All 1 Lord Wolfson of Tredegar contributions to the Economic Crime and Corporate Transparency Act 2023

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Wed 18th Oct 2023

Economic Crime and Corporate Transparency Bill Debate

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Department: Home Office

Economic Crime and Corporate Transparency Bill

Lord Wolfson of Tredegar Excerpts
Lord Agnew of Oulton Portrait Lord Agnew of Oulton (Con)
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My Lords, I support both Motion A1 and Motion B1. I turn first to my noble and learned friend Lord Garnier’s Motion and offer three reasons why I believe the Minister is completely wrong.

First, the smallest SMEs include some of the most unscrupulous enablers. Take estate agents, for example: they are a conduit of bad money into this country from all over the world. The gaps that the Minister is proposing to leave in the Bill will ensure that this continues. I have seen one case, for which I had to sign an NDA, of an individual who spent £150 million buying property but is apparently allowed to take only $12,000 a year out of the country. How did he manage that? That is a perfectly good example and no doubt we will hear more like it.

Secondly, on this set of rules, I offer the Minister an example. We do not say to the manufacturers of small cars that they do not need seat belts and that for some reason they are exempted. That would be an absolute nonsense and the same applies here. He mentioned costs—£300 million and £40 million—but they are entirely specious. We have seen no proper analysis of these figures; they are just waved around as a convenient excuse not to do something.

My last reason is that these smaller businesses need to be most alert to fraud. A failure to prevent helps them to make sure that their own systems are able to face these risks. We know that 40% of crime in this country is economic crime, but we deploy less than 1% of our resources on dealing with it. Surely smaller businesses should be equipped to know when they are dealing with crooks. I will have to support my noble and learned friend Lord Garnier if the matter is put to a vote.

In relation to the Motion in the name of the noble Lord, Lord Faulks, we again pursued this relentlessly for six months. Bill Browder said to me on several occasions that, if this Bill is to go through, we must make sure that we have some cost capping in it. It is a war of very unequal proportions. We know that the agencies have small budgets and that they have to go cap in hand to the Treasury if they need more money, which is never given. They even have to return the costs they recover to the Treasury. All this is doing is sending a message to these bad actors that, if they take on this kind of behaviour, they will have significant risks. We have amended this on several occasions to give more discretion to the courts to ensure that, if an agency overreacts and behaves rapaciously or capriciously against individuals, those individuals are not penalised.

If we are serious about dealing with the tidal wave of economic crime that is coming to this country, the Minister will give us the assurance that this is being dealt with. If not, I will have to support the noble Lord, Lord Faulks, in his Division.

Lord Wolfson of Tredegar Portrait Lord Wolfson of Tredegar (Con)
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My Lords, we have heard two different reasons for the proposed Motion from the noble Lord, Lord Faulks. He said that it was to give the courts a gentle nudge, but my noble friend Lord Agnew said that it would give fraudsters a significant warning that they might not get their costs. The same words cannot do both. The problem lies in the amendment being entirely unnecessary.

The previous version of the amendment said:

“The court should normally make an order that any costs of proceedings … are payable by an enforcement authority … unless it would not be in the interests of justice”.

We now have a list of factors—proposed new paragraphs (a) to (d)—but a court would always take those factors into account in its general discretion to make an appropriate costs order in a particular case.

My concern with this list is that it appears to be exhaustive and therefore does not include, for example, the result of the case or the effect on the successful party of not getting the legal costs which he has expended. I declare an interest as a lawyer, although not an expensive one in the category identified by the noble Lord. I therefore respectfully suggest that this amendment is entirely unnecessary. It reduces the discretion that we generally give the courts on matters of costs and omits factors that the courts should take into account in particular cases when considering costs. Therefore, I suggest that the House leaves this well alone and does not accept the amendment.