Courts and Tribunals (Online Procedure) Bill [HL]

Debate between Lord Pannick and Lord Beecham

Committee: 1st sitting (Hansard): House of Lords
Monday 10th June 2019 Lords Chamber

[Lord Pannick (CB)]

My Lords, I support what has been said by the noble Lords, Lord Marks and Lord Beith. I declare an interest as a barrister practising in offline courts. That was the reason I did not participate at Second Reading.

The Briggs report has been referred to, which said at paragraph 6.13 that there are persons,

“living mainly in rural areas with no access to broadband, those who cannot afford a lap-top or desk-top computer, and those who for a variety of understandable reasons regard moving to computer after a life spent communicating on paper a step too far”.

I agree with previous speakers that it is unacceptable that the Bill says nothing about such potential litigants. The Minister accepts that their interests must be accommodated—they need to be accommodated in the Bill.

That is the view of your Lordships’ Constitution Committee, on which I served with the noble Lord, Lord Beith, and the noble and learned Lord, Lord Judge. Our report said at paragraph 16 that, against the background of what was said by Briggs,

“forcing people to choose between online proceedings or not pursuing legal claims at all risks excluding large numbers of people from the justice system”.

For that reason, your Lordships’ Constitution Committee has recommended that the Bill must place duties on the Lord Chancellor to ensure that adequate provision is made to enable access for the sorts of people I have mentioned.

[Lord Beecham (Lab)]

My Lords, Amendment 10 in my name gives the right to respond, in addition to the person initiating the claim, to choose whether the new procedure applies. Amendment 11 then provides that, in the event of disagreement between the parties, the relevant court or tribunal will determine which course to follow—the matter just referred to by the noble Lord. Indeed, I concur with all the issues raised by the three Members of your Lordships’ House who have spoken already in this debate.

I confess that my drafting is somewhat less than elegant, but this is an important issue, given the difficulty that many will have with an online process, stemming from unfamiliarity with the process or medical or mental health issues. The report of the Constitution Committee of 7 June, to which reference has just been made, raises serious concerns about the process that go beyond the matters referred to in these amendments but are most apposite to them.

The committee declares:

“It is unsatisfactory for legislation to be drafted in a way that fails to acknowledge the fundamental right to a fair hearing, both at common law and under the European Convention on Human Rights. While ministers may have no intention of using the powers provided by the Bill to undermine the right to an oral hearing, it is incumbent on Parliament to frame the powers it confers in a way that acknowledges and respects fundamental constitutional principles”.


The committee expresses its concern that,

“the Bill confers broad powers on ministers to limit oral hearings in a much wider range of cases than is currently envisaged”,

and suggests:

“One way to secure appropriate control over this power would be to require not just consultation with the Lord Chief Justice, or the Senior President of Tribunals where appropriate, but their concurrence”,


in those proposals. In other words, consultation has to be taken seriously in these circumstances—perhaps more seriously than in most, given what is at stake here for the workings of our legal system.

Courts and Tribunals (Judiciary and Functions of Staff) Bill [HL]

Debate between Lord Pannick and Lord Beecham

Committee: 1st sitting (Hansard): House of Lords
Tuesday 10th July 2018 Lords Chamber

[Lord Pannick (CB)]

My Lords, I pay tribute to the noble Lord, Lord Marks, for managing to table an amendment to this anodyne Bill that raises an issue of real significance. I say simply that it is a remarkable achievement for the Government to bring forward a Bill on courts and tribunals that ignores all the serious problems facing our justice system, not simply diversity but the recruitment crisis, the crisis in legal aid, the appalling state of the judicial estate and the vital need for modernisation.

[Lord Beecham (Lab)]

My Lords, I concur with the remarks of the noble Lords, Lord Pannick and Lord Marks. I remind the House that I have a parental interest in these matters in that my daughter is a barrister and sits as a part-time district judge. We support the amendment, particularly because of the concern about both gender and ethnic representation in the judicial system, which is currently well below what should be expected.

I have only one reservation about the amendment, which is that it calls for a report to be laid within a year of the Act passing. That does not seem to be a reasonably long enough period in which to judge the extent to which progress is being made. I would have thought that if the Government were disposed to accept the principle here, and I hope they would be, a more realistic period of two to three years would be one in which we would be able to genuinely measure whether there was an impact that all of us around the House would wish to see. Subject to that, we certainly support the principles of the amendment and I hope the Government will look at it sympathetically.

European Union (Withdrawal) Bill

Debate between Lord Pannick and Lord Beecham

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 28th February 2018 Lords Chamber

[Lord Pannick]

My Lords, this is another amendment that comes from the Constitution Committee. It suggests that we should exclude from the scope of Clause 4 any EU law rights derived from the 1972 Act which are already the subject of an enactment—in other words, where Parliament has already dealt with the subject. The Constitution Committee explained its concern at paragraph 35 of its report.

The concern is this. Clause 4 as drafted would include, within retained EU law, rights and obligations under EU law irrespective of whether they have already been implemented in domestic law by primary or secondary legislation. The problem to which this gives rise is that, as a result of Clause 4, there may be, as part of our law after exit day, two conflicting sets of legal rights on the same subject: the ones already implemented by Parliament and the greater rights which a litigant will say are derived from retained EU law. The question is: how is the court supposed to deal with that conflict? It has two retained EU law rights on the same subject. The Constitution Committee heard evidence from the noble and learned Lord, Lord Neuberger of Abbotsbury, the former President of the Supreme Court. As set out in the report, he told the committee that this problem needs to be addressed by the Bill.

Paragraph 36 of the report mentions that the committee heard evidence from the Department for Exiting the European Union that suggested that the problem that I have sought to explain is no different from the situation under the current law where there may be a statute which has sought to implement an EU law obligation that is found by a court judgment not fully to have implemented the EU law obligation, so the EU law obligation takes priority over the inadequate domestic implementation. The problem is that under the Bill, both the domestic enactment and the EU law obligation —see Clauses 2 and 4 respectively—are treated as retained EU law, so the supremacy principle under Clause 5, to which we will come, applies to both of them, and the question remains: which of them takes priority? I look forward to hearing the answer from the Minister to this difficulty. I beg to move.

[Lord Beecham]

My Lords, at this late hour, I am more than content to rely on the amendment moved by the noble Lord, Lord Pannick, and the questions he has raised.

Social Action, Responsibility and Heroism Bill

Debate between Lord Pannick and Lord Beecham

Monday 15th December 2014 Lords Chamber

[Lord Beecham (Lab)]

My Lords, less than a week ago we debated the Government’s amendments to the Criminal Justice and Courts Bill, and inflicted defeats in relation to proposals affecting young offenders and, even more significantly in terms of their constitutional importance, two changes to the procedures for judicial review.

