Business of the House

Debate between Lord Hope of Craighead and Lord Pannick

Tuesday 26th March 2019 Lords Chamber

[Lord Pannick]

There could be the possibility of a challenge if this point had any substance to it. I am concerned that we do not adopt or approve a statutory instrument without consideration of this point. The alternative would be to have a statutory instrument that specifies 12 April as exit day and if, as we approach that day, it appears that the date for us leaving the EU will be later than that, a further amending statutory instrument is brought forward.

I emphasise that I am not telling the House that this is, in my view, a fatal amendment to this statutory instrument. I am raising a concern that has been expressed by some lawyers about this point. I would welcome it if the Leader were to consider the point—with the law officers if appropriate—and address it tomorrow.

[Lord Hope of Craighead (CB)]

It is not just a question of alternatives, is it? If you look at the text of the first alternative, you cannot determine what the date is by looking at the words in the instrument. Is that the point that the noble Lord is seeking to make?

[Lord Pannick]

There are two points. You cannot tell the date on which we are to leave simply by reading the statutory instrument, and that date, on the drafting of the statutory instrument, depends on an external event which is certainly not within our control.

Trade Bill

Debate between Lord Hope of Craighead and Lord Pannick

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Lord Pannick (CB)]

My Lords, I have added my name to this amendment because I share the concern expressed by the noble and learned Lord, Lord Judge, that it is simply not appropriate for Explanatory Notes to be used as the means by which overbroad powers enjoyed by the Minister are to be confined. I will add one point, however: the Minister gave an answer to the concern that we are all expressing. The answer was given in a letter on 19 February to the noble Baroness, Lady Taylor of Bolton, the much respected chairman of the Constitution Committee. In her response to the Constitution Committee’s report, the Minister suggested that the courts would apply a well- established legal presumption that, if powers were intended to be used for any of the purposes set out in the amendment, there would have to be an express reference to that effect in the legislation. Indeed, the Minister also expressed concern that this amendment, if accepted and written into the Bill, would undermine this legal presumption in relation to other legislation that does not include an express reference to these limitations.

My concern about that argument is that these powers are being conferred in this Bill in a Brexit context. The Minister’s letter emphasises that the Government are going to use the Clause 2 powers only to implement obligations and agreements that seek to provide continuity in respect of those already signed by the EU. My concern is that in this specific legislative context it might be said that when a Brexit Bill of this nature does not contain these express limits on the Minister’s powers—the limits set out in the amendment—it should be contrasted with Section 8 of the main Brexit Act, the European Union (Withdrawal) Act, which expressly contains restrictions that are similar but not identical to these limitations. It is my concern that such a contrast might be drawn in this context.

The noble and learned Lord, Lord Judge, made the important point that the Pepper v Hart principle is a troublesome one but, if the Government are not going to accept this amendment, at the very least it would be helpful for the Minister to give the House the clearest possible response to it, in the terms set out in her letter—that the Government understand that the powers in Clause 2 do not extend to the sensitive issues—so that her comments could if necessary be relied on in court proceedings under the Pepper v Hart principle.

[Lord Hope of Craighead (CB)]

My Lords, we should be very grateful to the Constitution Committee for drawing our attention to this matter, which might otherwise not have been observed. I shall add just a few short points to those that have been made. The first is to stress the importance of the words in subsection (5), to which the noble and learned Lord, Lord Judge, drew our attention:

“Regulations under subsection (1) may, among other things, make provision—”.


It is the words “among other things” that cause me concern. They appear in the Healthcare (International Arrangements) Bill as well: they seem to be a feature creeping in to this kind of legislation, which is quite disturbing. If we find that phrase, I suggest that we have to be even more exacting in setting out the qualifications to the power, otherwise the words “among other things” may be used to expand the power in a way that we have not foreseen. It is really very important, as the noble and learned Lord, Lord Judge, pointed out, that we take those words into account in what we make of this amendment.

My second point is to reinforce what the noble Lord, Lord Pannick, said about the comparison between Section 8 of the European Union (Withdrawal) Act 2018 and what we have now, in reply to the point that we do not need to be concerned about that, because express provision would be needed for a regulation that sought, for example, to create a criminal offence. These exceptions, or almost exactly the same ones, are expressly set out in Section 8(7) as,

“regulations … may not … impose or increase taxation or fees … create a relevant criminal offence … establish a public authority”.

If it was thought appropriate to put those qualifications in that very important subsection, which does not contain the words “among other things”, I should have thought it was all the more important to have them here.

