Terrorist Asset-Freezing etc. Bill [HL]

Lord Wallace of Tankerness Excerpts

Monday 25th October 2010 Lords Chamber

[Lord Pannick]

My Lords, I support the amendments, in particular Amendment 20A. The Treasury has no interest whatever in controlling expenditure on legal advice and legal representation; its only interest is to ensure that the assets are not used for terrorist purposes. It is important that the uninhibited right to seek legal advice and to obtain legal representation is stated clearly in the Bill and that it is not left to Treasury concession.

[Lord Wallace of Tankerness]

I thank my noble friend Lady Hamwee for dealing with licensing, which was an important part of our deliberations in Committee. Amendments 19, 20 and 20A would write expressly into the Bill a duty on the Treasury, if requested, to issue licences to allow the designated person and his dependants to access sufficient funds and economic resources to meet reasonable living costs and to pay for legal representation. In the case of living-costs licences, the amendment would place a duty on the Treasury to deal with applications urgently.

As my noble friend made clear, the amendments reflect concern that the Bill does not include a sufficiently clear obligation on the Treasury to issue licences for these purposes and that designated persons and their families are reliant on the good faith or good practice of the Treasury to grant such authorisations. I recognise the concerns that have prompted the amendments. It goes without saying that a designated person must be in a position at the earliest possible opportunity to access funds to meet his or her and their dependants’ living costs and to be able to pay for legal advice and representation in relation to their designation.

However, we do not think that to include in the legislation an obligation to issue such licences is necessary, since the obligation already exists by virtue of the Treasury’s duty to act in compliance with the Human Rights Act. Under Section 6(1) of that Act it would be unlawful if the Treasury acted in a way which is incompatible with a convention right. So, in response to the point made by my noble friend, it is not a question of acting with good grace but of acting under a requirement—an obligation—on the Treasury. It means that the Treasury must issue any licence that may be required to ensure that the affected person’s convention rights are not unlawfully infringed by the imposition of an asset freeze.

In order to secure compliance with this obligation on the Treasury, it routinely issues licences immediately on designation so that designated persons from the outset have access to frozen funds, including all social security benefits to which they are entitled, to meet their day-to-day living expenses. There is no requirement that such licences be requested by the designated person; they are issued automatically as a matter of course. The licences that the Treasury issues are broad and do not restrict the designated person’s access to funds necessary to meet only reasonable living costs. The only controls imposed are those necessary to protect against the risk of funds being diverted to terrorism.

In addition, a designated person or any other affected party may request a licence at any time if access to funds or economic resources is required which is not already authorised under the terms of a licence issued immediately upon designation. The Treasury’s practice is to treat any request for such licences as a matter of priority and, in particular, to deal urgently with requests where the failure to act quickly would result in hardship to the designated person or their family. It is therefore not necessary to impose an express duty on the Treasury to treat such applications as a matter of urgency as the Treasury already has a legal obligation to act in a way which is compatible with the affected person’s convention rights, and it is accordingly the Treasury’s established practice to do so.

My noble friend and the noble Lord, Lord Pannick, attested to the importance of legal expenses. Again, the Treasury is obliged by virtue of human rights law to ensure that it does not act in a way that would impede an affected person’s access to legal representation. To ensure this, there is already in place a general licence permitting the Legal Services Commission to pay legal aid funds to solicitors representing those designated persons who are eligible for legal aid. In addition, the Treasury will ensure that an additional general licence will be issued which authorises third parties to meet the legal expenses of designated persons by paying their lawyers.

There is an overriding obligation on the Treasury to issue licences for legal expenses. Therefore, again, it is not necessary to write such a duty into the Bill. I assure my noble friend and your Lordships’ House that the absence of such an express duty would in no way prevent an affected person from challenging the Treasury in circumstances where a Minister decided to impose a particular condition in a licence, delayed issuing the licence or refused to issue it at all. I repeat to my noble friend that this is not simply a matter of Treasury practice, but of the Treasury honouring the legal obligations upon it.

