Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Brennan Excerpts

Wednesday 14th March 2012 Lords Chamber

[Lord Brennan]

My Lords, the arrival of globalisation as a world economic and human phenomenon, we hope, brings more benefits than disadvantages. However, reality tells us that globalisation produces serious adverse consequences from time to time, particularly in the developing world. It cannot be right that developed countries such as ours do not have a system of justice that provides remedies for those affected in such countries because of the liability of companies based in this jurisdiction. That reality in terms of what justice should provide should enable people from those countries access to our courts to seek appropriate remedies.

Amendment 134 in this group gives a power to the Lord Chancellor to provide regulations that would permit, in certain circumstances, our courts to deal with such cases. The numbers of cases that are likely to arise are few. Their cost and complexity is very large. To make provision for them would produce no consequence that would damage the Government’s policy in this Bill to save money and introduce cost control. None of that would be affected.

In my professional experience at the Bar I have done several of these cases. I have two examples to illustrate what I consider to be the validity of my submission to your Lordships. The South African resource of asbestos was a major benefit to companies in this country for decades. The standards of working practices and protection of ordinary workers were extremely low. I will not reveal anything that is not in the public domain by saying that I represented the plaintiff African miners—7,000 of them—many of whom were women, who were being used to break asbestos rock against granite to free the asbestos fibres for collection and use while bearing on their backs newborn babies. It is difficult to imagine that anyone would not think that that called for some remedy, if proved.

The case was dealt with in this country in the 1990s and it took three years of hearings in the lower court, the Court of Appeal and the House of Lords Judicial Committee before the plaintiffs finally got an order that the case should be heard in this country. Not surprisingly, it was eventually settled, a settlement that included compensation to all those people who had had to produce their medical records, their X-rays, from the very difficult administrative circumstances of the young South Africa of the 1990s and of the Government of South Africa, who were given money by the defendant company to contribute toward the clean-up of asbestos residues at the mines where they had been produced. All of that produced a trust settlement. All of that cost a huge amount in expense, with top class lawyers. Can it seriously be suggested that, under any of the reforms proposed in this Bill, such services by lawyers would be given these days? It is an absurd proposition.

I will move on to describe the second case, and then I will briefly come to a conclusion. I was involved in the Ivory Coast case in its early stages and I went to Abijan. We had tens of thousands of claimants, all of whom had to fill in questionnaires and produce medical evidence—often in French, in Francophone Côte d’Ivoire —and then come to England to pursue their case. By the time of this case, a few years ago, the law had changed, and I invite the Minister and his staff to bear this in mind. The law of the European Union now states that plaintiffs like that must sue the company which is alleged to be at fault in the jurisdiction from which that company operates. They are required to come to our country to pursue their claim. It is not a matter of form shopping—it is a requirement. That case cost a fortune, and it was settled, and it took years.

Companies such as this are often either insured, with enormous excesses that give them a lot of influence on the conduct of the litigation, or they are self-insured, because they are so big and powerful. For two or three years the programme is one of the plaintiffs producing all their medical and expert evidence and then going to court, hearing after hearing, long before trial, and spending a fortune. However, there was legal aid for the South African case and a conditional fee agreement for the case I have just mentioned. It worked and justice was done. That is all that I am asking the Government to consider should be done for this class of case in the future. These people have to come here. They do not have elite lawyers, funding or local remedies. They come to our country for justice. They come to where the company was based and where it should face justice.

This is a state of affairs which I commend to the attention of the Government and the House. How could it be said that any such case was properly catered for by allowing the previous system that was used in the Côte d’Ivoire case to continue? How could that adversely affect all the domestic factors that figure for local people? How could it benefit this country? Will we leave the Chamber having voted in favour of this, with our heads held high because we represent a country in which justice still prevails and access for the poorest, from wherever, is still available, or do we hang our heads in shame over something that cannot possibly be justified?

There is a risk that if this kind of exception is not made grave injustice will follow and the reputation of our country and our courts for just civil proceedings will be seriously damaged. It is time to think.

[Lord Stevenson of Balmacara]

My Lords, I thank those noble Lords who have spoken in this debate, in particular the noble Baroness, Lady Coussins, who, with her usual fluency and clarity, made the case extremely well. My noble friend Lord Judd, with his lifelong commitment to human rights, also drew attention to the many organisations who have written to us and who have supported the case that has been made tonight. My noble friend Lord Brennan, who has just spoken, has direct experience of many of the cases which we are talking about today and left us with a very powerful message about the impact that could be effected if the Bill goes forward unchanged. I thank the noble Baroness, Lady Miller, for her support of our amendment, particularly for drawing attention to the wider soft-power aspects which are so important in this area, and the right reverend Prelate for bringing into play the inevitable impact on poor communities of the Rome II regulations. Those will of course limit the level of expenses that they can possibly receive, and therefore create a completely unbalanced playing field in this area.