Today we return to this Bill, a piece of vanity legislation if ever there was one, which, except for Clause 3—as we have heard—adds nothing to the provisions of the Compensation Act 2006, which, by implication, it purports to amend. I concur entirely with the critique of the noble and learned Lord, Lord Lloyd, the noble Lord, Lord Pannick, and others of this muddled attempt to deal with a problem for whose very existence there is a complete lack of evidence—a Bill that is very badly drafted, in any case.

At Second Reading, I acknowledged that the House is properly cautious about declining to give a Second Reading to Bills emanating from the Commons, and there is a similar reluctance totally to destroy Bills in the way in which the amendments of the noble and learned Lord, Lord Lloyd, would achieve if passed, which would leave the Bill consisting of only its title. However, if we were to go so far on a Bill as feeble as this, it would actually strengthen the hand of the Lord Chancellor in relation to the vastly more important and damaging provisions of the Criminal Justice and Courts Bill, which we have sent back to the Commons with our amendments. I fear that he would not hesitate to cast this House as a recalcitrant and obstructive group, placing us alongside the left-wing pressure groups and campaigners which he conjured up as the phantom proponents of judicial review and opponents of his attempts to undermine it. It would, I suggest, make it more unlikely for the Lord Chancellor to exercise political responsibility in relation to the amendments on secure colleges and JR by accepting them, or, should he fail to do so, for MPs on the Government Benches to demonstrate political heroism in a just cause by voting for them.

For those reasons, I regret that I cannot advise opposition Members to support the noble and learned Lord’s amendment to Clause 2, nor his amendment to Clause 4—in any case, the Government have tabled an amendment to it that reflects one moved by the noble Lord, Lord Pannick, in Committee, to which I added my name. I do that with regret because I share entirely the noble and learned Lord’s criticisms of the vacuous nature of the Bill; but it seems to me, for the reasons that I have given, unwise for the House to join him in the Lobbies. I say that with the more trepidation as I understand that he is the chairman of the East Sussex Rifle Association; I fear that I may end up as a target—if not for the noble and learned Lord, then for some of the members of that association.

There is nevertheless a serious issue as to the role of the House in these strange circumstances. However, in relation to Clause 3, I will be asking the House to agree that it should not stand part of the Bill, essentially because that clause seeks to effect a change in the law that is unacceptable for reasons which I will adduce when we come to debate that amendment. However, I fear that I shall not be joining the noble and learned Lord in the Lobby—

[Lord Pannick]

Is the noble Lord saying that the Opposition are not going to support the noble and learned Lord, Lord Berwick, because, although they think that Clause 2 is absolutely terrible, it is not the worst legislative proposal that Mr Grayling has brought forward in this Session?

[Lord Beecham]

There is a lot of competition in that respect. I merely say that on this Bill it is not worth the House taking a position that is a departure from its normal practice. I genuinely fear that the Lord Chancellor will use such a vote to muster support against the much more serious amendments that we have sent back for the Commons to consider. That will not help us in sticking to those amendments, should they come back to us. That is why I will not be in either Lobby this evening if the noble and learned Lord decides to test the opinion of the House.

--- Later in debate ---

[Lord Beecham]

My Lords, Clause 3 is the one clause in the Bill which the Government acknowledge embodies a substantive change in the law. In Committee, I moved an amendment to remove “generally” from the requirement on the court to consider whether,

“the alleged negligence or breach of statutory duty … demonstrated a generally responsible approach towards protecting the safety or other interests of others”.

Neither at Second Reading nor in Committee did the Minister define the meaning of “a generally responsible approach”, and in replying to the debate in Committee he acknowledged that the term was “unusual” in statutory terms. Indeed, he indicated that he would,

“consider carefully whether and to what extent it adds anything to what is in the clause at the moment and whether, on balance, it takes the matter any further”.—[Official Report, 18/11/14; col. 414.]

We await with bated breath the outcome of the Minister’s deliberations along with his response to the amendment tabled by his noble friend, who is seeking to ratchet up “generally” to “predominantly” in the proposed clause.

I have to say that neither term is satisfactory in terms of either definition, which is entirely lacking, or effect. Why should someone suffering damage through an act of negligence or breach of statutory duty be denied compensation on the grounds that the act or omission was in effect a first offence, or at any rate a rare offence? What, for that matter, constitutes a “responsible” approach? How does the Minister define those terms? Moreover, and crucially, the clause is not limited to social action, responsibility or heroism, terms which are in themselves undefined and undefinable, or to personal injury cases. We are dealing not just with safety but, in terms of the clause, with other interests. As I reported in Committee, the Minister in the House of Commons, Mr Vara, affirmed that the clause,

“could in principle be applicable in relation to other instances of negligence such as damage to property or economic loss where issues of safety may not necessarily be relevant”.—[Official Report, Commons, 20/10/14; col. 693.]

Why should a negligent builder, medical practitioner, accountant, surveyor or even solicitor—I declare my interest—escape liability for what might even be catastrophic damage because he has been hitherto “predominantly” responsible? Negligence can lead to large losses outside the realm of personal injury. Is not the reality that this badly drafted clause is yet another concession to the insurance lobby, which ordinarily would of course stand behind the defendant in such claims?

Many Members of your Lordships’ House will have received an e-mail today from one of those pressure groups which so exercise the Lord Chancellor in relation to judicial review. In this case, the pressure group is one which we can be confident he entirely approves of: it is the CBI. Its curiously worded communication supports Clause 3 on the grounds that it,

“provides better protection against accidents for those firms—particularly the small and medium sized companies that already have good health and safety processes in place”.

Of course, it does nothing of the sort. It provides “better protection” against claims for negligence arising from accidents and it extends, of course, to large employers as well as medium-sized and small employers.

The e-mail goes on to suggest that,

“this clause will encourage the courts to recognise that safety is a shared responsibility”,

as if the courts do not already do so, and do not make findings of contributory negligence when a claimant fails to take proper precautions, or dismiss a claim when he is wholly responsible. Of course, again, the CBI ignores the fact that the clause extends to all types of negligence, including by small and medium-sized businesses which might well find themselves a victim of negligence other than of the kind leading to personal injury.

As the CBI’s response eloquently exemplifies, this whole Bill has all the hallmarks of being drafted by the Lord Chancellor on the back of a small envelope. This clause, in particular, is deeply objectionable. Unless the Minister is prepared to abandon the clause, I shall invite the House to divide and consign the envelope to the parliamentary waste bin.

[Lord Pannick]

My Lords, I add my support to what has been said by the noble Lord, Lord Beecham. Clause 3 is very troubling for two reasons. First, the defendant may have shown a partially irresponsible approach towards protecting the safety or other interests of others, that partially irresponsible approach may be the cause of the accident and it may be entirely inexcusable. Why, then, is the generally responsible approach of the defendant in other respects of any relevance whatever? The amendment in the name of the noble Lord, Lord Hodgson of Astley Abbotts, would not cure this defect.

