Terrorist Asset-Freezing etc. Bill [HL]

Lord Lester of Herne Hill Excerpts

Monday 25th October 2010 Lords Chamber

[Lord Sassoon]

My Lords, Amendments 9 and 11 require the Treasury to apply to the court to make an interim designation. As I set out in Committee, the Government continue to believe that Ministers are best placed to take decisions to impose asset freezes, but it is absolutely right that these decisions should be subject to intense scrutiny by the courts in cases where a person wishes to challenge the asset freeze.

I believe that there are three compelling reasons why decisions to impose asset freezes should be taken by the Executive. First, they are preventive, not punitive, measures taken on the basis of operational advice to protect national security. It is accepted practice for such decisions to be taken by Ministers, who take decisions to impose proscriptions, deprivations of citizenship and exclusions. Secondly, Ministers are then accountable for these decisions to Parliament and the courts. This clear accountability and their broad view of the threat posed mean that Ministers are best placed to weigh the protection of national security with the interests of the designated person. Thirdly, there are strong international comparisons for this practice. The US, Australia, Canada and New Zealand all entrust asset-freezing decisions to the Executive, whereas the noble and learned Lord’s amendment would introduce mandatory court involvement in the making of interim asset-freezing decisions.

With permission, I should like to set out why the Government do not believe, as a matter of principle, that any asset-freezing decisions need to be approved by the courts. I accept, for example, that control orders work differently and are approved in this way, but the Government do not believe that the courts should have the same role in asset freezing, because the circumstances are clearly different. Asset freezes interfere with property rights but they do not impact on human rights to the same extent as control orders, which can impose restrictions on movement, association and communication. Furthermore, in contrast to control orders, asset freezing is not primarily used against people in the UK who cannot be prosecuted or deported. Indeed, as we have already discussed, only about 10 per cent of asset-freezing cases involve people who are in the UK or hold funds here and who have not been prosecuted for a terrorist offence. In cases where people are prosecuted for terrorist offences, evidence against them will be brought before a court.

In the case of terrorist groups or individuals overseas, the asset freeze has a less direct impact because it applies only within UK jurisdiction. Overseas terrorist groups and individuals have not challenged their asset freezes in the UK courts and we do not believe that mandatory court decision-making or approval would add any real value in these cases. Indeed, it may even provide groups such as Hamas with a public platform on which to challenge the UK’s operational and foreign policy decisions.

We therefore believe that the right way to recognise the need for proper judicial scrutiny over asset freezing is not to introduce mandatory court involvement but, rather, to make it clear that there is robust court scrutiny of cases where individuals or entities wish to challenge their freezes. The Government therefore brought forward amendments to the Bill to specify that challenges to designations should be on the basis of an appeal, rather than judicial review. Although I realise that judicial involvement is a principle on which certain noble Lords will have strong views—one certainly—I hope that they will be able to accept that the right way forward is to maintain the current drafting of the Bill and I ask the noble and learned Lord, Lord Lloyd of Berwick, whether he is prepared to withdraw the amendment.

[Lord Lester of Herne Hill]

My Lords, perhaps I may briefly echo my support for the noble and learned Lord’s amendment.

[Lord De Mauley]

My Lords, we are on Report.

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[Baroness Hamwee]

I have tabled Amendment 12 in this group. First, with regard to Amendment 10, I hope we will not hear from the Minister that it is not necessary to put the provision into the Bill because it is the practice—a point I may make later in a different context.

I might have said that my Amendment 12 was substantially the same as the amendments tabled by the noble Lord and the Minister. The point is the same—that the same or similar evidence should not be used to make more than one interim order. I could make the Government’s arguments against proposed new paragraph (b) in my Amendment 12, but I would like to hear them do so.

As regards the second limb of my amendment, it seemed to me that a time limit would be easier to deal with and could be more clearly analysed than relying on whether evidence is the same or substantially so. A time limit, although six months may not be the correct one, would make the matter absolutely clear—no one could argue with it or argue its nuances.

[Lord Lester of Herne Hill]

I agree with the noble Lord, Lord Pannick, and with my noble friend. I am speaking partly as a member of the Joint Committee on Human Rights, whose report was published on Friday last. We took the most unusual step of publishing our preliminary report before we had seen the Government’s response. I am therefore sure that once the committee, which meets tomorrow, has had a chance to look at this debate, it will be too late to influence what happens in this House, but I hope it may be looked at in the other place.

I shall not waste the time of the House by citing what is in our report as it can be read by anyone who is interested. However, one point at the end of it bears on all these amendments. At paragraph 1.47, we ask the Government to explain why the opportunity is not being taken in the Bill to provide a comprehensive and accessible legal regime for terrorist asset freezing, and therefore to provide Parliament with the opportunity to scrutinise those powers for human rights compatibility, the lack of which so troubled the Supreme Court. That is a general and important point, and it may have to be pursued if not here then in the other place.

