Criminal Justice and Courts Bill

Lord Davies of Stamford Excerpts

Wednesday 30th July 2014 Lords Chamber

[Lord Cormack (Con)]

My Lords, the noble Baroness asks some pertinent and important questions. I had not intended to contribute to this debate, but was moved to do so by the extremely perceptive observations of the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Marks, both of whom made some valid points.

We will be constantly reminded in 2015 of those central words of Magna Carta:

“To no one will we sell, to no one deny … justice”.

When the noble and learned Lord, Lord Woolf, talked about access to justice and how important it is that everyone should have it, it reinforced my belief that, although it is entirely proper to ask the sort of questions which my noble friend Lord Marks addressed, I would rather—I have said something similar in this Chamber before—we erred on the side of leniency. One is constantly reminded of that old adage that it is better that 10 guilty people get off than that an innocent person does not. In the context of the judicial review, it is far more important that the sort of people for whom the noble Baroness, Lady Campbell of Surbiton, pleaded the other day should not be discriminated against than that somebody who may be a little better heeled should be so. I hope that we can bring a balance to this matter and remind ourselves of that basic tenet of the rule of law:

“To no one will we sell, to no one deny … justice”.

[Lord Davies of Stamford (Lab)]

My Lords, I agreed with the very eloquent plea on behalf of the system of judicial review in a country based on the rule of law which we have just heard from the noble and learned Lord, Lord Woolf. I agree also with the remarks of and amendments put forward by the noble Lords, Lord Beecham, Lord Pannick and Lord Marks.

My noble friend Lady Lister has asked a lot of the pertinent questions. The noble Lord, Lord Cormack, just mentioned Magna Carta. I draw his attention to another part of that document. Ever since Magna Carta, it has been a principle that the state, the King or the Government cannot seize the property of the citizen except by some very clearly defined legal process and in very sharply legally defined circumstances.

Although I think that the rules about making third parties financially liable for court cases are not as clear in the law as a whole, particularly since the Hamilton v Al Fayed case, as they should be—and it would very good if we could have those codified more precisely—what would happen to the law in the matter of judicial reviews if we passed this Bill as it is would be quite horrifying. Clause 66 (3) states that a,

“court or tribunal must consider whether to order costs to be paid by a person other than a party to the proceedings, who is identified in that information as someone who is providing financial support for the purposes of the proceedings or likely or able to do so”.

I repeat,

“or likely or able to do so”.

That is in no sense precisely defined—it could be anybody. It could be any of the people listed by my noble friend Lady Lister. It could be—could it not?—someone who is a member of a corporate body, even though he or she had played no particular part in preparing for, or promoting, that application for judicial review. It could be—that would be a fear—someone who was a known supporter of a particular NGO which itself was an applicant; but, again, without he or she having played any part in supporting that application, or perhaps without even knowing that the application was being put forward. That is a perfectly possible scenario. We need to make absolutely sure that none of these obvious perversions of justice could occur.

I totally agree with the implication of the rhetorical question posed in the House this morning by the noble Lord, Lord Pannick, which is: why are the Government doing this? Clearly the Government are doing this in order to close down the judicial review system to the greatest degree possible, with the intention of protecting the Executive branch—it is a very dangerous tendency. What they are doing here, however, is drafting a law which simply does not meet the elementary requirement to be precise, clear and unambiguous. I think this phrase,

“or likely or able to do so”,

is really quite terrifying, and I hope we get some clear definitions from the Minister. Just a statement from the Front Bench will not do: we need to remove these very offensive—very dangerous—words, and replace them with something much more precise.

Since this group of amendments encompasses two clauses and two clause stand part debates, on Clauses 65 and 66, it is probably the right moment for me to raise Clause 67. It is probably also right for me to raise another matter that is coming up: Clause 68. Perhaps Clause 68 is coming up in another group of amendments. Is that the case?

[A noble Lord]

Later.

