Criminal Justice and Courts Bill

Debate between Lord Woolf and Lord Davies of Stamford

Wednesday 30th July 2014 Lords Chamber

[Lord Davies of Stamford]

My Lords, in my view there is a lot of mischief in this clause and the best solution would certainly be to leave it out of the Bill altogether. I want to touch on three particular pieces of mischief which lie within it.

Subsection (3) has already been dealt with by the noble Lord, Lord Pannick, in proposing his amendment to remove that subsection from the Bill. No one doubts the great importance and value of having a costs-limiting facility available in judicial review. The Government are not arguing that there should be no such scope for costs-limiting orders, and no one else has argued that there should not be such scope. I think no one would deny that if there were no possibility of getting costs-limiting orders, some very meritorious applications that were very much in the public interest would not be made. That would be a great loss to our legal system. As the Government have not argued against the principle of costs capping, I do not think that I need say more than that.

Equally, I do not think that anyone can deny that if the Bill is introduced in this form and subsection (3) proceeds on to the statute book, an awful lot of the value of costs capping will be negated because applicants will be exposed to very significant financial liabilities—almost certainly incalculable financial liabilities—before they get to the point when a costs-capping order can be considered by the court. Therefore the effect of the costs-capping order would itself have been negated and a large number of potentially meritorious applications will not be able to proceed at all and will not be started. That would be a great loss to the system. If the Government said that that was their intention, they would at least be straightforward about it. In actual fact, however, I think they are again in a state of contradiction, saying on the one hand, “Yes, we do want to have a costs-capping provision”, but, on the other, “We want to introduce a measure that will in practice negate very largely the benefit of that provision”.

My second problem with this clause concerns subsection (6), which states:

“The court may make a costs capping order only if it is satisfied that … (b) in the absence of the order, the applicant for judicial review would withdraw the application for judicial review or cease to participate in the proceedings”.

What exactly does that mean? Once again I ask for clarity because the law ought to be clear. This means that the court has to be satisfied that the applicant would actually withdraw the application if a costs-capping order is not provided. Is that based on the applicant saying that he or she would withdraw the application if no costs-capping order is given? If so, does that create an obligation for the applicant to withdraw if the costs-capping order is denied? It is perfectly possible that a costs-capping order might be asked for in very good faith by an organisation with very slender means or by an individual with very slender means who later finds that his or her cause is backed by a rather wealthier supporter. Therefore it is possible that the application could be saved after the denial of a costs-capping order, by some other party coming in to support the application, with all the liabilities attaching to that which we discussed this morning. Would that eventuality be denied by this provision in the Bill? We should be absolutely clear about that, because the word “satisfied” is a very strong word, it seems to me. How do you know that the applicant would withdraw in those circumstances? How can you possibly know such a thing unless the applicant has given such an undertaking? If the applicant has given such an undertaking, presumably that undertaking is enforceable. We are not told that in the Bill, but we ought to be told by the Minister whether that would be the effect that the Government seek.

Finally, I object very strongly to subsection (9), which has already been referred to as a Henry VIII clause. However, it is a Henry VIII clause of pretty extraordinary dimensions. One is used to Henry VIII clauses in legislation. There are far too many of them. There is one later on in the Bill under Clause 73. Clause 73(1) states:

“The Lord Chancellor or the Secretary of State may by regulations make consequential, supplementary, incidental, transitional, transitory or saving provision in relation to any provision of this Act”.

That is the sort of role that we associate with Henry VIII clauses—that is, adding something that is technical, that fills in some gaps at some point, but that does not change the main thrust of the primary legislation at all and merely makes it perhaps more easily implementable. That is an acceptable Henry VIII clause in principle. However, we are faced with the following in Clause 68(9):

“The Lord Chancellor may by regulations amend this section by adding, omitting or amending matters to which the court must have regard”.

In other words, the Lord Chancellor can rewrite the whole of the clause. That is an extreme form of a Henry VIII clause. It would probably be better described, by using some rather sinister terms from European history, as an Ermächtigungsgesetz or a plein pouvoir. To use a commercial analogy, I suppose that it is rather like a bidder or tenderer in a commercial contract who sends in a bid and says, “The price will be the following, the delivery date will be the following, the specifications will be the following”, and then adds a final clause saying, “The bidder may, at his discretion and without penalty or limitation, change any of the above at will”—in other words, devalue the whole document. The whole thing is complete nonsense because you cannot be certain that any of it will actually remain or that any of the apparent purposes in the text will actually influence reality in the future. The whole of this could be a complete waste of time by Parliament because, as I read subsection (9), the Lord Chancellor could go away and change anything in this clause at all, including the major substantive provisions: the terms, conditions and criteria by which a costs capping order can be considered. For the reasons that I and others have set out in this debate, that is actually a very important exercise.

Again, this is a completely unacceptable clause for government to put forward in any legislative context, and certainly in this one. I hope that the Government will withdraw the provision. I hope, better still, that the Government will withdraw the whole clause.

[Lord Woolf]

This costs capping provision was brought in because the nature of current litigation means that the costs of exercising your rights, whether as a claimant or defendant, are often prohibitive. Perhaps I may refer to one of the first matters where costs capping came before the courts. I was personally involved, so I hope that that does not make it inappropriate for me to refer to it. It was an action against tobacco companies that was brought by those who had suffered as a result of smoking. It illustrates that a situation can arise where, even with the help of conditional costs orders—of which the noble and learned Lord, Lord Mackay, was the original author—it is not possible for proceedings to be brought because the costs can be so great that no law firm could take the risks involved in bringing an action against the tobacco companies, which were going to fight them intensely and had huge commercial reasons for doing so. I suspect that the matter came before me because the precedent for those was, in fact, the litigation across the Atlantic. It is an indication that we have to take care to try to control costs capping orders. I refer to that because it seems to me questionable to regard these provisions as appropriate, if appropriate at all, only in regard to judicial review. I do not think that the reference to public interest proceedings would, for example, cover the tobacco proceedings of which I had experience.

In general, however, I agree entirely with the comments and points that have been made by the noble Lord, Lord Pannick, and others who followed him, which are the basis of the amendments. It is also quite right to say that there is no possible justification for this to be done. I know that I am reiterating what I have argued before in relation to other provisions. However, this is not an example of the Government doing something that Parliament cannot do; it is an example of the Government doing something that they should not seek to do. Bearing in mind the relationship between the judiciary and the legislature, the legislature should not seek to impinge on a judicial discretion where there is no suggestion that there is any need to do so and where the court—in the case to which the Minister referred, the Corner House Research case, in 2005, 1 Weekly Law Reports 2600—set out its views and the principles at that time. Those principles have had to be modified in the light of cases that have come before the court subsequently. Here is a natural process being developed whereby a problem arises—not of great dimensions, but very relevant to the very small minority of cases to which it refers—and the courts react to it.