[Lord Davies of Oldham]

Amendment 17 stands in my name and that of my noble friend Lord Bach on behalf of the Official Opposition. We table it today in order to debate what the Government propose to do about people whom they have reasonable grounds to suspect of being terrorists but have not gained further evidence to impose a further interim or final designation. If the Bill is passed in its current form, an interim designation will lapse after 30 days and the person will again have the opportunity to access their assets at potential risk to the public.

The Minister will appreciate the fact that he has had support from the Opposition on crucial aspects of this Bill both in Committee and again today. However, he ought not to countenance the view that we have no anxieties about the legislation, or any actions of the Government that may be related to the legislation if and when it comes into effect. We all recognise the seriousness of the debates we have had on this important legislation. On the one hand, we have clearly heard about the rights of the individual and their dependants, who may be subject to an asset-freezing law. We have heard so eloquently expressed today, in Committee and on Second Reading the anxieties that freezing orders can restrict the ability of such people to live their lives in the way that they would choose. That of course is an encroachment on human rights and we are grateful to those noble Lords who, as members of the legal profession, are able to identify exactly which human rights are involved in this. This Chamber has enough currency with regard to those significant debates of principle for all of us to be well aware of the importance of the issues.

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[Lord Wallace of Tankerness]

My Lords, in principle, it would be possible to allow people to spend their own funds on legal expenses. It does not detract from the possibility of a licence being issued, but there are practical reasons why it is not possible to allow frozen funds to be used to pay legal expenses. For example, there would be circumstances where banks would be put in a position of having to determine whether a particular transaction was for legal expenses or not. The Treasury allows this matter to be dealt with by way of licence with the appropriate conditions attached. That would be the way to deal with an individual licence on an individual application and a person seeking to use his own funds as opposed to and distinct from the general licence that exists for legal aid, which I have indicated would be issued with regard to the third-party circumstances that we have already discussed.

[Lord Lester of Herne Hill]

Will my noble and learned friend tell the House what legal remedy there would be if, in spite of good intentions, the reality was that there was an unfair, unnecessary and disproportionate interference with the right of access to court as a result of the way in which the Treasury was exercising its discretion?

[Lord Wallace of Tankerness]

My Lords, as my noble friend is aware, provisions within the Bill allow for a decision not to issue a licence with suitable conditions to be challenged. If I may say, this is a circular argument—how do you get the funding to challenge it?—but it is not without remedy.

I was asked whether there would be any restriction on the volume of funds. If the funds are required specifically for the purposes that the noble Lord, Lord Pannick, indicated, that would not lead to a restriction. This is best dealt with, and would be dealt with, on the basis of an individual licence application. Obviously, there would be a remedy there if the person was not satisfied with the terms of the licence that was issued.

The other amendment to which my noble friend spoke relates to the position under Clause 27 for a person affected by a Treasury decision other than a designation-related decision to apply to the court not only for the decision to be set aside but for it to be varied. The amendment would in particular allow decisions relating to licence conditions—the very issue that I have been discussing with my noble friend Lord Lester—such as limits on the amount of cash a designated person could access per week to be varied by the court. The Government agree that the court should have sufficient powers to require the conditions of a licence to be varied so as to ensure that the designated person has sufficient access to funds and economic resources subject to appropriate conditions, but we also believe that the amendment is unnecessary.

Under Clause 27, the court can set aside any licence-related decision made by the Treasury. For example, if the court considers a designated person should be entitled to access a larger amount of cash per week than he is permitted to withdraw under the cash limit in the licence, the court can set aside the Treasury’s decision to impose that cash limit. While it would not be open to the court expressly to write conditions into the licence or rewrite existing conditions, the Treasury is obliged to take into account the reasons that the court gives for striking down a condition in the licence. In practice, the Treasury has immediately revised licences, taking account of the court’s view on what the licence should contain. Therefore, I hope that my noble friend will not press her amendments on the assurance that these are matters not just of good practice but of obligation, which the Treasury obviously takes very seriously.

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Since the Government rightly intend to provide for a wider right to claim damages in the present context, given the damaging effect that a mistaken or unjustified designation order will have on a person and their family, my amendment seeks to state the principle clearly in the Bill. The amendment identifies what seems to be the appropriate criterion in this context. The victim should not have a right to damages in every case. The matter should be left to the discretion of the judge, both as to whether damages should be paid and, if so, how much. There may—although I hope not—be cases where the officials impose a designation order without proper care and attention, causing substantial harm to the victim. At the other end of the scale, there may be cases where the victim has, by his own conduct or failure to co-operate with the authorities, brought the designation order on himself. It would be quite wrong for that person to be awarded compensation simply because he succeeds in his appeal. I hope the Minister will confirm today, as he did in Committee, that the Bill is intended to confer a right to claim damages, with the judge in his or her discretion deciding whether it is appropriate to award damages in the individual case. If so, I hope the Minister will accept the amendment to clarify the position in the Bill for the avoidance of doubt and, indeed, for the avoidance of what will otherwise inevitably be expensive litigation from which no one, other than lawyers, will benefit. I beg to move.