[Lord Pannick]

If I understood him correctly, the Minister mentioned legal aid for the designated person and allowing third parties to fund legal representation for that person. My concern is when the designated person has assets of his own which he wishes to spend on his legal representation. I should like to have an assurance that the Treasury will allow the designated person to use as much of his own legal resources as he thinks appropriate in his own legal defence provided that the payment, as Amendment 20A states, is to,

“a person subject to regulation as a legally qualified person”.

[Lord Wallace of Tankerness]

I said that in addition to a general licence which already exists with regard to the Legal Services Commission paying legal aid funds to solicitors representing designated persons who are eligible for legal aid, the Treasury will ensure that an additional general licence will be issued which authorises a third party to meet the legal expenses of designated persons by paying their lawyers.

The noble Lord, Lord Pannick, raised the issue of whether the person’s own assets might then be used. That would be distinctive from a general licence which, by definition, cannot relate to that of an individual. As I indicated earlier, licences issued in respect of individuals are intended to impose controls that are necessary to protect against the risk of the funds being diverted to terrorism. That is the test. Therefore, an application for a licence—it would have to be a licence for an individual with regard to his own individual circumstances and not a general licence to which I have already referred—would have to be looked at by the Treasury against that test to ensure that that there was not a diversion of funds to terrorism.

[Lord Pannick]

I am sorry to test the Minister's patience, but if I understand him—please correct me if I am wrong—he is saying that there may be circumstances in which the Treasury would restrict the amount of money that the person who is designated—his own money—may be able to use for his own legal representation. If I understand the Minister correctly, that is because of the risk of the money being diverted to terrorism. But surely, if the money is going to a person who is regulated as a legally qualified person, the Treasury would have to suspect that a solicitor or barrister is involved, in some way, in terrorism. That is a very serious matter that should be taken up with the proper regulatory authorities and not be the subject of restricting the designated person from obtaining the legal representation that he seeks.

[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.

[Baroness Hamwee]

My Lords, with that last comment, my noble and learned friend anticipates my saying that I would not wish to see this matter rest on practice but that it is a matter of obligation.

I understood my noble and learned friend to say that a licence to use funds for legal advice or representation is in part to protect the banks. I find that difficult to follow, because I am asking for a licence; I am not asking for the banks to be allowed to release funds simply on the say-so of the designated person or third party that this is the use to which the funds would be put. I make that point quite seriously, although I will not ask my noble and learned friend to come back on it if he does not want to at this point. However, which article or articles does he rely on with regard to subsistence costs? The right to a fair trial leads one very directly to the point of legal advice and representation. It is probably, although I do not want to put words into the Government’s mouth, a combination of other articles that takes us to subsistence.

[Lord Wallace of Tankerness]

My noble friend is right to say that there are other articles. The right to a fair trial is the obvious one, but there is also the right to use one’s resources under Article 1 of Protocol 1. Also used in these contexts sometimes is the right to family life under Article 8, which might well be relevant in circumstances such as these.

[Baroness Hamwee]

I am grateful to my noble and learned friend. Although I remain a little uneasy—that is not his fault—I beg leave to withdraw the amendment.

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[Baroness Hamwee]

This was another matter that I raised in Committee, and I have been grateful for the opportunity to discuss it with my noble and learned friend since then. We agreed that I would table an amendment again to enable the Government to give a slightly longer explanation than they were able to at that date.

The amendment would protect a person who does not wish to incriminate himself. The exception of reasonable excuse would apply in this situation; it would be reasonable for a person to say that he will not comply because of the right not to self-incriminate. But this is a general defence to something that is really very specific, and if the Government can take us through their thinking it would be very helpful. On the question of what is reasonable in particular circumstances, one would have to analyse the circumstances so carefully and to such a degree that the concern about self-incrimination might be trumped. That is why a provision that was—as I described it—more straightforward, although longer, would be appropriate.

