Property (Digital Assets etc) Bill

Viscount Stansgate Excerpts

Second reading committee
Wednesday 6th November 2024 Grand Committee

[Viscount Stansgate (Lab)]

My Lords, I will say a few words in broad support of the Bill and thank my noble friend the Minister for the way in which he introduced it. This is my first involvement in a Law Commission Bill and the special procedure attached to it. I commend the Law Commission for its work.

I have a few points to raise which I hope will be considered legitimate. I am not a lawyer but, clearly, for many years, many lawyers have reached the view that the law in this area is inadequate when faced with the realities of modern life. It is not the first time that technological developments—in this case, crypto assets, bitcoin, et cetera—have, in effect, overtaken and bypassed the legal system.

Although I do not intend to talk about bitcoin, I ought to say that the points made by the noble Baroness, Lady Bennett of Manor Castle, who has just left her place, about the quantities of energy involved in bitcoin mining, were very well made. About two years ago, I was going down the Columbia River in Washington state when I saw my first server farm—an enormous building next to the river, which generates the water and electricity needed. We will have to face up to the point the noble Baroness made about the sheer quantity of energy involved. As I say, I do not intend to talk about that now, but the point is worth making.

The House spent a long time in the previous Session considering the Online Safety Bill for the same reason—technological developments had overtaken the framework of the law. We are still not sure whether that Act will work and do its job but, on the surface, this new Bill seems to be fairly simple and straightforward, as reflected in the briefing by the House of Lords Library. You could not have a shorter Bill if you tried, as has been said. I suspect, however, that it might have somewhat wider ramifications than we initially realised.

The Law Commission described digital assets as

“increasingly important to modern society”.

I absolutely agree, but the examples given—crypto tokens, cryptocurrency and non-fungible tokens—are not the only ones. I do not know when Members here first came across the idea of a non-fungible token— I did when I went to the Louisiana Museum of Modern Art just north of Copenhagen in Denmark to see a collection of art by David Hockney. They were pictures drawn on iPads and there were 50 of them around the room. David Hockney is of course one of our most famous artists. I found myself looking at these pictures, which were all very lovely, and saying, “If I took that one off the wall and bought it, in what way would that be an original David Hockney?” You could have passed it to any other noble Lord on their iPad.

A non-fungible token derives from the idea that, unlike in the old-fashioned art world where you buy a painting and take it home with you, you need some other way of ascertaining who is the owner of a particular —in this case—artwork. I began to realise that you could not possibly tell what was an original, in the sense that we do about paintings—references have also been made to Word documents in this debate—so the concept of the non-fungible token clearly grew out of that type of experience.

The emphasis in the Bill is clearly on the financial aspects of new digital things, hence the Law Commission’s 2022 Digital Assets consultation paper and its advocacy of

“a third category of personal property beyond things in possession and things in action”

taking form in the Bill. I notice that the House of Lords Library briefing refers to the Law Commission’s final report on the consultation in 2023, saying:

“The final report … concluded it would be best to avoid hard boundaries of what a third category”


is. Can the Minister confirm that it is intended to create or continue the expert panel—that has been suggested or maybe even set up—designed to give a guide in the future on emerging technical and legal issues?

I turn briefly to one of the more personal aspects of the effect of the Bill. I read an article recently about a new type of legal expertise making great strides. I cannot remember what it is called—something like crypto accountants. These specialist lawyers are much in demand in divorce cases where one party, usually the man, is thought to be hiding assets from the other party, usually the woman. I look towards those Members opposite who may have expertise in this direction but it strikes me as being entirely possible that that is happening. I presume that the Bill will help with those

“complex cases where digital holdings are disputed or form part of settlements”.

I hope that the Committee will not mind if I raise an issue that might turn out to be covered by the Bill, which is what you might call our personal digital lives. I am not referring to money, although the sheer scale of the monetary value of digital assets mentioned by the noble Lord, Lord Holmes, is astonishing. Mention has briefly been made of our online life: the records, messages, Zoom calls and the case of the person who died with a digital password unknown to others.