[Lord Lester of Herne Hill]

I spent much time on Bills seeking to persuade the previous Administration that the statute book should state the law as clearly as possible. I remember most recently, on the Equality Bill, that I managed to persuade the previous Government—with the help, as I recall, of my noble and learned friend Lord Wallace of Tankerness—that statutes ought to say what the law is. The summary of the position by the noble Lord, Lord Pannick, is absolutely accurate. There are problems in administrative law over the circumstances in which compensation or damages are payable. The Bill, at present, does not explain those.

Presumably the Minister will remind the House that we are dealing with Article 1 of Protocol 1; we are dealing with circumstances in which property has been taken away from somebody. In an appeal, I suppose it would be said that that was an interference that should give rise to compensation. In other words, the European convention and, I suppose, the Human Rights Act—which require this legislation to be read, if possible, compatibly with the convention rights—would give rise to a right to compensation or damages in appropriate circumstances. However, it is not satisfactory to leave this to a Pepper v Hart statement by the Minister, rather than to have some appropriate language—whether that of the amendment of the noble Lord, Lord Pannick, or something else—so that the individual does not have to go to lawyers to discover what the situation is, but can tell from the statute itself what the law is.

Even if the amendment of the noble Lord, Lord Pannick, is not accepted by the Government, I hope that by Third Reading some appropriate language will be inserted so that the Bill will state the law as it is intended to be, rather than relying on Pepper v Hart. In that case I had the good fortune to appear on behalf of the successful party, with the noble and learned Lord, Lord Mackay, dissenting. I sometimes wonder, with respect, whether he was right in his dissent. The case gave rise to the possibility that Hansard will always be used to make good what the statute does not properly state itself. Although I hope I was right and the House was correct in the outcome of Pepper v Hart, it could set a bad example to Ministers if they did not amend Bills to state the law correctly.

[Lord Mackay of Clashfern]

Noble Lords can hardly expect me to remain silent while that remark is made. I support the amendment moved by the noble Lord, Lord Pannick. So far as I can judge, it seems to be appropriate in its wording. If the Government were willing to accept the principle, they might wish to consider the precise words. There is also the question of whether the same principle should not apply in relation to Clause 27, where a judicial review provision is in question. The remarks of the noble Lord, Lord Pannick, apply as much to judicial review as to any other form of order in administrative law. Therefore, it is worth considering—if the Government decide to accept this amendment or something like it—whether something of the same kind should go into Clause 27 as well. It is obvious that if the Government think this is something that should happen, it is unwise to leave it on Pepper v Hart. However good the noble Lord, Lord Pannick, thinks that decision is, it would be rather better to put it in express provision, which in any event saves a certain amount of litigation.

[Lord Wallace of Tankerness]

My Lords, in responding to an amendment moved by the noble Lord, Lord Pannick, I feel somewhat guilty as I do not feel able to go so far as my noble friend Lord Sassoon in offering concessions. However, I welcome the noble Lord’s amendments as they have given us the chance to have a very useful discussion. Notwithstanding the points that have been made about the adequacy or inadequacy of Pepper v Hart statements in providing clarity, I hope that the noble Lord, Lord Pannick, will feel that sufficient clarity is provided.

This amendment relates to the debate that we had in Committee about the avenues available to a person who has suffered loss as a consequence of an asset freeze to obtain compensation. During that debate, the noble Lord, Lord Pannick, the noble and learned Lord, Lord Davidson of Glen Clova, and my noble friend Lady Noakes were particularly keen for the Government to indicate their position on this point, and I shall try to do so.

The amendment of the noble Lord, Lord Pannick, would provide that the court can, in relation to appeals by designated persons against designation-related decisions, award damages if and to the extent that the court thinks it just and appropriate to do so. The noble Lord has tabled the amendment following our discussion on the scope of the orders available to be made by the court under Clause 26(3). In that discussion I drew the Committee’s attention to that provision and indicated that,

“it would be possible, in connection with a successful challenge against the designation, for the person to claim damages, and it would be open to the court to award damages to a successful applicant”.—[Official Report, 6/10/10; col. 193.]

I was not suggesting—as my noble friend queried; and I am grateful for the opportunity to set the record straight—that it would be open to the court to award damages,

“simply for the invalid nature of the designation”.

