Economic Crime and Corporate Transparency Bill

Baroness Stowell of Beeston Excerpts

Committee stage
Tuesday 25th April 2023 Grand Committee

[Lord Garnier (Con)]

My Lords—

[Baroness Stowell of Beeston (Con)]

My Lords, I am grateful to my noble and learned friend Lord Garnier for allowing me to speak before him. I shall speak to the three amendments I have tabled in my name. I should declare that I chair the Communications and Digital Select Committee, and I have tabled those three amendments with the full authority of the committee, because they follow the work that we have done over the past year or so inquiring into the practice of SLAPPs. We have also been in correspondence with the Solicitors Regulation Authority, and that correspondence is available on the committee’s website. 

My amendments are Amendments 87, 88 and 89. I am very grateful to the noble Lord, Lord Cromwell, for signing all three of them and to my noble friend Lord Faulks and the right reverend Prelate the Bishop of St Albans for signing Amendments 87 and 88. I add, in a personal capacity, that I support the other amendments in this group, both that from the noble Lord, Lord Thomas, and the noble Lord, Lord Cromwell.

At Second Reading, we heard a comprehensive description of the impact of SLAPPs against journalists and public bodies, and the noble Lord, Lord Thomas, has given us a taste of that in his opening remarks, so I will not go over any of that again.

In very simple terms, looking at our different amendments, the noble Lord, Lord Thomas, is tackling this from the perspective of the rich and powerful who abuse the legal system; the noble Lord, Lord Cromwell, is seeking to introduce provisions that support journalists or public bodies in mounting a defence against that action; and, in my amendments, I am trying to deter and prevent solicitors from supporting anybody, normally the rich and powerful, in bringing forward this action in the first place.

In Amendments 87 and 88, I am trying to make it explicit that solicitors cannot accept clients who want to abuse the legal system and avoid and suppress information that could be relevant to economic crime, by giving the regulator clear power to fine and sanction solicitors who breach that rule. They also make it clear that dirty money cannot be accepted for fees when the purpose of the action could prevent someone being subject to the justice system.

To unpack that a little further and focus on those two amendments, at the moment the SRA can fine traditional law firms and solicitors up to £25,000—we know how small a sum that is for some of the very large and powerful legal firms involved. Strangely, the regulator can fine different types of law firms—what are known as alternative business structures—up to £250 million, but this applies only to that kind of category of firm. There is an odd discrepancy. The Solicitors Regulation Authority recently criticised the inadequacy of the £25,000 limit and called for it to be addressed.

My amendments are very much in line with the aims of the Bill, which already removes the regulator’s fining cap for a narrow set of economic crime transgressions but does not specify that this will be applicable to SLAPP cases relating to economic crime. The SRA has said that the Bill’s tests are tightly drawn and the numbers of relevant cases that will fall within them are limited. My Amendments 87 and 88 make it clear that measures to remove the fining cap for professional misconduct also apply specifically to cases that involve an abuse of the legal process to suppress legitimate reporting on economic crime. Not all SLAPPs are about economic crime but, importantly, the regulator says that around half of its current SLAPP investigations are linked to economic crime. Amendments 87 and 88 therefore provide a sensible and proportionate change that supports the spirit of the Bill and government policy to tackle SLAPPs.

Amendment 89 is about closing loopholes that allow the rich and powerful to abuse our legal system and use criminal funds to pay for it. Throughout our scrutiny of SLAPPs as a committee, I have learned that payment for legal advice is not subject to the same type of money laundering regulation checks as other legal services. The Proceeds of Crime Act apparently does not prevent lawyers accepting dirty money to pursue SLAPP cases or require them to report suspicious activity. We have held evidence sessions on this matter and our witnesses described it as a significant issue. Addressing this is complex because—I say this in a Committee of very distinguished lawyers—everyone should have a right to use our justice system and lawyers will need to be able to represent criminals without prejudicing confidentiality. I understand the argument that I expect lawyers to make on the need for criminals to be able to seek proper support and for questions not necessarily to be asked about money.

