Whiplash Injury Compensation
Nicholas Dakin Excerpts(1 day, 13 hours ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I beg to move,
That the draft Whiplash Injury (Amendment) Regulations 2025, which were laid before this House on 20 March, be approved.
This draft instrument amends the fixed tariff for whiplash compensation set by the Whiplash Injury Regulations 2021 by applying an inflationary uplift to the tariff values. In doing so, the amendment gives effect to recommendations made by the Lord Chancellor on 21 November 2024 following the completion of her statutory review of the 2021 regulations. By adjusting the whiplash tariff values to account for inflation, the Government will ensure that claimants can continue to receive proportionate compensation until the next review in 2027.
The whiplash reform programme changed the way claimants are awarded damages for low-value whiplash injuries following road traffic accidents. The aim of the reforms was to ensure an efficient, proportionate and reliable system for both claimants and defendants involved in road traffic accident-related whiplash claims. At their core, the measures aim to reduce the number and cost of whiplash injuries and deliver savings to consumers via reduced motor insurance premiums. Elements of the reform programme were delivered by the Civil Liability Act 2018, which introduced several important changes to the civil claims process. Alongside measures that introduced a legal definition of what constitutes a whiplash injury and banned the settling of such claims without medical evidence, the 2018 Act empowers the Lord Chancellor to set a fixed tariff of damages for road traffic accident-related whiplash injuries lasting up to two years.
The 2018 Act measures were supported by additional secondary legislative changes to increase the small claims track for road traffic-related personal injury claims from £1,000 to £5,000, and the introduction of a new pre-action protocol for personal injury claims below the small claims limit in road traffic accidents. At the same time, the insurance industry-owned and developed Official Injury Claim portal was launched to assist claimants affected by the reforms.
The first whiplash tariff was set by the Whiplash Injury Regulations 2021, which came into force on 31 May 2021. The 2018 Act requires the Lord Chancellor to review the 2021 regulations, and thereby the whiplash tariff, within three years of its implementation and every three years thereafter. In fulfilment of that statutory obligation, the first review of the whiplash tariff was completed on 22 May 2024 and the Lord Chancellor published her report of the statutory review on 21 November 2024. Upon reviewing the 2021 regulations, the Lord Chancellor concluded that the structure and component parts of the whiplash tariff were effective. However, she recommended that the tariff amounts be uprated to account for consumer prices index inflation between 2021 and 2024, and to incorporate a three-year buffer to account for expected inflation until 2027. She did not consider that any other changes to the 2021 regulations were necessary.
In reaching her conclusions and recommendations, the Lord Chancellor took into consideration relevant industry and courts data, as well as information from a Ministry of Justice call for evidence, which ran from 6 February to 2 April 2024. In accordance with the review, this statutory instrument increases the whiplash tariff damages values and, subject to approval by both Houses, the new tariff will apply to all road traffic accident-related personal injury claims in England and Wales from 31 May 2025.
I believe that the House will find it helpful if I provide some additional explanation of the increase that will be applied to the whiplash tariff. By way of background, I should say that the whiplash tariff operates via a rising scale of fixed compensation payments determined by injury duration, up to a maximum of two years.
The payments in the original whiplash tariff set in 2021 range from £240 for whiplash injuries lasting three months or less to £4,215 for whiplash injuries lasting between 18 and 24 months. There is a separate, slightly higher, tariff for cases where any minor psychological injury, such as low-level travel anxiety, is incurred at the same time as the whiplash injury. Claims for whiplash injuries that last longer than two years fall outside the fixed tariff.
When the tariff was first implemented in 2021, the amounts were set to include a three-year buffer. The buffer was designed to account for expected inflation, according to the available forecasts at that time, and to ensure that claimants were not under-compensated in the years between the tariff’s implementation and the first statutory review. In reviewing the 2021 regulations, the Lord Chancellor recognised the impact of inflation on the whiplash tariff amounts, noting that inflation over the first three-year period ran at a higher than expected rate, and, as most respondents to the 2024 call for evidence had noted, the real value of the tariff had fallen. In the light of this, she concluded that the tariff should be uprated by actual inflation between 2021 and 2024, and should again include a buffer to account for the expected inflation until the next review in 2027. The whiplash tariff will therefore be increased by around 15% for claims arising from road traffic accidents occurring on or after 31 May 2025.