As the noble Lord rightly observed then, and repeated tonight, that would be contrary to,

“the general principle of … administrative law … that the law does not normally provide compensation for those who have suffered direct loss as the result of invalid administrative action”.—[Official Report, 6/10/10; col. 194.]

It is not the Government’s intention to overturn that principle. However, it is the case that a designated person appealing a designation-related decision under Clause 26 can in certain circumstances make a damages claim in connection with that appeal. I apologise to your Lordships’ House if I did not make that distinction clear.

To clarify the effect of Clause 26(3), the orders that a court may consider appropriate in connection with an appeal of a designation could include, for example, an order to revoke the designation, or the renewal of it, or an order to uphold the designation. It would be open to a designated person to include in these, or subsequent, proceedings claims for damages under the Human Rights Act, as I believe my noble friend Lord Lester indicated, such as breach of the person’s right to enjoyment of property under Article 1 of Protocol 1 as a consequence of being invalidly designated, or—as I indicated in relation to the previous amendment— breach of Article 8, the right to respect for private and family life.

There have been relatively few legal challenges to designations, but where such challenges have been made a number of them have either included Human Rights Act damages claims or have given rise to separate Human Rights Act damages claims. Those claims which are being pursued are at a very early stage and as yet there has been no judicial determination of any of them. It may also be possible—although I appreciate that this would be more difficult—to found claims in tort or delict.

My noble friend Lady Noakes raised in Committee concerns about persons other than the designated person suffering loss as a result of a designation. Nothing in this Bill is intended to change the existing grounds—whether as a matter of the law of tort or delict or under the Human Rights Act—on which anyone affected by an asset freeze, whether the designated person, such person’s spouse or other family member, or any other third party, can claim damages against the Treasury if they believe that they have suffered loss as a consequence of an unlawful asset freeze.

In relation to loss suffered by both designated persons and persons other than designated persons, I should like to make one further crucial point. The purpose of the asset-freezing regime is to prevent the diversion of funds and economic resources for terrorist activity. It is the Treasury’s policy as far as is possible and consistent with that aim to license the use of funds and economic resources. The licensing regime successfully mitigates the impact on designated persons, their families and other third parties of an asset freeze. The general presumption is that a licence will be granted unless there is a risk that the transaction carries a risk of funds being used or diverted for terrorist purposes. Where third parties are affected, the power to grant a licence is exercised so as to ensure that, so far as is possible, no loss is suffered by any third party. For example, where payments to a family member or other third party would be prohibited because the designated person would thereby receive a significant financial benefit—for example, the discharge of a debt owed by the designated person—the Treasury can license such payments. Similarly, payments by a designated person to a third party in respect of, for example, contractual debts owed by the designated person to that third party are capable of being licensed.

I have heard the request that it would be useful to put something in the Bill. My concern is that although that might to some extent allow the individual to look at it and not necessarily contact a lawyer—however, I rather suspect that in many cases a lawyer will be quickly contacted—it might not cover the ingenuity of lawyers. If you put something in the Bill, it might seem to be limiting whereas lawyers might use their ingenuity to come up with other grounds under the Human Rights Act under which a claim could be made in the context of appeal proceedings or other proceedings. I shall certainly reflect on what has been said but I—

[Lord Lester of Herne Hill]

I am very grateful to the Minister. However, I would still like him to explain the practical disadvantage in accepting the amendment of the noble Lord, Lord Pannick. Would it not be of great advantage to the principle of reasonable legal certainty if this part of the Bill stated the law as it is? If not, what other means can the Government think of to bring home to people what the true legal position is, without having to consult a lawyer?

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[Lord Pannick]

My Lords, Amendments 23 and 24 are designed to give statutory effect, in the asset-freezing context, to the principle established by the Appellate Committee of this House in the case of AF (No. 3). I declare an interest—although it is not really an interest—in that I was counsel for the claimant in that case.

The principle stated by the Appellate Committee is that where a person is the subject of a preventive measure such as a control order, which severely restricts his basic liberties, that person must be given sufficient information about the allegations against him to enable him to give effective instructions to his lawyers or the special advocates to enable them to respond. The demands of national security, important though they are, cannot outweigh the basic right to know the case against you and to have the opportunity to answer it. The reason for that, of course, is that a right of appeal to a court is of very limited value if the subject of the order does not know the essence of the case against him.

I am surprised that the reply from the Minister, the noble Lord, Lord Sassoon, to the chairman of the Joint Committee on Human Rights disputes that the AF principles apply in the context of asset freezing. I am surprised for three reasons—first, because a recent judgment of the European Court of Justice in the Kadi case specifically applied the same principles to asset freezing. Secondly, I am surprised because a judgment of the Court of Appeal earlier this year in the Bank Mellat case applied the AF principle to a Treasury decision to prohibit the financial sector in this country from entering into business with the claimant—an Iranian bank. There is very little distinction in principle between asset freezing and the financial restriction proceedings that were an issue in the Bank Mellat case. The third reason why I am surprised that the Government do not accept that the AF principles apply in this context is that the Supreme Court judgment in Ahmed, which led to this Bill, accepted that asset freezing is a very grave interference with a person’s rights, comparable to a control order.