[Lord Davies of Stamford]

In that case I look forward to addressing the Committee on that matter later.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I add my name to those who have raised the objections to these clauses. The noble Lord, Lord Davies, says that one should have greater precision if one is going to legislate in this way. The fact is that you cannot have greater precision. This feature of the Bill, like so many other features of Part 4, should be left to the courts to work out. As has already been said, there is an existing and entirely satisfactory body of law which governs the ability to pursue cost orders from unseen funders and backers of litigation—those who mischievously or for their own advantage support litigation—but not from those who, appropriately and philanthropically, rightly back public interest causes.

Indeed, in the justice briefing on these aspects of the Bill there is a footnote—a reference to a case that the noble Lord, Lord Davies, mentioned a few moments ago: Hamilton v Al Fayed (No. 2), which was decided in 2003. Noble Lords will find this an illuminating judgment—it is one that I myself wrote—that provides an ample basis for developing this area of the law. This should be left to the courts. We should not seek to deal with it in this way, which is necessarily going to lack precision because legislation cannot address all the varying circumstances that could arise.

[Lord Davies of Stamford]

In the circumstances, I am following what the noble and learned Lord is saying particularly closely. He seems to think that it is adequate that the courts should set rules on these matters. Does he not agree that it is very important that a citizen should always know in advance whether he or she is incurring liability, just like a solicitor needs to know in advance whether he or she is breaking the law? There should be no ambiguity in these matters. It should be quite clear what constitutes support, potential support or the creation of potential liability. It is very unreasonable that the citizen should be left in any doubt on that subject.

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[Lord Faulks]

In many cases, this will be a fairly straightforward procedure, whereas in the Richard III case it would have been a rather unusual, more searching procedure. I am afraid that I cannot depart from the Government’s position that these clauses will put in statute an important process which has not always been adequately undertaken by judges, and which was welcomed by the senior judiciary, in order, in some circumstances—

[Lord Davies of Stamford]

Can we just establish the facts in relation to the Richard III case? We know that it would have been possible for the court in such a case, if it wished to do so, to investigate the funding of the straw company or the straw man who was the applicant and, if necessary, to have made an order for costs against the backers of that action. We also know that, in that case, that action was not taken. Did the Government make an application for a costs award in their favour on that occasion? In other words, did they attempt to initiate that process in the Richard III case?

[Lord Faulks]

I am not aware that they did. Rather than take up more time discussing the particular facts of that case, I will write to all noble Lords who have taken part in this debate and explain what course the Government took in relation to it. I think I have probably taken up enough time on the subject.

What we are concerned with is not, in fact, a radical departure from what exists, but sets down clearly the scope of the discretion and makes it a matter of course that in such cases there will be information about the financial resources, and that they will be used. As I have conceded, these clauses do not introduce any new principles concerning the costs liability of non-parties. Their purpose is to increase transparency, so as to allow the courts to exercise their existing powers and discretion more effectively. In other words, more information will be available on which to make any decision that they have to make.

The Government do not agree that the requirement to provide information should be limited or applied only in certain circumstances, as Amendment 73G would provide. We do not accept that the transparency requirements should apply to some people and not to others. Furthermore, we do not agree that prospective funding should be excluded from the information that an applicant is expected to disclose, as Amendments 73H and 73M seek to achieve. It is vital that the courts have before them the full financial picture of a claim. This must include details of any financial resources that are likely to be available towards the costs of the litigation. Noble Lords will surely accept that, were these amendments made, third-party funders who sought to protect themselves from liability would merely structure that funding in such a way that it would not be available on application but only thereafter.

We will be working with the Civil Procedure Rule Committee and the Tribunal Procedure Committee so that the rules can make clear the exact parameters of the information that applicants will be required to provide, together with a duty for applicants to update the information where circumstances change materially. The noble Lord, Lord Beecham, suggested that the rules of court would simply reflect what the Lord Chancellor wants. The position is that the Lord Chancellor can direct that they achieve a certain purpose, but the terms are for the rule committee. As I endeavoured to explain last time we debated these matters, the rule committee is made up of some extremely distinguished lawyers, and they will be responsible for the particular terms of the rules. I do not accept that the transparency requirement that Clause 65 permits is an onerous one.