The second troubling aspect of Clause 3 is that it does not appear to be confined to the subject matter of the Bill, social action and heroism. I would be very grateful if the Minister would explain whether Clause 3 was intended to be confined to the subject matter of the Bill, or whether, as its wording suggests, it is to have a broader aspect. For these reasons, if the noble Lord, Lord Beecham, divides the House, he will have my support.

Social Action, Responsibility and Heroism Bill

Debate between Lord Pannick and Lord Beecham

Tuesday 18th November 2014 Lords Chamber

[Lord Pannick]

My Lords, Amendment 2 seeks to give the Bill some coherent purpose and effect—not an easy task, as we debated at Second Reading.

Amendment 2 draws attention to an important legislative fact, which, surprisingly, is entirely ignored by the content of the Bill; that is, we already have on the statute book a provision which expressly addresses the very issues with which the Bill is concerned. The legislative provision is Section 1 of the Compensation Act 2006. It is a far more tightly and appropriately worded provision than the Bill, which, as we discussed at Second Reading, reads like an edition of the Valiant comic that I used to buy as a schoolboy.

Section 1 of the 2006 Act does the job. It has the title, “Deterrent effect of potential liability”, and states:

“A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might … prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or … discourage persons from undertaking functions in connection with a desirable activity”.

Amendment 2 recognises that there is a distinction between Section 1 of the 2006 Act and this Bill. The 2006 Act sets out factors that the judge may take into account. This Bill sets out factors that the judge must consider. If the Government are determined to change the law, all that is needed, even on their arguments, is to amend Section 1 of the 2006 Act so that “may” is replaced by “must”. That is what Amendment 2 would secure.

If Amendment 2 were accepted, we could and should remove Clauses 2 to 4 from the Bill. One of the many puzzling features of the Bill is that it entirely ignores Section 1 of the 2006 Act. It does not repeal Section 1 of the 2006 Act. It does not amend Section 1 of that Act. If, therefore, the Bill were to be enacted in its current form, the law would then state that under Section 1 of the 2006 Act judges “may” take account of the social benefit of the activity, and that under this legislation judges “must” take account of the social benefit of the activity, defined in different language.

According to the Lord Chancellor in the other place, the Bill is designed to send a message to potential volunteers and heroes. If Parliament were, through this Bill, to enact the legislative equivalent of a text message, the only message likely to be received is one of pure confusion. The man or woman thinking of volunteering or thinking of jumping into the lake to save the drowning victim is not—as the Lord Chancellor apparently believes —going to be comforted by their recollection of the contents of Halsbury’s Statutes of England. Once the Bill is enacted, the potential hero will pause while he or she consults leading counsel for advice on the implications of the fact that the statute book now contains both Section 1 of the 2006 Act and this new legislation.

Amendment 2 provides a simple and obvious solution to this problem, which I commend to the Committee. I normally agree with the noble Lord, Lord Beecham, but I cannot share his concern about Parliament in this context telling judges that they must take something into account. I do not share his concern because it will remain a matter for the judges what weight, if any, to give to the social benefit context in the circumstances of the particular case. Amendment 2 provides that the social benefit must be taken into account. It would do so in the very sensible context of the 2006 Act, which has worked very well since it was brought into force. Clauses 2 to 4 can then be removed, as the noble and learned Lord, Lord Lloyd of Berwick, will be proposing.

I hope that the Minister will respond favourably to this amendment, which is designed to be constructive. That is very difficult in the context of the Bill. If he is not able to accept this amendment, will he explain to the Committee whether it is really the Government’s intention to have on the statute book two differently worded sets of provisions that will be addressing precisely the same issue? I beg to move.

[Lord Beecham]

My Lords, I shall speak to Amendment 2, moved by the noble Lord, Lord Pannick, and to my Amendments 3, 5 and 9, which deal with the issue of judicial discretion in applying to any claim within the province of the Bill the provisions that the Bill sets out.

At Second Reading, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, averred that the change the Bill seeks to make in the provision of the Compensation Act 2006 that the court “may” take into account the factors that the Act spells out, to one which declares it now “must” take such matters into account will, in his words,

“actually make no difference whatever”.—[Official Report, 4/11/14; col. 1559.]

Perhaps that is a suitable epitaph for the whole of the Bill, it might be thought.

The noble Lord, Lord Pannick, from whose company I must unusually and regretfully depart on this occasion, seeks to replace the Compensation Act’s provision of “may” with this Bill’s “must”, presumably therefore reflecting the view of the noble and learned Lord, Lord Brown. The view that the two are the same, however, is not the Government’s view, as the Minister made clear at Second Reading, when he reminded the House that,

“the difference between ‘may’ and ‘must’ … caused the House to be divided on more than one occasion”.—[Official Report, 4/11/14; col. 1576.]

He also reminded us that there is a difference between the provisions in this Bill and the provisions in the Compensation Act.

To the extent that the obliteration of that difference could represent yet another and in this case, given its source, inadvertent legislative attempt to fetter judicial discretion—one of many such attempts made by this Government, some, alas, successfully—the Committee should resist that proposition. The JCHR in one of its more damning and dismissive, albeit characteristically elegantly phrased, reports published in recent years echoed its concerns about similar provisions in relation to judicial review in the Criminal Justice and Courts Bill. We have seen a succession of measures designed to fetter judicial discretion. I fear that, for all the intentions to the contrary, the noble Lord’s amendment might encourage that process. I therefore hope that, on this occasion, he will not object to my taking a different path, but it will be interesting to hear whether the Minister has changed his view since that expressed at Second Reading.

Criminal Justice and Courts Bill

Debate between Lord Pannick and Lord Beecham

Monday 27th October 2014 Lords Chamber

[Lord Pannick (CB)]

My Lords, the amendment and some of the other amendments in this group are in my name, that of the noble and learned Lord, Lord Woolf, and those of the noble Lords, Lord Carlile of Berriew and Lord Beecham. Under this group of amendments, your Lordships turn to Part 4, with its provisions relating to judicial review. On Second Reading and in Committee, noble Lords from across the House expressed concern that the provisions in Part 4 would damage judicial review for no good reason. It is very disappointing that, since Committee in July, the Government have not come forward with any amendments of their own to address those concerns. I would be very surprised to be told that the Minister made that decision.

I invite your Lordships to bear two principles in mind when considering all of the Part 4 amendments. First, judicial review is a vital means by which central and local government and other public bodies can be held to account to ensure the legality of their actions before independent judges in public. Secondly, when proposals for amendment of judicial review are brought forward by Ministers—who are, after all, the main defendants in such litigation—the proposals require the most careful scrutiny by the House.

Clause 70 would prevent a judicial review application proceeding to a full hearing and any remedy—I emphasise, any remedy—at the full hearing if the defendant shows that it is highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred. I have three main objections to the clause.