Amendment 23 would amend the relevant provision of the Counter-Terrorism Act 2008 so as to require rules of court to ensure that the court’s otherwise absolute duty of non-disclosure in asset-freezing proceedings, where national security so requires, is expressly qualified by a positive duty to ensure sufficient disclosure to protect the right to a fair hearing. Amendment 24 is consequential.

These amendments, like many amendments that your Lordships have debated today, are required to avoid uncertainty in courts, delay and expense in the implementation of legal rights. The House may be aware that 27 special advocates pointed out in their recent written evidence to the Home Office counterterrorism review that there have been continuing difficulties in practice in securing the right to a fair hearing in control order cases. These amendments are designed to make clear the primacy of the duty of fairness in this context, as in the other context, consistent with what the courts have repeatedly stated, and to avoid the uncertainty that will inevitably otherwise result. I beg to move.

[Lord Lester of Herne Hill]

My Lords, I have put my name to the amendment and I wish to speak briefly in support of it. I shall not add to anything that the noble Lord, Lord Pannick, has said, because I perfectly agree with his entire analysis.

Regarding the evidence given to the noble Lord, Lord Macdonald, QC, in his review of counterterrorism powers, the noble Lord, Lord Pannick, referred to 27 members of the Bar who gave evidence. Eleven of them are extremely distinguished Queen’s Counsel, as are the juniors who act for both sides, who cannot be accused of being soft on terrorism or anything of that kind. I do not know whether the Minister has seen their devastating criticism and attack upon the special advocates and control order regime.

Like the noble Lord, Lord Pannick, I do not agree that there is a distinction to be made between this regime and control orders for the reasons which he has given, including the judgment of the European Court of Justice in the Kadi case. I can deal with the amendment briefly, because the report of the Joint Committee on Human Rights published at the end of last week deals with this matter in detail, from paragraph 1.25 to paragraph 1.35. The committee will meet tomorrow and will need to consider this debate and the Minister’s letter to the committee, referred to by the noble Lord, Lord Pannick.

I hope that the House will be assisted by our having brought out the report, unusually before the Minister has had a chance to reply. Paragraph 1.35 states:

“We recommend that consideration be given to amending the legal framework to ensure that it secures the ‘substantial measure of procedural justice’ to which the subject of an asset-freeze is entitled under both Article 6 ECHR and the common law … we recommend that consideration be given to amending the Bill in four specific ways”.

Those are then set out.

Whatever happens today, this will not go away. It is extremely important, and it is my wish that both Houses take steps to ensure again that our statute book avoids the need for unnecessary litigation. Unless a significant change is made, whether in this House or the other place, it will be inevitable that this will be pursued not only in the context of counterterrorism, but also in the context of this aspect of counterterrorism; namely, asset freezing. Therefore, I hope that even at this late stage in the process in this House consideration can be given to what is in the report of our committee.

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[Lord Wallace of Tankerness]

My Lords, as the noble Lord, Lord Bach, indicated, this has been a short but fundamentally important debate. As he also indicated, it focuses on the challenge and dilemma of balancing the interests of liberty and those of security. I know that the noble Lord, having relatively recently been in government, had to do that himself. These are not easy issues to determine. It is important to recognise, too, that they are issues with which the Government constantly wrestle. It is fair to say that in its preliminary report—I welcome the fact that we have that report to help us today—the Joint Committee on Human Rights acknowledged the amendments that were moved in Committee and welcomed the Government’s willingness to consider the human rights issues raised during the debate at Second Reading and their amendments to the Bill, which are designed to improve the balance between national security and human rights in the asset-freezing regime. This is an issue of which Ministers are acutely conscious as they constantly try to ensure that the balance is correct.

Amendment 23, moved by the noble Lord, Lord Pannick, seeks to create a new subsection within Section 67 of the Counter-Terrorism Act 2008 that would apply to the content of the court rules about disclosure in financial restrictions proceedings and to court rules made in relation to challenges to decisions under the Bill. The amendment would require the court rules, which are to be made initially by the Lord Chancellor for England and Wales and Northern Ireland, to ensure that the Treasury provides sufficient open disclosure to enable the designated person to give instructions to the special advocate. As has been reflected in some contributions to the debate, the form of words is based on the European Court of Human Rights judgment in A, which was applied by your Lordships’ Judicial Committee in AF and Others to the stringent control orders that it was considering. The effect of the amendment is to apply AF (No. 3) to challenges to final designations.