I turn now to Clause 66. Amendments 73N, 73P and 73R are concerned with what the judge does with the information, and seek to change the circumstances in which the court should have regard to information about the funding of the application when making costs orders. Rather than requiring the court to consider the funding information provided under Clause 65, the amendments would allow the court to have discretion to consider financial information, which it would be able to order the applicant to provide if it considered it just to do so. The information would be limited to sources of funding actually available to the applicant, and would not cover sources that were likely to be available. Rather than looking at the applicant’s ability to fund the judicial review generally, the information would be limited to how the applicant would meet the other side’s costs.

Amendments 73Q and 73U seek to replace the duty, conveyed by the word “must”, with a discretion, conveyed by the word “may”, for the court or Upper Tribunal to have regard to information provided under Clause 65 when considering costs awards. These clauses do not mean that applicants have to provide an in-depth breakdown of every aspect of their financial position, but it is right that they should provide information on how they will fund the judicial review generally, and not just the other side’s costs. If necessary, applicants will be able to update the court at a later stage if the position changes. I would expect those who choose to bring a judicial review to consider first how they will meet the costs of doing so. This is what the clause seeks to bring about.

It is right that the courts should consider this information. Let me be clear that this does not mean that a court will be obliged to make a costs award against a non-party. As the noble and learned Lord, Lord Brown, made clear, there is a substantial body of jurisprudence as to how the discretion is exercised vis-à-vis a non-party. Rather, the courts are obliged to consider the information properly when deciding whether or not to make such an order.

Amendment 73T would allow the courts or Upper Tribunal to sit in private or impose reporting restrictions to protect the privacy of a person’s financial information which is required to be provided under Clause 65. I fully understand that it may seem that such a provision is necessary, but I hope to be able to provide reassurance that the amendments are not necessary as courts have existing powers in this area. There has long been a general rule that a hearing is to be in public. However, the power has existed for a long time to conduct proceedings in private where necessary in the interests of justice. Rule 39.2 of the Civil Procedure Rules already reflects that power so that if a hearing involves confidential information, including financial information, and if publicity would damage that confidentiality, this information can be kept private. As is the case now, this clause does not change the position that financial information made available to the courts need not be made publicly available.

Amendments 73W and 73X amend the duty on the court so that it need consider costs orders against only those who have actually provided support or, as provided by Amendment 73V, those who have promised to provide support. This would mean that the court would not have to consider making a costs order against those who are likely to contribute to the funding of the judicial review, including not making costs orders against those sheltering behind shell companies created simply to avoid proportionate liability for costs.

Amendment 73V would also mean that those who are likely to fund and drive litigation could escape the appropriate costs liability by not formally promising to provide support. In my view, this would defeat the purpose of the clause and is not a sensible position. It is the Government’s view that those who finance and drive judicial reviews should face appropriate costs consequences in doing so. I shall shortly answer the questions raised on that by the noble Baroness, Lady Lister, and others. This means that the court should have before it and consider all of the information when making costs awards, and this should include not just those who have provided funding but those who are likely to do so.

In my view, it should not be possible to bring litigation in such a way as to circumvent proper costs exposure. The changes introduced by Clauses 65 and 66 tackle precisely this issue, ensuring that those driving judicial reviews assume a fair and proportionate share of the financial risk, always, of course, subject to the discretion which must exist in these circumstances, given that it is impossible for a legislative provision to define exactly every single type of situation where the matter would have to be dealt with.

There is no question of singling out those who support applicants. In answer to a question raised by the noble Lord, Lord Beecham, and, I think, others, I should say that the power that courts have to order non-parties to pay costs in litigation of whatever character exists and, in appropriate circumstances, would apply to non-parties whether they are in some way supporting one side or another. That power exists.

As to the reduction in legal aid, my noble and learned friend Lord Mackay accurately stated the position in relation to legal aid. Unlike in many areas of the law, legal aid does remain in scope for judicial review subject to means tests and merits tests. That is an important inclusion of scope. On the point made by the noble Lord, Lord Pannick, the Civil Legal Aid (Remuneration) (Amendment) (No. 3) Regulations 2014 are concerned simply with that part of the procedure where an unsuccessful application is made for permission and only in relation to that permission. That, I know, is controversial, but it should not be thought that legal aid is not available for judicial review.