As I have mentioned, this increase has been calculated using the consumer prices index inflationary measure. After careful consideration of the available data and evidence, the Lord Chancellor determined that CPI remains the most appropriate measure for uprating the tariff amounts by inflation. In contrast, she considered that the alternative retail prices index measure, if applied, would likely overstate inflation. It is worth noting that the use of CPI is in line with common practice across Government, as recommended by the Office for National Statistics.
In accounting for inflation, the Lord Chancellor also decided that the whiplash tariff should continue to be future-proofed by applying a CPI rounding over three years from 2024 to 2027. This approach is consistent with the method used to protect claimants from additional inflationary impacts when the first whiplash tariff was set in 2021. While this three-year buffer could lead to some over-compensation in the short term, not implementing it would allow the real value of claimants’ damages to decrease and risk significant under-compensation in the long term. Therefore, this buffer protects access to justice and minimises the risk of claimants being under-compensated in the years leading up to 2027.
I would, though, like to acknowledge that some respondents to the call for evidence expressed concern that the buffer would artificially increase the amount of compensation available and potentially undermine cost savings. However, the difference in the tariff levels using the buffer is not substantial enough to significantly impact on savings. The tariff amounts are only being adjusted to account for inflation and, as such, it is our view that this does not represent a real-terms increase in claim values.
Conversely, I am aware that other stakeholders suggested that the whiplash tariff should either be subject to an annual review or be index-linked to inflation to ensure annual increases. As the Lord Chancellor made clear in her report, these arguments are not compelling. A three-year review period, as anticipated by the 2018 Act, strikes the right balance between adequately compensating claimants and maintaining a stable system that is as simple to understand and administer as possible.
It is also worth noting that the recent high inflationary cycle was driven by a unique set of circumstances and is not a regularly occurring event. Therefore, while it is appropriate that the whiplash tariff is regularly reviewed against inflation, three years is the appropriate length of time to hold such reviews. Other than uprating the whiplash tariff to account for actual and expected inflation, as I have explained, no other amendments to the 2021 regulations are made by this instrument.
In accordance with her statutory obligation, the Lord Chancellor has consulted the Lady Chief Justice before making this instrument. The Master of the Rolls, acting on behalf of the Lady Chief Justice, expressed his endorsement of the proposal to uprate the whiplash tariff. He also noted that the judiciary would not welcome any further derogation from the principle that damages are assessed and awarded by the courts. As we have seen, in accordance with the powers conferred on the Lord Chancellor by the 2018 Act, the instrument only adjusts the level of damages for whiplash injuries lasting up to two years.
The amendments that this instrument will make to the 2021 regulations represent a balanced, proportionate and practical approach to uprating the whiplash tariff ahead of the next review.
Sir Nicholas Dakin
I thank hon. Members for their contributions to the debate and for the support of the Liberal Democrats and the official Opposition on the direction of travel.
I am grateful to the Liberal Democrat spokesperson, the hon. Member for Chichester (Jess Brown-Fuller), for reminding us that behind every claim is a person, and that this is about helping real people and real lives. The official Opposition spokesman, the hon. Member for Bexhill and Battle (Dr Mullan), rightly mentioned the report on reducing insurance costs for consumers. We share his and the Liberal Democrat spokesperson’s concern about that, which I think is felt across the House.
The report was published on 27 March and shows that the whiplash reforms have reduced insurance costs for customers. It was produced by His Majesty’s Treasury, which worked with the Financial Conduct Authority to fulfil its statutory obligation under section 11(7) of the Civil Liability Act 2018. Although it is a factual reporting of the information from insurers provided to HMT through the Financial Conduct Authority, it does not represent the Government’s view, so it is right and proper that, separately from the report, the Ministry of Justice will undertake a post-implementation review of the whiplash reforms later this year. I thank hon. Members for their contributions.
