Libel and Defamation Cases: Cost to Public Funds

Lord Stevenson of Balmacara Excerpts

Monday 14th June 2021 Lords Chamber

[Lord Wolfson of Tredegar (Con)]

My Lords, the response from the Foreign Office was absolutely right. Legislation imposes proportionate sanctions where warranted, but restricting access to justice is something else. When it comes to payment of costs awarded against such people, I can say to the noble Lord from experience that there are ways in which such costs can be ordered and paid, but one has to be very careful in such circumstances not inadvertently to breach the sanctions regime.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, does the Minister agree that part of the problem raised by this Question is the absence of an appropriate, independent alternative dispute resolution mechanism for those unfairly treated by the press? Do the Government have any plans to consider this?

[Lord Wolfson of Tredegar (Con)]

My Lords, the short answer is yes. I would disagree with noble Lord in only one respect; that is, when he calls it alternative dispute resolution. We should not see these forms of dispute resolution as being alternative in the sense of being somewhat outré or unusual. They should be absolutely at the forefront of our civil justice system, and indeed, we are making changes throughout our civil justice system to make sure that only cases that really cannot be resolved outside of court end up in court.

Queen’s Speech

Lord Stevenson of Balmacara Excerpts

Tuesday 18th May 2021 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I join others in congratulating the noble Baroness, Lady Fullbrook, on her maiden speech. I start by echoing the pleas of my noble friend Lady McIntosh and the noble Baroness, Lady Bull, for more attention to be paid to culture and media issues in these debates. I hope that the good points made already by many noble Lords around the House will be picked up by DCMS. I declare an interest as a member of the Communications and Digital Committee of your Lordships’ House. However, what follows are my thoughts on the online safety Bill, prefaced in the gracious Speech.

In Our Digital Future, published yesterday, the Labour Party made it clear that we want empowered citizens who do not merely have access to the internet but are equipped with the skills and tools to make the most of technology and who are protected from those who use it to cause harm. The online safety Bill shares these aspirations, and, in so doing, reverses the history of international internet technology governance, based as it is on a 1990s presumption that this would be best left to companies and technologies, which had little legal ability to govern the things that people did on the platforms.

Thankfully, democratic Governments have begun, at last, to appreciate the extent of the harms that arise for citizens and businesses due to a loosely governed internet and its patchy adherence to human rights. In that spirit, I welcome the draft online safety Bill. The Government have got a lot right, particularly the adoption of the duty-of-care approach, the focus on systemic measures and the roles to be played by Ofcom, the DMU and the ICO. However, there are some gaps and concerns which have been referenced already, including the very long lead time before the Bill will actually reach the statute book, democratic accountability and a worry that the Bill underplays the current dangers to children and vulnerable users.

However, the welcome pre-legislative scrutiny will help sort out these issues. I hope it will focus on the following points. The internet gives everyone a voice—a really important point—but the resulting cacophony can mean that minority voices are lost in their entirety. Forms of expression which in the past were tolerable, even if they offended, are amplified to the point where action may be required to moderate volume and identity. But that brings real threats to freedom of expression and to quality journalism. How can these tensions be resolved? What content should be treated as illegal and who decides what should be treated as illegal but harmful? If there are forms of activity that were lawful in the past but should now be made unlawful, surely Parliament needs to set these new laws, lead and give clarity. If platforms are to determine their community standards, what role should be played by the regulator—or regulators—and will it have the resources and the powers it needs across the piece?

Online platforms have a responsibility to protect users against fraudulent and scam content as well as other harms. The Bill needs to rise to the broader challenge to democracy posed by digital technology itself, and we will need systems of regulation that protect that. As the Bill recognises, the platforms are a big part of the solution to online harms. They hold the technical expertise, the resources and the access to clean up online spaces, but they do not have the legitimacy to make decisions about what constitutes a free society and they should not be asked to do so without appropriate democratic oversight by Parliament.

Crime and Courts Bill [HL]

Lord Stevenson of Balmacara Excerpts

Tuesday 23rd April 2013 Lords Chamber

[Lord McNally]

I am reliably informed, post haste, that such aggregates in clouds are not covered. If by any chance that is not true I will write to the noble Lord and make sure the letter is circulated to the House. I cannot see over my shoulder but I sincerely hope that the Box is currently nodding firmly.

[Lord Stevenson of Balmacara]

I can inform the Minister that the Box looked absolutely transfixed by that recent exchange. I do not know who is more surprised, them or us, by the ability of the noble Lord, Lord Avebury, to come to the white heat of the technological revolution and ask a question that has stumped us all. On this side of the House, we would venture to say that we think they are covered, but that just adds a little piquancy to the debate which will, I am sure, be resolved before we get too far down the line.

Following the Leveson trail is a bit like appearing in “Rosencrantz and Guildenstern are Dead”. We pop up at odd times as other events seem to be filling the spaces. We pay a small contribution to it and then we discover that the whole event has moved on, another Bill has appeared, and yet another set of amendments appears which look awfully like the ones we have just been discussing. Only earlier today, we knocked out one set of amendments, yesterday we could have done the same, today we hope they will stick. I want to reassure the Minister that we will be supporting him in this event and he will not need to use the wiles he displayed when he almost reached across the Dispatch Box to my noble friend Lady Hayter to try to persuade her not to push her vote. The vote was unsuccessful so he won out in the end anyway: he has all the luck.

As the Minister has explained, these amendments, inserted into the Bill late in the process, provide for new rules on exemplary damages and costs. They are an essential part of the cross-party agreement on a royal charter which is part of the new framework of independent self-regulation, guaranteed by law, as recommended by Lord Justice Leveson. This part of the Bill aims to provide publishers with incentives to sign up to the new system of self-regulation that should meet the criteria set out in the royal charter. Publishers that join a recognised regulator will receive protection from the award of exemplary damages in media disputes, the opportunity to use an arbitration service and cost benefits from having access to this service. That is one reason why it would benefit local as well as national newspapers. If a complainant chooses not to use the arbitration service, they can still be liable for costs even if they win.

Lord Justice Leveson’s report was mainly about the press but the original drafting of this Bill had the unintended effect of catching blogs. That said, Lord Justice Leveson did express the hope, in Recommendation 73 of his report, that online publishers would also join a regulator. The Bill therefore needs to be amended to ensure that exemplary damages did not apply to blogs and they could receive the benefits of joining a recognised regulator. In recognition of the fact that this is a complex area, your Lordships’ House agreed a placeholder amendment on 25 March. The Government’s decision to hold a mini consultation and pause for reflection to consider how the Bill should deal with the blogosphere was sensible and we agree with the policy objectives that the Government are seeking to address to exempt micro businesses from the definition of relevant publisher where they are a blog or where their publications are merely incidental to their other businesses and to enable such micro businesses to receive the benefits and cost incentives of joining a recognised regulator. The Minister has been helpful in setting out a number of accompanying thoughts around these points and the issues relating to what would and would not qualify, and I think they will bear further consideration once we see them written up in Hansard.

However, the main point is that the amendments we are now looking at and which we support define a small blog as one whose turnover is below £2 million and has up to 10 employees. It exempts such businesses from exemplary damages and enables them to benefit from the cost advantages of an arbitration service if they join a regulator, and that last point will be particularly welcome to the community. As I say, we support the proposals, and I am grateful for the manner in which they have been pursued within the all-party agreement which has underpinned the whole process, so we will not be dividing the House.

In the time available, I would like to make a couple of ruminations about some of the issues that we are talking about today, and within that are two questions to which I hope the Minister will be able to respond. The first is that the digital world as we know it is changing rapidly and the complexity and parliamentary arithmetic of changing the royal charter means that it will be hard to alter the legislation after this Session, so it needs to be right. What consideration have the Government given to the health and future of the blogging industry, and can the noble Lord share with us the Government’s thinking on this point? I understand that the indicators for a micro-business have come from a definition used by BIS, and in that sense they are not specific to the blogosphere. I have had representations already, and I am sure that other noble Lords will also have received them, from those who argue that the figures being used are on the high side, as rarely do we find 10 employees or even an annual turnover of £2 million in a blog company. That would make for a very healthy company, but it is not how the sector operates. Can the Minister estimate roughly how many blogs this definition would capture at present?

I turn to a related but more general point. We are talking about an industry that is in the process of change. For example, the print circulation of newspapers is estimated to shrink by at least a quarter in the next five years and yet we are facing a rather bizarre situation where newspapers are exempted the full 20% rate of VAT on print sales despite the fact that in many cases online traffic now represents the majority of their audiences. This is something which is bound to grow as we go forward. In fact, we are fast approaching a situation where what we previously believed, which is that we in this country do not tax reading, is becoming the reverse of what will happen. Those who read using electronic means, which will include those who are caught by this amendment, will be paying 20% VAT. Is this something that the Minister can say is under consideration, because it seems to me that we will need to face up to it before too long?

I am very grateful to the Minister for mentioning Mumsnet because it was the subject of discussions in another place, and others have raised it. The break point that he expressed is one to which we may need to return. Perhaps when he concludes he will reflect on this. At what point do those who blog and use it as a campaigning tool get caught? There is some doubt in what he has said about whether Mumsnet, which is not a charity but exists largely to circulate material that is in favour of a particular point of view, could possibly be caught by this exception. It is one of a number of areas in which, as the Minister has said, time will show us what emerges. However, a little more clarity at this stage would be helpful.

Finally, the Minister was keen to assert that it would not be sensible at this stage to define a blog. He was then caught quite quickly by a question related to blogging which illustrates that sometimes it might be sensible to have in primary legislation clear definitions which we can all use. I understand and support the idea that it is probably wrong to try to be definitive at this stage and that we should see how things go, but if that is the case, are there are any thoughts about how the Government might consider revisiting the issue within a reasonable time if it turns out that we need to move? After all, as I have said, this is the digital age and things are moving fast. What is a blog today may change into something else, and we want to be sure that we have the flexibility which I do not currently see in the Bill.

[Lord McNally]

I thank the noble Lord, Lord Stevenson, not only for that reply but for the constructive role he has played in getting us as far as we are today. It is important to retain an all-party approach as we take this through. The noble Lord asked how many blogs this amendment will cover. We cannot provide an accurate estimate because blogs are constantly started up and then stopped. However, we feel that this is the right figure in order to exclude all those who we hope and intend to exclude. On the definition of a blog, I was tempted to call in aid that used by Clement Attlee when he wanted to exclude Trotskyists from the Labour Party. They said, “How do we know who are Trotskyists?”, and he said, “It’s a bit like an elephant—when you see one, you know one”. In a way, we are groping with blogs in an age of technology that is constantly and frighteningly rapidly changing.

We have tried to get some key features which distinguish blogs from online newspaper reporting. A blog is used primarily for an expression of opinion. Multi-authored blogs usually cover a single subject of interest. In all cases, blogs do not report in a factual and neutral way on news or current affairs but are led by the personal views of the individuals. While an online news site may contain comment, opinion or bias, comment pieces are not its principal focus. What constitutes a blog may change over time as convergence increases.

It is a difficult area. When we debate these areas, we often point out that future-proofing is virtually impossible. We hope that the definition I have given today has been sufficiently carefully drafted to provide the maximum possible clarity to organisations seeking to know whether they are caught. We have produced a handy set of questions on our website to help organisations to work this out. This is intended as guidance only. Ultimately, as in the case of all legislation, the decision on whether an organisation comes within or outside the scope of any particular piece of legislation will fall to the courts. The intention of the definition is to capture news publishers who were the focus of Lord Justice Leveson’s inquiry and his subsequent recommendations. They are intended to act as the key incentive for those publishers to join the new press regulator, while also protecting those not intending to join.