The noble and learned Lord, Lord Woolf, whose excuse for lateness was, of course, of the highest order, mentioned the availability of conditional fees. These are of course much less available following Part 2 of the LASPO Act, which indeed was supported by the noble and learned Lord, Lord Woolf, among others, on the basis that an unfortunate consequence of the expansion of the original idea of conditional fees—which I think was in modest scope the responsibility of my noble and learned friend Lord Mackay—had resulted effectively in a bonanza which was in fact having a number of undesirable consequences. There is a much more modest scope now for conditional fees.

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[Lord Faulks]

No, I do not think that the noble and learned Lord was here at the beginning of the debate, but I have not, in fact, suggested that the provisions were there only for that reason. I see the noble Lord, Lord Beecham, is nodding. I said that they are there because the Government think that they should be included. However, I did say that the senior judiciary welcomed a degree of transparency. I am not suggesting that that they also endorsed the precise form of the statute, if that helps the Committee or the noble and learned Lord.

[Lord Davies of Stamford]

The Minister said two things, if I heard him right. One was that the intent of these clauses is not in any way to change the common law basis of the criteria for determining liability for the costs of a judicial review, and that those who are currently not exposed to such liability will not be exposed as a result of the provisions in the Bill being passed. At the same time, he said that there are categories of people who have been getting away with avoiding financial liability for judicial review at the expense of the taxpayer, when they should have been liable. Can I put it to him that those two statements are not logically compatible? Either there is a change in the scope of liability for judicial review as a result of these clauses or there is not.

[Lord Faulks]

I cannot add much to what I have already said. For the first time, in statute—if this clause becomes law—we shall have a requirement for information about financial resources to be provided. We shall also have clear guidance to the court as to how it should exercise its discretion on using that information about financial resources. I think that the noble Lord himself said that it was useful to have some of these things stated in the statute. That is precisely what we are doing.

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[Baroness Deech (CB)]

My Lords, I intervene very briefly, again as one who has been judicially reviewed—indeed, as one who is constantly being judicially reviewed. There is something of a flavour here that judicial review is always a case of David versus Goliath. However, it has to be remembered that sometimes it is a case of David versus David. Although the first David may passionately believe that what is being done in their name is in the public interest, the person on the other side may equally strongly and decently believe that what they are standing up for is also in the public interest. They are not necessarily a well funded public organisation. That is why I have some sympathy with the retention of Clause 69(2), and with giving some support to the other party who also believes that their costs should be capped because they are defending something that they believe is in the public interest. Other than that, I think that the general tenor of the argument that judicial discretion should prevail is the right one. I support the general thrust of the amendments, subject only to our remembering that the person who is not the claimant—the respondent—may have an equally innocent and good case and believe that they are standing up for the public interest.

[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.

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[Lord Faulks]

I do not have any more authoritative figures. I will certainly write to the Committee before Report giving those figures, if they are available. I cannot guarantee that they are available, but if they are, I will certainly assist the Committee. We have, however, to consider not only the past position but the position prospectively. It is necessary in this context to consider what might be done in the future were there, as some of these amendments suggest, to be a loosening of the rules.

It is important that the matters listed in the clause are taken into account. I do not consider the factors to be contentious. Common sense dictates that, in deciding whether proceedings are public interest proceedings, consideration needs to be given to the number of people directly affected and the significance of the effect. It is also right that the court considers whether the proceedings involve consideration of a point of law of general public importance.

Clause 68 sets out three requirements in subsection (6) that proceedings must meet before a costs capping order can be made: first, that the proceedings are “public interest proceedings”; secondly, that in the absence of the costs capping order the claimant would not continue with the judicial review; and, thirdly, that it would be reasonable for the claimant to act in this way. Amendment 75F seeks to remove these entirely and Amendment 76 would remove the third of these criteria.

The noble Lord, Lord Pannick, was concerned about how this subsection would be interpreted.