To apply the test that was proposed by the noble Lord, Lord Faulks, in the previous group, it is clear that the widely held view around your Lordships’ House is that once this Bill becomes law, it will not be possible to mount cases brought by vulnerable victims of corporate abuses perpetrated overseas by UK companies within the English courts. As we have been reminded, they have to be raised here. There can be little doubt that the Government really are on the wrong side of the argument tonight, and I join with the noble Baroness, Lady Howe, in not being at all clear why this is the case.

In his letter to me and the noble Baroness, Lady Coussins, of last month, which has already been referred to, the Minister argued that corporate human rights cases could still be viable under the measures contained in the Bill, and he helpfully highlighted the opportunity to use damages-based agreements—DBAs. This line of argument derives from the much quoted Jackson report which, it is worth pointing out, did not specifically deal with the cases that we are highlighting today. I will not go into the detailed arguments, as they have been well covered, but neither of Lord Jackson’s suggestions—under which the effect of lower damages recovery would be ameliorated, in his view—will work for typical corporate human rights abuse actions brought by claimants from developing countries.

We recognise, and indeed support in some ways, that one objective of this Bill is to reduce the costs of cases across the legal system as a whole, and one cannot be against that. Clearly there is a much better reason for this where these costs fall to be met in whole or part by the public purse but, as the Minister has already accepted, we are not dealing with this area in this part of the Bill. However, in the cases we have highlighted, not only is there no cost to the public purse, but there is already a system in place to decide whether the legal costs awarded are appropriate. Indeed, it was used in recent cases to significantly reduce the costs claimed by the winning side, although they did in fact settle.

It may be irritating to the department to have to create a carve-out in a Bill for such a small group of cases, but surely it is vitally important that vulnerable victims should get justice—and at least some compensation —for the trauma and harm that they have experienced, or for the loss of livelihood or even of life that has been caused by UK companies. It is equally important that companies need to know that they can be brought to account if they act irresponsibly. That is why we believe it is warranted to carve out an exception, so that the broader measures in this Bill do not close off justice in the UK for this small but very significant group of cases.

Our amendments would retain the current funding system in effect for human rights cases. Creating this exception would not be fatal to the overall aims of the Bill. The existing regime of success fees and “after the event” insurance premiums being paid by the losing company instead of coming out of the damages of the claimant are, in our view, the most sensible way of ensuring that these cases continue to be mounted. Moreover, it is unlikely to be more than a few cases a year, as stringent rules have to be met before such cases can be mounted.

In the debate last week, the noble and learned Lord, Lord Wallace of Tankerness, recognised that, in clinical negligence cases, removing the recoverability of ATE insurance premiums could create a real problem for claimants. The Government have therefore created a carve-out because expert reports are such an essential requirement for building clinical negligence cases successfully. However, the expenses of obtaining such reports would not necessarily be covered under the new regime. In the human rights cases that we are looking at, expert opinions and reports—for example, the analysis of alleged toxic waste or polluted water; or medical examinations in relation to asbestos ingested by miners in South Africa—are a vital part of showing that there is a valid case to answer. There is a very strong read-across from clinical negligence cases to the sort of human rights cases we are dealing with here.

I hope we can find an accommodation here. In plain terms, all the evidence suggests that the approach being taken in this Bill will kill off the chances of mounting this very small group of special cases in future. How poignant it is that at the same time as we are debating this amendment, the Foreign Office is leading valuable cross-governmental work on how we implement the UN guiding principles on business and human rights adopted in June 2011, which the Ministers told us in our meeting with them that the Government support. We were one of the countries most closely involved in UN Special Representative John Ruggie’s work. Indeed, the previous and the present Governments have been vocal in their support of the guiding principles and the present Prime Minister has committed publicly to implement them.

What sort of example are we setting and what message are we sending to UK companies if we now change our laws to make it hard for poor victims of corporate abuses perpetrated by UK companies to seek redress? They may be a small number of cases but they have had a direct impact on the lives of millions of people in the developing world. Each successful case has shone a harsh light on key areas of corporate misconduct in the developing world—from the dumping of pollutants in the water supplies of communities to appalling health and safety standards in mines and to direct corporate involvement in abduction and torture. Ultimately, it is surely important that businesses know that they cannot act with impunity. We do not want the majority of responsible UK businesses to be at a disadvantage because laggard companies get away with substandard, harmful business practices.

