Divorce (Financial Provision) Bill [HL]
Debate between Lord Faulks and Lord Davies of Stamford(10 years, 1 month ago)
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Lord Davies of Stamford (Lab)
The noble Lord said that one of the reasons why the Government would introduce the full setting aside of a prenuptial agreement would be “need”. If that is the case, would that not, first, have the potential to open up an area of great ambiguity and uncertainty because “need” would have to be defined very closely? Secondly, would there not be a real risk that “need” could be interpreted by a court as being the right to retain the same standard of living as had been the case when the party had been married, and that might be possible only by drawing on prenuptial, non-matrimonial property? That would undermine the whole purpose and force of the Bill. Will the noble Lord say a few more words about how the Government envisage defining the word “need” in this context?
Lord Faulks
The noble Lord makes an important point. What I did say was that the Government had not yet concluded how they proposed to respond to the Law Commission’s recommendations. The Law Commission has said that it considers it appropriate to override an agreement in some cases. I take entirely his point that if, as it were, the court is going to have a free rein to override an agreement simply because it thinks it fairer in the circumstances to come to a different conclusion, that would significantly undermine the degree of certainty which can be obtained by a prenuptial agreement. However, at the heart of what the Government will have to decide on this is to respect all the advantages that one can obtain from having a prenuptial agreement for the reasons that have already been outlined in the debate, yet not making it iniquitous in some circumstances—limited circumstances, I would imagine—where it is manifestly unfair for a party to be restricted by the scope of that agreement.
Criminal Justice and Courts Bill
Debate between Lord Faulks and Lord Davies of Stamford(10 years, 4 months ago)
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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.
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.
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.
Criminal Justice and Courts Bill
Debate between Lord Faulks and Lord Davies of Stamford(10 years, 5 months ago)
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Lord Faulks
It might or might not be “inevitable”, but we suggest “highly likely” would ensure that it would not survive. “Inevitable” might leave room for the argument that it was highly likely but not inevitable. This makes sure that the position would be as we say that it should be.
Lord Davies of Stamford
I am grateful to the Minister for giving way. Does he accept that his remarks in his last few sentences do not really address what has come out of the debate on the subject? It is quite clear at present that the court would almost certainly not give judgment in such circumstances as he described; it would set aside the argument, not accept a judicial review and say that there was no reason to reopen the whole case. The court at present has that jurisdiction and has that opportunity if it wishes to use it. What the Government are trying to do with this clause is to remove any judicial discretion at all by the phrases “must not” or “may not”. The examples cited by the Minister stand in favour of the preservation of the existing law, not the changes in the way recommended or as enshrined in this Bill.
Lord Faulks
I think that is very much the same comment the noble Lord, Lord Beecham, made, although expressed in slightly different terms. As I will come on to explain, we suggest that the clause—if it is incorporated into the Act—would still give the judge discretion. We are simply making it clearer where the bar is placed.
At present the courts will find that there will be no difference where the end result was inevitably the same. Amendments 71B, 71C, 72B, 72C, 73C and 73D and the amendments consequential upon those would go further in adding additional requirements concerning the public interest and the overriding objective. Those additional requirements do not apply at present as the law is understood by the Government.
The current threshold is already extremely high. In the Government’s view, this means that judicial reviews can be grounded on technicalities which would in practice have made no difference to the end result, or, ultimately, the applicant. That is why it comes up so rarely, and that is why we wish to modify the current approach. In the Government’s view, scarce court resources would be better applied to cases in which a difference to the outcome is more likely. But I reassure noble Lords that, as drafted, what Clause 64 does not do is make the exercise of this power in any way routine. This is because the clause applies the standard of “highly likely”. This will remain a high threshold, and when there is any significant doubt that there could have been a difference for the applicant, the threshold will simply not be met.