Madam Deputy Speaker (Caroline Nokes)
I am sure I heard the Minister ask for the leave of the House at the beginning of his remarks.
Question put and agreed to.
Sentencing Council Guidelines
Nicholas Dakin Excerpts(2 weeks, 3 days ago)
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Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Robert Jenrick (Newark) (Con)
(Urgent Question): To ask the Secretary of State for Justice if she will make a statement on the Sentencing Council’s publication of community and custodial sentences guidelines.
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
The Sentencing Council is independent of Parliament and Government. The council decides on its own priorities and workplan for producing guidelines.
The Sentencing Council consulted the previous Government on a revised version of the imposition guideline, which included new guidance on pre-sentence reports. That consultation ran from November 2023 to February 2024. The previous Government responded to the consultation on the guideline on 19 February 2024. The former sentencing Minister, the hon. Member for Orpington (Gareth Bacon), who is now the shadow Transport Secretary, wrote to the chair of the Sentencing Council thanking him for the revisions to the guideline. In particular, he thanked the council for fuller guidance on the circumstances in which courts should request a pre-sentence report.
The Lord Chancellor was clear about her discontent with the guideline when it was published. It is our view that there should not be differential treatment before the law. The House will be pleased to hear that the Lord Chancellor met the chair of the Sentencing Council last week, and the discussion was constructive. It was agreed that the Lord Chancellor will set out her position more fully in writing, which the Sentencing Council will consider before the guideline is due to come into effect.
Robert Jenrick
In just 14 days, new two-tier sentencing rules will come into force. These sentencing rules will infect our ancient justice system with the virus of identity politics, dividing fellow citizens on the basis of their skin colour and religion. The rules will ride roughshod over the rule of law and destroy confidence in our criminal justice system. The stakes are high, but the Justice Secretary seems clueless—in fact, she is not even here. Has the Department conducted an assessment of the additional pre-sentence reports that will be required and the impact of that on the Probation Service, given that it is already working above capacity? Is it considering providing the Probation Service with additional resources to cope with the extra demand? Does it expect the additional pre-sentence reports to lead to further delays in our courts?
I ask these questions because not only do these new rules violate the most foundational principle of equality before the law, but they also create immense pressure on the criminal justice system. If the Justice Secretary wanted to stop two-tier justice, she would have supported my Bill on Friday. She would have used her powers of appointment to sack the individuals who drafted the rules. Time is running out, and so is confidence in the Sentencing Council. Frankly, the public are losing confidence in the Justice Secretary and her Ministers, too.
I cannot escape the conclusion that the Justice Secretary actually supports these two-tier sentencing rules. Why? Because she supported a group that called the criminal system institutionally racist. Her representatives walked through the two-tier guidance and approved it, and she refuses to legislate to block the guidance coming into force or to take any sanction against the members of the Sentencing Council that drafted it. If there is one thing we know about Labour Governments, it is that they always end in tears. This time, it is a second-tier Justice Secretary pursuing two-tier justice, all to suck up to her boss, two-tier Keir.
Sir Nicholas Dakin
There is one thing that we know about Labour Governments: they always have to clear up the mess left by Conservative Governments. That is what the Lord Chancellor is doing at the moment. She is clearing up the mess left by the previous Government: the clogged-up the courts, the overflowing prisons and the overworked Probation Service.
Getting back to the facts of the case, the Lord Chancellor met the Sentencing Council last Thursday and had a constructive discussion. It was agreed that she will set out her position more fully in writing, which the Sentencing Council will then consider before the guidance is due to come into effect. This is serious government, not auditioning for government. The Conservatives were not only consulted; they welcomed these guidelines when they were in office. The former Minister for sentencing wrote a letter of welcome to the Sentencing Council setting this out on 19 February 2024. There is a process in place now that needs to be allowed to play out. We will not pre-empt that process.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
The Sentencing Council is—it should not need saying—a non-political body whose guidelines are carefully drafted and widely consulted on. These guidelines received positive responses from the Justice Committee under its previous Chair and from the previous Government. They do not require that a pre-sentence report is ordered, they do not limit who should be the subject of such a report and they do not tie the hands of the sentencer. Does my hon. Friend agree that by dragging the Sentencing Council into the political arena without good cause, the shadow Justice Secretary degrades both the Sentencing Council and himself?