First, it ignores the fact that one of the central purposes of judicial review is to identify unlawful conduct by the Government or other public bodies. If Ministers have applied the wrong rule, or they decided a matter without giving a person a fair hearing, the court will say so and it will give a declaration, even if, on the particular facts, the error made no difference. This surely serves the public interest because the risk of a public hearing before independent judges encourages high standards of administration, and once the court has given its judgment, Ministers and civil servants know that they must change their conduct for the future. That is precisely what they do. Clause 70 would undermine these valuable purposes of judicial review.

My second concern is that Clause 70 ignores the fact that even if the defect did make no difference on the facts of the individual’s case, the individual may have a personal reason to seek a declaration that there was unlawful conduct. Last year Lord Reed emphasised for the Supreme Court in the Osborn case that the law requires public bodies to adopt a fair procedure to ensure not only that the right conclusion is reached on the merits of the case but also that the subject of such a decision is not left with a sense of injustice.

My third and final concern about Clause 70 is that, far from speeding up judicial review procedures, it would require the court at the preliminary stage to conduct a detailed review of what would have happened if the defendant had acted differently. That would be time consuming, expensive and an extremely difficult exercise for the judge. It would promote satellite litigation.

Clause 70 would have very damaging effects—nor is it necessary. Judges have ample powers, which they use, to dismiss hopeless or abusive cases. To those of your Lordships who think that there is too much judicial review and that it takes too long, I say that Clause 70 is a blunt instrument to use in such a sensitive context. It would impose an absolute duty on the court. It would prevent the judge from considering whether, in the particular circumstances of the individual case, there is good reason to allow the claim to proceed or to grant a remedy such as a declaration.

Amendment 146, which I commend to the House, would maintain a judicial discretion to consider the circumstances of the individual case. That is surely appropriate in this context. Amendment 146 is to be read together with Amendments 147, 149, 151, 152 and 154, each of which substitutes judicial discretion for the judicial straitjacket which is proposed by Clause 70.

I have spoken briefly in moving this amendment because there is a great deal of business for the House to get through today on Part 4. I hope that that will not lead your Lordships to doubt the importance of this issue. I beg to move.

[Lord Beecham (Lab)]

My Lords, the last four years have seen the construction of major roadblocks on access to justice. Some 650,000 claimants a year, and their dependants, can no longer benefit from civil legal aid or advice, resulting in the collapse of law centres, extreme pressure on advice agencies and the expense and delays caused by litigants in person unable to receive legal advice in the preparation or presentation of their case. As we heard just last week, the family courts are often now clogged with litigants in person. The imposition of charges for employment tribunal claims have led to an 80% reduction in applications. Large cuts in fees for criminal legal aid threaten to reduce the chances of a fair trial.

However, as the noble Lord, Lord Pannick, has made clear, Part 4 of the Bill proposes even more insidious changes which would narrow the scope of judicial discretion in cases in which the lawfulness of decisions made by the Government themselves, or by public agencies, is challenged through the process of judicial review. As the Equality and Diversity Forum reminds us in its briefing, the Master of the Rolls, Lord Dyson, has asserted that,

“there is no principle more basic to our system of law than the maintenance of the rule of law itself and the constitutional protection afforded by judicial review”.

The Bill seeks deliberately to make it more difficult and potentially more expensive for citizens, either as individuals or whose interests may be represented by a charity, to seek a ruling from the courts as to whether decisions which might have far-reaching effects were properly made. I remind your Lordships that they already have first to obtain the leave of the court to bring such a case, and very often matters can be and are resolved at that stage.

Criminal Justice and Courts Bill

Debate between Lord Pannick and Lord Beecham

Monday 27th October 2014 Lords Chamber

[Lord Pannick]

My Lords, Amendment 176 raises an issue of some constitutional importance. The proposed new clause would prevent the Lord Chancellor using the powers that he was granted under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, or LASPO, to restrict eligibility for legal aid in judicial review proceedings. Your Lordships will recall that during the debates on LASPO Ministers repeatedly assured the House that the restrictions on legal aid contained in the LASPO legislation did not affect judicial review. Had the Bill made express provision restricting legal aid for judicial review, I think that Ministers would have found it difficult to secure the approval of the House for such provisions.

Instead of bringing forward proposals for restrictions on the availability of legal aid for judicial review by way of primary legislation so that such proposals could be fully scrutinised, the Lord Chancellor has limited legal aid in judicial review by subordinate legislation. Such subordinate legislation, as your Lordships well know, receives only limited scrutiny in this House. Detailed amendments cannot be tabled and debated, and the convention is that we very rarely indeed table, far less approve, a fatal Motion. To give one example of the problem, on 7 May your Lordships’ House debated a Motion of Regret that I had tabled in relation to the Civil Legal Aid (Remuneration) (Amendment) (No. 3) Regulations 2014.

Restrictions on legal aid for judicial review are far too important a matter for secondary legislation. If the Lord Chancellor wants to restrict the scope of legal aid in the context of judicial review, let him bring forward proposals in primary legislation. Those proposals can then be properly scrutinised and amended as appropriate. The purpose and effect of Amendment 176 is to secure that objective, and I commend it to the House.

Amendment 177 would introduce a further new clause to prevent the Lord Chancellor implementing a residence test for legal aid in judicial review proceedings. If I may, I will leave the noble Lord, Lord Beecham, to explain the purpose of that amendment, which I support. I beg to move.

[Lord Beecham]

Having been given that cue by the noble Lord, Lord Pannick, I cannot resist the temptation to rise now and speak to the amendments. Both of the amendments, as the noble Lord has said, relate to the issue of the availability or otherwise of legal aid in judicial review cases, and the noble Lord’s amendment deals with the broad problems implicit in the Secretary of State’s use of delegated powers to remove funding for applications for legal aid except where permission is granted or subject to an ex gratia scheme. In his characteristic way, the noble Lord has dealt comprehensively, not to say devastatingly, with that general issue.

Amendment 117 focuses exclusively on the Government’s attempt to deny legal aid for applications for judicial review by the imposition of a residence test. Noble Lords will be aware that an order under the provisions of LASPO to implement this approach was laid in the summer and was due to be debated under a Regret Motion in July, but that it was withdrawn in the light of the decision of the Divisional Court, with Sir Alan Moses—then Lord Justice Moses—presiding, which pronounced the provision unlawful.

The order would have imposed a prohibition on anyone over the age of 12 months—I repeat, 12 months—who had not been continuously resident in the UK for 12 months at some time from obtaining legal aid for judicial review cases. In its seventh report of 2013-14 the Joint Committee on Human Rights had criticised the Government’s proposals on a number of grounds, including their reliance on the possible availability of exceptional funding when, as we know, only 2% of applications for exceptional funding are successful. It took exception to the Government proceeding by way of secondary legislation, as the noble Lord has already mentioned, given the important human rights considerations urging that changes should be effected through primary legislation. Of course this Bill could have provided such a legislative vehicle if the Government had not chosen to use it in the way they have by tabling amendments on other, less fundamental, issues.