[Lord Davies of Stamford]

The noble Lord has just read out the criteria for making a costs capping order in subsection (6). Does he agree that because of the Henry VIII-plus provision in subsection (9), all those criteria could equally well be set aside, waived or completely changed simply by fiat of the Lord Chancellor at any time?

[Lord Faulks]

As the noble Lord would expect, I am coming on to consider the Henry VIII clause, so perhaps he will be kind enough to bear with me until I come to address that particular issue.

In the mean time, I shall deal with the assessment of whether it was reasonable to discontinue the claim, which was a question from the noble Lord, Lord Pannick. This was not in the summary of the Corner House case, and it was only a summary that I endeavoured to assist the Committee with. It is a matter that we can find in the case. The provision in respect of the claimant being reasonable in discontinuing their claim comes from the Corner House principles. The court now assesses whether, without a protective costs order, the claimant would be reasonable in discontinuing their claim based on the lack of financial protection. All that we are seeking to do in statute is to confirm what is already in that case. I will come on to the point about the Henry VIII clause.

It was a requirement of the Corner House case that capping orders may only be in cases where the issues raised were of general public importance. The public interest requires that those issues be resolved and if a costs capping order is not made, the claimant would discontinue the proceedings and would act reasonably in doing so. The Government are not of the view that those requirements should be removed. Amendments 75F, 77 and 81 would remove from Clauses 68 and 69 powers for the Lord Chancellor to amend lists of matters within these clauses through statutory instrument. We do not believe that that is a sensible approach. I will set out why.

Removing the powers to amend these lists of matters would prevent us from responding quickly should it become necessary. Over time we have seen the development of the principles governing where a costs capping order should be made. That is clear from the changes that have been made to the principle set out in the Corner House case, referred to by the noble and learned Lord, Lord Woolf, in his contribution to the debate. It may be the case that there are future developments which mean that it would be appropriate for the courts to consider different matters when deciding whether, for example, proceedings are public interest proceedings. These powers give us the ability to respond quickly should change be needed. While this is done through statutory instrument rather than primary legislation, it does not mean that Parliament will be unable to consider any changes. Both powers are subject to the affirmative resolution procedure, so any changes will be debated in both Houses before coming into force. I also note that the Delegated Powers and Regulatory Reform Committee, whose report was discussed earlier in Committee, recommended the creation of a similar model elsewhere in this part.

This is not a question of the Lord Chancellor, as it were, having a free opportunity simply to alter the whole burden or interpretation of the clause. When dealing with the present position of the Lord Chancellor, the noble Baroness, Lady Lister, referred to the Joint Committee on Human Rights and the position of the Lord Chancellor generally. Of course, the Government responded to that report, as she will be aware. In particular, it referred to Section 1 of the Constitutional Reform Act 2005, which expressly provides that its provisions do not affect the existing constitutional principle of the rule of law or the Lord Chancellor’s existing constitutional role in relation to that principle. Furthermore, the Lord Chancellor’s oath specifies that his role is to,

“respect the rule of law”.

It suggests that the responsibility of the Secretary of State, for example, regarding sentencing or prisons, undermines the Lord Chancellor’s responsibilities for justice and the rule of law. It is a big question which I understand has been considered by the Constitution Committee of your Lordships’ House. I do not think it would be appropriate for me to comment further except to say that, as I think the Lord Chancellor has said on a number of occasions, he is very mindful of his oath and his obligations in that regard. As the noble Baroness herself acknowledged, the change—to put it neutrally—to the Lord Chancellor’s role was brought about in something of a hurry by the party opposite when in power.

I turn to Amendment 75B, which seeks to extend the protection of costs capping orders to those who intervene in judicial reviews even though they are not parties to the proceedings. We see that as a step too far. Under the current scheme, I believe that interveners do not receive such orders. It would not be consistent with their status as a non-party. For example, an intervener could not, as required under the clause and the Corner House principles, meet the criteria of discontinuing the proceedings. I said in the debate on Clause 67 that an intervention should be made in a way that does not incur additional costs for the claimant or to the usually taxpayer-funded defendant. There are sufficient safeguards set out in Clause 67 to render this amendment unnecessary. For example, if the court considers that there are exceptional circumstances that make it inappropriate for the intervener to pay those costs, it will not award costs.