Concerns have been raised that in applying this approach of diligence, the courts will be dragged into the forbidden ground of a merits-based review, where they insert themselves into the decision-maker’s shoes. I respectfully disagree with this. I am sure that the courts will continue with the established way in which judicial reviews progress; namely that they consider the process which led to, and not the merits of, the decision, the legality of the process being the essence of the challenge. They will perform this exercise even in the examples postulated by the noble Lords, Lord Beecham and Lord Davies. It is inevitable that they will have to look at the facts there and then on the basis of the information. What we are suggesting is that a very low bar is raised slightly higher, but the exercise will be performed at the same stage.
Furthermore, there is an additional reason why this exercise should not create real difficulties for judges. Judges often have to make decisions on the basis of information available to them which is not complete. For example, in a civil claim where, let us say, a claimant is suing for negligence, the defendant may argue that the claim should be struck out on the basis that it discloses no cause of action. There the claimant’s case may be taken at its highest, and the argument proceeds that even if the claimant is right, the claim is not sound in law and must therefore be struck out, to which the answer often given by claimants is, “Well, my Lord, you haven’t heard the evidence. If you hear the evidence and get a clearer view of the matter, then our slightly adventurous case may be seen in a better light”. Sometimes that argument is persuasive, but very often judges are able to take the view that the position is sufficiently clear for it to be uneconomic and unnecessary to hear the case. This is the task they perform.
Nor do I think that the “highly likely” test should be beyond the agility of our very distinguished judges performing in the High Court, as the noble Lord, Lord Elystan-Morgan, emphasised. It is not the balance of probabilities, but the “highly likely” test is something I feel confident that they will be able to apply.
Amendments 72E and 73A probe the scope of Clause 64 in practice following the recent report of the Joint Committee on Human Rights, to which the Government responded in July, over what types of flaw the clause will affect. In the Government’s view, the term “procedural defect” is too imprecise to be used in legislation. The grounds for judicial review are not defined in legislation; doing so in certain areas would be a significant step. “Procedural defect” has no accepted definition at present under case law, and it would be virtually impossible to arrive at one that would stand the test of time, given how judicial review evolves with each new decision. Furthermore, it would lead to the risk of satellite litigation, referred to by a number of noble Lords.
We have also heard concerns that the clause will cause administrators to act unlawfully, for sinister motives, safe in the knowledge that, if challenged, they will have a “get out of jail” card. No decision-maker is going to follow knowingly an unlawful process simply because they think that at some point in future they may be able to argue successfully that there would have been no difference to the outcome. This is particularly so, as I have already indicated to your Lordships’ House, because our reforms have maintained a very challenging threshold.
Lest it be thought that the Government have not listened and are ploughing on regardless of the views expressed by others, I say that the question of standing was one that was often considered controversial in the reform of judicial review, and the Government initially thought that there ought to be a real connection between the claim and the applicant. The applicant state is referred to by the noble Lord, Lord Pannick. I looked at the White Book as to the summary of the development of the sufficient interest test for standing, and it contained this comment:
“The courts have adopted an increasingly liberal approach to questions of standing over recent years”.
Quite so—but the advantage of having a fairly elastic rule on standing was acknowledged by the Government on the basis that sometimes it is important that these cases are brought forward. It is an indication that the Government are making appropriate responses to the concern that has been expressed.
Some have argued that this clause will add delay to the consideration of judicial reviews by potentially requiring fuller argument at the permission stage. That is in part, as I apprehend it, the basis for Amendments 72 and 73, which would remove the requirement for the High Court or Upper Tribunal to consider a no-difference argument when it is raised by the defendant in the response to the application for permission. The Government consider that it is entirely proper that, when a no-difference argument is made by a defendant, it should be considered by a court or tribunal. I accept that when this argument is raised it requires courts to look at the case and the issues with care, but they do that at the moment. I do not think that that would mean that judicial reviews would become overlong. On the argument being raised more often, I say that it should be put only by defendants sure or confident of their arguments and position; if made without a sound basis, I would expect the courts to look to costs, which would act as a sufficient deterrent. In due course, we will invite the Civil Procedure Rules Committee to create a process that allows for oral arguments on this question at permission. While it would be wrong of me to pre-empt that committee, I am sure that it will be done in a way that makes the procedure straightforward and cost effective.