My last point is made with reference to the point made about Lord Steyn’s use of Explanatory Notes. I had the privilege of sitting with Lord Steyn for a number of years and of discussing with him how Explanatory Notes might be used. I do not think that at any point in our discussion he suggested to me that Explanatory Notes could be regarded as a form of legislation or its equivalent—certainly not. He was referring to them as a means of understanding ambiguities in legislation; he thought that one could look to the Explanatory Notes to understand the legislation one was seeking to explain. That was his point, and it was made in a number of cases where I agreed with him. It would be a mistake to think that he was embarking on something outside the normal use of Explanatory Notes, which is to explain but not to legislate. For these reasons and the others mentioned, I warmly support the amendment that the noble and learned Lord has brought to our attention.

Crime (Overseas Production Orders) Bill [HL]

Debate between Lord Hope of Craighead and Lord Pannick

Ping Pong (Hansard): House of Lords
Monday 11th February 2019 Lords Chamber

[Lord Pannick]

I am very grateful. I do not have immediate access to that judgment, but perhaps the Minister can provide the House with some assistance in relation to it. Can the Minister also confirm what I understood her to say: no information will be provided abroad under the Bill, unless and until there is an agreement with the relevant state—here the United States? My understanding—again, I think the noble Baroness said this, but I should like her to confirm—is that before any such agreement has practical effect, it must be put before this House and the other place for approval. Ratification cannot take place unless and until, under CRaG 2010, Parliament has had that opportunity. It seems that is the time at which both Houses of Parliament can consider whether they wish to approve such an agreement, if it does not contain the sort of assurance that the noble Lord, Lord Paddick, is seeking.

[Lord Hope of Craighead]

I can respond to two of the noble Lord’s points. First, I am happy to agree with him about the stages in which we are moving, which was my earlier point: we are at the preliminary stage of negotiation, rather than the CRaG stage. As for whether the provision of information over which we have control is a breach, that is still open to question. That is why I said that I realised it had not been tested. I was certainly thinking about the very point that the noble Lord makes. It is quite different if you have an individual—that is absolutely plain—but if you are gathering information nevertheless, it runs up to the big question of whether that is a breach. It is an uncertain point, so we have to be very careful.

[Lord Pannick]

I am entirely in agreement with the noble and learned Lord. All I was saying was that I would not wish to assert to the House that it would be a breach of our international obligations under the European Convention on Human Rights to provide information to another state in circumstances where we are not extraditing a person to that state. The courts and the European court may take a different view. I have no doubt that in the legal proceedings arising from the case referred to by the noble Lord, Lord Paddick, one of the grounds of challenge would have been that this is a breach of the human rights of the individual concerned, who, as a consequence of our providing the information, may face a death penalty. That is why I should like the Minister to give any further assistance to the House on what the court said.

Data Protection Bill [HL]

Debate between Lord Hope of Craighead and Lord Pannick

Committee: 3rd sitting (Hansard - continued): House of Lords
Monday 13th November 2017 Lords Chamber

[Lord Pannick (CB)]

My Lords, I shall speak to Amendment 86BA, in my name. It concerns the application of data protection principles in the context of the law of trusts. The law has long recognised that a trustee is not obliged to disclose to a beneficiary the trustee’s confidential reasons for exercising or not exercising a discretionary power. This is known as the Londonderry principle, named after a case decided by the Court of Appeal, reported in 1965, Chancery Division, page 9.1.8. The rationale of this principle was helpfully summarised by Mr Justice Briggs—recently elevated to the Supreme Court—in the case of Breakspear v Ackland, 2009, Chancery, page 32, at paragraph 54.

The principle is that the exercise by trustees of their discretionary powers is confidential. It is in the interests of the beneficiaries, because it enables the trustees to make discreet but thorough inquiries as to the competing claims for consideration for benefit. Mr Justice Briggs added that such confidentiality also advances the proper interests of the administration of trusts, because it reduces the scope for litigation about how trustees have exercised their discretion, and encourages suitable people to accept office as trustees, undeterred by a concern that their discretionary deliberations might be challenged by disappointed or hostile beneficiaries and that they will be subject to litigation in the courts.

There is, of course, a public interest here, which is protected by the inherent jurisdiction of the court to supervise and, where appropriate, intervene in the administration of trusts, as the noble and learned Lord, Lord Walker of Gestingthorpe, stated for the Judicial Committee of the Privy Council in Schmidt v Rosewood Trust Ltd, 2003, 2 AC 709.

The problem is that, as presently drafted, the Bill would confer a right on beneficiaries to see information about themselves unless a specific exemption is included. A recent Court of Appeal judgment in Dawson-Damer v Taylor Wessing, 2017, EWCA Civ 74, drew attention to the general applicability of data protection law in this context unless a specific exemption is enacted.