As was foreshadowed in the letter of my noble friend Lord Sassoon to the committee, the Government do not support this amendment, and I shall explain why. I start by stressing a fundamental point on which I know there is common ground all round the House. Designated persons must have the full protections afforded to them under Article 6 of the European Convention on Human Rights; namely, the right to a fair hearing.

Section 67(6) of the Counter-Terrorism Act 2008, which is imported into the regime for dealing with asset freezing, is absolutely clear that nothing in that section, or in rules of court made under it—they include provisions relating to the Treasury’s disclosure of information only to the court and a special advocate—requires the court to act in a way that is inconsistent with Article 6 of the ECHR. It is important to emphasise that the judge also has an important role to play in challenging the closed material and in weighing the impact that non-disclosure has on the fairness of the proceedings. The court determines whether material should be withheld, and the disclosure process is designed to ensure that the maximum amount of material that can be disclosed to the individual without damaging the public interest is disclosed.

The Government and the legislation are absolutely clear that Article 6 rights apply in full to asset freezing. Therefore, it would be inaccurate to say—and I do not think that this was suggested—that advocates of the amendment support Article 6 rights while the Government do not. To make it clear, not only do the Government support Article 6 rights but those rights are there in the Bill by reference to the Counter-Terrorism Act 2008.

I hope that there is broad agreement that the legal position regarding the application of AF (No. 3) principles to asset freezing has not been fully determined by the courts. That is probably a matter of fact but it is clear that different views are being expressed in the House this evening regarding the applicability of the decision in AF (No. 3) to asset-freezing designations. Of course, the courts have determined—indeed, it was determined in the case itself—that AF (No. 3) principles apply to stringent control orders and to financial restrictions proceedings under the Counter-Terrorism Act 2008. That was the subject matter of the case to which the noble Lord, Lord Pannick, referred. However, the courts have not yet determined that AF (No. 3) principles apply to asset-freezing cases. The Government’s view is that it would certainly be wrong to say that legally there is no room for doubt on this.

I shall now seek to address the points that the noble Lord, Lord Pannick, made in moving the amendment. When the Bill was discussed in Committee, I indicated that in the Government’s view the principles do not apply to asset freezing because, although I do not in any way wish to minimise their significance or importance, asset freezes do not have the same impact on individuals as stringent control orders, nor are they as wide-ranging in their financial and economic impacts as decisions to impose financial restrictions under the Counter-Terrorism Act 2008. Perhaps I can assist the noble Lord, Lord Bach, who asked me to identify some of the distinctions. Asset freezes are not of the same nature or magnitude of interference, because they restrict the rights to property and indeed can be modified or alleviated by licences, whereas control orders restrict people’s liberty, communications and movement. As I said, I do not in any way diminish the seriousness of asset-freezing designations but, in our argument, their impact is not of the same magnitude as that of stringent control orders. However, it is open to the courts to determine whether the Government’s position is to be challenged.

It is certainly possible to draw a distinction in the case of Kadi, which was determined by the European Court of Justice. That judgment concerned the process followed by the European Commission in listing Kadi, and the Government would certainly argue that it had no direct bearing on the process to be followed by the United Kingdom Government in applying asset freezes domestically against persons believed to be involved in terrorism. We believe that the European Court of Justice judgment in Kadi is separate from the question of whether AF (No. 3) principles should apply to asset freezes. Likewise, in the Bank Mellat case, which was determined in May this year, the court’s rulings on disclosure were specific to the cases concerned and there was no general ruling on whether AF (No. 3) should apply in asset-freezing cases. The court ruled that the application of AF (No. 3) applied in the context of financial restrictions imposed against the Iranian bank, but the circumstances of such financial restrictions, where the Treasury issued a direction that the UK financial sector must cease dealings with the bank, were very different from those where an individual is subject to an asset freeze because of his alleged involvement in terrorism. Therefore, I do not think that a direct read-across of the court’s ruling is right, applying the specific circumstances under consideration to the freezing of terrorist assets, where different considerations may well apply.

[Lord Lester of Herne Hill]

I apologise for interrupting the noble Lord, but does he not agree that his valiant attempt to distinguish the control order regime and the asset-freezing regime runs against the following difficulty? The European Court of Justice in Kadi (No. 1) and Kadi (No. 2) took an extremely robust position with regard to a UN framework, emphasising the extreme deprivation that could result from asset freezing and the need for adequate safeguards. The Court found that the European Commission’s second attempt to produce adequate safeguards had failed. Would that not give advocates using arguments of that kind in our courts a very hard time indeed?