In divorce cases, one often reads about the business of dividing up assets: “Who keeps this? Who keeps that? Who keeps”—this is a very old-fashioned term these days—“the CD collection? And who keeps the photo albums?” In what way will this Bill apply to disputes over things such as digital photos? I have here a mobile phone. A lot of noble Lords have them. They may have large quantities of digital photos on their phones—tens of thousands, in some cases. As I said, we all have them. Will this Bill lead to the courts applying this legislation in some way to whether a phone is a digital asset that can be apportioned in the case of, for example, a divorce?

I read something that interested me the other day. An AI company has apparently set up a digital version of a BBC broadcast with Michael Parkinson, who died a few years ago. In conjunction with his family—at least, with the approval of his eldest son—the company is creating a digital Michael Parkinson, who will be programmed to take part in digital conversations in future with real, alive people. This may seem strange to noble Lords but it looks to me as though this type of thing is coming. What I want to know is, supposing this does happen but part of the family objects to it, if it came to the courts, how might this Bill be applied to decide whether a digital version of a former relative counts as something that can, as an asset, be divided, disputed and so on? I would be interested to know that. I very much doubt that the Minister has anything in his brief relating to it but, nevertheless, I feel it is the type of issue that will arise in terms of the Bill and its potential applications.

I entirely understand the wider international benefits to the UK legal system of this legislation. I hope that it will keep the UK at the forefront of the international legal industry, where we are already recognised as being able to apply the rule of law when so many other jurisdictions around us are not.

Coroners (Suspension of Requirement for Jury at Inquest: Coronavirus) Regulations 2024

Viscount Stansgate Excerpts

Friday 24th May 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)]

My Lords, this instrument is an important part of the Government’s ongoing support for coroners’ services in their continuing recovery from the impact of the Covid-19 pandemic. It extends for a further two years the disapplication of the statutory requirement for any inquest into a death involving Covid-19 to be held with a jury.

As noble Lords will recall, the Coronavirus Act 2020 removed the requirement for juries in coroner cases in many—indeed, at the time almost all—circumstances, following which the Judicial Review and Courts Act 2022 provided that juries should not automatically have to be empanelled in cases involving a Covid-19 death. That provision was extendable, and the present regulations seek to extend that exception for a further two years.

I have three points to make. First, it is entirely open to any coroner to empanel a jury if he thinks fit; it does not prevent there being a jury but simply gives the coroner discretion, rather than automatically having to have a jury. Secondly, there is, as I have just said, a sunset provision as the extension is limited to two years. Thirdly, this measure helps reduce the delays that I am sorry to say are still besetting coroner services and the system of coronial inquests. I understand, on the basis of a comment from the senior coroner in the north-west of England, that for each day of a listing for an inquest without a jury, it takes a week’s listing with a jury. So, to empanel a jury automatically in all these cases, irrespective of whether you need a jury, is, in the Government’s view, somewhat excessive provided that the coroner also always has the power to empanel a jury if he wishes to.

The Government are concerned about the impact of inquest backlogs, particularly on bereaved families, and feel that this measure, if the House agrees it, will support coroners in their continuing efforts to reduce those backlogs and promote the Government’s objective of putting the bereaved at the heart of the coronial process. Of course, in high-profile cases it always remains possible and open to the coroner to empanel a jury. For those reasons, I commend the regulations to the House.

[Viscount Stansgate (Lab)]

My Lords, I would like to ask the Minister one question in relation to something he just said about the families and the fact that coroners will have discretion. If, for whatever reason, a family wishes a coroner’s procedure to proceed with a jury, what weight would a coroner place upon that in deciding in his or her discretion whether to empanel one?

[Lord Bellamy (Con)]

My Lords, I cannot answer for individual coroners, but I would venture to suppose that such a circumstance would have great weight with most coroners.

Powers of Attorney Bill

Viscount Stansgate Excerpts

2nd reading
Friday 16th June 2023 Lords Chamber

Moved by

[Viscount Stansgate]

That the Bill be now read a second time.

[Viscount Stansgate (Lab)]

My Lords, the Bill will modernise the process for making and registering lasting powers of attorney and will enable chartered legal executives to certify copies of powers of attorney. I welcome all Members here today, whether to listen to or participate in this debate. This is a good example of an entirely bipartisan Private Member’s Bill. It passed the other place with all-party support and without amendment. It was introduced and steered through by my good friend and colleague Mr Stephen Metcalfe, the Member for South Basildon and East Thurrock, who is a government Back-Bencher. It is now being shepherded through this House by an opposition Back-Bencher—the very definition of bipartisanship. I am delighted that Stephen Metcalfe is present today to watch our proceedings.