The Joint Committee was particularly exercised about the position of children, people with problems affecting their mental capacity and detainees seeking a remedy, for example, for abuse inflicted while in detention. It made the obvious point that the Government’s ostensible justification for denying legal aid to non-residents, on the grounds that they do not make a financial contribution to taxation, could not in any event apply to children. In its first report of the present Session, the committee joined the Children’s Commissioner in condemning the application of the residence test to children as a contravention of the UN Convention on the Rights of the Child. How long, one wonders, might it be before UKIP or the Tea Party tendency call for us to withdraw from the UN, on that sort of approach?

Some 30 highly reputable organisations have supplied a briefing which I commend to Members of your Lordships’ House, if you have not already seen it, setting out in clear terms 10 powerful objections to the proposed test. Interestingly, the first of those contained quotations from the noble Lord, Lord McNally, and the former Lord Chancellor, Ken Clarke, in debates on the then LASPO Bill. At that time the noble Lord, Lord McNally, affirmed that,

“the reforms establish an affordable system while ensuring that no one is denied … justice”.—[Official Report, 20/12/11; col. 1717.]

He went on to say that,

“there is no question as to what services might be funded; they are in the Bill for all to see”.—[Official Report, 5/3/12; col. 1569.]

Mr Clarke said that,

“we are continuing legal aid in all cases involving judicial review ... That applies to every kind of judicial review, because we do not think that the Government or a public body should be resisting a claim about abuse of their powers from a litigant who cannot get legal advice”.—[Official Report, Commons, 17/4/12; col. 227.]

Those remarks are of course entirely consistent with much of the debate that we have heard tonight and the amendments that have been carried already. They would, and should, apply to this proposal to restrict legal aid in cases involving a residence test, even to the extent of applying to children.

However, those assurances given at that time clearly carried no weight with the present Secretary of State; nor did the criticisms to which I have referred, although some of us are, if anything, astonished by their moderation, especially when set alongside the court judgment mentioned earlier and which is now under appeal. That judgment held that the residence test was both ultra vires, because it was not authorised by LASPO, and discriminatory, unlawful both at common law and under the Human Rights Act; but, significantly in the light of the threatened onslaught on the latter to garner votes from UKIP, that it was unlawful with or without the latter. Lord Justice Moses, as he then was, stated that,

“it is not possible to justify such discrimination in an area where all are equally subject to the law, resident or not, and equally entitled to its protection, resident or not … In the context of a discriminatory provision relating to legal assistance invoking public confidence”—

which, I note in passing, was an ostensible reason for the measure given by Ministers—

“amounts to little more than reliance on public prejudice”.

Sir Alan went on to identify a number of situations described in the large volume of evidence filed in the case which underlined the force of his concerns. Incidentally, it was a case of judicial review, which perhaps demonstrates the merits of that process. He then went on to refer to the extraordinary comments of the Lord Chancellor, who, during the case and pending judgment, went on record as saying,

“most right-minded people think it’s wrong that overseas nationals should ever have been able to use our legal aid fund anyway … And yes, you’ve guessed it. Another group of Left-wing lawyers has taken us to court”.

On this Sir Alan remarked that Mr Grayling was:

“Unrestrained by any courtesy to his opponents, or even by that customary caution to be expected while the court considers its judgment, and unmindful of the independent advocate's appreciation that it is usually more persuasive to attempt to kick the ball than your opponent”.

That is a perfect depiction, one might think, of the Lord Chancellor as the Luis Suarez of our justice system—which are my words, not Sir Alan’s. Sir Alan went on to quote a 40 year-old judgment of Lord Scarman:

“Every person within the jurisdiction enjoys the equal protection of our laws. There is no distinction between British nationals and others. He who is subject to English law is entitled to its protection”.

It is shameful that while the Government are justifiably promoting the use of our courts and lawyers to wealthy foreigners and overseas corporations, they should seek to deny access to justice to those in dire need of it but without the means to procure it on the grounds that they have not been resident for 12 months. In a previous debate this afternoon I referred to the Minister who advised organisations like those who have supplied briefings for Members on these issues to “stick to their knitting”. I had hoped that Members of your Lordships’ House would not emulate those earlier knitters, the tricoteurs of the French Revolution, but would instead have sought to prevent the guillotine falling on some of the fundamental rights enshrined in and enforced by our system of justice. However, it is apparent that there would not be a majority to achieve that objective, given the late hour and the fact that most Members have now departed. In the circumstances, I will not be asking the House to divide on this issue, but I very much regret that the Government have set their face solidly against doing anything to retract an obnoxious and objectionable proposal which does them no credit whatever and, in fact, given his attitude, demeans the position of the Lord Chancellor.

Criminal Justice and Courts Bill

Debate between Lord Pannick and Lord Beecham

Wednesday 30th July 2014 Lords Chamber

[Lord Beecham (Lab)]

My Lords, one of the most objectionable provisions in Part 4 of the Bill, which deals with judicial review, is embodied in Clauses 65 and 66, dealing with the provision of information about financial resources. Amendments 73G, 73H, 73M, 73Q, 73T, 73U and 73X in my name deal with this issue, alongside those in the previous group, which dealt with the procedural aspects covered in the Delegated Powers and Regulatory Reform Committee report and which we debated in somewhat curious fashion on Monday. Then, it will be recalled, we broke shortly before the dinner break business and the Minister had the unusual job of making a very short reply after the dinner break.

At Second Reading, the Minister described Part 4 as,

“a much needed rebalancing of the financial risk of bringing or driving a weak judicial review. We think it right that those who bring or choose to become involved in a judicial review should face their fair share of the financial risk that entails”.

The noble Lord went on in a minatory—or should I say “maxi-Tory”?—vein to say:

“Those who intervene in a case … can … add value … but we think it right that they should face the financial consequences of their decision to intervene”.—[Official Report, 30/6/14; col. 1542.]

This, as we will no doubt hear again today and heard at Second Reading, completely misrepresents the character of intervention, which, after all, requires permission from the court. It is very often provided in significant cases of public interest by reputable charitable organisations and equally often is found to be helpful to the parties and to the court. I cannot blame the Minister—the voice is the voice of the noble Lord, but the hands around the throat of judicial review are the hands of the Lord Chancellor.

Clause 65 requires an applicant for leave to apply for judicial review to disclose any information about the source, nature and extent of financial resources available, or likely to be available, to meet the costs of the proceedings. The nature of the information would, as we heard on Monday, be specified by rules of court effectively determined by the Lord Chancellor because, as was made clear on that occasion, the rules of court committee effectively has to implement what the Lord Chancellor desires to be done.

Amendment 73G is intended, on the assumption that Clause 65 stands part of the Bill, to provide for judicial discretion about the funding issue. I must concede that it is poorly drafted and the word “or” in the amendment should be replaced by “unless”.