[Lord Wallace of Tankerness]

Again, my Lords, I am grateful to my noble friend for raising this point, which we dealt with in Committee and which we have had an opportunity to discuss further. I hope that I can persuade her that the Bill does not really provide the ace of trumps up the sleeve; rather, it recognises—as I think would this House—the importance of the privilege against self-incrimination.

The amendment would replace a qualified requirement to provide information in the absence of reasonable excuse with an absolute obligation, but would provide that such information could not be used in subsequent criminal proceedings. Again, as my noble friend indicated in moving the amendment, the purpose of doing so would be to protect the privilege against self-incrimination.

In Committee, I confirmed to my noble friend that the privilege against self-incrimination was not overridden by the Bill. In particular, I clarified that if a person was concerned that compliance with an information request would infringe that person’s right against self-incrimination, that concern itself would form a reasonable excuse, under what is now Clause 22(1)(a), for refusing to comply with that request.

I appreciate that the amendment is prompted by a concern that “reasonable excuse” operates as a defence, and that it is inappropriate to rely on a general defence in such a fundamental area. I readily appreciate the nature of this concern, but it is misplaced as it is founded on a misunderstanding of how the prohibition in Clause 22(1)(a) will operate. In order for the offence to be committed, the person must have no reasonable excuse for failing to provide the information. If the person decided that providing the information would infringe his or her right against self-incrimination, he or she would have a prima facie reasonable excuse for withholding it and would not have committed the offence.

The onus would not be on the person to raise a defence based on the privilege against self-incrimination. It would instead be on the prosecution to show that the person’s reliance on that privilege was not reasonable in the circumstances. In practice, no prosecution would be brought unless the prosecution considered that there was a reasonable prospect of establishing this, and then it would be incumbent on the prosecution to prove that beyond reasonable doubt. I hope that this further reassurance will permit my noble friend to withdraw the amendment.

[Baroness Hamwee]

My Lords, with reference to where the onus lies, the Minister’s reply is particularly helpful; I am glad to have the assurance that it lies on the prosecution in that situation. I beg leave to withdraw the amendment.

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[Lord Bach]

Briefly, I can say only to the noble and learned Minister: plus ça change. Here I am, supporting in what I am about to say the suggestion made by the noble Lord, Lord Pannick, in his amendment. I do so in rough terms; I am not in any way inviting him to test the opinion of the House on it today. This is surely a matter that can be dealt with in some more satisfactory way than that. The noble Lord seems to have a point, backed up as he is by the noble Lord, Lord Lester, and the noble and learned Lord, Lord Mackay of Clashfern. I ask the Minister this simple question. Presumably he will argue that,

“such order as it considers appropriate”,

includes damages. If the answer to that question is yes, can there be any reason not to put that in the Bill in express terms, for the reasons stated by the noble Lord, Lord Pannick?

[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?

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, my concern is that it would not necessarily provide the degree of certainty which my noble friend seeks. It could leave open all sorts of possibilities as to the grounds on which claims might be sought. However, important points have been made in the debate. I wish to reflect on them without commitment, but I am concerned that the proposed remedy might raise as many questions as it is intended to resolve. Therefore, I hope that the noble Lord will withdraw his amendment.

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[Lord Bach]

My Lords, I was very well assisted by the report that the committee brought out, and by the paragraphs referred to by the noble Lord, Lord Lester. The Government of whom I was a member set up the special advocate system in order to deal with what was and remains a very difficult issue around terrorism. However, we recognise that there are difficulties with it that any Government will have to deal with in due course. On balance, we do not think that the Bill is the appropriate vehicle to make sweeping changes of principle on the issue of the special advocate system.

