Economic Crime and Corporate Transparency Bill

Baroness Bennett of Manor Castle Excerpts

Committee stage
Tuesday 25th April 2023 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to rise to take part in this debate, which has been rich, full and powerful. I will seek not to repeat anything that has been said but simply to make a couple of points.

First, I offer the Green group’s support, showing that we have the broadest possible political support in your Lordships’ House for this approach. I also want to address the use by the noble and learned Lord, Lord Garnier, of “ingenious”. These amendments are not ingenious—they are obvious, reflecting an obvious step. It is interesting that a number of Members of your Lordships’ House, operating so far as I am aware entirely independently, have collectively brought together a group of amendments that forms a quite complete package. I am happy to accept that we can work on the detail, and I very much join others in wishing that the Government will work on the detail, but the package is there, approaching this issue from different angles.

I bring up a point made by the noble Lord, Lord Agnew, in the previous group, which reflected on the failures of HMRC to deal with money laundering. That is just one element of the way in which our institutions that are supposed to be taking on economic crime are simply not up to the task or resourced for it. I join the media crew here as a former newspaper editor, which is the perspective I come from. In many of the worst cases, as the noble Baroness, Lady Wheatcroft, outlined earlier, it is not law enforcement or HMRC that uncover situations that bring gross abuses and crimes to public notice but journalists and NGOs bravely stepping out to expose what is happening. The Government are not capable of doing that, and we desperately need the fourth estate to take those actions. It fills a gaping hole which otherwise will not be filled, and crimes will not be exposed if the media and NGOs are not in a position to do this.

I think the noble Lord, Lord Cromwell, referred to an important report from the Foreign Policy Centre and Article 19. Last night an event in the Houses of Parliament looked at an updated report that they had prepared called London Calling—a very timely event. To look at some of the contents of the report, it says that the UK is

“a leading jurisdiction for domestic and trans-national SLAPP cases”.

A 2020 study by the Foreign Policy Centre found that 63 journalists working on financial crime and corruption in 41 countries identified the UK as the leading international jurisdiction for legal threats. I also make the point—it was made by others, but it needs to be driven home—that this report notes that the use or threat of SLAPPs “rarely make the public record”. So, although the noble and learned Lord, Lord Garnier, says this is just a handful, it is the tip of an iceberg of people using the UK legal system for criminal purposes. It is not exposed, but we know that it is there.

I will make two final points. The world knows that that issue is there. If we think about the geopolitical state of the world now, this is broader even than the financial impacts. I note one estimate of the cost of worldwide economic crime: $274 billion. There is the financial cost, but also the impact in a world where the rule of law is under consistent attack, where we see not just individual oligarchs or kleptocrats but entire nation states attacking the rule of law. The UK is putting itself in a far weaker position by being the home where the kleptocrats, oligarchs and those states are able to use the law as a weapon.

Finally, we have mostly referred to the traditional mainstream media. Looking at the range of organisations involved in the initial launch of the Foreign Policy Centre and Article 19 report, on the panel were Tortoise Media, Open Democracy and English Pen. This concerns some very small, brave organisations with very few financial resources; it is not just the old legacy media, which still have some financial resources left. We have people stepping up to the plate. We think about London, but we have also seen a real rise of quality regional media in places such as Manchester, Liverpool and Sheffield, where local media is stepping up and doing investigative journalism. They have almost no resources to be able to take on the threats; they need legal protection, so this needs to happen at all levels. Your Lordships’ House has come up with a package that takes us a long way towards where we need to be. We must get there now. As many others have said, we cannot wait.

[Baroness Altmann (Con)]

My Lords, I add my support to my noble friend Lady Stowell’s Amendments 87, 88 and 89 and congratulate her and her committee on their work. I also support Amendment 80 from the noble Lord, Lord Thomas, and Amendments 105 and 106 from the noble Lord, Lord Cromwell. As I said at Second Reading, this is a vital issue that must be covered in this Bill. In this group, we are discussing threats and lawsuits whose intention is to silence, intimidate or censor critics such as investigative journalists. So often, as the noble Baroness, Lady Wheatcroft, explained so well, they stem from economic crime.