Amendments 72 and 73 would also remove the duty on the court to refuse permission when satisfied that it is highly likely that in the absence of the flaw complained of the outcome would not have been substantially different for the applicant. Those are, effectively, wrecking amendments. The Government’s view is that in those situations permission should not be granted.
Lord Faulks
I do not think that I can expand much on my previous answer. If it makes no difference, it is true that, as the clause says, no relief should be granted. What I said that I would consider is the question of when it would make no difference but there is some benefit of a declaration or some judgment which reflects the lawfulness, whereby there might be some scope for providing that that should be given in the course of determining the very issue that Clause 64 covers. I think that that is as far as I can go. I shall consider the argument.
Lord Davies of Stamford
The Minister seeks to make a distinction between the court’s ability to grant relief and its ability to proceed to make a declaration. That seems an interesting line of approach in the light of the debate that has taken place. Can I therefore put to him the suggestion that I put earlier to the noble and learned Lord, Lord Mackay? Would it not be helpful if the Government—in this case, the Minister—brought in a new amendment at Report that made it clear that, notwithstanding the restrictions that appear to be overwhelming in Clause 64, the court could nevertheless proceed to grant a declaration?
Lord Faulks
I am grateful to the noble Lord, but with very great respect I think that we are going over the same ground again. I hear the argument; I have said that I will consider it, but I want to consider it in a way that does not emasculate Clause 64, which is there effectively to prevent cases in which it would make no difference from proceeding to lengthen expensive litigation. But I acknowledge that there is a potential force in the argument made by the noble and learned Lord, Lord Woolf, and picked up by other noble Lords, including the noble Lord, Lord Davies, about the possible benefit of a declaration, whether it is in the form of a judgment reflecting the point that seeks to be established but does not involve the expense and time of having a full-blown hearing. I do not think that I can take the matter any further at this stage.
In the approach that we suggest to what is essentially a desire to get rid of technical objections, we wish to refer to Lord Denning’s reasoning—and I am glad that he was mentioned earlier as he gets insufficient citation in the courts nowadays. He held that the court,
“should not find a breach of natural justice unless there has been substantial prejudice to the applicant as a result of the mistake or error which has been made”.
That is a reference to a case in 1977—
Criminal Justice and Courts Bill
Debate between Lord Faulks and Lord Davies of Stamford(10 years, 5 months ago)
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Lord Faulks
The Government and the Parole Board, as the noble Lord would expect, are in frequent communication. It is difficult to be precise about these figures; an estimate is simply that. I assure the noble Lord that the figures in so far as they can be reached are the result of a number of conversations that have taken place regarding predictions about the demand. It is the Government’s position that we are providing the appropriate support for the Parole Board now and its estimate of what will be required in future. I also said—
Lord Davies of Stamford
I am most grateful to the Minister for giving way. It is clear that the Parole Board has a serious backlog in this matter. In considering the appropriate budget for the board, have the Government been looking at this matter completely by itself in vacuo or have they been looking at it in connection with the very relevant point made just now by the noble Lord, Lord Ramsbotham, that there would be considerable savings to public funds if these prisoners were released, to the order of about £40,000 a year? Is it not the case that the interests of financial rationality and justice are aligned in this matter but that the Government are running counter to both of them?
Lord Faulks
I am very surprised that the noble Lord thinks that somehow the Ministry of Justice has failed to notice that it costs the Government a great deal of money to keep prisoners in custody. It is painfully aware of that, and of the cost. However, the ministry is also aware of its obligation for the protection of the public, and it is in balancing these issues that it comes to the very difficult decisions that it has to reach.
It is right that offenders serving indeterminate sentences—IPPs—should continue to be detained post tariff if their detention is necessary for the protection of the public and they are therefore not safe to release. There is evidence that IPP prisoners who take the opportunities presented to them to reduce their risk are beginning to achieve release in greater numbers. Since 2010 the number of IPP releases has grown, and we have seen over 400 IPP releases in 2012 and 2013. The percentage of IPP cases considered where release was ordered was 6% in the 2010-11 report, whereas in the 2012-13 report the figure was 16%.