On Mumsnet, protection is the interlocking test, but such an organisation may branch out or develop a kind of activity which takes it into the realms of news and newspapers—a news media. Again, we would have to be flexible. If an organisation develops in a way that makes it a news organisation, it would have to consider its position. Lord Justice Leveson, in making his recommendation and recognising the changing architecture of our media, specifically said that he hoped news organisations that were primarily online would consider themselves willing to join any new regulator.

Parliament at both ends of the Corridor has done a good bit of business in dealing with a specific concern that was raised. I thank the noble Lord, Lord Stevenson, for his very constructive and helpful approach, not only at the Dispatch Box, but in bilateral discussions.

Defamation Bill

Lord Stevenson of Balmacara Excerpts

Tuesday 5th February 2013 Lords Chamber

[Lord Elton]

My Lords, before we come to the Front Bench speeches, may I ask for some help for lay Members of the House and point to an opportunity? An enormous amount rides upon my noble friend’s very convincing and confident undertaking to deliver an acceptable and effective solution by the middle of this year. Many others have had that ambition and failed; there is a danger that he may fail. It seems we would then have a situation where nothing can be done for a very long time. The Minister would be giving a great help to the House if, between now and making his speech, he could get clearance for an undertaking that if a satisfactory solution is not arrived at by the end of this year, or indeed by its middle, then legislative time should be brought in so that we can have a statutory system instead—and not wait to extend the 67 years into three quarters of a century.

[Lord Stevenson of Balmacara]

My Lords, today’s excellent debate has strong echoes of the occasion on which we first received the Leveson report. Your Lordships may recall that on that occasion we had to have two Statements; one was given by the then Leader of the House, the noble Lord, Lord Strathclyde, who said that he was speaking for the Government, and the other was given by, let us say, another government Minister—did we are discover in what capacity it was that the noble Lord, Lord McNally, was speaking? The point is that on that occasion, all three major parties claimed to be supporting what Lord Justice Leveson was recommending. The noble Lord, Lord Strathclyde, said,

“Lord Justice Leveson sets out proposals for independent self-regulation organised by the media. He details the key requirements that an independent self-regulatory body should meet, including: independence of appointments and funding; a standards code; an arbitration service; and a speedy complaint-handling mechanism. Crucially, it must have the power to demand upfront apologies and impose million-pound fines. These are the Leveson principles. They are the central recommendations of the report. If they can be put in place, we truly will have a regulatory system that delivers public confidence, justice for the victims, and a step-change in the way the press is regulated in our country. I accept these principles and I hope the whole House will come behind them”.—[Official Report, 29/11/12; col. 340.]

The noble Lord, Lord McNally, obviously quoting his leader, said:

“I have always said that I would support Lord Justice Leveson’s reforms, providing they are proportionate and workable … I believe that to be the case for the report’s core proposal for a tougher system of self-regulation, supported by new, independent checks, recognised in law”.—[Official Report, 29/11/12; col. 351.]

The other groups in your Lordships’ House were equally supportive. As my noble friend Lord Puttnam reminded us, that remained the situation when we had our extended debate on the report on Friday 11 January. Since the original publication of the report, the parties have been engaged in tripartite talks that have been ongoing for about two months. However, we hear that the pace of these has slowed down considerably in recent weeks, with the most recent scheduled meeting being cancelled by the Government and offers to meet and resume talks in the light of today’s amendments being rebuffed. It is worth recalling that when we entered the cross-party talks, we set the Government a deadline of the end of January to publish Leveson-compliant measures. It is noticeable that the Government have so far been unable to publish their proposals, although we know that they include at least one draft royal charter and some statutory underpinning.

At the heart of today’s debate is the question of whether we have independent self-regulation backed by law. We need statute because the current system of self-regulation has failed year after year for 70 years, and despite seven major reports. Trust, as the most reverend Primate said, is in short supply here—something has to happen. Lord Justice Leveson proposes a framework that provides for the continuation of self-regulation by the press but with a legal guarantee that self-regulation will be effective and independent and will continue to meet high standards. The role of the law, the legal underpinning, would be limited to setting up a body whose task would be to recognise the self-regulated system and to check it once every three years. Lord Justice Leveson said that this was essential to ensure that, despite all the protestations of change and good intentions, the press did not once again slip back into its old ways, as it has always done after all the other inquiries and reports.

We believe that Lord Justice Leveson’s answer to that decades-old problem is ingenious. It ensures that the press regulates itself independent of both the Government and its own interests, but it also ensures that there is statutory backing for the system. As I have indicated, there is wide agreement in Parliament that Lord Justice Leveson’s recommendations should be implemented. If we were in power, we would make every effort to get agreement to implement the Leveson proposals in full. We think that there is no credible argument for today, and that action should be taken forthwith—certainly by the end of the current parliamentary session.

While the Government have shared their suggestion of a royal charter and accompanying clauses with us in the talks—and with the newspaper industry, it should be noted—most MPs, Peers, lawyers and others with an interest have yet to see them.

The noble Lords, Lord Black and Lord Hunt, made interesting interventions in this debate today. I am bound to say that without the detail it is very hard to judge what they are doing and how they are going to do it, but I felt that neither of them commanded the support of the House.

It is now time for the Government to have the courage of their convictions. The status quo is not an option. We have drafted and published our Bill and so have others, including Hacked Off. While the talks have been useful and obviously will continue, the main decision here—whether it is to be statute alone or statute and charter—must now be discussed openly; the public must be able to scrutinise the proposals; the victims should be able to signify their consent; and Parliament, to which Lord Justice Leveson entrusted a key role in setting up the new system, must be given an early opportunity to decide.

As I said, there is a strong case for action being taken on an all-party basis; the victims, and the public more generally, expect that. The families who suffered press intrusion and gross violations of their privacy are still pressing for the changes that will protect people in the future from what happened to them. These victims have gone through, and, in some cases, are still going through, unimaginable suffering. They remind us by their evident presence why the status quo, unsatisfactory for decades, is not an option. We must act on Leveson’s proposals for substantial and lasting change.

The amendments so brilliantly introduced by my noble friend Lord Puttnam and supported by the noble and learned Lord, Lord McKay, the noble Baroness, Lady Boothroyd, and my noble and learned friend Lady Scotland are a reflection of the lack of confidence in, and the frustration with, the current process of implementing the Leveson proposals. There are some who feel that the apparent politicisation of the implementation process, because of alternative ideas such as the royal charter, takes us some considerable distance from Lord Leveson’s recommendations, and in so doing, erodes the trust of both victims of press abuse and the general public.

The purpose of the amendments in the name of the noble Baronesses, Lady O’Neill and Lady Hollins, is to tighten up the amendments tabled by my noble friend Lord Puttnam so that the new clause and schedules being inserted implement Lord Justice Leveson’s recommendations in a clearer and more effective way. These amendments are entirely consistent with the spirit of my noble friend Lord Puttnam’s amendments and aim to ensure that the Defamation Bill contains a fully workable version of the Leveson recommendations.

No one is claiming that the amendments answer the criticisms the Government might make about the drafting, nor that these amendments make the package “Leveson in full”, but they would, if passed, mark the beginning of a process to incorporate most of the Leveson recommendations into statute and they send a very direct message to the Government that the House wishes to see the Leveson report implemented. If they are passed this afternoon, as I hope they will be, your Lordships’ House will be doing a valuable service helping the Government of the day to do what at heart they say they want to do but which they have, to date, not been able to deliver.

So the questions we need to focus on are not the particular drafting of the amendments before us, because there would be ample time to sort that out at Third Reading, in the Commons or at ping-pong, but, under our procedures, that could not happen if we do not pass these amendments today. We must beware false choices. We were offered them recently in the sense that the allegation being made is that what is on offer is statutory regulation of the press. It is not. It may well be that what we have on offer today is not Leveson, it may be the back door but, as the noble Lord, Lord Skidelsky, said, the prospects of getting it through the front door, certainly not one with the number 10 on it, are quite remote. It could be characterised as being a first step down the road we need to take, and it changes the status quo. It will remind the Prime Minister and the coalition Government of the welcome they gave to the Leveson report when it was first published and, because a clock will have started ticking, remind them that too much time has already passed.

I suppose that the arguments that the Minister will give us shortly are that the Government are listening, that they can be relied on to act, and that they will be bringing forward consensus proposals which will be acceptable to all parties. He may suggest that all this can be done by Third Reading, which I understand is on Monday 25 February, immediately after our Recess. He may even promise publication of the Government’s proposals—that would be nice—and he may offer a revised timetable for more talks, which we would certainly look at. Can we take that risk? As the noble Baroness, Lady Boothroyd, warned us, tomorrow never comes. Is there credible evidence sufficient to believe that those responsible for the current delays are working to a deadline that delivers the necessary changes by the end of this Session? Even if you believe all that, what is the downside if we pass these amendments today? At heart, they genuinely offer the Government a chance to get this process back on track. Even if the Minister, when he comes to reply to this debate, gives your Lordships’ House an unequivocal assurance that he will bring back a government amendment on this topic which will deliver Leveson on Third Reading, I still believe that agreeing this amendment is what the people of this country want, and what the victims deserve.

When the Minister sits down, it will be for the proposer of the amendment to decide whether to test the opinion of the House. If he decides to do so, we on this side will support him.

Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Stevenson of Balmacara Excerpts

Tuesday 27th March 2012 Lords Chamber

[Lord Brennan]

My Lords, the topic under debate appears to involve general agreement that this class of case is a proper one to be brought in the courts of this country. The critical question therefore is: is it financially possible to bring such a case under the proposed reforms in this Bill? These are long cases, which take years, and they are complex and very expensive. They involve defendants with economic might who are prepared to take on the claimants remorselessly. I remind the House that the Trafigura case actually reached the stage where this Parliament was debating whether that company’s obtaining of a super-injunction meant that Parliament could no longer debate the issues raised by the case. That is might.

The idea that such a case can readily be brought and financed under these reforms is one with which no one whom I know in the law agrees. I have been involved in four of these 10 or 12 cases in the past decade and they have all involved millions of pounds on both sides. In Trafigura, the published costs of the defendants without a trial were £14 million. I await with interest to hear from the Minister any mathematics or economic analysis that explains to this country how lawyers here under these new arrangements—a reduced success fee and no “after the event” insurance—could fund such a case. Everyone I speak to says, frankly, that it is impossible.

If the Minister comes forward with some mathematics that are realistic and not ethereal, and if he gives us financial analysis that is not far distant from reality, the House might still be persuaded. As yet, no one in public has produced such material. The result is that we expect the developing world to open its doors to our great companies to make large profits for the benefit of our country but, when those investments produce adverse consequences, we in this country close our doors of justice to the people who have suffered. That cannot be acceptable, and the Government should think again.

[Lord Stevenson of Balmacara]

My Lords, the noble Baroness, Lady Coussins, has introduced this group of amendments with her customary fluency and passion, and she has been joined by other speakers who have made the case well. As has been pointed out, this measure risks damage to the UK’s reputation for justice to those people who have suffered damage to their human rights caused by companies based in the United Kingdom. I am sure that none of us wishes to see that happen.

We have support from all around the House, and we are grateful to those who have joined in on these amendments. The settled view of your Lordships’ House is clearly that there is a real danger that, if this Bill goes through in its present form, the changes that it makes to the way in which international human rights cases are to operate, combined with the restricted damages that the Rome II regulations impose on the level of damages that can be awarded to claimants, will make it impossible for such cases to be mounted in the UK in future.