I have a couple of questions that I should like to ask. This may be a short debate, but the issue may be one of the most important that we debate this afternoon. As my noble friend Lord Davies of Oldham said in an earlier debate, this matter calls into question the balance between civil liberties and security—it is right at the heart of that argument. Any Government of whatever complexion will have to deal with this, day by day and month by month. I take the point made by the three noble Lords who have spoken already that it is difficult to understand why the Government argued in Committee that the regime for control orders is not the same as that for asset freezing, particularly as it relates to the special advocate system. In the end, it seems that the same rules will have to apply, whatever they are. I hope that the Minister will deal with that point when he sums up the debate. What are the differences between the two regimes, especially in relation to the special advocate system?

I am aware that there is to be a Green Paper on this vexed issue in 2011. Will the Minister confirm that that will not be December 2011, as presently planned, but more like the middle of the year? I also understand that there is likely to be a case, perhaps on point, that the Supreme Court will be asked to decide, and which will be heard very early next year, with the judgment expected in good time for the Green Paper.

Those are my questions. Despite what I have said, I hope that the noble Lord will not press the amendment. It needs some careful consideration. However, the points that have been made are powerful and must be dealt with at some stage.

[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?

[Lord Wallace of Tankerness]

My Lords, I can almost hear the noble Lord advancing that case. The Government’s position is simply that it is possible to make a distinction where there was a challenge to the listing in the Kadi case. It is not a position that we would wish to concede; it is on all fours with the circumstances that would arise in an asset-freezing case.

Should the courts decide that AF (No. 3) applies to asset-freezing cases, any court rules that cut across this would be read down to ensure compatibility with the ruling. Therefore, it would not be necessary to amend the legislation. In any event, it would be premature to prejudge such a determination by the courts and now to require the disclosure of sensitive information that could damage national security or the detection or prevention of crime.

The question is how best to deal with a situation where the applicability of AF (No. 3) principles is not given and is uncertain. Advocates of the amendment argue that we must remove the uncertainty by giving the Government specific obligations in this statute in the terms of the amendment moved by the noble Lord, Lord Pannick. As I believe is abundantly clear, the Government’s approach is different. As I said in Committee, and as the Prime Minister announced in July, the Government will review the whole matter of the use of intelligence material in judicial proceedings and will issue a Green Paper next year. I say in response to the question from the noble Lord, Lord Bach, that the intention is for the Green Paper to be published in the summer of next year. In response to his second question, this will allow time for a judgment to be handed down in the lead case—the employment tribunal case of Tariq—in relation to whether AF (No. 3) applies more widely than stringent control orders. I understand that that case will be heard by the Supreme Court in January and we expect a judgment in the spring. It would be wrong to pre-empt the Green Paper, although there will obviously be an opportunity for reflection on that judgment before the Green Paper is published.

It would also be wrong to adopt a piecemeal approach to this important issue. As we have heard eloquently expressed in the debate this evening, the issue of special advocates and the use of intelligence material cuts across a number of areas. If we try to address these important issues in an ad hoc way in individual pieces of legislation dealing with different aspects, we risk ending up with different requirements in different pieces of legislation. I know that that is not what many noble Lords wish to happen in this area of legislation. They want to see greater coherence and consolidation, not fragmentation and a piecemeal approach. I could not have agreed more with my noble friend Lord Lester when he said that this matter will not go away. The Government readily recognise that. As I indicated, our commitment is to address the issue. The fact that we are willing to do that is a testament to the importance that we attach to it.

The Green Paper will aim to develop a framework for ensuring full judicial and non-judicial scrutiny of intelligence and wider national security activities in line with the Government’s commitment to individual rights, to the rule of law and to properly protecting national security. It will need to address concerns about the United Kingdom’s ability to protect intelligence material, including that shared by foreign partners, and to bring forward proposals to reconcile the evolving legal position—duly informed, as it will be, by Strasbourg and Supreme Court rulings—with modern intelligence practices. We will try to ensure such a coherent and consistent approach. I hope that noble Lords will welcome and support that approach and see it as a recognition not just of how important this issue is but also of just how difficult it can be to reconcile two very important but at times competing requirements. Although I recognise that noble Lords have raised necessary and important issues with this amendment, I hope that the noble Lord will agree to withdraw it.