Of course, we keep the matter under review. The amendment, as I understand it, would effectively lead to the prisoners who are within the scope of the amendment being automatically released, as it would mean that there was no discretion for the Parole Board to do other than to direct release. That is not the Government’s policy, as noble Lords are aware, and I will be unable to accept the amendment on those grounds.
I should also say that there would be difficulties with the amendment as it stands, regardless of the acceptability of the principle. The amendment would add a subsection to Section 128 of the LASPO Act directing the Parole Board to release IPP prisoners who had a tariff of less than two years. Section 128 is not about the duty to release indeterminate sentence prisoners but, rather, gives the Secretary of State the power to change the Parole Board’s release test by order. The amendment, however, appears to direct the Parole Board to release certain prisoners without any consideration of a test whatsoever.
The noble and learned Lord, Lord Lloyd, to whom I pay tribute, as others have, for his tenacity and his great concern for these prisoners—indeed, concern has been expressed for them all around the House—suggests that the amendment would be a gentle push. With very great respect to the noble and learned Lord, as it is currently expressed the amendment would be a very firm shove indeed. However, I understand that the intention is that these particular prisoners would be released at the point at which they would naturally fall due for Parole Board review, thus phasing their release. Presumably, the retention of the Parole Board’s role in the process is designed to align as much as possible with the current statutory arrangement. However, it would be problematic to give the duty to release to the Parole Board if in fact there was no discretion for the board under this proposal. For these reasons, I do not think that the amendment is the right way to achieve the noble Lords’ objectives.
However, in turning away and facing the principle rather than the detail, the noble and learned Lord, Lord Lloyd, has chosen to concentrate on those with tariffs of under two years, who he suggests have been particularly disadvantaged as they could not have received an IPP after the 2008 changes to the IPP statute. In fact, it remained possible to receive an IPP with a tariff of lower than two years until IPPs were abolished, where the offender had a serious previous conviction, and a fair number continued to do so. While between 2005 and 2008 courts were obliged to impose IPPs in certain circumstances, this was only where they found the offender to meet the dangerousness threshold. The statute, however, did not oblige courts to find the offender dangerous if he had a previous Schedule 15 conviction and it was clear that the court need not conclude that a previous conviction made the offender dangerous if it would be unreasonable to do so.
The noble and learned Lord, Lord Lloyd, and some other noble Lords have seen an analysis of the management information that was put together last year relating to the situation of IPP prisoners who were sentenced before July 2008 with tariffs of under two years who remained in prisons and whose tariff had expired. It is the Government’s view that this analysis supports that position in respect of the group. It provided clear evidence that the continued detention of short-tariff IPP prisoners remains justified and that the Parole Board still considers that in many cases they pose an unacceptable risk to the general public and to themselves. The majority—80 prisoner cases of the 100 sampled—were assessed as at high risk of serious harm, whereas none was assessed as being at no risk of serious harm. Almost all of that sample had had recent parole hearings and were deemed unsuitable for release. However, the fact that 11% of the sample were in fact approved for release clearly also demonstrates that, where risk has been reduced enough to be safely managed in the community, short-tariff IPP prisoners are being approved for release by the Parole Board using the current release test.
I know that many noble Lords keep themselves closely informed of the National Offender Management Service’s ongoing work to enhance support for this group of prisoners, but a brief reprise of those efforts bears repeating. We have come a long way in terms of management and support since the introduction of the sentence. For example, NOMS has made substantial improvements to the waiting times for IPP and other indeterminate-sentence prisoners. Once they have been approved for open prisons, in addition IPP prisoners have improved access to accredited programmes and they remain a priority group for interventions. Sentence planning instructions have been overhauled to emphasise that there are a range of interventions, not just accredited programmes, that can provide useful evidence for parole hearings. This has also been emphasised in discussions with Parole Board members. Measures have been taken to ensure that programmes can be delivered more flexibly, supporting greater access and the inclusion of offenders with more complex needs, such as learning difficulties. NOMS will continue to oversee positive changes to the management of IPP prisoners. As I said earlier, the reality is that IPP prisoners are now achieving release in greater numbers under the current arrangements.