As the House has heard, several very important independent charities have been lobbying hard on this issue. Several meetings have been held with the Minister and correspondence has been exchanged. We hoped that an accommodation could be reached, and we went to see him yesterday in the hope that that might be possible. He e-mailed us today to say that he could not accept our amendments.

It is clear to me that while on the one hand the Government do not want to be responsible for preventing these cases continuing in future, they have not so far been convinced that it is highly probable that they will occur in future. Why is that? The arithmetic, as has been said, is very clear. We seem to be in a situation where the department’s overriding concern that the architecture of the Bill should be retained is working here against good legislation. What other arguments can there possibly be? We have heard from those directly involved in these cases and we know what the figures are. It is clear that the facts outlined by the noble Baroness, Lady Coussins, and my noble friend Lord Brennan that the Government are wrong. I hope that when the time comes the noble Baroness will test the opinion of the House, and we will be supporting her in the Lobby.

[Lord McNally]

My Lords, I confirm that we have been in regular discussions about these amendments, and I regret that I am not able to accept them today.

There have been a number of comments about costs and indeed about the Trafigura case. What strikes me most about that case is that the £30 million that was won in damages worked out at about £1,000 per victim—against, as has already been accepted, legal costs that at one time, until they were beaten down, were running at £100 million. To me, that is an obscene system.

With regard to the reforms that we brought forward, we have said that we believe CFAs will continue. We are also introducing damages-based agreements. Far from welcoming them, though, the CBI and others worry that those may well provide funding in this area. So, it is not that the Government are opposed to bringing companies to account for their behaviour. I just do not believe in the rather broad claims by the noble Lords, Lord Brennan and Lord Judd, that this issue will dramatically affect the lives of people in developing countries. There are other areas of policy that are going to do much more than that.

I make clear that the Government strongly support claims arising from allegations of corporate harm in developing countries being brought, and we support the protection of damages for personal injury. Where we disagree with the supporters of the amendment is that we do not believe that our plans would prevent such cases being brought or ultimately damage the ability of NGOs and others to hold big business to account.

An exception along the lines proposed is in our view neither necessary nor justified. It is not necessary because reformed “no win no fee” arrangements will still allow cases to be brought. It is not justified because it would undermine the wider rationale for the Jackson reforms in Part 2 of the Bill, which should apply across civil litigation without any exceptions. In doing so, it would introduce unfairness between different types of claimant.

We recognise, however, that, following the Rome II regulations, damages in these cases can be relatively low, and they will not be subject to the 10 per cent increase available for other claims. The costs awarded can nevertheless be extremely high, as was demonstrated by the Trafigura case. The question is whether any exception should be made for these cases either on a wider basis, as proposed in Amendments 21, 22, 23 and 26, or on a narrower basis, as proposed in Amendment 27. I concede that in putting forward Amendment 27, the movers tried to put forward a narrow-based solution.

The Government have listened to this debate and those that went before, and we have reflected carefully on the points raised. We have held many meetings with interested stakeholders and NGOs over the past months, and the Government are fully aware of the strength of feeling on this issue. I have looked again at the evidence that has been presented, including reports by Professor Rachael Mulheron of the University of London and Mr Smith of First Assist. Both reports make the general case for recoverable success fees and insurance premiums to continue in these cases, but they do not present any figures showing why these cases could not be brought in future. During our discussions with the NGOs we have asked for such evidence but it has not been forthcoming, even though we have asked them for more detailed figures.

The truth is that the available evidence shows that these cases, though few in number—about 10 in a decade—have historically been highly profitable for the legal firms involved. Although under our plans the margins available would be reduced, they are still likely to remain attractive. I remind noble Lords of the sums involved. Since the previous Government introduced the recoverability of success fees and insurance premiums in 2000, we know that there have been only around 10 of these cases, mainly undertaken by a single firm of solicitors. Most of these cases have succeeded or settled, but some claims have been pursued in which costs have not ultimately been recovered. The figures suggest that in those cases that were not pursued to trial, there were disbursements of some £131,000 and legal costs in the region of £1.4 million. I appreciate that those figures will not cover all costs in all cases but they should be a fair ball-park indication. £1.4 million sounds like a lot of money for a firm to bear in what are effectively losses on a case not pursued and won until the substantial sums that have been received in success fees are considered. We know that in the case of Trafigura alone, success fees—intended to cover the costs in lost cases—of around £29 million were allowed by the Court of Appeal. Those figures amount to a net gain for claimant lawyers from these cases over the past decade of more than £27 million from the success fees for Trafigura alone. That does not include all the success fees in the other successful cases.

These figures speak for themselves. They cast all emotion aside and demonstrate the substantial gains in legal costs from these cases and the proportionately much lower costs expended. When the ratio of earnings to losses is more than 10:1, the current system can, to put it mildly, bear some reform. Therefore, while I recognise that claims against multinationals can be complex, the changes that we are making to the CFA regime will not prevent these cases being brought in the future. They can still be brought but the costs will be more proportionate. As Lord Justice Jackson recognised, a greater incentive for claimants’ lawyers to work more smartly is needed so that they incur only costs that are justified when bringing a claim, rather than allowing costs to escalate.

It is worth pointing out, as I have previously in the House, the criticism by the Court of Appeal of the costs claimed by the claimants in the Trafigura case. In that case, the court itself questioned whether some of the work undertaken by the claimants’ lawyers was necessary. It criticised them for seeking costs of £100 million in a case that resulted in payment of £30 million in damages. It is not for me to question the conduct of those involved, but it needs to be borne in mind when looking at the extraordinary costs claimed in that case alone. I should add—again, as I have pointed out to the House previously—that in that case the defendant’s costs were approximately £14 million, which is around one-seventh of the costs claimed by the claimants.

I turn now to Amendment 27, which seeks to allow for the recoverability of “after the event” insurance premiums to pay adverse legal costs, including expert fees and other disbursements. In doing so, the amendment goes much wider than just the cost of funding the expert reports for which we have provided in the special situation of clinical negligence cases. The amendment would potentially cover paying the other side’s costs, too, but this is not necessary because we are introducing a system of qualified one-way cost shifting in personal injury cases, which will protect losing claimants from having to pay the other side’s costs. We have discussed making exceptions in relation to expert reports in other contexts, but we do not believe that an exception is more needed here than in other cases. As I have said, the costs recovered in successful multinational cases have been substantial and could provide funds towards paying up front for reports where needed.

As I indicated on Report, on several occasions my officials and I have met representatives of the NGOs that support these cases. However, we have not been persuaded that such cases cannot continue to be brought when our changes are implemented. Nor are we persuaded that they justify an exception in the Bill that would be unfair to other, no less deserving claimants.

The House will be aware of all the arguments that I have rehearsed today, in Committee and on Report. We have treated subsequent discussions with the seriousness they deserve, and we have listened carefully. However, the Government continue to believe that reform is unavoidable, necessary and overdue. In this case in particular, we should not mix up a challenge to overgenerous costs with a denial of access to justice. Access to justice is precisely what the reformed CFA regime will protect, but as part of a more proportionate and balanced system. Therefore, I urge the noble Baroness to withdraw her amendment.

Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Stevenson of Balmacara Excerpts

Wednesday 14th March 2012 Lords Chamber

[Lord Brennan]

My Lords, the arrival of globalisation as a world economic and human phenomenon, we hope, brings more benefits than disadvantages. However, reality tells us that globalisation produces serious adverse consequences from time to time, particularly in the developing world. It cannot be right that developed countries such as ours do not have a system of justice that provides remedies for those affected in such countries because of the liability of companies based in this jurisdiction. That reality in terms of what justice should provide should enable people from those countries access to our courts to seek appropriate remedies.

Amendment 134 in this group gives a power to the Lord Chancellor to provide regulations that would permit, in certain circumstances, our courts to deal with such cases. The numbers of cases that are likely to arise are few. Their cost and complexity is very large. To make provision for them would produce no consequence that would damage the Government’s policy in this Bill to save money and introduce cost control. None of that would be affected.

In my professional experience at the Bar I have done several of these cases. I have two examples to illustrate what I consider to be the validity of my submission to your Lordships. The South African resource of asbestos was a major benefit to companies in this country for decades. The standards of working practices and protection of ordinary workers were extremely low. I will not reveal anything that is not in the public domain by saying that I represented the plaintiff African miners—7,000 of them—many of whom were women, who were being used to break asbestos rock against granite to free the asbestos fibres for collection and use while bearing on their backs newborn babies. It is difficult to imagine that anyone would not think that that called for some remedy, if proved.

The case was dealt with in this country in the 1990s and it took three years of hearings in the lower court, the Court of Appeal and the House of Lords Judicial Committee before the plaintiffs finally got an order that the case should be heard in this country. Not surprisingly, it was eventually settled, a settlement that included compensation to all those people who had had to produce their medical records, their X-rays, from the very difficult administrative circumstances of the young South Africa of the 1990s and of the Government of South Africa, who were given money by the defendant company to contribute toward the clean-up of asbestos residues at the mines where they had been produced. All of that produced a trust settlement. All of that cost a huge amount in expense, with top class lawyers. Can it seriously be suggested that, under any of the reforms proposed in this Bill, such services by lawyers would be given these days? It is an absurd proposition.

I will move on to describe the second case, and then I will briefly come to a conclusion. I was involved in the Ivory Coast case in its early stages and I went to Abijan. We had tens of thousands of claimants, all of whom had to fill in questionnaires and produce medical evidence—often in French, in Francophone Côte d’Ivoire —and then come to England to pursue their case. By the time of this case, a few years ago, the law had changed, and I invite the Minister and his staff to bear this in mind. The law of the European Union now states that plaintiffs like that must sue the company which is alleged to be at fault in the jurisdiction from which that company operates. They are required to come to our country to pursue their claim. It is not a matter of form shopping—it is a requirement. That case cost a fortune, and it was settled, and it took years.

Companies such as this are often either insured, with enormous excesses that give them a lot of influence on the conduct of the litigation, or they are self-insured, because they are so big and powerful. For two or three years the programme is one of the plaintiffs producing all their medical and expert evidence and then going to court, hearing after hearing, long before trial, and spending a fortune. However, there was legal aid for the South African case and a conditional fee agreement for the case I have just mentioned. It worked and justice was done. That is all that I am asking the Government to consider should be done for this class of case in the future. These people have to come here. They do not have elite lawyers, funding or local remedies. They come to our country for justice. They come to where the company was based and where it should face justice.

This is a state of affairs which I commend to the attention of the Government and the House. How could it be said that any such case was properly catered for by allowing the previous system that was used in the Côte d’Ivoire case to continue? How could that adversely affect all the domestic factors that figure for local people? How could it benefit this country? Will we leave the Chamber having voted in favour of this, with our heads held high because we represent a country in which justice still prevails and access for the poorest, from wherever, is still available, or do we hang our heads in shame over something that cannot possibly be justified?

There is a risk that if this kind of exception is not made grave injustice will follow and the reputation of our country and our courts for just civil proceedings will be seriously damaged. It is time to think.

[Lord Stevenson of Balmacara]

My Lords, I thank those noble Lords who have spoken in this debate, in particular the noble Baroness, Lady Coussins, who, with her usual fluency and clarity, made the case extremely well. My noble friend Lord Judd, with his lifelong commitment to human rights, also drew attention to the many organisations who have written to us and who have supported the case that has been made tonight. My noble friend Lord Brennan, who has just spoken, has direct experience of many of the cases which we are talking about today and left us with a very powerful message about the impact that could be effected if the Bill goes forward unchanged. I thank the noble Baroness, Lady Miller, for her support of our amendment, particularly for drawing attention to the wider soft-power aspects which are so important in this area, and the right reverend Prelate for bringing into play the inevitable impact on poor communities of the Rome II regulations. Those will of course limit the level of expenses that they can possibly receive, and therefore create a completely unbalanced playing field in this area.