This issue is not just about actual lawsuits. As others have said, often the matter will start with a threatening letter or even a phone call, which is enough to stop journalists or investigators from pursuing inquiries. That is why so few SLAPPs have come to court. I respectfully disagree with my noble and learned friend Lord Garnier on whether the few cases are any indication of whether this legislation and these amendments are required. These threats and vexatious potential lawsuits threaten not just journalists, campaigners, authors or academics but everyone’s rights in this country. They limit the rights of the public to have matters exposed, such as bribe-taking, poisoning water supplies with toxic chemicals, or general economic wrongdoing, which falls squarely within the remit of this Bill. Our courts are supposed to be there to protect ordinary people and small companies without large resources against those with more power, money and influence. Without these amendments, that protection will be fundamentally weakened when we have an opportunity to strengthen it.

I am not a lawyer, but Amendment 80 seems sensible to me. I believe that the Law Society supports judiciary-led gatekeeping. Amendments 87, 88 and 89 from my noble friend Lady Stowell seek to remove the incentives to issue these kinds of threats by introducing properly meaningful fines and intend that payments should not be able to come from the proceeds of economic crime. Again, that seems eminently sensible. I will listen carefully to my noble and learned friend but, equally, I urge him to listen carefully to the powerful arguments across all sides of this Committee and either accept these amendments or introduce his own.

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[Lord Bellamy (Con)]

I entirely accept that it is not impossible and, to take the phrase of a noble Lord earlier, that it is actually doable. I think that it was the noble Lord, Lord Cromwell, who used that phrase.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I was hoping that someone with a great deal more legal knowledge than me would rise to speak, but I feel that I need to challenge the Minister’s comment that this proposal is unprecedented. Other noble Lords will be able to say more, but we have a process of law about vexatious litigants who are unable to bring cases. There is a whole set of rules there, and there are rules in the family courts that eventually stop cases being brought. So it is not the case that this is something that has been miraculously conjured out of the air that does not exist in any form whatever in the legal framework.

[Lord Bellamy (Con)]

My Lords, on that last point I had primarily in mind the amendments that seek to criminalise bringing cases before the courts, which is the subject of some of the amendments.

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[Lord Bellamy (Con)]

Indeed. I suggest that I meet with my noble friend and we go through it with a fine-toothed comb. I am happy to meet with anybody else who wants to go through particular amendments with a fine-toothed comb and see where we are, because there is no point in arguing about things where we are ad idem.

The same point arises on Amendment 89, which relates to POCA—I pronounce it “poker”, but others pronounce it “pocker”—and Section 327 of that Act. Amendment 89 aims to stop corrupt claimants using their criminal property to pay their legal fees. Our view on Section 327 of POCA is that that is already effectively covered because it makes it a criminal offence for anyone to convert, conceal or transfer criminal property, so the payment for legal services using criminal property is already a crime. I am led to believe that the Solicitors Regulation Authority will shortly publish new guidance on the application of POCA in relation to solicitors’ responsibilities in that respect. So our position on our amendment is that it is already covered, but again, let us discuss this in detail so that we can get it right. Formally speaking, for those reasons I ask my noble friend in due course not to press her amendment today.

I am grateful to the noble Lord, Lord Cromwell, for his Amendments 105 and 106, and for the care and attention that he has devoted to this. Again, the Government’s position is that these amendments do not quite cut the mustard, if I may put it that way.

As drafted, Amendment 105, which seeks to create a new defence, would cut across several other areas of jurisprudence. There is a common law public interest defence for a breach of confidence, and a very careful balancing, in Section 4 of the Defamation Act 2013, as to when you can have a public interest defence in defamation cases. This kind of provision should not be rushed through without a careful examination of its side effects on other legislation and potential unintended consequences. Neither does the amendment quite attack what the Government would suggest is the main problem, which is not whether you have a defence but whether you have the money to fight it in the first place. You need some cost protection to be built into the SLAPPs framework.