My understanding, which is indirect—I declare an interest as a barrister, but this is not an area in which I normally practise—is that in other jurisdictions such as Jersey, the data protection legislation contains a statutory restriction on the rights of a data subject to make a subject access request where that would intrude on the trustees’ confidentiality under the Londonderry principle. Indeed, I am told that those who practise in this area are very concerned that offshore trustees and offshore professionals who provide trust services are already actively encouraging the transfer of trust business away from this jurisdiction because of the data protection rights which apply here, and which will apply under the Bill.

The irony is that the data protection law is driving trust business towards less transparent offshore jurisdictions and away from the better regulated English trust management businesses. I have received persuasive representations on this subject from the Trust Law Committee, a group of leading academics and practitioners, and I acknowledge the considerable assistance I have received on this matter from Simon Taube QC and James MacDougald.

This is plainly a very technical matter, but it is one of real public interest. I hope that the Minister will be able to consider this issue favourably before Report.

[Lord Hope of Craighead (CB)]

My Lords, I want to add a word in support of the points made by the noble Lord, Lord Pannick, particularly with reference to the concerns that some people have expressed about money being moved out of the very closely and properly regulated regime of English trust law to offshore organisations and jurisdictions which are less careful about how people’s money is handled.

I should declare an interest as Chief Justice of the Abu Dhabi Global Market Courts. I am not suggesting that this has anything to do with Abu Dhabi, but it has introduced me to an aspect of trust law with which I was not previously familiar, and it bears closely on the point made by the noble Lord, Lord Pannick. He referred to Jersey as one of the jurisdictions of concern. One aspect of its legislation which has come to my attention through my connection with Abu Dhabi is the Foundations (Jersey) Law 2009. This is a structure set up by statute under Jersey law which is matched with an equivalent statute in Guernsey. It creates a form of trust which is, as it were, a hybrid between a trust and a corporation with a number of aspects that are described very well in Sections 25 and 26 of the Jersey law.

One of the points about the foundation, which appears in Section 25, is that a,

“beneficiary under a foundation … has no interest in the foundation’s assets; and … is not owed by the foundation or by a person appointed under the regulations of the foundation a duty that is or is analogous to a fiduciary duty”.

So the beneficiary under that system is rather different from a beneficiary under our system, where undoubtedly they have an interest in the foundation’s assets. But also to the point is Section 26, which provides that foundations are,

“not obliged to provide information”.

That has its counterpart in the point made about the Data Protection Act in that jurisdiction. It says that except,

“as specifically required by or under this Law or by the charter or regulations of the foundation, a foundation is not required to provide any person … with any information about the foundation”.

It goes on to say in subsection (2) that the,

“information mentioned in paragraph (1) includes, in particular, information about … the administration of the foundation … the manner in which its assets are being administered … its assets; and … the way in which it is carrying out its objects”.

I do not wish in any way to criticise how the foundation laws are run in Guernsey or Jersey, but it is a pattern which, if repeated in less scrupulous jurisdictions, has obvious attractions. People move into a foundation and nobody knows what part of the foundation money they own, because they are not supposed to own any part of it, and the foundation is not obliged to disclose any information at all. There is a risk that those who are keen, for whatever reason—it could even be for matrimonial reasons—to conceal their assets could move them offshore from a trust such as we have in this country, closely regulated and subject to the ordinary rules, to one of these other bodies, which we would not wish to encourage. One has only to look at the Criminal Finances Act 2017 and some of the clauses in the Sanctions and Anti-Money Laundering Bill that is before the House to see that we are taking a completely opposite line to the foundations laws, because we are insisting that we should be provided with information about what organisations of this kind hold and, indeed, who holds what assets. We have not got as far as actually requiring trusts to do that but, certainly, anyone who puts his money into a company, in an attempt to conceal his assets within the company, will be forced eventually to have that information disclosed.

I add these points to suggest that the point that the noble Lord, Lord Pannick, made has a great deal of substance, which one can trace through the foundations law. I stress again that I am not criticising how this is administered in Jersey or Guernsey—that is not really the point. The point is that those who would wish to copy their systems are subject to less close scrutiny. I also emphasise that I am not suggesting that we in this country would want to adopt a foundations law; that would really be quite contrary to how our current legislation is proceeding. So there is an important issue here about protecting ourselves—and those who set up trusts here and administer them properly according to our rules and conventions—against a loss of business, which would be detrimental not only to those who run the businesses but to the whole ethic by which we practise our trust law.

I hope that the Minister and those advising him will look carefully at the Jersey and Guernsey examples, with a view not to criticism but to sensing the risk to which the noble Lord, Lord Pannick, drew our attention.