To apply the test that was proposed by the noble Lord, Lord Faulks, in the previous group, it is clear that the widely held view around your Lordships’ House is that once this Bill becomes law, it will not be possible to mount cases brought by vulnerable victims of corporate abuses perpetrated overseas by UK companies within the English courts. As we have been reminded, they have to be raised here. There can be little doubt that the Government really are on the wrong side of the argument tonight, and I join with the noble Baroness, Lady Howe, in not being at all clear why this is the case.

In his letter to me and the noble Baroness, Lady Coussins, of last month, which has already been referred to, the Minister argued that corporate human rights cases could still be viable under the measures contained in the Bill, and he helpfully highlighted the opportunity to use damages-based agreements—DBAs. This line of argument derives from the much quoted Jackson report which, it is worth pointing out, did not specifically deal with the cases that we are highlighting today. I will not go into the detailed arguments, as they have been well covered, but neither of Lord Jackson’s suggestions—under which the effect of lower damages recovery would be ameliorated, in his view—will work for typical corporate human rights abuse actions brought by claimants from developing countries.

We recognise, and indeed support in some ways, that one objective of this Bill is to reduce the costs of cases across the legal system as a whole, and one cannot be against that. Clearly there is a much better reason for this where these costs fall to be met in whole or part by the public purse but, as the Minister has already accepted, we are not dealing with this area in this part of the Bill. However, in the cases we have highlighted, not only is there no cost to the public purse, but there is already a system in place to decide whether the legal costs awarded are appropriate. Indeed, it was used in recent cases to significantly reduce the costs claimed by the winning side, although they did in fact settle.

It may be irritating to the department to have to create a carve-out in a Bill for such a small group of cases, but surely it is vitally important that vulnerable victims should get justice—and at least some compensation —for the trauma and harm that they have experienced, or for the loss of livelihood or even of life that has been caused by UK companies. It is equally important that companies need to know that they can be brought to account if they act irresponsibly. That is why we believe it is warranted to carve out an exception, so that the broader measures in this Bill do not close off justice in the UK for this small but very significant group of cases.

Our amendments would retain the current funding system in effect for human rights cases. Creating this exception would not be fatal to the overall aims of the Bill. The existing regime of success fees and “after the event” insurance premiums being paid by the losing company instead of coming out of the damages of the claimant are, in our view, the most sensible way of ensuring that these cases continue to be mounted. Moreover, it is unlikely to be more than a few cases a year, as stringent rules have to be met before such cases can be mounted.

In the debate last week, the noble and learned Lord, Lord Wallace of Tankerness, recognised that, in clinical negligence cases, removing the recoverability of ATE insurance premiums could create a real problem for claimants. The Government have therefore created a carve-out because expert reports are such an essential requirement for building clinical negligence cases successfully. However, the expenses of obtaining such reports would not necessarily be covered under the new regime. In the human rights cases that we are looking at, expert opinions and reports—for example, the analysis of alleged toxic waste or polluted water; or medical examinations in relation to asbestos ingested by miners in South Africa—are a vital part of showing that there is a valid case to answer. There is a very strong read-across from clinical negligence cases to the sort of human rights cases we are dealing with here.

I hope we can find an accommodation here. In plain terms, all the evidence suggests that the approach being taken in this Bill will kill off the chances of mounting this very small group of special cases in future. How poignant it is that at the same time as we are debating this amendment, the Foreign Office is leading valuable cross-governmental work on how we implement the UN guiding principles on business and human rights adopted in June 2011, which the Ministers told us in our meeting with them that the Government support. We were one of the countries most closely involved in UN Special Representative John Ruggie’s work. Indeed, the previous and the present Governments have been vocal in their support of the guiding principles and the present Prime Minister has committed publicly to implement them.

What sort of example are we setting and what message are we sending to UK companies if we now change our laws to make it hard for poor victims of corporate abuses perpetrated by UK companies to seek redress? They may be a small number of cases but they have had a direct impact on the lives of millions of people in the developing world. Each successful case has shone a harsh light on key areas of corporate misconduct in the developing world—from the dumping of pollutants in the water supplies of communities to appalling health and safety standards in mines and to direct corporate involvement in abduction and torture. Ultimately, it is surely important that businesses know that they cannot act with impunity. We do not want the majority of responsible UK businesses to be at a disadvantage because laggard companies get away with substandard, harmful business practices.

Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Stevenson of Balmacara Excerpts

Monday 12th March 2012 Lords Chamber

Moved by

[Lord Stevenson of Balmacara]

74A: Schedule 1, page 141, line 3, at end insert—
“Debt management and relief or remedyCivil legal services in relation to any debt management relief or remedy available under Part 5 of the Courts, Tribunals and Enforcement Act 2007.”

[Lord Stevenson of Balmacara]

My Lords, I rise to speak to Amendments 74A and 74B about legal aid for debt, and in so doing I declare an interest as chair of the Consumer Credit Counselling Service. Under the proposals in the Bill, all legal aid for debt issues, including advice, is excluded from the scope of legal aid, except for legal services provided in relation to a bankruptcy order against individuals, under Part IX of the Insolvency Act 1986, where the individual’s estate includes their home. The purpose of our amendments is to reverse that proposal. We believe that it starts from the wrong premise, that it will not save money and that we will lose an effective and well used remedy, the debt relief order, which helps the poorest and most indebted in our society.

Debt problems are sadly increasingly common, and unless dealt with promptly and effectively can have a major impact on individuals, families and communities. A recent report from the Legal Services Commission confirms that there are a variety of causes of debt problems, the most common being changing circumstances such as ill health, relationship breakdown and loss of employment. Qualitative interviews, and I confirm this from my own experience, often reveal particularly distressing impacts on parents’ relationships with their children and on the wider family. More generally, debt problems have been found to make it difficult for people to carry on living normal lives.

In the same report, the average cost to the public and in lost economic output is estimated at over £1,000 per debt case, with more serious problems involving costs of many times this amount. So we can say with some confidence that debt problems are serious and that they can, and often do, have direct consequences. We therefore reject the premise that debt cases should be removed from the scope of legal aid.

When we debated this issue in Committee, the point was made that all debt problems are underpinned by complex contractual obligations and that, in the majority of cases, such advice and support take place within a legal framework that will involve issues of liability, consumer credit contracts, creditors’ enforcement powers, statutory debt remedies and enforcement processes within the court system and beyond.

As I have mentioned already, there is another dimension to this, which is that most, if not all, of those who contact my charity and other providers of debt advice almost always have other issues, such as illness, employment problems or relationship problems that have either caused the debt problem or contributed to it. It is this compounding effect that makes the withdrawal of legal aid for all debt issues such a simplistic proposal. Therefore, my second point is that debt problems should not be removed from the scope of legal aid because the economic and social consequences far outweigh the savings that are being proposed.

Our third point is expressed in Amendment 74B. We think that the withdrawal of legal aid for debt will in effect lead to the closure of the debt relief order system, which is operated by the Insolvency Service. DROs can be considered only by application via approved intermediaries working for organisations that have to be approved by the Insolvency Service. Approved intermediaries are usually experienced debt advisers, the vast majority of whom are based in citizens advice bureaux around the country, and they are currently funded by legal aid.

In 2011, nearly 29,000 debt relief orders were made, of which 70 per cent were processed by CAB debt advisers in their role as authorised intermediaries. Citizens Advice has made it clear that it will not be able to employ a sufficient number of approved intermediaries if legal aid is withdrawn. If the Bill goes ahead in its present form, it is clear that the DRO system will not survive. More than 20,000 families a year who would otherwise be able to write off their debts will not be able to do so.

It is a classic Catch-22; you can proceed with a DRO only through an authorised intermediary approved by the Insolvency Service. If the legal aid funding is cut, there will be no authorised intermediaries and the DRO scheme will simply wither on the vine. This is not just a cut in the legal aid bill; it is the end of a good and effective debt solution introduced in 2007 and used since then by thousands of families faced with disaster. It simply should not happen. I beg to move.

[Baroness Coussins]

My Lords, I support Amendments 74A and 74B, to which my name has been added. I declare an interest as president of the Money Advice Trust. In that capacity I have sat in as an observer at the National Debtline and the telephone helpline service that the Money Advice Trust runs, and I have heard first hand some up-to-date examples of the complexity of debt problems. This has brought me to the conclusion that the problem here—which these amendments are designed to resolve—is that when this proposal was framed in the Bill, sufficiently careful attention was not paid to the distinction between legal advice for people with debt management problems and general debt advice.

The Money Advice Trust tries to prevent existing debt problems running out of control, especially when they are tied up with other issues such as mental health problems or the threat of repossession. While we are talking about complex problems that require the advisers to be quite expert—and certainly sensitive—we are nevertheless talking about first-stage generalist debt advice. This is way beyond the point at which the client needs legal advice.

My understanding is that the Government view debt advice as “not strictly legal work” and feel comfortable about the withdrawal of legal aid because they expect that services such as the Money Advice Trust’s debt helpline will provide appropriate advice services instead by phone—the withdrawal of legal aid is neither here nor there. As I understand it, this shift in service responsibility has not even been discussed, formally or informally, with the Money Advice Trust, and it is precisely because the kind of debt advice that the Money Advice Trust provides is different from advice that is “strictly legal” that legal aid needs to be retained.

The Money Advice Trust describes what it provides as “assisted self-help”—preparing budgets, helping clients seek additional benefits, helping them calculate acceptable repayments to creditors, and so on—but this is not legal advice. The Money Advice Trust is not equipped to provide legal advice; for example, it cannot advise clients on their chances of success in court or prepare them for court hearings, or how to get statutory debt relief or challenge collection and enforcement actions. If people needing formal legal advice were to rely on the Money Advice Trust, it simply would not have the capacity or the expertise to help them. The 200,000-odd people who go to that service every year would get much poorer outcomes.

In the long run, the cost of the gap in provision that would be created by the withdrawal of legal aid in these circumstances would end up being far greater, and would therefore frustrate and subvert the Government’s perfectly reasonable objective of saving money. People with debt problems need the services of organisations such as the Money Advice Trust but they may also need formal legal advice, and when and if they do, it would be uncivilised to deny them access to legal aid.

I urge the Government to think again carefully about the distinction between legal advice and more generalist debt advice of the sort that this charity provides, and to accept these amendments.

--- Later in debate ---

[The Minister of State, Ministry of Justice (Lord McNally)]

The noble Lord, Lord Clinton-Davis, was always known for his impetuosity.

I pay tribute to the noble Lord, Lord Stevenson, and his ongoing interest in debt matters. However, this amendment would have the effect of broadening the availability of legal aid for debt cases, contrary to our current proposals, which are to retain legal aid for priority debt cases only, where the individual’s home is at immediate risk of possession because of rent or mortgage arrears or involuntary bankruptcy.

It is never an easy decision to restrict the availability of funding but economic reality dictates that we focus scarce resources on the cases that are the highest priority. The Government have taken a principled approach to making spending reductions, prioritising funding for those categories of case that are most serious, such as where life, liberty or immediate loss of home are at stake. The necessary corollary of protecting funding in the most important areas is that we have to make tougher choices in the lower-priority areas.

When making these decisions, we have taken into account the presence of alternative appropriate forms of advice. It is simply not the case that legal advice is the only—or even the best—response to debt problems. Figures show that liability for the debt itself was reported as successfully contested in fewer than 2 per cent of cases in 2009-10, and also reveal that 62 per cent of legal help funding for debt matters was spent not on complex matters of law but on negotiating payment arrangements and advising clients on managing their affairs better.