Divorce (Financial Provision) Bill [HL]
Debate between Lord Faulks and Lord Davies of Stamford(10 years, 6 months ago)
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The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, like all other noble Lords, I thank the noble Baroness, Lady Deech, for introducing the Bill and for enabling the House to debate the appropriate division of financial provision on divorce. She has done the House a great service by prompting this high-quality debate.
The Bill has the highly laudable aim of seeking to assist divorcing couples and civil partners undergoing separation in resolving disputes over the division of property. It is intended both to recognise and enforce prior agreements between separating spouses and substantially to amend the law on financial provision on divorce.
The Bill makes fundamental changes to the law on financial provision on divorce as it has applied for over 30 years. However, it differs from and goes beyond recommendations made by the Law Commission report, which the Government are currently considering. Comments were made about the speed at which the Law Commission has historically proceeded. There is no criticism of the quality of the work that the Law Commission does and I echo the comments made by my noble friend Lord McNally about the way in which a number of Law Commission Bills have been going through Parliament recently.
The Government are not anxious to pre-empt the consideration that is taking place of the Law Commission’s report. In any event, the Government have a number of concerns about the Bill’s provisions and whether these sufficiently safeguard the needs of children and families so as to avoid potential hardship. I will set out these concerns by reference to the current law, the proposals in the Bill and the proposals on matrimonial property agreements made by the Law Commission.
The current law on financial provision on divorce provides a number of important safeguards. This is governed in England and Wales by the Matrimonial Causes Act 1973. Section 23 provides for lump-sum payments and various other forms of financial provision; Section 24 enables property transfers; and further provisions allow for orders for the sale of property, pension-sharing orders and so on.
The courts have a wide discretion as to what orders to make in any particular case and must have regard to the factors set out in Section 25 of the Act. On the face of it, that might seem to be a fair state of affairs. However, there has been a great deal of criticism during the course of the debate that, although the Act provides for all these matters to be taken into consideration, it nevertheless produces uncertainty of outcome—too much depends, perhaps, on the idiosyncrasies of particular judges and fashions—and it does not enable parties to be sufficiently clear on divorce about what is the likely division of property.
However, Section 25, importantly, says that the first consideration of the court is the welfare of any child of the family under the age of 18. Other factors in Section 25 include the income and earning capacity of the parties, contributions made to maintaining the home and children, the financial needs and obligations of the parties, the age of the parties, the duration of the marriage and any physical or mental disability suffered by either.
The noble Baroness’s Bill provides that Section 25 will be repealed and will therefore no longer have effect in relation to orders for financial provision between the parties to a marriage or civil partnership. The Government would be particularly concerned if this had the effect of weakening the protection given to children when their parents divorce. The noble Baroness has indicated that maintenance for children will not be affected, but the Government are concerned that the removal of the welfare of minor children as the court’s first consideration in making financial provision for spouses might cause adverse consequences for children. This would plainly require a great deal of consideration.
Clause 6 addresses the provision for children of the family and provides that the court must have regard to any order for support of a child of the family, the age and health of any child, the educational and financial circumstances of the child and so on, but it does not make the welfare of the child the first consideration of the court, and thus may not provide as much protection for children as the current law. The Government think that the court should look at the needs of the children first and then go on to consider the division of property between the parents.
The Bill proposes that subject to certain exceptions, matrimonial property, defined as is, should be divided equally between the parties. The Government are concerned that this would also be potentially unfair and could cause hardship, particularly for poorer families and for families with children. The noble Lord, Lord Kennedy, referred to the danger of a one-size-fits-all provision. Moreover, reference has been made during the debate to the changes in society since 1973, including the demographic changes described by the noble Baroness, Lady Bakewell, and women’s increasing equality. None the less, as the noble Baroness, Lady Meacher, said, the old models of marriage do still exist in some sections of society and we cannot ignore them when deciding on an appropriate change to the law, if indeed any is needed. In fact, the Law Commission recommended that there should be no change to the law on need in financial provision on divorce.