Amendments 73H and 73M would remove the court’s duty to consider what information is, in the Government’s extraordinary formulation, “likely to be available”. “Who from?”, one wonders. Crowdfunding, charities, or repentant spouses of Russian businessmen deprived of tennis games with the Prime Minister? And what is meant by the test of likelihood? Come to that, what is meant by the test of availability?

Amendments 73Q and 73U would restore the court’s discretion in the matter of an order for a non-party to pay costs, while Amendment 73X would confine any surviving provision for the court to order costs to those who actually provide financial support rather than those likely or able to provide it, who may never have provided such financial support. It is of course interesting that no equivalent provision in relation to costs appears to apply to those who might benefit from—or even, I suppose, help to fund, directly or indirectly, the respondent to—an application, unless Clause 66(3) is intended to apply in such a case. Perhaps the noble Lord could confirm whether that is the position.

In general, however, the effect of Clause 65 is to threaten not only the applicant but those who might support an application with a liability for costs on the basis of guilt by association in the eyes of the Government—who might, of course, be the defendant. That is an improper approach. The whole object of the clause is clearly designed to provide what we have heard referred to in debates on the Bill thus far as a “chilling effect” on the judicial review process, and in particular on those who might wish to raise significant matters affecting the rule of law where, I repeat, the court has to grant permission in any event. It is a wholly improper concept and I hope that even at this stage the noble Lord will indicate that the Government are prepared to think again about it. If they are not, and we get to Report with the Bill unamended, serious consideration will have to be given as to what will happen thereafter, because the portents do not look good for the preservation of judicial review in this important respect. I beg to move.

[Lord Pannick (CB)]

My Lords, I have indicated my opposition to Clauses 65 and 66 standing part of the Bill and I agree with everything that has been said by the noble Lord, Lord Beecham. I do not understand why the Government are seeking to single out judicial review for such provisions, unlike any other form of civil litigation, unless the objective is to discourage judicial review claims. Where is the evidence of any mischief that these clauses are designed to remedy? Courts already have ample powers, which they exercise in appropriate cases, to require third parties to pay costs.

I am particularly concerned about the effect that these clauses will inevitably have because the reduction in legal aid already makes it extremely difficult for claimants to secure funding for judicial review on matters of public importance. If claimants are able to demonstrate that they have a properly arguable case on its merits, and if they satisfy other requirements such as standing and time limits, they should not be obstructed further by complex requirements—as these are—to disclose financial information.

In any event, Clause 65 is far too broadly drafted, referring as it does to financial resources “likely to be available” to the applicant. What does that mean? Does it cover the family and friends of the applicant, the law firm or law centre that is providing services pro bono and the charity that is supporting the claim? For all these reasons, I am concerned that Clauses 65 and 66 will impose a wholly unnecessary hurdle that will impede the delivery of justice in this important area of the law.

Anti-social Behaviour, Crime and Policing Bill

Debate between Lord Pannick and Lord Beecham

Wednesday 22nd January 2014 Lords Chamber

[Lord Pannick]

My Lords, I am very pleased that the Minister has responded so positively to the amendment which I tabled in Committee and thank him for it. As he said, prior to 1925, the law contained a presumption that a wife was coerced by her husband. The Minister said that time moves on, but Sir James Fitzjames Stephen, the great 19th century authority on criminal law, described this area of the law as “irrational”. In 1922, the Avory committee recommended abolition of any special rule for wives and so did the Law Commission in its 1977 report. Therefore, it could not sensibly be suggested that law reform in this context has in any way been rushed.

It was of course this area of the law to which Charles Dickens referred in Oliver Twist. When Mr Bumble is told that,

“the law supposes that your wife acts under your direction”,

he replies:

“If the law supposes that … the law is a ass—a idiot. If that’s the eye of the law, the law is a bachelor”.

I am delighted that this truly idiotic provision of English law is at long last to be abolished.

[Lord Beecham]

My Lords, I join in the welcome to the Government’s acceptance of the amendment of the noble Lord, Lord Pannick. It is nice to have a touch of harmony in these proceedings. I entirely support the abolition of what is clearly an archaic and now defective provision.

However, an issue perhaps needs to be addressed. We have now abandoned, rightly, the law of marital coercion, but there is a question about the operation of the law of duress. That of course applies only in limited cases where extreme violence or even death are threatened by one person against another; if that other then conforms with instructions given under such a threat, there may be a defence. Those would be very extreme circumstances, but there is some concern about the position of—usually but not necessarily exclusively—women in a situation of, for example, domestic violence and abuse of that kind. They might be prevailed upon to commit or assist in committing an offence by a threat obviously much less severe than is required by the law of duress. I wonder whether the Government might look at that, or invite the Law Commission to do so, to see whether there is a case for providing a safeguard for those who may be virtually compelled to take action without this rather archaic background.

In addition to or perhaps separately from that, perhaps some consideration might be given to those who have responsibility for deciding whether to charge or to proceed with the prosecution—or, following a prosecution, to impose sentencing—in situations where, as I say, without the extreme requirements of the present law of duress it is nevertheless apparent that pressure and threats of violence or worse have been brought to bear upon the weaker party in that situation. They might not be parties living together; one can envisage other circumstances. Perhaps that matter might be looked at. Having said that, we certainly support the amendment and are glad that this anomaly will be dealt with.

Crime and Courts Bill [HL]

Debate between Lord Pannick and Lord Beecham

Monday 10th December 2012 Lords Chamber

[Lord Beecham]

No, I want to speak now if that is all right. Thank you. Burglary is a serious crime and a particularly distressing one. The forced invasion of one’s home adds a further dimension to the effect on its occupiers. I suspect several Members of the House will have shared my experience, at least in part. My home—which, incidentally, was built by the father of the noble and learned Lord, Lord Woolf, to whom I apologise for anticipating in this debate, for reasons that I shall give later—has been burgled and my office has also been burgled once. Fortunately, little damage was done; even more fortunately, no one was present at the time. Where the householder or other occupant is present, the impact of the crime transcends distress and, too often, becomes traumatic.

I say at once that we welcome the extension of the present law to non-residential premises, such as those of shopkeepers, to which the Minister has referred. However, in relation to domestic premises, while absolutely affirming the right of residents to defend themselves and their property, we have doubts about the Government’s proposals. The amendments have been spatchcocked into the Bill at virtually the last minute, almost, it would seem, as an initiation rite performed by the new Lord Chancellor. Unlike the proposals on community sentencing, we have not had the opportunity of a general debate under the recommittal procedure. I propose therefore to treat the debate on these amendments as, in effect, a Second Reading debate, which is why I sought to speak now rather than later.