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[Lord Vaux of Harrowden (CB)]

My Lords, I am not sure whether I can speak to this, being neither a journalist nor a lawyer. I am very sympathetic to what these amendments are trying to do. It must be right to try to prevent the abuse going on. However, I confess to feeling some niggling doubts. Journalists do not get everything right, and there are those who are not above embellishment or exaggeration. The balance of power is not only one way. A small company or individual may well find themselves up against a large media organisation, for example. Whatever we do, we must not make it harder or more expensive for innocent parties to defend themselves from unfair reporting, pre-emptively if necessary.

There is a balance to be found, and I am not yet convinced that these amendments quite reach it. That said, I agree that there is a problem with the current situation. It is being abused, and we need action sooner rather than later. So let us have the discussion and get something into the Bill. If not now, when?

[Baroness Stowell of Beeston (Con)]

I shall just add briefly a comment before we get to the wind-ups, in response to something that my noble and learned friend Lord Garnier said when he urged us not to overstate the problem of SLAPPs. I just wanted to make two brief points.

One has been made by many people already, which is that in fact, when it comes to SLAPPs we do not really know the scale of this problem, because so many of these cases never make it to a court of law. I wanted to make a second point in response to what my noble and learned friend said about not seeking to overstate the problem, and his questioning my and others’ ingenuity in bringing forward amendments in the Bill. My understanding of the reason for the Bill is that economic crime is a real problem. So, if we are legislating because that is the real problem, and we are aware that some of the most significant perpetrators of economic crime have ways of preventing the evidence that would lead them to be potentially subject to the justice system because they operate in that kind of market, as it were, surely we ought to seek to close that gap. Whether or not the number of them that might qualify under that heading is large or small, there is a gap. As I say, the objective here is tackling economic crime, and our amendments are only about economic crime.

I understand very much that the broader question of SLAPPs will have to be returned to, because the whole issue of SLAPPs cannot be addressed in an economic crime Bill. However, my amendments and others in this group are trying to make sure, in the context of economic crime, that those who may be the most significant perpetrators of it on a large scale have nowhere to hide.

[Lord Fox (LD)]

My Lords, this has been a fantastic debate and I will not add any pearls of wisdom and substance, but I would just like to just say something about process in response to the noble Lord, Lord Agnew. In the event that the Government are unable to satisfy what I think is the strong view of your Lordships that something needs to be done, I think we can pledge that the noble Lord, Lord Thomas, and I will work well within our own group to make sure that the comments of the noble Lord, Lord Agnew, about pushing this further on Report will certainly have some legs from our point of view.

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[Lord Bellamy (Con)]

My Lords, perhaps I expressed myself a little loosely. Let me put it like this: in the Government’s view, this is not an area where we should introduce the criminal law, whether it is in relation to pre-litigation or in any other respect in terms of litigation. One is faced with a very basic question of when is something that is a robust and justifiable approach to litigation in a pre-action letter a threat. That is not straightforward, in the Government’s view. The Government’s view is that this is not a matter where the criminal law should intrude.

[Baroness Stowell of Beeston (Con)]

My Lords, I am sorry to interrupt my noble and learned friend, but his reference to the Solicitors Regulation Authority prompts me to ask him a couple of questions. He makes reference to access to justice and to the Government being nervous about legislating in a way that would call that into question. As I said at the start, the amendments that I have tabled, Amendments 87, 88 and 89, are directed at the Solicitors Regulation Authority. As my noble and learned friend has already said, it issued a notice recently to reinforce the fact that this kind of activity is unacceptable.

My amendments seek to codify that yet further and give it the power, which it does not feel it has sufficiently clearly in law, to act when a solicitor is conducting themselves in a way that could be supporting somebody trying to prevent proper inquiry into what could be economic crime. I am struggling because I understand the argument my noble and learned friend is making about parliamentary time and the Government wanting to legislate for this in the round, but I also know as a former business manager that it is very difficult for any individual government department to be confident, even if it wants and hopes to be able to legislate in the way he is indicating that he and his department do, because the timetable is not in its control.