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[Lord Lester of Herne Hill]

My Lords, I have added my name to the noble Lord’s amendment because I am a member of the Joint Committee on Human Rights and we dealt with the issue in paragraphs 1.41 to 1.44 of our latest report. Indeed, together with the noble Lord, Lord Judd, I was a member of the previous Joint Committee on Human Rights, when we made similar recommendations.

In our report, we paid tribute to the Government—it is important that tributes should be paid—for the way in which, during the passage of this Bill, they have moved in a human-rights compliant direction. One of the many ways in which they have done so, as we report at paragraph 1.42, relates to the two additional safeguards that have been included:

“First, there is a requirement that the Treasury report quarterly to Parliament about the exercise of the powers. Second, that the Treasury is required to appoint a person to conduct an annual ‘independent review’ of the operation of the asset-freezing regime, reporting to the Treasury which lays a report before Parliament”.

The Joint Committee then states at paragraph 1.43:

“Safeguards which enhance democratic accountability for the exercise of counter-terrorism powers are clearly to be welcomed from a human rights perspective. Our predecessor made a number of detailed recommendations for improving such safeguards, including that the post of statutory reviewer of terrorism legislation should be appointed by Parliament and report directly to Parliament, on the grounds that a reviewer with a supporting secretariat within Government might suffer from a perceived lack of independence from the Government”.

The committee therefore recommended that,

“consideration be given to amending the Bill so as to give Parliament the power to appoint the proposed independent reviewer and for the reviewer to report directly to Parliament, in line with earlier recommendations concerning the statutory reviewer of terrorism legislation”.

Like the noble Lord, Lord Judd, I pay tribute to my noble friend Lord Carlile for the work he has done as reviewer. Nothing I am about to say should be taken in any way as a criticism of his fine work. In previous debates, I have made the case that important public appointments should be made at least with the advice and consent of Parliament, not only by the executive branch. I am not suggesting that this is an occasion when that principle needs to be slavishly followed, but it is one that has a great deal to commend it. In other states that I can think of in Europe and beyond, it is regarded as good governance.

I am not in favour if disfiguring Bills with too much unnecessary detail, and there may well be other ways than this amendment of accomplishing the objective indicated by the noble Lord, Lord Judd: that is, to enhance public confidence in the perceived independence of the reviewer.

When for 18 months under the previous Government I acted as the independent unpaid adviser to the right honourable Jack Straw, Minister for Justice, one of the requirements on which I insisted, and which the Cabinet Office strongly resisted, was that I should not have an office in the Ministry of Justice and that I should not have a secretary appointed within the ministry. The Cabinet Office could not understand why I took such a strong position. I said, “Well, I am meant to be the independent adviser and it seems to me important that, as a matter of public confidence, I do not have staff from, or an office located in, the ministry”. In the end, as I said that I would not do the job otherwise, the Cabinet Office had no alternative but to comply.

I appreciate the reasons why that has not happened in the case of my noble friend Lord Carlile, and I can see arguments of convenience about security and confidentiality that would point in the other direction. However, if I am allowed, I would say to the noble Lord’s successor that, whatever the fate of these amendments, I very much hope arrangements will be made to enhanced the perceived independence of the reviewer in order to enhance public confidence. It does not have to be done in the way suggested in this amendment: it can be done administratively, provided that sensible arrangements are made. So I support the objective of the amendment, and although I have no doubt that it will not be pursued to a Division today, I hope that the principle that the Joint Committee on Human Rights has made several times will be appreciated within the Executive. I am sure that they will appoint an admirable person without the need for parliamentary intervention, although I would prefer some parliamentary involvement in the process. That person, whoever is appointed—it is a matter of judgment and character—needs to act in a way that will enhance public confidence.

[Lord Carlile of Berriew]

My Lords, I fear that it would be negligent if I did not take a little bit of the House’s time to comment on the amendment of the noble Lord, Lord Judd. I thank him for declaring my interest so generously—I mean that genuinely. Even if there are any implicit criticisms of the way in which I have conducted myself during my nine years and 25 days as independent reviewer of terrorism legislation, I have been around the political world long enough to take them on the chin and respond to them.

I am slightly surprised that I was not asked to give evidence to the Joint Committee on Human Rights prior to its most recent report. Perhaps it thought that I might have disagreed with it far more than I do, because, basically, I do not disagree with what it has said.

I remind the House how the process developed. There were a number of distinguished independent reviewers of terrorism legislation who dealt with Northern Ireland. That had become a significant but not particularly time-consuming role prior to 11 September 2001. By one of those extraordinary coincidences of life, I was approached on that very day, before the twin towers were hit in New York, and asked to carry out a function which I was told would take only a few days per year. Later during the day, after the twin towers had been hit, I asked the Home Secretary’s Private Secretary if the Government now wanted someone competent to do the job. The response was that they were happy for me to do it, and I have done it ever since.