The same point applies to Amendment 106 on the power to strike out. There are already powers to strike out, and the noble Lord makes it clear that we need to clarify those powers—but one cannot get away from the fact that, typically speaking, a strike-out application is very expensive and complicated, because you are trying to throttle a case at the beginning and the court is having to go through a great deal of work to get there. In the end, a strike-out will probably not be effective in achieving what the noble Lord seeks to achieve. We share the objective, but we are not sure that this is the right way to do it.

While we are sympathetic to the sentiment behind the amendments, from a technical point of view, the Government do not think that they are quite right. Unscrupulous claimants could exploit all this by ensuring that the process remains very complicated, long and burdensome. That is the Government’s position on these amendments. I repeat that I am very happy to engage so far as I can in a dialogue with noble Lords to see whether we can make further progress on the technicalities of this issue and look for a proper legislative vehicle in which to carry it forward.

[Baroness Bennett of Manor Castle (GP)]

I do not believe the Minister addressed the point that I and a number of other noble Lords raised about the international dimension of this, and the UK’s position in the international framework. Noble Lords may have seen that the noble Baroness, Lady Kennedy of The Shaws, was joined in this Committee by some guests, one of whom was Sebastien Lai, the son of Jimmy Lai, who was a victim of what has been labelled lawfare by the Chinese state in Hong Kong. We are also seeing British institutions being used as a weapon for that lawfare. Does the Minister acknowledge that there is a true international reputational issue and that the whole rule of law across the world is under attack?

Reflecting on what the Minister said, I think we heard something of a hint about the Government’s thinking that cost protection could be one way of addressing this issue. That fails to address the point made by the Labour Front Bench and others that, even if there is cost protection, an enormous amount of time, energy and stress goes into a case. Even if you are able to take away the financial threat, you are taken away from doing other journalism if you have to spend months engaging in a case.

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[Lord Bellamy (Con)]

Again, I thank the noble Lord for his remarks. The key problem is to distinguish access to justice from harassment. It is quite difficult, but it can be done. That is my answer to that question. On where the Government are, as I said before, we are working on drafts, but I cannot go any further than that until I know whether there is a legislative vehicle and which it can be. I am sorry not to be able to commit the Government at the Dispatch Box today any further than that but, as I said, I am hoping—and I can only express as a hope—that this is a short-grass and not a long-grass issue.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I apologise to the Committee, I perhaps should have declared my position as co-chair of the All-Party Parliamentary Group on Hong Kong in my last intervention.

[Lord Thomas of Gresford (LD)]

My Lords, I am grateful to Minister for his response and look forward to discussing these issues with him. I am grateful to all noble Lords who have spoken, and in particular to the noble Baroness, Lady Stowell. I commend her and her committee for the work they have done in investigation and taking evidence on this issue. I admire the guts and determination of the noble Lord, Lord Cromwell, and the fury of the noble Lord, Lord Agnew, on this issue.

I do not want to speak for too long: we have had a very long debate. The only dissenting voice was that of the noble and learned Lord, Lord Garnier. Your Lordships may recall that I said that, when the results of the consultation were looked at, the claimants’ lawyers were saying, “There’s nothing to see here, guv. It’s all the ordinary rough and tumble of litigation in this country”. The noble and learned Lord, Lord Garnier, referred to his experiences in the bear garden. I remember the bear gardens—I remember appearing in a bear garden for the leader of the Opposition in the Singapore Parliament; it was not an easy position. He was suing the Straits Times for libel, and the application to strike out was made on the grounds that he had no reputation in this country. When he died, some years later, he had obituaries in the Times, the Telegraph and the Guardian.

I know the games that these media lawyers play. They do not face up to some of the realities that we in the criminal courts perhaps have to face from time to time. But I have the highest regard for the noble and learned Lord, Lord Garnier, in his professional capacity, so nothing that I say should be taken as derogatory to him—otherwise, subject to professional privilege, I might find myself in court.