Conduct Committee

Lord Neuberger of Abbotsbury Excerpts

Tuesday 20th April 2021 Lords Chamber

[Lord Neuberger of Abbotsbury (CB) [V]]

My Lords, as someone who since 2018—since retiring as a judge—has been practising as an international arbitrator and legal expert, I must of course disclose a real and substantial interest in the issue being debated this afternoon.

As recent events have shown, the need for transparency in the field of Members’ outside interests is very important, but any change to the rules has to be justified and proportionate. Overregulation and unnecessary regulation are self-defeating as they undermine regulation by bringing it into disrepute, and rushing to judgment in legislation or rules can notoriously lead to difficulties. We should not include unnecessary categories of registrability, especially when they may cause damage; while the report asserts the need for the relatively blanket regulation proposed, it does not really explain why it is necessary.

So far as they relate to the legal profession, the proposed amendments are problematic in three important respects: first, they cut across some fundamental legal principles; secondly, even if that is held not to be a sufficient objection to the rules change, they are also questionable in relation to arbitration; thirdly, while—to be fair—recognising the confidentiality problem, they deal with it in a way which is demonstrably unsatisfactory. On the first point of cutting across principles, I can add very little to what noble Lords, in particular the noble Lords, Lord Marks and Lord Pannick, and the noble and learned Lord, Lord Goldsmith, have said. However, I add that much has been made of public interest against private interest. While I readily accept that my private interest and theirs can be said to be affected, that is not something that I accept should be taken into account; but the rule of law is as important as anything else, and part of the rule of law is the right to a lawyer of your choice and the right to confidentiality. On any view, that is being cut into.

Turning to my second point, I suggest that even if one were happy in principle with the proposals, it is highly questionable whether they should apply to arbitrations, at least so far as the appointment of arbitrators is concerned. Commercial arbitrations, whether international or national, are like court cases save that they are mostly held strictly in private; that is one of arbitration’s principal attractions. They are of enormous benefit to this country financially, and not just to individuals, because we are probably the international arbitration centre—indeed, the international legal centre—of choice in the world. It is also right to mention that there are one or two types of arbitration which are public.

Normally there is a panel of three arbitrators, one appointed by each party, and the third appointed by the other two. Even though the three arbitrators are paid by the parties, an arbitrator, whoever appoints him or her, has no duties to any party save to conduct the arbitration independently and fairly; in other words, like a judge. Quite why that makes an arbitral appointment disclosable is a mystery to me other than the—perfectly true—point that the arbitrator may be paid by the foreign power if a foreign power is involved. However, there is no duty to the foreign power; indeed there is positively no duty to act in its interest but a duty simply to act like a judge. I therefore question the applicability of these new regulations to arbitration while freely admitting, as I have said, that this is in my personal interest as well.

Finally, I wonder about the provisions, which have been mentioned already, found in paragraphs 55A and 57A. To the credit of the committee, they try to deal with confidentiality. They say that Members who provide legal services to a foreign Government need not register until one of two conditions is satisfied: first, that the matter is public knowledge; or secondly, that the Member is partly or wholly paid. Condition 1 is, as has already been said by another speaker, entirely sensible, and nobody could quarrel with it. But condition 2, which makes the instruction disclosable only when the lawyer Member is paid, is illogical in principle and perverse in practice. It is illogical because if the matter is confidential, the client’s right to confidentiality is permanent and continues after the lawyer is paid. It is perverse in practice because a lawyer, particularly an arbitrator, will often not be paid—and, indeed, can arrange not to be paid—until the whole matter is over. The idea that the House will know of the Member’s involvement with a foreign Government only once that involvement has terminated is pretty cockeyed, and Members’ purely historic interests or connections are of limited relevance.

I should add that, as the noble and learned Lord, Lord Hope, has shown, the transitional provisions giving effect only to appointments that have been made to date until the end of the year are very problematic.

In conclusion, while I sympathise with and support the whole thrust and basis of the report, I therefore suggest, in agreement with the noble and learned Lord, Lord Garnier, that the committee should consider the possibility of introducing some more satisfactory qualifications to the relatively blanket nature of the current proposals.