I tell that story because it is important to remember that the role of the independent reviewer has been evolving all the time, just as counterterrorism law has been evolving all the time. I am sure that the previous Government would acknowledge that, from time to time, they made mistakes about counterterrorism law. I, as independent reviewer, made mistakes in reviewing certain aspects of counterterrorism law. I suspect that the present Government—whom I support politically, at least, although I am neutral for this purpose—will also make mistakes. It is a very difficult area.

The whole process of reviewing started in my case from a relatively unsophisticated position and has developed into a much more demanding role. On the question of independence, I should say that it really depends whom you speak to. I fear that I may have been cited on most sides of almost every argument about counterterrorism. If that is evidence of independence—and it may well be—I am satisfied with that position.

About office and matters of that kind, I remind those who have spoken in this debate and may be interested in it that I have always conducted the role of independent reviewer of terrorism legislation from my chambers, which I have paid for allowing me to carry out the role there. I had better give them a plug —9-12 Bell Yard. My chambers, as one would expect of a good set of barristers’ chambers, has been prepared to put up with that inconvenience—possibly because I was head of chambers for six and a half years of the time that I have been doing it.

I have had an office in the Home Office, and I am glad to see my noble friend Lord Thomas of Gresford here, because on one occasion he castigated me in this House for having an office in the Home Office. He was kind enough to acknowledge afterwards that he might have overlooked the fact that in my office in the Home Office, which is situated in the Office for Security and Counter-terrorism, I have a room, quite an ample room—it even has a sofa, which is quite hard to get these days in the Home Office—which I use only because I have to keep documents in a secure place. Keeping documents in my chambers or, even worse, in my home, is insufficiently secure.

I confess to your Lordships that on my not-very-frequent visits to that office—perhaps, on average, I go there about once a fortnight—I hold meetings, but it is convenient to meet Home Office officials, police and others whom one needs to meet in a secure place in precisely that, a secure place. It would be far more expensive for government if such meetings were to take place elsewhere. Although I entirely support the notion of physical and intellectual independence being clear, it is not so easy in practice.

The Bill proposes that there should be a reviewer of yet another aspect of counterterrorism law, of which there has not been an independent reviewer up to now. It makes sense that whoever succeeds me after the end of this year—my appointment having been extended, after three three-year terms, for a very short period so that a successor can be appointed and find his or her feet—should be able to carry on as independently as I believe that I have, although I recognise that not everybody would agree with that, and should have the secretariat with which to do so.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I rise briefly to congratulate my noble friend on the way in which he moved this serious and important amendment for the House to consider and triggered a constructive and significant debate. I favour the amendment. It has not always been the case in recent years that I have favoured Back-Bench initiatives from my party, but one of the liberating factors in opposition is that one is able to reform old friendships after the obvious discipline that imposes itself in government. I am happy to indicate from the Front Bench how much we welcome the way in which my noble friend has acted in this respect and has presented this amendment today.

First, I want to make it absolutely clear that none of us has anything but admiration for the way in which the noble Lord, Lord Carlile, has carried out his duties. He has described with great accuracy this evening the nature of the role and its challenges, but his reputation has run before him over these many years. The fact that he identifies that he has spent nine years and 25 days in the role shows the degree of service that he has done to the nation in a very challenging role. I emphasise that in so far as we see merits in the amendment, that is in no way a criticism of the way in which the noble Lord carried his duties—far from it. We are great admirers of the way he discharged those responsibilities.

I also recognise what the noble Lord, Lord Lester, generously said. The Government have included two additional safeguards with regard to this legislation, on which they are to be congratulated. That is part of the reason, but not the sole reason, why we in the Opposition have been moved to offer support throughout the bulk of the debates in this House. We recognise that the Government are facing challenging issues in identifying this legislation accurately. On one point I disagree with the noble Lord, Lord Lester. I am not sure that an amendment of this kind can be described as potentially disfiguring the Bill. If the amendment brings a dimension to the Bill that meets the objective that my noble friend emphasised in his introduction—taking the hearts and minds of our people with us on combating terrorism—we need the confidence of the nation in the processes that we put into place.

[Lord Lester of Herne Hill]

I do not think that the amendment to which I put my name does so. I was simply seeking to say that in general one should not include unnecessary detail of a disfiguring kind, but I support the amendment, which is why I put my name to it.

[Lord Davies of Oldham]

I am delighted to hear that. I apologise for my slight misinterpretation of the noble Lord’s advocacy this evening. I thought that he put that point in to indicate that it might detract from the Bill when, of course, I assumed that he signed the amendment with the wholehearted determination to support it as far as he was able. He certainly largely did so in his contribution this evening.

As I indicated, I want to speak only briefly with regard to this issue. We find merits in the amendment, and we hope that the House does too.