Terrorist Asset-Freezing etc. Bill [HL]

Debate between Lord Wallace of Tankerness and Baroness Noakes

Wednesday 6th October 2010 Lords Chamber

[Baroness Noakes]

My Lords, I am sure that the Minister has “resist” written in large letters all over his speaking notes, but before he rushes to do so I shall add one example from the real world, which came to my party when we were preparing for the emergency Bill earlier this year. Our adviser at that stage, who was an eminent QC, gave us an example in relation to analogous legislation in which a company had been included on a blocked list because its shares had previously been held by a suspected person. Some months before his inclusion on this list, the person had sold his shares in the company on an arm’s-length basis and for value, but the company was nevertheless incorrectly included on a blocked list. It took a fair amount of time for the designation to be challenged and for the various other licences to be obtained, but in that intervening period the company suffered a considerable period of loss. My point in raising this is merely to say that there are real-world examples when loss can occur. We are not dealing with theoretical situations of safeguards to be included in the Bill. I hope that the Minister can give some reassurance to the Committee that remedies are available when that sort of situation arises.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, in responding to the amendment, I congratulate the noble and learned Lord, Lord Davidson of Glen Clova, on a very productive summer working on the Antipodean experiences, based on questions that he had already asked my noble friend Lord Sassoon, which are the origins of these new clauses. They raise important points about compensation in very real situations, such as the one described by my noble friend Lady Noakes, when an incorrect designation can lead to consequences of loss for those who have been wrongly designated, and also on the question of indemnity.

Amendment 46 introduces a new clause that imposes a duty on the Treasury to make an order providing for compensation for persons who have suffered loss as a result of an incorrect designation. The noble and learned Lord, Lord Davidson, said that this was based on Australian legislation in a similar field, and referred in his closing remarks to a parallel provision in the Anti-terrorism, Crime and Security Act 2001, under which the Treasury may include a provision for the award of compensation when a person has suffered a loss as a result of a freezing order or in relation to a licensing decision. The word “may” marks the distinction between the 2001 Act and the new clause before us today, which makes it a requirement by using the word “shall”.

With regard to our position, my noble friend Lady Noakes rightly anticipates the word “resist”, not because we do not recognise that there is an important issue here to be addressed but because the Bill already includes a number of important safeguards, including the right of any affected person to challenge a decision of the Treasury. Indeed, following our amendments, we have debated today the right of affected people to apply to the courts for a robust and in-depth consideration of a Treasury asset-freezing decision, as well as to apply for judicial review in terms of licensing matters. Should a designated person or any other person wish to seek compensation for loss suffered as a result of an incorrect designation, we believe that there are sufficient existing opportunities available for them to do so. It would be possible, in connection with a challenge of the sort that I have described above, for the person to claim damages.

I note that the new clause, as drafted, is in respect of an incorrect designation—in other words, it goes to the heart of a designation that has been made. That is in the terms of the new clause that has already been debated and which the House will vote upon later. The new clause relating to appeals to the court relates to a decision of the Treasury to make an interim or final designation of a person. I refer the Committee to the terms of that new clause, at Amendment 57:

“On such an appeal, the court may make such order as it considers appropriate”.

Therefore, as I have indicated, we believe that it would be possible, in connection with a successful challenge against the designation, for the person to claim damages, and it would be open to the court to award damages to a successful applicant. Indeed, there may be other circumstances—

[Baroness Noakes]

I apologise for interrupting the Minister. If I turn to Amendment 57, I see that it is the designated person who may appeal, which does not include all the potentially affected persons. Would he comment on that?

[Lord Wallace of Tankerness]

I acknowledge that point. My understanding is that if a person other than the designated person had suffered loss as a result of a decision of the Treasury, it would be possible for them to raise an action. I will get further information to confirm that to my noble friend, but the person whose designation is being challenged—the designated person—would have a forum and an opportunity in that context to seek damages. It may also, in some circumstances, be open to a person to claim damages under the Human Rights Act if the particular circumstances so arose, and therefore we not believe that any further provision for compensation is necessary.

The purpose of Amendment 52 would appear to be to increase the protection from prosecution given to a person complying with the provisions of Part 1 of the Bill. It would achieve that by specifying that no person complying with Part 1 was liable to court action as a result of such compliance. Again, the intention behind this is understandable, and we recognise that the rationale is to provide that additional protection from claims made against persons—it could be, for example, bank employees who have quite dutifully acted in compliance with the requirement under Part 1 of the Bill. However, we do not believe that the proposed clause is necessary. It is already a defence to claim that a person was acting in compliance with a lawful requirement, and the Government believe that this principle is sufficiently well established that the drafting of the Bill does not need to be amended. In fact, the basic principle is already there, and we do not need to add to it; indeed, it is often the case that when you add to something that is already well established in principle, you sometimes can give rise to questions about the extent of the principle. We believe that that principle is there, and it is well established. Accordingly, the amendment is not necessary. In the circumstances, I hope that the noble and learned Lord, Lord Davidson, will be prepared to withdraw his amendment.