There is frustration in this context because we know that this is about only economic crime and that we are proposing amendments that would tackle only economic crime, as the noble Lord, Lord Cromwell, has said several times—maybe this is a bigger issue than even the SRA is telling me. This would make a difference none the less. In my humble view—I am not a lawyer—I do not think we are proposing anything that would limit people’s access to justice. When my noble and learned friend goes back to his department, even if he cannot make any kind of commitment at the Dispatch Box today, which I understand, could he at least have a conversation with others that is a bit more open-minded than his colleagues seem to have been on this matter up to this point?

[Lord Bellamy (Con)]

I thank my noble friend for that intervention. I can certainly have that conversation. I do not want to give the impression that the Government are close-minded. We are very prepared to legislate and have said that we are willing; the question is finding the right vehicle. I will deal with my noble friend’s amendments in a moment. When I said a moment ago that there are issues around access to justice, I meant no more than that. We have to be very careful in talking about approaching a court and whether that is in some way unprofessional, subject to sanctions or otherwise criticisable.

As far as the Government can see—if I may think aloud—there are probably two essential mechanisms to deal with this, one of which is in part reflected in some of these amendments, although the Government would not entirely agree with how it is put. One is an early disposal mechanism and the other, critically, is a cost protection measure so that people are not exposed to costs. As has been said many times, the risk of having to pay the costs is the real imbalance. Those are two general thoughts that, I hope, illustrate that the Government are not closing their mind to this. We are thinking about it and hope to come forward with a comprehensive, balanced solution, but today I cannot say exactly when.

With that background, I will deal with the specific amendments, which the Government are sympathetic to but cannot accept. On Amendment 80 from the noble Lord, Lord Thomas, as I have already said, new criminal offences should be created with care. That is especially true when targeting professionals with responsibility for assisting persons to achieve access to justice. There is a risk of inadvertently undermining access to justice in that way and the Government’s view, as I have said, is that a criminal approach in this area is not correct and would in any case create quite a lot of difficulties around proof beyond reasonable doubt, the concept of reasonable excuse, et cetera. Criminal offences need to be clear and we are very reluctant to see a new criminal offence created. That is our position on Amendment 80—it is too far-reaching. On that basis, I ask the noble Lord, Lord Thomas, in due course to withdraw it.

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My noble friend’s intention to specifically target professional misconduct involving litigation and threats of litigation is one that the Government wholeheartedly support. However, the Government’s position is that that is already captured in the drafting of Clause 181.

[Baroness Stowell of Beeston (Con)]

Briefly, I urge my noble friend to look at the correspondence I have had with the SRA specifically about the Bill. The SRA makes it clear that what I am proposing by way of these amendments would give greater clarity to the fact that SLAPP cases which relate to economic crime would also not be subject to the current cap but would benefit from that cap being lifted, which the Government are seeking to do. To put it another way, my amendments are trying to make sure that the intention of what is already in the Bill is achieved in the way that the SRA is asking for.

[Lord Bellamy (Con)]

Indeed. I respectfully suggest to my noble friend that she may have copied the letter to which she refers to the Home Office and the Ministry of Justice recently.

[Baroness Stowell of Beeston (Con)]

It was also copied to the Minister’s office.

[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.

Police, Crime, Sentencing and Courts Bill

Baroness Stowell of Beeston Excerpts

Lords Hansard - part one & Committee stage
Monday 8th November 2021 Lords Chamber

Moved by

[Baroness Stowell of Beeston]

153: Clause 66, page 63, line 21, after “vehicle” insert “or pedicab”

[Baroness Stowell of Beeston (Con)]

My Lords, I will speak to this amendment and my other amendments in this group. First, though, I welcome my noble friend Lord Sharpe to the Front Bench, and I look forward to his response.

These amendments are about pedicabs. I will briefly explain the problem, and then come to the solutions and proposed way forward. For any noble Lords unsure about what I am referring to, pedicabs are passenger vehicles operated by a cyclist at the front pulling a small carriage at the back. Sometimes they are known as rickshaws. Noble Lords may have seen them lined up on Westminster Bridge touting for business from tourists. They are often covered in flashing lights and blaring out loud music. They are mainly found in the West End and other tourist hotspots, whether that is Oxford Street and other major shopping zones during the day, or Leicester Square, Soho and the theatre district at night.

