for itself.

[Lord Murphy of Torfaen (Lab)]

My Lords, about a decade ago, I had the privilege of chairing the Intelligence and Security Committee, which produced a report on rendition. I assume, therefore, that all of the information that the Minister has given us today in this Chamber, and which the security services and the Government have given to the ISC, comes under a different regime. The committee now has more powers of greater strengths. Will the Minister tell us when the ISC is likely to report on this matter?

[Lord Keen of Elie]

Clearly, I am not in a position to determine the timing of the ISC report, but my understanding is—and the expectation is—that it will be published later this year.

[Lord West of Spithead (Lab)]

My Lords, I welcome this Statement: it is very clear in drawing a line under matters. Things have changed since these events happened. I was the Security Minister at the time and when I asked the question about rendition, I was told, as a Minister in the Government, that it was not going on. Does the Minister feel that this could not possibly happen again now because of the changes that have been put in place by a number of noble Lords, when they were in the other place, and by the committees that are in place or does he think that such a thing could happen again, where a tiny cabal of people is able to do something and there is no way of breaking this out?

[Lord Keen of Elie]

My Lords, I am confident that we have put in place such measures as will ensure that there will be no repetition of this.

[Lord Fox (LD)]

My Lords, the Statement mentions the unacceptable practices of other countries on several occasions. Can the Minister assure this House that we will not be bent in our moral judgment by the need to kowtow or suck up to other countries, which appears to be one of the reasons that has driven this behaviour in the past? Can he also undertake to make sure that these other countries have been told that we find these practices unacceptable?

[Lord Keen of Elie]

My Lords, our international partners are well aware of our standards, our belief in the rule of law and our desire to uphold the rights of the individual. They are therefore well aware of our concerns in that area.