Amendment 24 would amend Civil Procedure Rule 79.2. That rule requires the court, when dealing with certain cases, to read the overriding objective of the Civil Procedure Rules—in other words, to deal with cases justly in a way that is compatible with the requirement to ensure that information is not disclosed contrary to the public interest, while ensuring that it has the material available to properly determine the proceedings. This relates to a similar range of arguments to those that we have just gone through. It comes from a belief that the ruling in AF (No. 3) should apply to challenges to designations under the Bill.

For two reasons, I do not believe that the amendment is necessary. As I have already made clear—I shall not rehearse the reasons again—the Government do not accept that AF (No. 3) applies to asset-freezing challenges. It is for the court to decide the ambit of AF (No. 3) on a case-by-case basis. Even if ultimately the court found that AF (No 3) applied to challenges to asset-freezing decisions, we do not think that there would necessarily be a conflict between the disclosure requirements of AF (No. 3) and the public interest requirement of Rule 79.2 of the court rules. Rule 79.23 makes it clear that the public interest provision is without prejudice to the need for the court to satisfy itself that the material available to it enables it properly to determine the proceedings. Furthermore, as I have indicated, Section 67(6) of the Counter-Terrorism Act 2008, which is imported into this Bill, simply states:

“Nothing in this section, or in rules of court made under it, is to be read as requiring the court to act in a manner inconsistent with Article 6 of the Human Rights Convention”.

In short, the Government do not believe that Rule 79.2 would cut across any fairness obligation required by the court to meet Article 6. It is an important reminder of the need to deal carefully with sensitive material but it does not constrict the proper determination of the proceedings.

I recognise that serious and important issues have been raised. I have sought to address, although I suspect that I have not done so fully, the concerns expressed by noble Lords. We hope that this will be considered fully. My noble friend Lord Lester mentioned the special advocates, as did the noble Lord, Lord Pannick, who expressed his views very robustly. There will be an opportunity to deal with that in the context of a Green Paper, which will be a way to move forward in a coherent rather than a piecemeal manner. Therefore, I ask the noble Lord to withdraw his amendment.

[Lord Pannick]

My Lords, I am grateful to noble Lords who have spoken in the debate for the support that they have given these amendments and to the Minister for his detailed response. I sympathise with the noble and learned Lord because, with his brief, he faces the substantial difficulties of inviting the House to accept that the legal position is not as it has been stated by the European Court of Human Rights in the A case, by the Appellate Committee of this House in AF (No. 3), by the Supreme Court in Ahmed and by the European Court of Justice in the Kadi case. For all those judges essentially to agree that basic fairness is required when the Government impose a substantial detriment, whether a control order, asset freezing or something similar, on a person—and I forgot to mention the Court of Appeal in Bank Mellat—poses a certain difficulty for the Government. As we are all rightly concerned about saving public money, I respectfully suggest to the Government that it would be a considerable waste of public money to litigate again the question whether the AF principles apply in the context of asset freezing.

The noble and learned Lord mentioned the pending case of Tariq in the Supreme Court, which is concerned with whether the AF principles apply in an employment context. The case concerns alleged race discrimination. Whatever the Supreme Court decides in that case, it is most unlikely to throw any light on the issue that we are debating here and it is most unlikely to conflict with what has been said previously.

Having made all those points, I recognise that we shall not take this matter further today. I hope that the Government will reflect on what has been said—not by me but by other noble Lords who have spoken—that they will reflect on the range of judgments that have been given and that they will recognise that, if they want to impose orders of this sort, they have to comply with basic principles of fairness that involve telling the person concerned why, in essence, the detriment is being imposed on them. I have no doubt at all that the House will return to this matter on a future occasion, if not future occasions. For today, I beg leave to withdraw the amendment.