We have an unacceptable situation. These vehicles are legal, but, believe it or not, they do not need insurance. There is no way to identify the drivers, there is no requirement for operators to undergo criminal records checks, most vehicles do not undergo any safety or maintenance checks, and there is no control over the fares charged. Pedicabs are the only form of public transport in the capital that is completely unregulated.

It may assist the Committee if I explain very briefly the history of how this unacceptable anomaly occurred. Nearly 20 years ago—lawyers here will be able to expand on this—pedicabs were defined in case law as stage carriages in Greater London under the Metropolitan Public Carriage Act 1869, so do not fall under Transport for London’s licensing powers. This is not the case elsewhere in England and Wales, where they are defined as hackney carriages and subject to local licensing and regulation.

The upshot is that pedicabs can ply for hire in any street or place in Greater London. They are acting with impunity and in competition with black cabs, and where appropriate with licensed taxis, for custom. To state the obvious, those vehicles are subject to a range of regulations and exacting standards. It will not surprise the Committee that this impunity and the full knowledge that they cannot be held to account leads to a wide range of safety and traffic incidents. This includes dangerous driving, such as going the wrong way up one-way streets—I have personally seen pedicabs come on to pavements—nuisance driving, parking in bus lanes, and impeding traffic. There is a range of passenger safety issues associated with roadworthiness, and some vehicles have motorised the bicycle at the front, creating more risks to passengers. Hit and runs are not uncommon.

Then there is the nuisance and anti-social behaviour, which has a detrimental effect not just on businesses and residents but on the reputation of our capital city. There is aggressive touting for business; ripping off passengers with outrageous charges; very loud music played all day and night; harassment of passengers, including women; violence between drivers; and even reports of facilitating drug dealing across the city.

The Anti-social Behaviour Crime and Policing Act 2014 has been useful to some extent, but it is only a short-term measure, as it takes a huge amount of evidence, time and police resource to apply. We need regulation to prevent those wishing to give our capital city a bad name having the chance to do so in the first place. Having said all that, there are some reputable firms that want regulation. Indeed, there is an environmental case for pedicabs to be part of London’s public transport system, but that can happen only if they come under the control of Transport for London.

What is the solution? Before I explain my amendments, I want to highlight a better solution. My honourable friend Nickie Aiken, MP for the Cities of London and Westminster, has been campaigning tirelessly on this issue since she was elected in 2019. She has cross-party support from London-based MPs, many of whom have campaigned on this issue since Labour was in government. Her Private Member’s Bill, due its Second Reading on Friday 19 November, would bring pedicabs under the remit of Transport for London and allow it to introduce proper regulations. That would bring London into line with the rest of England and Wales. The Bill, and what it will achieve, is supported by MPs, the Mayor of London, Westminster Council, Kensington and Chelsea Council, other affected councils, Transport for London, the Soho Society, the Marylebone Association, the Heart of London Business Alliance, and a wide range of other bodies that are members of the Regulate Pedicabs Coalition. No one is against this, so I know she is pushing at an open door when it comes to government support. For the last five years, Minister after Minister has promised to introduce legislation to make this regulation happen when an appropriate legislative vehicle is available, but so far none has arrived.

So, here is what I am asking. First, I would like the Minister to confirm that the Government will support Nickie Aiken’s Private Member’s Bill if it gets a Second Reading on 19 November. But notice that I said “if”, because, even with the Government’s support, we face a real risk of not getting that far. This is the third attempt to introduce legislation via a Private Member’s Bill. Nickie’s Bill is the fifth due to be debated on that day, so there is a real danger that it will not get a Second Reading and will fall again. To be fair, this Private Member’s Bill is a suitable vehicle because it is simply bringing London in line with everywhere else, where local authorities can already regulate. It is not introducing new policy; it is just correcting something which needs to be corrected.