The Government accept that the court should continue to be able to grant cost protection where the issues are genuinely of public importance and the case cannot proceed otherwise because of the costs risk, but we wish to ensure that they are not made widely or in any way routinely. As the noble Lord, Lord Pannick, pointed out, they may not be very frequent, but we certainly do not want to increase their use or increase their use in different circumstances. It is only in exceptional meritorious cases, where there are serious issues of the highest public interest that otherwise would not be taken forward, that a public body defendant should have to pay its own costs regardless of whether it wins or loses. The clause retains the principle that the costs are a matter for the judiciary. When considering an application for a costs capping order, it will be for the judge, as currently, to decide whether the particular proceedings are in the public interest and whether an order should be made in an individual case. I am extremely mindful of the comments made by the noble and learned Lord, Lord Woolf, in the context of this and other amendments—indeed throughout Part 4. In his view and that of other noble Lords, it is an encroachment into judicial territory. It is said that Parliament should not be involved in areas where judges can develop the law and where they exercise their discretion. I understand that point. The Government do not seek to fetter the discretion inappropriately but none the less consider it appropriate to set out with some clarity what the provisions are while still permitting there to be judicial discretion, as indeed is appropriate.

[Lord Davies of Stamford]

Before moving to the next clause, I wonder whether the Minister would be kind enough to address the two questions I asked on how the court will satisfy the obligation that will be imposed on it by the Bill that an applicant would not proceed if a costs-cutting order were denied. My two questions were: would the applicant be asked the question and be required to make a statement saying that he or she would desist from an application if a costs-cutting order was not available? Secondly, in the event that such a declaration was made, would it be enforceable and would the applicant be held to it? In other words, would it in all circumstances be the end of that application, even if other sources of funding could, at that late stage, be found, even if they were not anticipated?

[Lord Faulks]

Those are precisely the circumstances in which we think the matter is best left to the judges. Indeed, judges have been performing such an exercise under the Corner House principles, which would not alter if the Bill is enacted in the way in which the Government suggest.

Clause 69 sets out the way in which a court should approach the decision of whether to make a costs capping order and the terms of such an order if made. It contains a list of five factors that the court must consider as part of this process. Noble Lords will recognise that, with one exception at subsection (1)(e), the factors build on considerations for making a costs capping order which were set out in the Corner House case.

Amendment 78 seeks to make it optional for the court to have regard to these factors. It is right that the court must consider the factors at Clause 69 when considering whether to make a costs-capping order as they are of great importance in ensuring that a costs-capping order is not awarded where it is unnecessary. However, the courts still have discretion, as the clause does not inhibit the courts’ discretion in deciding how much weight, if any, should be given to each factor. In addition, the list is not exhaustive, meaning that courts can have regard to any other factors which they consider to be relevant to the case before them. Amendment 78 is therefore unnecessary in the Government’s view.

In order to understand the effect of Amendment 77A, it is necessary to consider Amendment 75F, which is discussed in a later group and which removes the requirements for making a costs-capping order from Clause 68. When taking this amendment into account, the effect of Amendment 77A is to grant the court a general discretion to make costs capping orders, provided it is of the view that an order would be just, having considered the circumstances of the case, including the factors set out at Clause 69.

Amendment 80A transposes the requirements from Clause 68 that are removed by Amendment 75F into Clause 69, where they become additional factors that the court must take into account when considering whether to make an order, instead of requirements which must be met before an order can be made. Amendment 80 also adds an additional factor to the list of factors for the court to consider, which is the likely effect on the applicant if a costs-capping order is not granted.

Amendments 77A and 80A go too far, particularly when taking Amendment 75F into consideration. The effect of these amendments together would be that a number of the Corner House principles, which must currently be satisfied before a court can make a costs-capping order, would merely become factors for the court to consider, allowing an order to be made in cases where none of those principles was fulfilled. We suggest that that cannot be right. The principles set down in this case must be the starting point, and must certainly be satisfied before the taxpayer is asked to subsidise the cost of the litigation.