We recognise that debt problems can be difficult and stressful for the individuals concerned, but we believe that what people often need is practical advice and support, rather than specialist legal advice. This help is quite widely and effectively available from organisations such as Credit Action, the National Debtline, the Consumer Credit Counselling Service and the Insolvency Service inquiry line and website. Local authorities also signpost people to local sources of advice and assistance on debt matters. In addition, the Money Advice Trust, to which the noble Baroness, Lady Coussins, referred, has recently launched “My Money Steps”, an online tool for providing advice for people with debt problems. The Consumer Credit Counselling Service also offers a free online “Debt Remedy” service.

Such sources of help are best placed to deal with issues like debt relief orders, which this amendment suggests should be brought back into the scope of legal aid. These orders are relatively informal procedures, used by people who owe limited amounts of money and do not have assets. Indeed, the current legal aid scheme does not pay for their completion.

Given the availability of alternatives, and the pressing choices forced upon us by the economic situation, it does not seem a wise use of scarce resources to continue funding widely available legal advice, much of which replicates advice available elsewhere. We must move away from the assumption that for many problems that are fundamentally non-legal, the only answer is for the state to pay for legal advice.

I understand that this amendment is motivated in part by the noble Lord’s concerns about funding for citizens advice bureaux to provide debt advice. As I have said in earlier debates, we share that desire to see what can be done to help to ensure sustainability for the non-profit sector. However, let us not overstate the impact of our changes in legal aid on CABs. Legal aid funding is intended for specialist advice, not for cross-subsidy of other activities. As a matter of practice, in 2010, 85 per cent of all bureaux funding came from sources other than legal aid and half of all bureaux do not hold a legal aid contract at all. Moreover, it should be borne in mind—I am sure that the Opposition will be glad to know this—that we have already provided £20 million, which has come ahead of reductions in legal aid spend.

It is worth remembering that CABs have not had any cut in legal aid spend and will not until 2013. Of that £20 million, £16.8 million assigned to England is being used for the Advice Services Fund to support not-for-profit providers in delivering essential advice on debt, welfare benefits, employment and housing. Despite the concerns of the sector, the Money Advice Service will continue resourcing the existing free face-to-face debt advice services after 31 March, so that people in need have access to good, free advice. The Financial Services Authority has agreed to fund this provision from April.

I also understand that the Cabinet Office’s review is expected to conclude shortly and will provide recommendations on proposals to secure long-term sustainability of the sector. As my noble and learned friend Lord Wallace pointed out, it is only nine days to my right honourable friend the Chancellor’s Budget. Therefore, I would ask the House to be patient and to allow us to bring this important work to its conclusion.

It is always easy to make the case for spending but tough times require tough decisions. I hope that even our critics accept that we are making genuine attempts to protect the not-for-profit advice sector, not least by the pressures brought to bear by my noble friend Lord Shipley at earlier stages of this Bill and by other Members of this House who have raised the specific issue of the CABs and the not-for-profit sector. I have given assurances about this and, against that backdrop, I urge the noble Lord to withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Baroness, Lady Coussins, for her contribution to this debate and for sharing her experience of working directly in this field, which I echo. I recognise many of the points that she made around that. It was also nice to have the unprompted support of the noble Lord, Lord Clinton-Davis. I seem to be having a little run of these things because the previous time I tried to speak about this subject, the noble Lord, Lord Best, came in on housing, which, although again relevant, was not exactly helpful to my support. Never mind, we will battle on.

At last weekend’s Lib Dem conference, a Motion was passed calling for:

“The protection of fair and equal access to justice, through … A properly funded system whereby access to legal advice and representation before the courts is not denied to those otherwise unable to bear the costs”.

It was unanimously passed but I notice that the Minister did not mention it when he made his remarks a few minutes ago.

A lot of the points that I made, which were picked up by the noble Baroness, Lady Coussins, were about the difference that had to be made between legal advice and generic advice. It is certainly true that a lot of work is going on in the generic debt advice field but we have been facing problems in terms of legal advice. I notice that in his comments the Minister made more of a case for support of the voluntary sector in this area, which of course we are grateful to have, than about the individuals who we think will be affected by this. For example, if the bailiffs are at the doorstep seeking to seize someone’s goods and chattels, I think that everyone in this House would agree that they are reasonably said to be facing serious direct consequences. Yet, under the present proposals, they would neither be eligible for legal aid to contest the original order nor would they be able to access legal aid to challenge the manner in which the order had been carried out. Indeed, we know a lot about that. There are quite serious difficulties within the legal advice sector of debt which have not really been picked up in this debate so far.

It was interesting that the Minister made the point that currently debt relief orders were not being funded to any great extent by legal aid and that, to some extent, legal aid should perhaps not be used at all for this. The key reason why the DRO scheme is successful is its lower cost, which was much trumpeted by the Insolvency Service. That is because the administration fee is £90, of which £80 goes to the Insolvency Service, leaving £10 for those who have to administer it. I have looked carefully at the way in which these forms are created. It would take me a great deal of time to work through these things and I am an accountant. However, specialist support and advice is needed. I think that it is ingenuous of the Minister to say that somehow this will survive. My charity estimates that it costs us about £350 per case to deliver a completed DRO. Where will that money come from? I do not think that we have had any answer to that.

Finally, the way in which the noble Lord went on seems to suggest that he has not read the BIS Select Committee report on debt management, which was published last week. The report states:

“Citizens Advice informed us that the legal aid budget for debt advice in England and Wales is due to fall by 75 per cent from 2013”.

The noble Lord admitted that there would be some changes after 2013. The report continues that the,

“figures, from the Justice Department, suggest that the number of people currently helped with debt problems will fall by 105,000”,

which is a significant number.

Later in the report, a BIS Minister is reported as recognising that,

“the cuts to legal aid could be a problem. Clearly for particularly some Citizens Advice Bureaux and other advice agencies, it may well have quite a big impact … I am afraid these are not easy times. There are cuts being made”.

The situation facing those in debt in this country—very often not of their own accord and they certainly are not the feckless poor—is really difficult. I do not think that these proposals will help. I should like to seek the opinion of the House.

Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Stevenson of Balmacara Excerpts

Thursday 9th February 2012 Lords Chamber

[Lord Ramsbotham]

My Lords, the amendment is tabled in the context of something mentioned in the Green Paper that has occurred many times in statements by the Government relating to what they intend to do with prisoners—in other words, to make prisons become working prisons and to increase the amount of time that prisoners spend at work; the 40-hour working week has been mentioned.

Clause 118 amends Section 47 of the Prison Act, which lays down what may happen. New subsection (2) refers to secure training centres and young offender institutions; new subsection (3) adds that different provision may be made for different cases; and new subsection (4) talks about employment rules made by the Secretary of State in that context.

My reason for this amendment, which may look a little prescriptive, is that from experience I know perfectly well that there is no way in which under current circumstances the Government will be able to enact what they say they want to do. I have known for years and years that the problem is that NOMS and the Prison Service simply are not orientated or equipped, nor do they have the ethos, to provide the business-like structure that is necessary if work is to be provided. They never have and they never will. The NOMS bureaucratic procedures involved in dealing with private contractors are ludicrously complicated and frustrate those who would like to contribute by providing work.

I have always contended that the ideal in a prison is a full, purposeful and active day for every prisoner, designed to tackle what has prevented them from living a useful, law-abiding life, with the idea that they come out and do not reoffend. That is not realised by prisoners spending all day in their cells doing nothing. A census done now of prisons would, I believe, come up with a figure of nearly 50 per cent of all prisoners doing nothing, which means that there is no help for them to live a useful and law-abiding life.

I have said again and again that there is a need for someone to be in charge, responsible and accountable. I have said for years that until and unless a businessman is appointed to be in charge of the overall direction and provision of work in prisons, nothing will happen.

I have spoken to two distinguished providers of work in prison: Mr James Timpson, who not only runs four academies but has taken on almost 200 ex-prisoners in his employment around the country, and Mr Edwin Lucas, who has been working in the recycling trade as well as providing work in prisons for years. I listened with horror to the frustrations that they have expressed about trying to deal with prisons where no one has a clue about how to deal in a business-like way. For example, a van will arrive with deliveries of materials to be used by prisoners only to be sent away because people say, “We do not accept vans until four o'clock in the afternoon. It is now 11 o'clock in the morning, and you will have to wait”. That is not how business works. People do not answer letters. Invoices are invariably late. People bring in pallets of material and are sent bills by prisons.

Until and unless there is proper oversight, run by businessmen, which includes trained people responsible for conducting business activities in each prison, nothing will happen. The present inefficiency of the system, where every governor is allowed to do his own thing, is telling against that, because the businessmen who are working with prisons tell me that probably only 20 of all the governors are capable of conducting the sort of activities that are needed. The others simply do not have the understanding or the ability to do it. There is no reason why they should. It should not be part of the requirement for a prison governor, who is there for another purpose.

In order to make the rehabilitation revolution work, I desperately want work to be provided. I know that a number of things could happen. For example, one of the best programmes in prison currently is Toe by Toe, where prisoners teach other prisoners to read. I seriously believe that in the prison population many skills are held by existing prisoners which could be put to good use in acting as trainers, and which are free and therefore will not act as a resource problem for the Prison Service. You get a double whammy, because the person doing the teaching gets as much out of the process as the person being taught.

For years, there has been an inhibitor on prison governors using their initiative to bring work in: grant in aid, which is required by the Treasury. Under that, a governor can declare that he will make a profit from an activity that he is to conduct, including prisoners making things. He declares that profit and, if he makes it, he is allowed to keep it and apply it within the prison. If he makes more, he has to surrender it to the Treasury. If he does not reach what he has said he will make, he has to provide it from his budget. For years, the impact of this has been that people have not been willing to risk making a loss and therefore they have not encouraged the uptake of work as much as they might have done.

The three additional aspects that I have suggested the Secretary of State should consider are all to do with the provision of work. The amendment would make certain that those contracted were properly overseen and that all the activities, both vocational and educational, carried qualifications of worth that could be used outside. As I said, I admit that this is prescriptive but I feel so strongly that this work ethic must be encouraged and enabled that I could not resist proposing the addition of these paragraphs to Clause 118. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, I support the amendment so eloquently introduced by the noble Lord, Lord Ramsbotham. From what he said, I got the sense that it is really a probing amendment and that he did not expect to receive much support for it. However, he made such a powerful case that I hope the Minister might be swayed to think again about some of these points. As we have already heard in this Committee, it is obvious that many people enter prison without the capacity to read and write, let alone to hold down a job when they come out on release. Therefore, examples such as the Toe by Toe programme should be mandatory. Indeed, it is a pity that the amendment has not specified that it should be a requirement on the Secretary of State.

We have no objection at all to what is being proposed. Indeed, we would regard its prescriptive nature as being of benefit in the sense of tying down, as the noble Lord, Lord Ramsbotham, said, what is required of prisoners—that they should have a full, purposeful and active day, and that every prisoner should undertake something instead of staying in their cells so as to at least become engaged and appreciate what is necessary in order to succeed outside prison. It would therefore also reduce the level of reoffending.

There are some good examples of work with prisoners having been done by private employers. National Grid had a project at Reading in which I was involved in an earlier life, and I thought it was absolutely exemplary. It provided what seemed to be the critical path forward for those due to leave custodial sentences in the sense that it provided them with housing, jobs and training. It started before the prisoners left in order to bring their reading and writing up to speed, and it allowed them to learn a skill—in this case, fitting—which meant that they were able to operate as soon as they left. As I understand it, that programme is still going. The recidivism rate was very small indeed, so the programme was certainly worthy in that regard. It also had the advantage of satisfying a need on the part of employers—they had realised that they were not getting an adequate supply of people to do the necessary jobs, and they found that this programme provided a ready supply.