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[Baroness Stowell of Beeston (Con)]

My Lords, I will certainly withdraw the amendment. I am grateful to my noble friend the Minister for making clear that the Government support the Private Member’s Bill, and I will of course accept the offer of a meeting with my noble friend Lady Vere—although, if it is a meeting we have to have because the Private Member’s Bill has not been successful in its Second Reading on 19 November, I hope the Minister is ready and prepared for action to take us further forward.

I am grateful to the noble Lord, Lord Pannick, for his suggestion, which I will certainly consider, if necessary, and discuss with the Government in the first instance. I would very much prefer government support if it is necessary to take this step.

I also reassure the noble Lord, Lord Berkeley, that it is certainly not my intention, nor that of my honourable friend Nickie Aiken in her Private Member’s Bill, to include the kinds of vehicles he describes—the domestic arrangement where a parent may have a small trailer on the back, with small children in it. This is about vehicles that charge passengers to transport them.

I also take on board the points made about the nature of the new ways of transporting freight using cycles within London. That is why I emphasised in my opening remarks that, on pedicabs more generally, there was a time when there was a real effort to ban them altogether. Now we realise that, with today’s environmental challenges, there is scope for vehicles that use pedal power, as opposed to standard motorised power.

I am grateful to all noble Lords who spoke in support, and to my noble friend Lord Attlee. I hope that I do not need to come back on Report to detain your Lordships further on this but, if I have to, I will. I beg leave to withdraw the amendment.

Amendment 153 withdrawn.

Queen’s Speech

Baroness Stowell of Beeston Excerpts

Tuesday 18th May 2021 Lords Chamber

[Baroness Stowell of Beeston (Non-Afl)]

My Lords, it is a pleasure to follow the noble Lord. I congratulate the noble Baroness, Lady Fullbrook, on her maiden speech, and I welcome the noble Lord, Lord Wolfson of Tredegar, because this is the first debate I have spoken in since he joined your Lordships’ House and has been sitting on the Front Bench. I will focus my remarks on the Police, Crime, Sentencing and Courts Bill, and the contentious measures in it about protests and demonstrations. I support the Bill and those measures, although I regret that they are necessary. I will explain why.

Over the past five years, we have experienced a series of shocking political events that have exposed how divided our society has become. For me, the most graphic illustration of that division was the demonstrations and protests in April 2019 that brought parts of central London to a standstill for several days. To be clear, I am talking not about the subject of the protesters’ demonstrations but about how they went about their protest.

Until then, I think most of us assumed that it was not possible for people, in the name of any cause, however noble or important, to block other people’s rights of way and to get away with it. The inconvenience and cost of the disruption that the protest caused was reason enough to be angry, as was the inertia of the police in the face of such disruption. But what dismayed me was the realisation that common consensus among law-abiding people was breaking down—the common consensus that nothing justifies one group of citizens wilfully and deliberately obstructing other law-abiding people from going about their business.

One thing that has always united the vast majority of us, regardless of our differences, is what is acceptable behaviour in public, including when it comes to how we protest and demonstrate in support of things we believe in or are against. My regret is that we now have to legislate to make something that never used to be in doubt undeniable in law.

Of course, one thing that is still uncertain is whether there will be prosecutions or convictions in the light of this legislation. Only a month ago, a jury acquitted protesters who had caused criminal damage to private property, even though the judge directed the jury that there was no defence in law for their actions. I would welcome the Minister’s reaction to that.

That brings me back to what has caused this fracture in society and why I believe that Parliament has no choice but to act. As hard as it may be for some noble Lords—and Members in the other place—to accept, the political realignment we are seeing in Britain is in part because many voters cannot be sure that people such as parliamentarians and political and social campaigners, who may have different views, stand for and share the same belief in upholding common standards of behaviour which unite all law-abiding people. As regrettable as this legislation may be, it is necessary because these same citizens need us—Parliament—to stand up for them and what unites us with them.

The gracious Speech said that the Government will legislate to

“level up opportunities across all parts of the United Kingdom”.

I believe that all sides of this House support this goal but, if we really want to achieve it, we should keep in mind that the inequality and unfairness that people feel is not only about lack of economic opportunities. It is also about the erosion of standards which all of us must uphold if we are all to have an equal opportunity to succeed.