Burglary is an offence against the person as well as against property, because a break-in destroys the victim’s peace of mind by violating the safe haven of their home. The householder is not in a position to exercise calm, cool judgment. The householder is entitled to use reasonable force to get rid of the burglar; and, in measuring whether the force is reasonable or not, you are not doing a paper exercise six months later:

“You have to put yourself in the position of the man or woman who has reacted to the presence of a burglar and has reacted with fury, with anxiety, with fear”.

These are not my words—although I concur with them—but the words of the Lord Chief Justice, the noble and learned Lord, Lord Judge, commenting on the recent case of two men jailed after raiding a remote cottage, when they were blasted with a shotgun. What is significant is that his words reflect the present state of the law. Although the victims in that case were questioned by police, their Member of Parliament, Alan Duncan MP—not, I think, generally known as a bleeding-heart liberal—said:

“The police did a very good job and investigated as thoroughly as they had to when a firearm is involved”.

The first question is what the government proposal adds to the present state of the law, as enshrined by the Labour Government’s Criminal Justice and Immigration Act 2008 and the present Government’s clarification, embodied in Section 148 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, passed only a few months ago. In my submission, it adds only confusion. It purports to allow the use of disproportionate force but not grossly disproportionate force. Can the Minister define, or even better exemplify, the difference between the two, especially bearing in mind the words of the Lord Chief Justice? What difference, if any, in his view would the amendment’s wording have had, for example, on the case of Tony Martin, who shot dead a burglar? What does the Minister make of the statement by Michael Wolkind QC, who represented Tony Martin? He said:

“The law already recognises that people react in a certain way in the heat of the moment”,

and argued that the law does not need changing.

The second element that the proposal might add to the Bill is, paradoxically and obviously unintentionally, a heightened risk to home owners. A study in Texas has demonstrated that the notorious “stand your ground” law, promoted by the US gun lobby and enacted in several US states, has led to more injuries and deaths being inflicted on householders and others by criminals, rather than fewer. Anyone who watched the recent TV programme on “stand your ground” would surely hesitate before opening the door to similar unintended consequences here, even allowing for the radically different gun culture that is such a blemish on American society.

There are other questions to be asked. Have the Government consulted the judiciary or the police on the proposed changes? If so, what responses have they received? If they have not consulted them, why not? Have they conducted an impact analysis? Your Lordships might think that a particularly fitting term in this instance for an assessment of the consequences of legislation. What is the evidence that the present state of the law, as defined by the noble and learned Lord, Lord Judge, is inadequate? The Minister has circulated what purports to be a fact sheet. Your Lordships might think that that document contains precious few facts and no evidence on which to base the Government’s proposals.

My right honourable friend Sadiq Khan sought information by means of Parliamentary Question on the number of home owners arrested or charged after defending their property against burglars since 1994. The answer was:

“The information on arrests is not collected centrally … It is not possible to match the arrests data to any subsequent outcomes”.—[Official Report, Commons, 22/10/12; col. 641W.]

The Guardian recently reported, after a review by the CPS, that there were all of seven cases—I repeat, seven cases—between 1990 and 2005 in which a householder was prosecuted. In other words, there is simply no evidence to suggest that the problem the Government purport to be addressing is significant in terms of numbers, whereas it is clear that neither the police nor the courts are going to fall over themselves to prosecute householders who react in the way described by the Lord Chief Justice.

Is the Minister suggesting that where serious injury or death is inflicted on a burglar—or even someone such as the man featured in a recent BBC radio programme who was thought to be a burglar but was apparently just a confused man trying unsuccessfully to enter what he thought was his own home—the police should not investigate the situation in a proper manner, not least in the interests of those whom they interview? I wait to see not only what answers to these and other questions emerge from this debate but what transpires when this Bill goes to the House of Commons.

I have no doubt that the Lord Chancellor will seek to portray himself as the champion of the victims. It is a pretty hollow claim on the part of a Government who are both alienating and cutting the police force; undermining community policing; presiding over the reduction of community support officers, who provide invaluable back-up to front-line policing; and savagely slashing or altogether removing compensation for the victims of crime by their changes to the criminal injuries compensation scheme. Those changes, I might add, were forced through the House of Commons by the process of mugging several Conservative members of the relevant committee, including John Redwood MP, a senior former Minister, and substituting placemen in the form of Parliamentary Private Secretaries—not much consideration for victims of crime in that context.

I repeat that we are at one with the intention to protect the householder and punish the burglar. We remain to be convinced that the Government’s proposals are sound in law and safe, from the perspective of the very people they are supposed to protect.

[Lord Pannick]

Before the noble Lord sits down, in the light of his very powerful speech, is he going to invite his Benches to enter the Lobbies to oppose this amendment?

[Lord Beecham]

My Lords, I am treating this as a Second Reading debate, which we could and should have had some time ago, to allow the Government the opportunity to make their case—which, it seems to me, the Minister has failed to do today—either here or in the other place, but we will not be voting on these proposals today.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord Pannick and Lord Beecham

Monday 23rd April 2012 Lords Chamber

[Lord Pannick]

My Lords, together with the noble and learned Lord, Lord Woolf, and the noble Lords, Lord Hart of Chilton and Lord Faulks, I tabled the amendment on the independence of the director that was approved in this House. I thank the Minister and the Government for listening on this important subject and for including in the Bill, as the Minister explained, a reference to the independence of the director, which will give great comfort to all those who will be involved in the administration of this legislation.

Although these are matters of constitutional principle, they can be addressed by compromise, I am happy to say. I very much hope that the Government will be able to adopt a similarly conciliatory approach to the amendments that your Lordships’ House approved earlier this afternoon. I thank the Minister.

[Lord Beecham]

My Lords, tempting though it is to regard the notion of an entirely independent civil servant as somewhat oxymoronic, I echo the remarks of the noble Lord, Lord Pannick, and welcome the fact that the Government have moved sufficiently to meet the considerations that were advanced on Report. We are glad to be able to conclude these matters, and look forward very much to seeing precisely how the system works in practice.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord Pannick and Lord Beecham

Wednesday 14th March 2012 Lords Chamber

[Lord Beecham]

My Lords, Amendment 136A is in another group of amendments that seek to modify the Government’s stance and I anticipate something short of a welcome from the Minister when he replies. Nevertheless, I want to raise these matters. The effect of Amendment 136A would be to permit the recoverability of ATE insurance in judicial review cases funded by a CFA. This is particularly relevant since at the moment there is no proposal to introduce QOCS for these cases. In addition, in any event claimants would have to fund their own disbursements via an ATE policy as well. Particularly in the absence of QOCS, recoverability remains an important issue in those cases.

Amendment 136B would effectively disapply the Bill’s provisions for breach of an employer’s duty leading to physical or psychological injuries—in effect, personal injury claims. I do not propose to repeat what was said in Committee or at Second Reading about the desirability of including personal injury cases within this proposal. The noble Lord will disagree but it strikes me as axiomatic.