Before I get to the Bill, I want to establish something at the beginning. The Bill affects the lives of people all over the country. Over 6 million lasting powers of attorney are currently lodged with the Office of the Public Guardian—frankly, I found that an astonishing number when I first discovered it. That means that families up and down the country have an interest in the subject of today’s debate and I dare say that Members of your Lordships’ House have, both personally and professionally, had personal contact with the LPA process. I should add that I am one of them. A few years ago, my younger brothers and sister took out a lasting power of attorney in respect of our dad, with his full agreement, although it was not necessary in the end.

Turning to the Bill, I refer all Members to the excellent House of Lords Library briefing, which provides everything that they might need to know. Clause 1 introduces the schedule to the Bill and amends the Mental Capacity Act 2005 for making and registering LPAs. Clause 2 adds chartered legal executives to the list of those who can certify copies of LPAs. Clause 3 sets out the Bill’s territorial extent and application—basically, the Bill extends to England and Wales only and it will come into force in stages.

What is an LPA and what is its significance? An LPA is a legal document that helps people to plan for their future. It allows an individual, known as the “donor”, to plan for circumstances where they can no longer make decisions for themselves due to a loss of mental capacity, by granting such powers to another person—an “attorney”. People can apply for, broadly, two main types: first, a health and welfare LPA, which can make decisions about a person’s medical care and treatment; and, secondly, a property and finance LPA, which can make decisions about a person’s money and property. Thus an LPA lets an individual choose the people they trust to be attorneys to support them and make decisions for them if they lose the mental capacity to make their own decisions in the future—for example, due to an illness like dementia, or through an accident.

LPAs are increasingly valuable and necessary as our population ages. No one likes to think about a loved one losing the ability to make their own decisions, but this is, sadly, a reality for so many people. Two nights ago, on Wednesday, I went to a meeting at the Royal Society about the impact of AI on medicine. The capacity to analyse images will mean that, before very long, it will be possible to give people 15 years’ advance notice that they are likely to get dementia or Alzheimer’s. This will have quite a significant impact on people’s lives and, probably, on the LPA process.

My colleague Stephen Metcalfe in the other place spoke about the importance of a quick and accessible process. This Bill will give people the assurance that their family can act in their best interests and make life as comfortable as possible in their later years. It is with great frustration that I say that this is not necessarily the reality that people face today.

One of the problems is the sheer volume of paperwork. Many people find the current process for making LPAs stressful and needlessly complicated. Registering an LPA takes time. The latest figures show on average that the Office of the Public Guardian receives 5,700 LPAs each day—all of them on paper. The number of applications will exceed 1 million for the first time this year.

Once the Office of the Public Guardian receives an LPA, it must conduct manual checks on each piece of paper to confirm that it has been filled in correctly. As one can imagine, this is an entirely time-consuming process and many users find it cumbersome, bureaucratic and complex. That is an understatement. Frankly, the Office of the Public Guardian is at risk of financial unsustainability because its costs are increasing. What is more, if the LPA has been filled out incorrectly, it must be returned and corrected. In some circumstances, a new LPA must be made, which increases the delay to registration.

The Bill offers some solutions and the detail is outlined in the schedule. The Bill makes changes to the Mental Capacity Act 2005 to make it safer, easier and more sustainable to make and register an LPA. I will take these points in turn. First, how does it make it safer? Reforming the way in which people make and register their LPA will allow the Public Guardian to strengthen protections against fraud, undue pressure and abuse. The most crucial new safeguard is to allow the Public Guardian to verify identity as part of the registration process, which will help to prevent LPAs that have not been legitimately made.