[Lord McNally]

My Lords, the noble Baroness, Lady Coussins, said that making this exception would not “gut” the Bill. But I hope that noble Lords who sit through these debates or perhaps read Hansard will see the pattern. Clauses 43 and 45 are a fundamental element of the package of reforms recommended by Lord Justice Jackson to deal with the problems of disproportionate costs in civil litigation under CFAs. I have called that the central architecture of the Bill. The clauses seek to reform and remove the inflationary defects introduced into the system by the previous Administration, which is the central point.

The Jackson reforms look at a specific part of our civil justice system. Throughout the passage of the Bill, we have had claims for exceptions to the central architecture. Certainly, in debates an adopter stands up and goes into the great clinical detail of an illness that we might be talking about, as if that is what the debate is about, and whether one should vote for or against it. Or the noble Lord, Lord Brennan, tells us of the suffering and the hardship of working in mines in South Africa as though that was the subject of the debate. Then everyone thinks, “Oh, we can’t be against poor women in South Africa in such conditions or people suffering from such terrible diseases”. In fact, that will remove the central reforms of the Bill.

In most of the examples that we have had so far, when one looks at what we are actually doing, they do not stand up to examination. It is of course always possible to make the case for an exception in a particular class of case, as noble Lords have done. But we believe that our changes must apply across the board. However, let me make it clear at the outset that we support claims arising from allegations of corporate harm in developing countries being brought and we support the protection damages for personal injury. No-win no-fee conditional fee agreements will continue on the same basis on which the noble and learned Lord, Lord Mackay of Clashfern, introduced them. Indeed, if the noble Lord, Lord Brennan, was referring to a case in the 1990s, it was probably brought under this regime, which is the basis on which it still operates in Scotland. We are also extending the availability of damages-based agreements, which are sometimes called contingency fees, to enable their use in civil litigation. Some of the objections to DBAs from the representatives of big business make me feel that they are a much more potent weapon than people give them credit for.

As I have said, we recognise how important these cases can be. We recognise also that, following the Rome II regulations, the damages in these cases can be relatively low. But the costs have been extremely high, as demonstrated in the now notorious Trafigura case, in which the Court of Appeal criticised the claimant lawyers for seeking costs of £100 million in a case which resulted in £30 million in damages. I should add that the defendant’s costs were only approximately £14 million, which was about one-seventh of the costs claimed by the claimants.

The reforms in Part 2 are about making costs more proportionate, while allowing meritorious claims to be pursued. As has been recognised by the noble Baroness, Lady Coussins, I and my officials have met on several occasions with representatives of NGOs which support these cases but we are not persuaded that they cannot be brought when our changes are implemented. We have asked for examples of further details of costs. If noble Lords want to engage between now and Third Reading, I will be happy to do so.

However, I continue to come to this Dispatch Box to answer attacks on this legislation that do not stand up to examination of the reality. It often means that the Opposition cleverly erase their own record in these areas and immediately adopt whichever hard case is being brought forward as the exception that will not damage the whole architecture of the Bill. We believe that Jackson was right in his reforms. We do not believe that those kinds of cases—I think the number referred to is about 10 such cases in the past 15 years —will be prevented from being brought.

We have listened carefully and we have sought to engage with relevant NGOs on this issue. As I said I would in Committee, I have now discussed this matter further with the Secretary of State but for the reasons that I have given we remain unconvinced that these cases cannot be brought under the new regime, as was suggested by the right reverend Prelate the Bishop of Newcastle.

[Lord Brennan]

The noble Lord is most gracious to give way. The points I was making were illustrated with cases. My principle point was that these cases are so expensive to run that you need a capital base which is not available to lawyers in this country. I should like the Minister to consider—if not now, later—in explaining to the House how it is that his advisers are telling him that lawyers in this country can raise £2 million, £3 million, £4 million or £5 million to run a case for three or four years. How will that be done?

[Lord McNally]

I will certainly take note of that. I realise the experience of the noble Lord, Lord Brennan, in these areas. When we asked the NGOs for hard facts and figures on costs, they were not forthcoming but perhaps there is time between now and Third Reading to re-engage. I also think that part of the problem is that whatever we have in civil law, conditional fee agreements or anything else, some of the problems raised by the noble Lord, Lord Brennan, in illustration will not be solved in British law courts or by changes in the British legal system. We are trying to reform what everyone who comes to the Dispatch Box acknowledges is a defect in our civil legal system and for which Lord Justice Jackson has produced a reform package that we are trying to put into law. Everyone agrees that we are right to do so, but for this, that and the other exception. Again, I am willing to discuss this further, but I do not think the case has been made—