Sir Nicholas Dakin
My hon. Friend the Chair of the Select Committee makes a good point about the way in which the shadow Justice Secretary conducts himself. The important thing is that the Lord Chancellor had a constructive meeting with the chair of the Sentencing Council and there is now a process in place to address this issue.
Josh Babarinde (Eastbourne) (LD)
I would like to think that all in this House believe in equality under the law, in sentencing matters and otherwise, but it is clear that two-tier justice has existed in our country, having been governed by two-tier Tories who thought they could get away with illegal No. 10 parties while the rest of us were told to stay at home; two-tier Tories such as the shadow Justice Secretary, who unlawfully approved a development for his donor; and two-tier Tories who have pummelled our prisons and crashed our courts, leaving victims to pay the price. Can the Minister tell us how he will reform sentencing in England and Wales to protect the victims and survivors so let down by the Conservatives?
Sir Nicholas Dakin
The hon. Member is perfectly right to underline the importance of equality before the law. He gives me the opportunity to give a plug to the independent review of sentencing being conducted by David Gauke with an independent panel, which will address the issues that he has raised.
Imran Hussain (Bradford East) (Lab)
Does my hon. Friend agree that if there is a two-tier justice system, it is not the one claimed by the Conservatives, but it is certainly one that was created by them—one where victims of crime are let down by delays, where working-class communities see justice delayed and denied, and where the reality remains that black and ethnic minority defendants are disproportionately sentenced? Does he agree that instead of playing political games with sentencing, we should focus on delivering real justice, ensuring that every decision made in our courts is based on evidence, not culture wars or headlines in right-wing rags?
Sir Nicholas Dakin
My hon. Friend is right to contrast the approach of the soundbites from the shadow Justice Secretary with the Justice Secretary’s approach of rolling up her sleeves and getting on with the job of sorting out the mess left in our prisons, Probation Service and courts.
Sir Edward Leigh (Gainsborough) (Con)
Just to be constructive for a moment and to try to get a bit of consensus, surely no one is suggesting that anybody in Parliament wants to restrict the power of judges and their traditional right to sentence people according to their own lights. All we are questioning is whether a quango like the Sentencing Council should try to stack the deck against certain groups. All we are saying is that judges should impose sentences irrespective of people’s race, colour or whatever.
Sir Nicholas Dakin
The Father of the House and my constituency neighbour brings a constructive note, and I agree with exactly what he says. We have an independent judiciary that we should let get on with the job.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
As a former magistrate, I have been personally involved in sentencing decisions and have relied on and can attest to the importance of pre-sentencing reports giving as much information about an offender as possible before deciding an appropriate sentence. Used properly, they can cut reoffending rates. Does the Minister agree that pre-sentencing reports should therefore be available for all offenders and that access should not be determined by an offender’s ethnicity, culture or faith?
Sir Nicholas Dakin
My hon. Friend is exactly right that pre-sentence reports play an important role, and we ought to applaud the work that the Probation Service and others do in preparing those reports. She is exactly right to point to how effective they are in helping with sentencing.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Minister is right to stress the independence of the Sentencing Council, but would he accept that he cannot criticise the shadow Secretary of State for having a view on these draft guidelines when the Secretary of State herself did exactly that? I also ask him to consider in this debate the real purpose of a pre-sentence report. It is there to give more information about an offender, but it also enables a judge to impose a non-custodial sentence if they believe that is the appropriate course. It is hard for a sentencer to do that, unless someone has been assessed as suitable for a community penalty. Whatever the rights and wrongs of this debate, is it not important that the Sentencing Council makes clear that what is important in deciding whether to ask for a pre-sentence report is whether that extra information is needed and not anything else, including protected characteristics?