The Bill provides that periodical payments for spousal maintenance should be for a maximum period of three years and that lump-sum payments and periodical payments should be intended to enable the recipient to become independent of financial support within three years. An absolute three-year limit on maintenance would be similar to the law in Scotland, referred to by the noble and learned Lord, Lord Hope, and my noble and learned friend Lord Mackay. Having looked at the matter, I see that it emanated from a recommendation by the Scottish Law Commission that eventually became part of Scottish law. But, again, the Government are concerned that this could cause hardship and may be inappropriate for many couples. Having to adjust to a new financial reality may take longer than three years, so the Government currently consider that it is better for the court to retain a discretion to provide as it thinks best to meet the circumstances of each individual family.
Lord Davies of Stamford
My Lords, I am listening to the noble Lord with great attention. Would he be kind enough to say what it is that makes circumstances or human nature different in England from what they are in Scotland?
Lord Faulks
I am not altogether sure whether that is a serious question, but of course human nature is not different. The answer is that there is no perfect solution to these difficult problems, as I am sure all noble Lords would agree. The Scottish solution is one that is certainly worthy of great consideration. The current solution in the law of this country is rather different. At the moment we are all concerned to find a solution which best serves the interests of all parties on divorce. Scotland has much to teach us, but it does not have necessarily the perfect answer. We need to learn from the experience in Scotland while accepting that human nature is the same in Scotland as it is in England.
As I say, the Bill provides for matrimonial property agreements to be binding upon couples on divorce. In its proposals on matrimonial property agreements, the Law Commission has strongly recommended that the courts should be able to depart from a matrimonial property agreement where this is considered necessary in order to protect the needs of a spouse or in the interests of any children. The Bill departs from that proposition. In its proposals on matrimonial property agreements, the Law Commission set out a comprehensive list of the requirements necessary to underpin enforceable agreements made prior to divorce. In considering the Law Commission’s proposals, the Government wish to reflect on the sufficiency of safeguards before committing to legislate to make agreements enforceable. We are currently considering those and, as my noble friend Lord McNally said, we will announce our response to them in the very near future. That will be in August—albeit that I heard what he said about the undesirability of reflecting and responding in that particular month.
The Bill’s proposals differ quite substantially from the recommendations made by the Law Commission in the light of really extensive consultation, which included consultation with family practitioners—although I am glad to say that this debate has benefited from the contribution of family practitioners. The proposals in the Bill are substantially different and their likely effects are at least unclear.
I appreciate, as I am sure the whole House does, the noble Baroness’s desire to ensure that financial division on divorce and on dissolution of a civil partnership is made simpler so that people will much more easily be able to estimate what they are likely to receive and be better able to negotiate with each other, and that couples should be able to enter into agreements to determine what they would receive on divorce.
The Government are considering the Law Commission’s report on matrimonial property agreements and how these could be made binding, and will respond in the near future. The report recommends making information available on the likely outcomes of financial applications on divorce—that has been developed during the debate—but recommends that there should be no change to the law governing “need”. The Government are concerned to give proper consideration to these and all the recommendations made by the Law Commission.
The Government recognise that divorcing couples often need help to reach an agreement and should be encouraged to avoid court proceedings. There is unanimity that court proceedings very rarely help in resolution of these disputes. They are far too expensive and the result is usually damaging both financially and, very often, to the future happiness of warring parties and children. The Government are therefore particularly anxious to encourage people to use family mediation and other forms of alternative dispute resolution.
For those who are eligible, legal aid is available for mediation. Under the Children and Families Act 2014, from 22 April this year applicants for financial orders and for financial provision on divorce must attend a mediation information and assessment meeting—