Amendments 79 and 80 seek to amend the list of factors in Clause 69 that the courts have to consider. Specifically, they seek to remove the requirement that the courts have regard to: the financial resources of third parties who have provided or may provide financial support to the parties; and the extent to which third parties who have provided or may provide financial support to the claimant are likely to benefit if the claimant is granted a remedy in judicial review.

Amendment 79 would mean that the court would not have to take into consideration the financial resources of third parties who may provide funding in the future. This would mean that the court would not have a full picture available when deciding whether it was appropriate to grant costs protection. We do not agree that this is a sensible position. Courts should consider information relating to potential sources, otherwise it could lead to orders being made in cases where it is not necessary or appropriate and, should the claimant lose, would result in the taxpayer being asked to pick up the bill. Again in the Corner House case, one of the requirements was that the court should have regard to the financial resources of the parties to ensure that any order the court made was fair and just.

I would like to reassure noble Lords that we intend to provide a safeguard so that, where a claimant has told the court—this perhaps answers to some extent the residual query of the noble Lord, Lord Davies—that it expects to receive future financial support and that support is ultimately not forthcoming, the claimant will be able to inform the court so the court can take the change of circumstances into consideration. Clause 68 provides that rules of court will set out the information that a claimant must provide when applying for a costs-capping order. We will invite the Civil Procedure Rule Committee to include the safeguard in those rules. While it may be argued that an alternative to this safeguard would be for the court to take account of financial support only once it has been received, I do not think that this would be appropriate as the making of the costs-capping order may well remove the need for that support, meaning it might never be forthcoming.

Amendment 80 would remove the requirement that the court considers the benefit to a potential third-party funder. The Corner House principles recognise that a claimant’s private interest in a case is a relevant factor when considering whether to grant a costs-capping order. This principle from Corner House is reflected in Clause 69, which requires the court to consider the extent to which a grant of relief in the judicial review would be of benefit to the claimant and third parties who have funded or may fund the claimant’s case. It is right that the court consider the full picture when considering whether to make an order.

Clause 69 also requires that, when a court makes a costs-capping order in favour of the claimant, it must also make one for the defendant—a matter referred to by the noble Baroness, Lady Deech—thereby limiting the defendant’s liability for the claimant’s costs should the defendant lose. Such orders are commonly known as cross caps and are not new. A court will often already make such an order in practice, but we think that in future they should be made in all cases where the claimant is granted costs protection. Amendments 80B and 80C would weaken this principle so that the courts may, or should normally, impose a cross cap. I accept that in most cases a public body has more resources available to it than a private individual. However, they are not unlimited, as the noble Baroness quite rightly said. These resources ultimately come from the taxpayer and it is right that they should also have costs protection. This subsection reflects the general principle in civil cases that overall costs should remain within reasonable limits and that the taxpayer is not asked to subsidise a disproportionately large costs bill.

I entirely accept what the noble and learned Lord, Lord Woolf, said, that sometimes the courts have to intervene to protect claimants where otherwise a claim simply could not be brought. It is a difficult balance to achieve, begun modestly by my noble and learned friend Lord Mackay and expanded upon subsequently in a way that effectively resulted in unfairness to the defendant. It is always difficult to establish a regime that entitles proper access to justice, but nevertheless retains a level playing field for all parties.

We say that neither this subsection nor the clause as a whole will take away the discretion of the courts—I emphasise this—to make decisions on costs. The clause does not prescribe the level of the caps; judges will be able to set the caps at levels tailored to the cases before them. The levels of the claimants’ and defendants’ caps may naturally be different, depending on their means. This, I believe, will address any imbalance between the financial positions of the parties. It remains a matter for the court to decide whether a costs-capping order should be granted in individual cases, and the terms of that order. This is the only appropriate way to ensure that these orders are made only in cases that genuinely need them and are set at a level that properly reflects the financial position of the claimant.