As well as identity checks, the objection process has been redesigned to ensure and enhance safeguards where there are concerns about how an LPA has been made. This is an important early protection against an LPA being misused after registration. While it cannot catch all potential abuse—in reality, the number of such cases is very small—it is important that anyone with grounds for objection can raise them before the LPA is registered so that these concerns can be properly considered. Individuals must therefore understand how to lodge an objection to the registration of an LPA and everyone with grounds to object must be able to do so. The Bill simplifies the objections process by having the Public Guardian receive all types of objections in the first instance and allows anyone to make an objection. The Bill also requires the Public Guardian to notify all relevant parties when a completed LPA is ready to start the registration process. This relieves the donor, as in the past, of a great deal of the burden of doing so. Other protections that were supported during debates in the other place included restricting who can apply to register the LPA only to the donor. These changes combined will help to remove loopholes in the system so that they cannot be exploited to the detriment of the donor. This is one of the reasons why I hope that this House will support the Bill.

I turn to the ways in which the Bill will make the process easier. The Bill makes provision to help the public by, for the first time, facilitating a digital channel and enhancing the paper route. This is an important point, which is worth emphasising. The Bill will open up a digital alternative and this will have many benefits in the future. I must stress that the paper-based route to getting an LPA will remain, but this multichannel system will allow parties to move between channels to create a single LPA. As the debates in the other place highlighted, this flexibility will ensure that a wider group of people can create LPAs more easily. It is envisaged that all LPAs will eventually be stored in digital form, but of course if people want a paper copy, they will be provided with one.

On sustainability, there is currently a huge burden on the Office of the Public Guardian due to the manual processing of paper. I feel sure that the House instinctively understands this. A digital LPA will help to reduce the amount of paper that the Office of the Public Guardian has to receive, process and store. Each day, the OPG has to process 80,000 sheets of paper. The annual number of documents with which it has to deal amounts to roughly 11 tonnes of paper. Hence, noble Lords can understand how a digital alternative would allow the Office of the Public Guardian to redirect resources and invest in wider service provision. Provision of both the digital and paper channels will also build resilience into this process and help to reduce the likelihood of future backlogs. This will create a more positive experience for everyone involved in making LPAs better value for the fee payers.

The benefits of modernising LPAs do not stop there. The Bill means that future LPAs will be evidenced electronically, increasing accessibility for attorneys and others, who will be able to access an LPA through their electronic devices and securely share it with third parties when managing their loved ones’ affairs. Furthermore, third parties can have more confidence in LPAs, because they can check the status of the document in real time. This will be outlined in more detail in the secondary legislation.

So far, I have spoken only about the changes outlined in the Bill as they will affect LPAs; however, the Bill also allows chartered legal executives to certify copies of LPAs. This provision addresses the anomaly where chartered legal executives are able to participate in the process of setting up an LPA but are unable to certify copies of the same document. The Chartered Institute of Legal Executives has long argued for the removal of that statutory barrier, which is why Section 3 of the Powers of Attorney Act 1971 is being amended. The institute estimates that it will enable over 3,000 more lawyers to certify copies of LPAs, which, in turn, will facilitate competition and enhance access to this service for many consumers, with the potential for a reduction in the cost of service provision.

Licensed conveyancers have been assisting organisations with evidence of powers of attorney in many instances for many years. I would be grateful if the Minister could expand on the fact that the Bill is not intended to interfere with that process.

Finally, I turn to the Bill’s territorial extent and commencement, as set out in Clause 3. The Bill’s main provisions relate to England and Wales only, but there is some consequential effect on Scotland and Northern Ireland. Unfortunately, as the House knows, there is no working Assembly in Northern Ireland, but, on whether or not a legislative consent Motion is needed in respect of Scotland, I am very glad to report that one has been granted. Two days ago, a point was raised with me by the Law Society of Scotland regarding the automatic operation of Scottish powers of attorney in England. I believe that this issue was covered in a letter that the Minister of Justice wrote to Mr Patrick Grady in another place, but perhaps the Minister could cover that from the Dispatch Box.

As for commencement, Clause 3 comes into force on the day that the Bill becomes law; Clause 2 comes into force two months from the day it becomes law; and Clause 1 and the Schedule will come into force in subsequent regulations by the Lord Chancellor.