Therefore, there can be a win-win in what the Government and private enterprise are looking for. Indeed, one might say that it could apply to charities and public bodies and not just to private companies. However, the essential point of the amendment is that, if it is decided that there will be employment from such activities in prisons, it should be done properly so that those who benefit from it have skills and qualifications that are nationally recognised, and it should be done in all cases so that we have a better outcome from the prison element.

[Lord McNally]

My Lords, like the noble Lord, Lord Stevenson, I have had the opportunity to look at some organisations that have become involved in providing work for prisoners and, like him, I am impressed. It is encouraging that those who have taken the risk, as some may see it, of employing ex-prisoners, helping to train them, and doing work in prisons, find it a very fruitful experience.

Sometimes I think that the noble Lord, Lord Ramsbotham, is a little hard on NOMS. I fully accept that it is obvious that the vast majority of the prison estate was not designed for operating work regimes. Many very competent prison governors and prison officers are not equipped to run businesses. That is a given, which makes the idea of work in prisons difficult but not impossible. One of the things that we have tried to do in the past 18 months is to tackle in a practical way the realities to which the noble Lord, Lord Ramsbotham, referred. Several hundred organisations already provide work and training opportunities inside prisons, but many are small and want to do more to attract business.

We aim to provide a competitive package for business. We will make involvement as straightforward as possible and get the commercial model right for both prisons and the private sector, subject to our paramount interest in ensuring security, in line with our legal obligations. NOMS is developing new structures and putting in place the right people to operate in a businesslike way. That includes the recruitment of a new chief executive for the prison industries team within NOMS and a business development manager who will have responsibility for finding new businesses and managing relations with customers.

We are trying to address some of the issues raised by the noble Lord, Lord Ramsbotham, and as of now around 9,000 prisoners are employed in prison industries, which my rough arithmetic makes it to be around 10 per cent, or perhaps just a little over of the prison population. It is clear that there is much to do, but there are great prizes if we can get this right. Clause 118 is central to our plan to achieve our aim to make prisons places of meaningful and productive work where prisoners make reparation. Ensuring that prisoners and those detained in young offender institutions or secure training centres have access to training and can obtain qualifications is important. The Government certainly recognise the importance of this area and agree with the intent behind the amendment.

Let me assure noble Lords that we are already doing much of what we aim to do. Through our desire to increase the amount of meaningful and productive work done in prisons, the Government will give many more offenders the chance to learn the discipline and skills of working. As study after study has shown, offending patterns diminish once employment has been found. However, it is not just through prison working that we aim to reduce reoffending. Experience of a proper working week will be augmented by ensuring that their work links them to the right opportunities to develop the skills necessary to their finding employment when they are released.

We plan to deliver learning bases on clusters of institutions that regularly transfer offenders between them. The learning and skills offer will focus on the needs of employers in the areas into which prisoners will be released, as well as on key issues, such as numerous, literacy and communication skills. Here again, I pay tribute to Toe by Toe, which is a marvellous way of tackling illiteracy—one of the problems that comes through time and again in offending. Decisions on the most appropriate learning and skills offer will be taken locally with the key aim of giving offenders the skills that they need to find and keep jobs and apprenticeships on release. There will be no one size fits all approach, nor should there be. Within this new framework we are retendering the offender learning and skills services—a process that gives the chance to look afresh at how to work with the best range of providers. As well as learning the necessary skills and having the right qualifications, many offenders have barriers to entering the labour market that must first be tackled.

As the Deputy Prime Minister announced in August 2011, from the summer of this year offenders leaving custody and claiming jobseeker’s allowance will have to engage with a work programme provider on release, who will be paid for getting them into work. As well as creating this “day one” service, we are bringing together the claiming of jobseeker’s allowance and the processing of benefits before release rather than after it, so prisoners should have a shorter wait for their first benefit payment, which will help their resettlement. In addition, any prison leaver who claims jobseeker’s allowance within 13 weeks of release will be mandated to the work programme from the point of claim. We will also test, in two work programme areas, the addition of a reducing reoffending payment as part of our payment by results approach, in which we will use a variety of methods in the pilot phase.

We recognise that equipping children under the school leaving age with the skills they will need to succeed in life is vital. There is already an expectation that they will be in education rather than paid work. The raising of the participation age will mean that from 2013 all young people, including those in custody, must continue in education or training until the age of 17, and until 18 from 2015. Young people in secure training centres and under-18 young offender institutions will have access to a full day of education and constructive activity. In secure training centres, young people participate in education or training for at least 25 hours per week. In the under-18 young offender institutions, each young person will receive at least 25 hours per week of education and other constructive activity.

We believe that the amendment is constructive but unnecessary. Section 47(1) of the Prison Act 1952 allows the Secretary of State to make rules concerning the regulation and management of prisons, young offender institutions and secure treatment centres, and the treatment of those required to be detained therein. Subsection (3) states:

“Rules … may provide for the training of particular classes of persons”.

Clause 118 will not change those aspects of the 1952 Act, which cover the same ground as Amendment 181A.

For adults detained in custody, the rule-making powers contained in the Prison Act are augmented by provisions in the Apprenticeships, Skills, Children and Learning Act 2009, including a duty on the chief executive of Skills Funding to,

“secure the provision of reasonable facilities for education suitable to the requirements of persons who are subject to adult detention”,

and, in doing so, to take account of a range of factors such as facilities and equipment. In carrying out this duty, the chief executive must have regard to various matters, including the desirability of prisoners continuing the education or training that they have begun, and making the best use of resources.

I have listened often to—and have always welcomed—the noble Lord, Lord Ramsbotham, championing the concept of making work, training and education a priority. They are the key to rehabilitation. I hope that what I have said has convinced him that, although we may not have achieved all that he desired, we are listening and trying as best we can to move in the direction that he advocates. For that reason, I hope that he will withdraw his amendment.

--- Later in debate ---

[Lord McNally]

My Lords, I cannot resist commenting on the last point made by the noble Lord, Lord Ramsbotham. He is such an old Whitehall warrior that he is always between one department and another, asking, “What are the difficult questions that I can ask them?”.

Clause 120 provides that prisoners who are being transferred under escort from one state to another for the purpose of serving a sentence of imprisonment may transit through the territory of Great Britain. Transit will normally involve a prisoner and escort changing aircraft at an appropriate UK international airport. The clause is required to enable the UK to fulfil its international obligations under existing and future prisoner transfer arrangements. Following discussions with the authorities of the Channel Islands and the Isle of Man, it has become clear that further powers are necessary to enable escorts from these territories to transit through Great Britain when transferring a prisoner to another state. This group of amendments address that particular issue with the Crown dependencies. They have no other, wider or ulterior motives, despite talking about transiting through territories et cetera. They are to enable the Crown dependencies—the Channel Islands and the Island of Man—to participate in what are already international obligations. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, I am deeply sad that my appearance before the witching hour did not receive the approbation of the Minister, who did not welcome me to the Front Bench with my comments. I make no further comment on that. I also make it absolutely clear that the comments which follow have not been solicited by me creeping around Whitehall. The noble Lord, Lord Ramsbotham, has gone, but I will obviously take lessons from him about how to do that in future. He concealed his briefing very well to the end. Perhaps he should have done so until after the Minister responded.

The Minister is right. The wording of these amendments looks pretty innocuous on the surface but we wonder why they are there. I have five questions to leave with the Minister. He said that these were necessary to fulfil international obligations. That of course raises in one’s mind the words “extraordinary rendition”. Could he reassure the Committee that, as he said at the end, there is nothing that one should be worried about in that? Clearly, we are worried about extraordinary rendition. Is this a part of that overall process and, if not, could he explain precisely why the Channel Islands and the Isle of Man need to have this legislation at this time? I am sure that there is an innocuous explanation, but we would be grateful to have that. Perhaps in answering that he could also say what he estimates the effect will be of the provision. I cannot imagine that many international flights carrying prisoners and escorts, or without escorts, land in the Channel Islands and require this sort of arrangement; so it would be interesting to have the figures and, if he does not have them to hand, perhaps he could write to me.

Since we are on extraordinary rendition, which has been a sensitive issue for some time, perhaps the Minister could use the opportunity to refresh our memories about where we are on this. Is it still the case that the UK will not undertake extraordinary rendition of detainees in a manner that may be illegal? Confirmation of that would be gratefully received.

[Lord McNally]

On the last point, of course I can give that guarantee. I very much welcome the noble Lord as part of the nightshift. I apologise for the omission during his earlier contributions.

The Isle of Man, Jersey and Guernsey are not part of the United Kingdom; they are Crown dependencies. Whether it was an oversight or not, I do not know, but this just clears things up so that they can operate through UK airports if that was needed. I understand that there have been two or three cases in the past three or four years, so this is not some mass movement of people. They are applications on a voluntary basis, with people wanting to be repatriated back to their own country, and for prisoner exchange purposes.

It may help if I speak to Clause 120. The clause would enable prisoners who are being transferred from one state to another for the purpose of serving a sentence of imprisonment to transit through the territory of Great Britain. Transit will normally involve a prisoner and escort changing aircraft at an appropriate UK international airport. It is required to enable the UK to fulfil its international obligations under existing and future prisoner transfer arrangements. The United Kingdom is party to a number of international prisoner transfer arrangements which require the United Kingdom to facilitate transit wherever possible. In the absence of a specific power to authorise transit, and where necessary to detain a prisoner during transit, applications have been routinely refused.

Clause 120 will enable the relevant Minister to authorise transit through the territory of Great Britain where a request is made in accordance with a relevant international prisoner transfer agreement to which the UK is party—in particular the Council of Europe’s framework decision which requires a member state to facilitate transit between member states when requested. It also provides a power for the police to detain a prisoner in transit only for a period necessary to complete the transit.

The Government fully support the principle that foreign national prisoners should be able to serve their sentences in their own country and we need to support partner jurisdictions in achieving this end. For this system to work effectively, Governments must to co-operate with each other in facilitating transfer. Indeed, the UK regularly seeks and obtains permission to transit through other countries when returning British nationals here.

I recognise that concerns have been raised about the rights and protection of individuals subject to transit, but I remind the House that only when a person has been convicted and sentenced by a court of law and when that person is being transferred for the sole purpose of the enforcement of that sentence in another country would transit through the UK take place. The prisoner concerned is unlikely to have any connection with the United Kingdom and any challenge to the prisoner’s transfer and detention should be made either to the sentencing or receiving state, not the United Kingdom.

This is a technical amendment and has none of the sinister implications that might have arisen at first blush. I hope that the assurances that I gave at the beginning to the noble Lord’s questions will satisfy him.

--- Later in debate ---

Debate on whether Clause 120, as amended, should stand part of the Bill.

[Lord Stevenson of Balmacara]

My Lords, I do not intend to detain the Committee long on this. This was not so much a probing matter as a sort of defensive one, in case the answers to the questions on the previous group of amendments proved in any way suspicious or raised questions about extraordinary rendition. I think I got it, although I found it a bit confusing as sometimes we were in Great Britain and sometimes we were in the United Kingdom. I will read Hansard very carefully. If there were any other points I am sure we can sort them out but, on that basis, we will not press this.

Clause 120, as amended, agreed.

Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Stevenson of Balmacara Excerpts

Monday 30th January 2012 Lords Chamber

[Lord Elystan-Morgan]

My Lords, I, too, support this amendment, which was presented with such lucidity and articulation by my noble friend Lady Coussins. The exact motivation behind the changes that are being incorporated into the Bill is not clear to me. Is it to save the public purse some money, or is there some other purpose? If it is a case of saving the public purse some money, what aspects of the possible results have been examined? Exactly what evidence has been collected? How satisfied are the Government that a net saving in that regard will be brought about? It is obviously not the Government’s intention to deprive worthy people of a redress that they have at the moment, albeit in an imperfect state, as my noble friend Lord Pannick suggested. That cannot be the motivation, but undoubtedly that would be the result.

It is true that the number of cases is not immense, but justice is one and indivisible. The stain on the name of justice in these matters is considerable indeed. I remember in the early 1970s being a member of Lord Elwyn-Jones’s chambers. He was briefed by some South Sea Islanders whose island had been abused by the rapacious acts of mining companies that were registered in the United Kingdom. Out he went for a conference. As the launch was drawing into harbour, hundreds of people were drawn up on the quay—a very high percentage of the islanders—all singing, “Oh God our help in ages past, our hope for years to come”. Elwyn-Jones, being the man he was, was greatly inspired by that and, indeed, the islanders won a redoubtable victory. It is in defence of such situations that I greatly welcome the initiative brought about by the noble Baroness.

[Lord Stevenson of Balmacara]

My Lords, this has been a very interesting debate that has been well supported all round the House. I hope the fact that so many noble Lords have spoken in support of these amendments will weigh on the Minister when he responds.

I would like to spend a few minutes talking about the dichotomy between the rhetoric that we have heard from the Government about the importance of human rights, which we support, and the impact of the measures before us. Under the existing regime, it is already extremely difficult for the cases that we have talked about to be brought in the UK. In the past 15 years, only nine or 10 such cases have been brought. However, these cases have had a significant impact not only on the lives of thousands of people directly affected but—this is important—on corporate practices and international norms in business and human rights.

When the Prime Minister met the Colombian President Juan Manuel Santos in London on 21 November, we were delighted to hear him say:

“Governments of the United Kingdom and Colombia reaffirm their shared commitment to respect, protect, and promote human rights. We reaffirm our commitment to uphold the human rights treaties and agreements we are signatories to, in particular the Universal Declaration of Human Rights, and the International Covenants on Civil and Political Rights and Economic, Social and Cultural Rights”.

I am sure the Minister and his Government want to match reality to that rhetoric. The problem is that, possibly as a result of an unintended consequence or possibly of trying to get one cap to fit all cases, the considered view from all those involved in this area is that the practical result of the proposed changes will be that it will be almost impossible for poor individuals and communities from the developing world to pursue justice in UK courts. We think that this is wrong in principle but also because of the message that it sends to multinational companies based in the UK. Our amendments would create an exemption so that vulnerable victims of human rights abuses in the developing world would still be able to bring cases to the UK. There is no evidence of any need to address the possibility of a spate of spurious claims here; the truth is that it is already very difficult to bring these kinds of cases against UK-based companies in our courts.

Amending the Bill will be essential if the UK is to meet its commitments on business and human rights and to avoid giving the impression that somehow the Government have gone soft on the way they wish to treat business that causes abuse overseas. The rhetoric is good. We know that the Government have consistently supported the UN “protect, respect and remedy” framework for business and human rights and the guiding principles developed by Professor John Ruggie and adopted by the UN in June 2011. In those framework and guiding principles, Principle 26 explicitly states:

“States should take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing human rights-related claims against business, including considering ways to reduce legal, practical and other relevant barriers that could lead to a denial of access to remedy”.

As recently as December 2011, the UK submission to the UN Working Group on Business and Human Rights stated:

“The United Kingdom has placed human rights as central to and indivisible from the core values of British foreign policy. We believe the potential of business to impact on the human rights of individuals worldwide has only been fully recognised in recent years. The endorsement by the Human Rights Council of the UN Guiding Principles on business and human rights in June 2011 marks a high point of international consensus on the issue”.

In light of the praise for Professor John Ruggie’s achievements, it is vital that we keep open the chance of mounting human rights actions in the United Kingdom. The reality of today’s world is that global companies play an increasingly important role and can impact on almost all aspects of our lives. While many UK transnational companies act responsibly, it is important that in situations where human rights abuses occur abroad, poor and vulnerable victims can still seek justice in our courts.

As the noble Baroness, Lady Coussins, said, the Government have already made an exception in the Bill for ATE in clinical negligence cases. Is it not possible to do the same for this limited set of cases? As has been mentioned, the mover and supporters of the amendment met last week the noble and learned Lord, Lord Wallace of Tankerness, and the noble Lord, Lord McNally, who I thank for their time and courtesy in listening to us. I came away from the meeting feeling that there was a willingness to find an accommodation on this issue. If the Minister is happy to signal his willingness to continue those discussions, I am sure that there will be a way of resolving the differences, and I look forward to having a chance to do that.

[Lord McNally]

My Lords, I pay tribute to the noble Baroness, Lady Coussins, and her record in this area. Looking down the list of noble Lords who have spoken in this debate, I see the names of many with whom I have been shoulder to shoulder in many debates. I do not think that there is any division between us on that.

To address the point made by the noble Lord, Lord Stevenson, about the Government’s rhetoric on human rights, I shall, to quote Tony Blair, “leave it to history” to make judgments about the coalition Government. However, one thing that I am absolutely proud of is that in a time of great austerity the sustaining of our aid programme and the follow-on impact on human rights around the world will always be to our Government’s credit—as, too, will their decision to implement the Bribery Act, to take the lead in international anti-corruption campaigns and to be strong advocates for human rights around the world. There is more than rhetoric in this Government’s record on this issue.

I talked with the noble Baroness, Lady Coussins, and the noble Lord, Lord Stevenson, on these issues and, as they know, I am not convinced that the amendments are necessary or appropriate. Let me try to explain why. The Government believe that it is still possible to bring claims against multinational companies once our changes to CFAs are implemented, but the costs involved will be more proportionate to the sums at issue. The proposers seek to address not the validity of the claims but the iniquity of a system that can allow legal costs to escalate to significantly more than the damages at issue.

It is worth emphasising at this stage that the current system of recoverable success fees and recoverable ATE insurance premiums, with the consequence of high civil costs, is not seen in any other jurisdiction in the world. However, I should emphasise that while we should do all we can to ensure that UK business continues to flourish abroad, this will never be done at the expense of violating any of the rights and laws of the host country. The Government are committed to ensuring that UK companies continue to conduct themselves to the highest standards, especially when carrying out trade and transactions in other countries.

CFAs will continue to be available, but the Bill also extends another funding option, to which the noble Baroness, Lady Coussins, referred: the Government are making available alternative methods of funding—such as the use under Clause 44 of damage-based agreements, DBAs, which could be used to fund group actions against multinational companies. Some say that our proposals will decrease the number of these claims, while others, including the Confederation of British Industry and some American companies, are concerned that DBAs will in fact increase the number of such claims. The Government believe that they have the balance right between protecting access to justice and making costs more proportionate. Our aim has been to ensure that litigation is available to stop corporate harm.

It has been mentioned that we were among the champions of the Ruggie guidelines, and it is true that the Government strongly support the UN guiding principles on business and human rights that were developed by Professor Ruggie. We co-operated closely with him on his mandate and fully support the international working group that has been established to take his work forward. I was pleased that I was able to announce that support immediately after that report was published.

Public Bodies Bill [HL]

Lord Stevenson of Balmacara Excerpts

Monday 7th March 2011 Lords Chamber

Moved by

[Lord Stevenson of Balmacara]

65A: After Clause 2, insert the following new Clause—
“Report on the merger of the UK Film Council and the British Film Institute
(1) Before making an order under section 2 in respect of the UK Film Council, the responsible Minister must report to Parliament with details on which body will be responsible for performing the following functions currently discharged by the UK Film Council—
(a) supporting film exports;(b) protecting intellectual property and combating film theft;(c) providing film research, statistics and market intelligence; and(d) providing co-production support and diversity initiatives.(2) One year after an order has been made to merge the British Film Institute and the UK Film Council under this Act, the responsible Minister must report to Parliament on—
(a) the performance of the British Film Institute in discharging its function to promote the UK as an international filming location and to raise the profile of British films abroad;(b) the performance of the British Film Institute in discharging its function to develop new and emerging talent in film production throughout the UK;(c) the performance of the British Film Institute in discharging its function to ensure that a broad range of films are available for the British public; and(d) the criteria used and funds allocated and distributed by the British Film Institute for film production in the UK.”

[Lord Stevenson of Balmacara]

My Lords, the Bill deals with the questions of whether certain functions undertaken by government should be devolved to public bodies and how to ensure that these bodies are accountable. The Government are supposed to check whether a function needs to be carried out at all and then to apply certain tests to determine whether a public body is the “right delivery mechanism”.

Our case is that film policy fits these tests and that government has been right to establish public bodies to deal with the delivery of its objectives. The issue is which bodies and how they are to be brought into a relationship of accountability to Parliament. The purpose of the amendment and those in the group is to review and, if possible, to learn lessons from the situation that has arisen because of the precipitant decision of the Government in July 2010 to abolish the UK Film Council. The purpose of the amendment is also to safeguard the position of its main successor, the British Film Institute, and thereby give an opportunity to your Lordships to celebrate the outstanding achievement of British talent and skills in the recent Oscar and BAFTA ceremonies.

I declare a past interest as former director of the British Film Institute. I thank my noble friends Lord Wills and Lord Judd for putting their names to these amendments. My noble friend Lord Puttnam apologises for not being present. He was here last week when we nearly reached consideration of the amendments; indeed, that would have been well timed, because it was the night after the Oscar ceremonies, for which we were on tenterhooks. Unfortunately, he is now abroad and cannot be with us today.

By all accounts, this was one of the best years for British films in the BAFTAs and one of the best years for British nominations in the Oscars across all the technical specialisms, as well as in acting, producing and directing. I am sure that I speak for all noble Lords in sending our warmest congratulations to all those involved. “The King’s Speech” joins nine other British films that have won an Oscar for best picture. Colin Firth richly deserves his best actor accolade. Tom Hooper is the latest British director to be honoured and joins Danny Boyle, Sam Mendes, Anthony Minghella and Dickie Attenborough—to name but a few of the most recent winners. With the winners for the best original script, David Seidler, and best supporting actor, Christian Bale, Britain kept up its remarkable record of success. We are good at making films.

On another occasion, I should like to draw attention to the excellent work being done, perhaps behind the scenes, at the National Film and Television School in Beaconsfield, which had another good awards season, with 40 graduates involved in the BAFTA nominations and 25 working on films that garnered Oscar nominations. We are good at films and at training people for film.

“The King’s Speech” was supported by the UK Film Council with lottery funding and is already the most successful British independent film of all time. It has taken a staggering £42 million so far in the UK and has grossed $278 million worldwide. It is reaching new audiences. Indeed, one could say that it boldly goes where no British film has gone before. As a result of the modest investment made by the UK Film Council, millions of pounds will be recycled back into supporting the UK film industry. In that sense, the film perfectly makes the case for the UK Film Council’s work.