Amendment 136C maintains the same approach in respect of professional negligence cases which can take a variety of forms, as we have said before, affecting members of the legal and other professions. The noble Lord will repeat the mantra that we should not be seeking to add to cases where the general principle is disapplied, but this is potentially important. In particular, the loss of money by professional negligence will be compounded by having to pay, potentially, a significant success fee out of damages, which does not seem at all reasonable.

Amendment 136D would give a complete exemption for clinical negligence cases as opposed to the partial exemption which is currently proposed. Amendment 139C would require the Lord Chancellor to make regulations to provide for cost orders to require payment where the applicant has taken out an insurance policy against the risk of liability to pay their own costs within a pre-action protocol period or 42 days in the absence of such a period. This is a potential stumbling block. In an earlier debate I referred to the potential scale of the cost of premiums to cover the cost of disbursements—leaving aside road traffic cases where it will be fairly nominal—ranging from £900 through to a very high claim of around £11,000 in respect of clinical negligence.

I am not anticipating a favourable response at this hour. It is a matter which will have be returned to if not at Third Reading then in future as we see an accumulation of cases in which claimants are put at a disadvantage or alternatively in which many people are deterred from taking proceedings in the first place by the potential cost of organising their own “after the event” insurance to cover disbursements—estimated by the Access to Justice Action Group to be something like 25 per cent of cases, following an extensive trawl through some 69,000 cases. That would represent a significant reduction in the number of claimants actually able to bring their cases before a tribunal. I beg to move.

[Lord Pannick]

My Lords, I am sure the Minister will tell us again that the general regime for success fees and “after the event” insurance must apply to all cases and one cannot have exemption for this type of case. But have the Government given any thought to whether it might be desirable to include in Part 2 a provision similar to Clause 8(2) of Part 1, giving some form of discretion to the Lord Chancellor to exclude from the scope of Part 2, in the light of experience of how Part 2 operates, any categories of case in respect of which it becomes apparent after this Bill comes into effect that the system is not working very well and is causing practical problems about access to justice? It might then be more sensible to go back, in relation to particular categories of case, to the old system under which the unsuccessful defendant would have to pay the success fee. Will the Minister give some thought to whether a general power for the Lord Chancellor to that effect might not be a good idea? Things might look rather different in a year or two from how they look now.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Lord Pannick and Lord Beecham

Wednesday 1st February 2012 Lords Chamber

[Lord Beecham]

My Lords, the amendments in this group refer to referral fees. Recent years have seen an explosion of growth among what might best be described as parasitic commercial organisations—claims management companies and the like—seeking to obtain part of the financial stream that flows when litigation occurs by charging for the referral of clients to lawyers. Paradoxically, it might be thought, some of this is fuelled by the very insurance companies that complain about the compensation culture and the costs of litigation. Clause 54 very properly seeks to prohibit referral fees to and by regulated persons, who will include claims management companies, lawyers, insurers and perhaps others. Perhaps slightly counterintuitively, for the purposes of the legislation a referral fee need not take the form of a payment, but could, for example, be an offer by a lawyer to take on work at a reduced rate or for no fee. However, the potential for abuse of the system is apparent, and the Bill seeks to address it.

The amendments tabled in my name and in the names of other noble Lords seek to improve the wording of the Bill. Perhaps I may briefly outline what they do. Amendment 164A would exempt not-for-profit organisations from the operation of the ban on referral fees. It would take them outside the category of regulated person for the purposes of the ban. Of course, there will be many membership organisations—charities, for example—that will come into that area. I understand that some charities refer people for legal and medical advice and any sums arising from those referrals go back into the work of the charity or the membership organisation. That seems a perfectly reasonable category to take out of the provisions of the Bill.

Amendment 164B is a consequential amendment making it clear that regulated persons would be businesses carried on for profit. It is a corollary of Amendment 164A, as is Amendment 164C, which is another consequential amendment. More substantively, Amendment 166 provides:

“A regulated person is not in breach of this section if … that person is a solicitor; and … the body to which the payment is made for the prescribed legal business is a registered charity that has been granted an exemption by the claims management regulation unit”.

Again, both the person making the payment—the solicitor—and the body receiving it—the charity—would be taken out of the scope of the provision.

We support Amendment 166ZA, tabled by the noble Lord, Lord Pannick. The noble Lord will of course address this matter, but the thrust of the amendment seems to be to except from the ban a referral from one solicitor to another. This can easily arise in the course of practice where a case, either from the outset or it becomes apparent, is somewhat beyond the experience and expertise of a particular firm but a good deal of work may have been done on it and in any event it is not unreasonable for a referral fee to be paid.

Perhaps more significant is Amendment 166ZB, in the names of the noble Lords, Lord Martin of Springburn and Lord Elystan-Morgan, and my noble friend Lord Collins of Highbury, which would take out of scope of the ban the relationship between trade unions and their members. I speak with long experience of these matters because I personally acted—the firm, for which I am now an unpaid consultant, continues to act— for a number of trade unions. The relationship there is not simply the passage of a name of a member but, as your Lordships will no doubt hear, one in which a good deal of administration is required and where the union is performing a service on the part of the member that will ultimately benefit the conduct of the case and therefore the solicitors involved in it. Again, it seems quite reasonable in that instance that a fee might become payable and it is unnecessary to bring that sort of relationship within scope.

Finally, Amendments 169 to 171 to Clause 56 are connected amendments. Instead of allowing the Treasury to make regulations enabling the Financial Services Authority to monitor and enforce compliance, they make this an obligation. Amendment 169 substitutes “shall” for “may” and Amendment 170 requires rather than enables the FSA to take action. Similarly, under Amendment 171 it would become a requirement for the Treasury to make rules outlining circumstances where payments are not to be treated as a referral fee. This echoes the Lord Chancellor’s powers proposed under Clause 55(8).

None of this seeks in any way to detract from the thrust of the Bill’s proposals but rather tailors them to the realities of the issues that the Bill seeks to address and to make better sense of what is in principle a sound proposal that the Opposition support. Accordingly, I beg to move.

[Lord Pannick]

My Lords, Amendment 166ZA in this group is in my name. I am grateful to the noble Lord, Lord Beecham, for expressing support for it.

The amendment would exempt solicitor-to-solicitor referral fees from statutory prohibition. I am puzzled as to why the Government think it is appropriate to impose a statutory prohibition on such referral fees. I am puzzled for two reasons. First, there is a public interest in solicitors having an incentive to transfer a case—with the consent of the client, of course—to another solicitor; for example, if the latter solicitor has greater expertise or if the former solicitor will not be able to deal with the case expeditiously. Secondly, any such referral fees from one solicitor to another are regulated by the SRA, which has ample powers to impose sanctions on either of the solicitors if there were any abuse of proper professional standards to the detriment of the consumer.

I ask the Minister—and it is a genuine inquiry—why, in the light of these factors, it is necessary or appropriate to regulate referral fees paid directly from one solicitor to another.