Since LPAs were first introduced in 2007, people’s expectations have changed, as has technology. People now expect digital services with appropriate safeguards. We need an LPA system for the digital world; this Bill provides it. It is narrow in scope and seeks to bring about real improvements. It tries to strike the right balance between improving efficiency and accessibility, while strengthening safeguards against fraudulent or abusive use of the system to protect the most vulnerable people in society, and it comes at a very modest cost to the public purse. I believe it will be successful in achieving its objectives, and I hope all noble Lords will join me in giving their full support to this important Bill. I commend it to the House and beg to move.

--- Later in debate ---

[Viscount Stansgate (Lab)]

My Lords, I will not detain the House, but I would like to say a couple of things. It gives me great pleasure to see my friend and colleague present to listen to the compliments paid to him today for having steered the Bill through the other place. It strikes me that so many contributors today have personal experience of the subject; it shows that, as I said, millions of people and their families up and down the country will find that this Bill affects them, I hope for the better.

It would be remiss of me not to thank noble Lords for some of the compliments I have been paid. I take it as a great compliment to hear from some of the legal experts in front of me that I have introduced a Bill—incidentally, the first time I have ever done so—in a “comprehensive way”, unless of course that is a hidden way of saying that I took too long to do so.

The points made by the noble Lord, Lord Wolfson, are very important. It is a great comfort to a donor to know that they have arrangements in place and I think the new procedures will assist. The noble Baroness, Lady Watkins, mentioned the issues raised by Compassion in Dying—as we know, they apply not so much to this Bill, which falls in a different area—which has been in touch with me. In fact, I spoke to Compassion in Dying this morning before this debate. I fully understand the way in which she raised these issues and know very well the reasons why they matter to people. I hope that one of the effects of this Bill reaching the statute book, which I hope it does, will be to further advance the causes she raised. I also thank my noble friend on the Front Bench for the support that he has given the Bill on behalf of the Official Opposition and the Minister for covering some of the points raised to the satisfaction, I think, of all concerned.

The last thing I will say is that this has been a fairly short but consensual debate. It has seen Parliament as it is supposed to be: a working environment, or a workshop, designed to try to bring about changes in people’s lives for the better. When you consider some of the attacks made on Parliament and the parliamentary process, you could do worse than look at a short debate such as this and see that it is possible to make real change in a consensual way—and I will leave it there.

Bill read a second time and committed to a Committee of the Whole House.

Independent Public Advocate

Viscount Stansgate Excerpts

Thursday 2nd March 2023 Lords Chamber

[Lord Bellamy (Con)]

My Lords, I thank again the noble and learned Lord, Lord Judge, for those comments and questions. Again, I think that these are matters for further reflection; it is very important that the noble and learned Lord has put them on the record. The questions of judicial review and how quickly and so forth are for further consideration; it is certainly envisaged that the independent public advocate would be able to act very quickly.

I think, if I may say so, that the Hillsborough situation was, tragically and very regrettably, distorted by a cover-up that defeated even one of the noble and learned Lord’s predecessors, the Lord Chief Justice at the time, Sir Peter Taylor. Any system that you can devise will always have difficulty coping with that kind of situation. But, in terms of speed of process, not repeating the process, having one process and defining the trigger event, those are all very important issues that we need to reflect on further.

[Viscount Stansgate (Lab)]

My Lords, I welcome the Statement and am grateful to the noble and learned Lord for repeating it. In line with some of the questions that have just been put to him, can I press him slightly further on the phrase used in the Statement, “major disasters”? The Secretary of State would presumably decide on behalf of the Government that such and such an event is considered a major disaster that triggers the independent public advocate. Is that correct? Do the Government have any sense of what a major disaster is going to be defined as being?

[Lord Bellamy (Con)]

My Lords, I think the statute will have to make an attempt to define what it means by “major disaster”. As presently envisaged, one is thinking of what one can loosely describe as one-off disasters, such as the ones we have been discussing: perhaps the 7/7 bombings, the Paddington train crash of some years ago and those kinds of things. At least so far, government reflection has not extended to things such as the Post Office scandal, which arose over many years, or the contaminated blood scandal, which arose over many years, or the North Staffordshire NHS scandal that eventually came to light, because those were ongoing things going wrong. They were certainly in one sense disastrous, but it was not quite envisaged that they would be a disaster in terms of the statute. However, I say again that the exact scope of this new independent public advocate is a matter for close consideration.