The last Government were considering a merger between the BFI and the Film Council but wanted the bodies themselves to come up with a workable proposal. In abolishing the UK Film Council by press release, the Government threaten one of the outstanding achievements of the past 10 years, during which time film became one of the UK’s real success stories and a hugely dynamic part of the creative industries and the creative economy. Not all of this can be directly attributable to the UK Film Council, but it is worth noting that the UK box office has grown by 69 per cent over the past 10 years and is now worth £1 billion per annum. The UK film industry now contributes more than £4.5 billion a year to the UK’s GDP and returns more than £1.2 billion to the Exchequer in tax payments. The UK film industry directly employs around 36,000 people and, in total, supports about 100,000 direct and indirect jobs. Over the past 10 years, inward investment—mainly US films made here—has surpassed £5.4 billion and film exports have reached a record £1.3 billion. The Film Council, over its lifetime, has invested over £160,000 of lottery funding into more than 900 films and shorts, which have won more than 300 awards, entertained more than 200 million people and helped to generate over £700 million at box offices worldwide.

I said earlier that the Government had been precipitate in abolishing the UK Film Council. Contrast, if you will, its demise with the careful way in which the previous Government set up the body a decade ago—a process in which I played a small part. Working from an initial proposal from the BFI, a working group co-chaired by the right honourable Tom Clarke MP, the Film Minister, and Stewart Till from the industry consulted widely across industry and abroad before the report, A Bigger Picture, was delivered to the Secretary of State and then implemented. Many of the findings of that report are very relevant today.

Film is both art and business. The British director John Boorman once called it the business of “turning money into light”. It is creative and innovative, it powers growth, it stimulates employment, it drives tourism and, as the Americans have recognised from the earliest days, it can promote both cultural and physical goods. If we are to diversify the British economy, we need to support and nurture our creative industries. Film is a collaborative industry and it ought to be at the heart of our drive to develop the creative industries, drawing as it does on so many other allied industries, increasingly in the new technologies.

However, we in Britain have a schizophrenic attitude to film. Is it a coincidence that the Royal Opera House dominates Covent Garden, that the National Theatre draws eyes across the Thames and that the Royal Festival Hall stands proud beside it, but that the National Film Theatre is hidden under Waterloo Bridge, every screening potentially ruined by the traffic grinding its way across above it and audiences constantly frustrated about how to find their way in, let alone watch a movie?

The machinery of UK film is complex, with many moving parts, and there is a need for a single body to continue the work of turning the UK film sector into a professional, co-ordinated and powerful industry, capable of making and distributing movies that will earn back their investment across the world. Every Government in the world, including that of the USA, support their film industry. We have the talent and the facilities—our records show that. What the industry wants is a long-term, stable partnership with government.

When I first put down this amendment to the Bill last year, I did not know at that time that the majority of the functions of the UK Film Council were to be transferred to the BFI. Although I regret the way in which this was done, I support that decision, which I think was the right one. I am confident that the senior management and the board of the BFI will rise to the “challenge”, as the Minister Ed Vaizey put it, of becoming the,

“new strategic body to oversee the future development of film in this country”.

However, closer inspection of the plans gives me cause for concern. I understand that only 44 of the 76 UK Film Council posts are to be transferred to the BFI, as no funding is earmarked for several of the functions currently undertaken, including support of film exports, protecting intellectual property and combating film theft, and providing co-production support. Can the Minister give us some explanation of what is to happen to these functions and why it was felt that they were not central to the future development of film in this country?

Of the 44 posts that are transferring out of the UK Film Council, I understand that four are to go to Film London, which is to take over the functions of the British Film Commissioner and be responsible for promoting the UK as a base for making films across the world. Film London is a good body with an excellent track record, but separating out the functions of inward investment not only from the BFI but from the eight regional film agencies, which are combining to form Creative England, and the film agencies in the three nations of Scotland, Wales and Northern Ireland seems an odd way of restructuring this vital area. Can the Minister give us an idea of how this will work in practice and what benefits will flow from the new arrangements?

--- Later in debate ---

[Baroness Rawlings]

My Lords, this has been a fascinating debate with, as is so often the case in your Lordships’ House, contributions by dedicated and knowledgeable Peers who are passionate about their subject. I am grateful to those who introduced these amendments but I want to be clear from the outset that the Public Bodies Bill is not the right place to debate the abolition of the UK Film Council or the transfer of functions to the British Film Institute. The UK Film Council is a company limited by guarantee. The British Film Institute is a registered charity established by royal charter. Neither is a statutory body, so neither has a place in the Public Bodies Bill.

However, Amendment 67B, in the names of the noble Lords, Lord Stevenson and Lord Wills, and Amendments 77A and 85B, in the names of the noble Lords, Lord Stevenson, Lord Wills and Lord Judd, would include the UK Film Council and the British Film Institute within Schedules 2, 4 and 5. Amendment 65A, in the names of the noble Lords, Lord Stevenson, Lord Puttnam and Lord Wills, and the noble Baroness, Lady Bakewell, would create a duty for the Government to lay before Parliament a report following a merger under Clause 2.

I will consider these amendments together. In answer to the remark made by the noble Lord, Lord Wills, about recognition from Ministers of the success of “The King’s Speech”, as recently as last week the Minister, Ed Vaizey, praised the UK Film Council in a speech at the UK Screen Association. That is on public record. The Government remain absolutely committed to supporting the British film industry. The decision to abolish the UK Film Council should not be misconstrued as an attempt to undermine the industry. I urge noble Lords to consider the substance of our proposals before coming to conclusions as there is a certain amount of support for this merger even from the noble Lord, Lord Stevenson. While the UK Film Council is being abolished, its most important functions will be retained, many of which will move across to the British Film Institute. These functions include the distribution of lottery money, support for films in the regions, the media programme and the certification unit that is essential to film tax relief.

The noble Lord, Lord Wills, was rightly concerned that the British Film Institute’s research and statistics unit should be retained. I can assure him that we, as well as the industry, believe that that is critical. Discussions are progressing well between the BFI, Film London and the UK Film Council, and we are confident that the transfer in April will leave no gap in the service provided to the UK film industry. The noble Lord, Lord Stevenson, is right that we are looking for the full transfer in April 2011. As referred to by the noble Lord, Lord Stevenson, the DCMS is currently discussing with the industry and the BFI the solution to funding the research and statistics unit. My noble friend Lord Cathcart made a very valid point and he is absolutely right. I am most grateful to him for reminding us yet again that these bodies have no place in the Bill.

British film-making continues to have a bright future under this Government. The film tax credit, which is worth more than £100 million each year to the British film industry, will continue with the certification unit moving across from the UK Film Council to the British film industry. Lottery funding available for the industry will increase from the current £27 million to £43 million by 2014, an increase of more than 50 per cent. The success of films such as “The King’s Speech” shows that we can be proud of the country’s contribution to film-making and I was delighted that this contribution was acknowledged at last week’s Oscar ceremony, as well as at the BAFTAs and the Golden Globe Awards. I should like to add my congratulations to all those involved to those of the noble Lord, Lord Stevenson.

The noble Lord, Lord Wills, asked several questions. He asked whether talented staff will have a fulfilling future. We agree and would hope that they will. Transfer arrangements are currently the subject of due diligence discussions between the British Film Institute and the UK Film Council. He also asked about film exports, as did the noble Baroness, Lady McIntosh. Tough government decisions have had to be taken and priorities established but the UK Film Council continues to work with the industry to promote film exports. The noble Lord and my noble friend Lady Benjamin asked about responsibility for diversity issues. I can assure them that it is part of the fuller policy remit. The noble Lords, Lord Wills and Lord Triesman, asked about piracy and we understand their concern. The BFI does not represent the film industry on IP issues. The responsible agency for public policy is working with the industry.

We have had an interesting debate and I should like to remind your Lordships once again that these are not statutory bodies and should not appear in the Bill. However, I have taken note of the points and some of the constructive ideas. If I have not answered all questions asked by noble Lords I will of course take them back to the department. I should also like to remind your Lordships that the additional statutory reporting requirement is not feasible as it relates to a merger under Clause 2 of bodies which have no place in Schedule 2. I would therefore ask the noble Lord to withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, I thank the Minister for her response. In some senses, this debate has proved to be exactly what we had hoped that it would when we put down the amendments. We did so in a spirit of discussion and debate, which I hope has not been misconstrued on the other side. It is clearly a probing amendment. You cannot reinstate that which should not be instated in the first place and you certainly cannot abolish it subsequently since it has already been abolished. So we were in somewhat of an Alice in Wonderland world. We expected to be caught out and indeed we were.

However, in so doing, the debate has been exactly as we had hoped it would be. There have been contributions from all around the House, which have covered all aspects of what we thought was an important issue. We have made the point that this is something that will not wait simply on some arbitrary definition of what is a statutory body and what is not. I said at the very beginning of my remarks—I am sorry that the Minister did not come back to this—that if the general point being made in this Bill is that bodies devolved from government to bodies whether statutory or not is an important feature of our constitutional hardwiring, why is it that we are not able to work into our system a method under which those bodies can be asked to report back to Parliament so that we can have the sort of discussion which we so patently have had today? That is a question which the noble Baroness might like to take back and think about as we move towards the Third Reading of the Bill.

Several extremely valuable points were made during the debate. I particularly enjoyed those made by the noble Baroness, Lady Benjamin, which she has made to me on many occasions when I was in a position to do something about them. I suffered then and I think we have all suffered again today as we realise how bad we are about the diversity issues to which she drew our attention, and how much neglect there is in our overall concern about culture if we do not nurture our children. I wish the noble Baroness all the best in carrying on with putting these points forward. It may not be the case that the Danish model is the right one, but it is certainly something that we should be looking at, and I hope that the BFI will take it forward.

The noble Earl, Lord Clancarty, was too modest when talking about his family’s experiences. I think that there is an Oscar lurking in there somewhere, along with other prizes, and we should celebrate that with him. He made the point exactly as one would expect: when we have something successful in the country—we had the Crown Film Unit that did fantastic work which is now being restored and reissued to audiences—when it is doing particularly well, we tend to chop it down on the grounds of cost.

My noble friend Lady McIntosh said that we always have to think about how to get started in the industry. It is not a traditional industry in the sense that you can join at the bottom and work your way up; rather it is one that is feast or famine. If you have a success you are able to build on that, or you may have a series of failures. What you have to do is create a context within which work can be supported and nurtured and in which new people can always be brought forward. Creativity lies in the innovation of the young, not in the successes of the old, and we have to make sure that we get that right.

My noble friend Lord Judd drew attention to the imaginative drive that permeates throughout many ministerial Statements these days. Why on earth can we not recognise that the creative economy is one of the places that we will get the returns we need? It must be backed with really sensible proposals that will take it forward and thus out of the traditional modes with which we have been trying to support it. My noble friend Lord Triesman made the important point that IP is the key to a lot of future creative activity and that those who try to abuse it are often linked into other criminal behaviour. We are going to be in serious trouble if we cannot think through how the rights to creative activities are being taken away from the creators up to the point where sometimes they will not invest in order to achieve the benefits that we would like from them.

All in all, we have had a particular debate. I felt that the Minister did not really pick up on what the excellent speech of my noble friend Lord Wills was about. My noble friend tried to say that while we are supportive of where we are, because we are going to have a merger between the UK Film Council and the BFI whether we like it or not, there are some good things to say about it. The noble Earl, Lord Clancarty, drew attention to the problems that can arise where a cultural body takes on a commercial wing. But the BFI has done production before and, I think, can rise to the challenge going forward. However, as my noble friend Lord Wills said, we now have a benchmark. We know what success means in this world. I recommend to Ministers that they should think carefully about where the UK Film Council took our film industry so that, when we are able to debate this issue again, we can think again about the benchmark and consider whether the changes that are being brought forward now are sufficient and can succeed in achieving a sustainable British film industry, something that all noble Lords will join me in saying that they want.

As I said, this is a probing amendment and I do not intend in any sense to embarrass either my own or any side by taking it to a vote. I beg leave to withdraw the amendment.

Amendment 65A withdrawn.