Tony Vaughan (Folkestone and Hythe) (Lab)
Does the Minister agree that there is a fatal flaw in the case of the shadow Justice Secretary: his party worked for months to develop the very guidelines about which they now complain? Does the Minister further agree that rather than desperately scoring an own goal for his party, the right hon. Member should get behind this Government’s reforms to clear up the mess left by the Conservatives?
Sir Nicholas Dakin
To be fair to the Conservatives, they did not work on the guidelines, but they were consulted on them, and they did respond to them in a positive way.
Jess Brown-Fuller (Chichester) (LD)
I note the comments by the chair of the Sentencing Council Lord Justice William Davis, who said that both Labour and Conservative Ministers, or their representatives, had known about the plans since 2022 and did not object. While I am disappointed that the Government are only acting reactively now, does the Minister not agree that the shadow Secretary of State has no shame and that it is hard to take his faux outrage seriously when this is just another audition for Tory leader?
Sir Nicholas Dakin
The hon. Lady has said what everybody else in this House and outside it is thinking.
Steve Yemm (Mansfield) (Lab)
Does the Minister agree that the Conservatives have some explaining to do, given that the Sentencing Council’s consultation on the guidelines that recommended differing approaches for those from an ethnic minority background was undertaken during the previous Government, that the previous Government was a statutory consultee and that it was welcomed by the Government at the time?
Sir Nicholas Dakin
My hon. Friend is exactly right. The previous Government were fully involved in the consultation, and not only were they fully involved, but they welcomed it.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
Coming to this fresh, as one without a legal background, it seems to me that there are matters here of very great importance that ought to be properly debated by this House. Does the Minister agree that this is yet another classic example of where the much-vaunted separation of powers is likely to interfere with the process?
Sir Nicholas Dakin
This is the third consecutive week in which we have discussed this in the House. We discussed it in the Lord Chancellor’s statement, we discussed it at Justice questions last week, and we are discussing it again today.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for his response. It has already been mentioned that pre-sentencing reports are important for judges. However, does he agree that pre-sentencing reports should be available for all offenders, and that their availability should not be determined by an offender’s ethnicity, culture or faith? Further to what the hon. Member for Eastbourne (Josh Babarinde) said, we also had a two-tier probation system under the last Government.
Richard Tice (Boston and Skegness) (Reform)
Does the Sentencing Council understand that, with these guidelines, it is totally out of touch with the mood of the British people, totally out of touch with the mood of the Government, and totally out of touch with the mood of the House? And therefore, why will it not agree to delay these guidelines until they have been properly debated in this House?
Sir Nicholas Dakin
To be fair, the chair of the Sentencing Council met the Lord Chancellor last week, and it was a constructive meeting. He is awaiting a letter from the Lord Chancellor, which he promises the Sentencing Council will consider and respond to before 1 April.
Alistair Strathern (Hitchin) (Lab)
As a former local authority lead for youth justice, I saw at first hand how important pre-sentencing reports can be in shaping effective and progressive outcomes in justice. However, it cannot be right that access to them is determined by factors such as race and religion. I applaud the Justice team for making such a strong and robust response to the Sentencing Council’s guidance so far. Can the Minister assure me that unlike the last Government, who were clearly asleep at the wheel during the consultation, we remain willing to take whatever action is needed to uphold this important principle?
Sir Nicholas Dakin
I agree with my hon. Friend that the last Government appear to have been asleep at the wheel, rediscovering their mojo only once they were in opposition.
Esther McVey (Tatton) (Con)
Last week, the Prime Minister announced that he is abolishing NHS England to make sure the NHS is brought back under democratic control. Will the Minister be lobbying the Prime Minister to abolish the Sentencing Council to make sure sentencing is brought back under democratic control?
Sir Nicholas Dakin
I thank the former common sense Minister for her question—
Sir Nicholas Dakin
If the right hon. Lady stops gabbling and listens, I will attempt to answer her question.
I think the right hon. Lady is getting a little ahead of herself. There is a process in place, and there has been a constructive meeting with the Sentencing Council. A letter is being sent to the Sentencing Council, and the Sentencing Council will respond.
Siân Berry (Brighton Pavilion) (Green)
I do not believe the shadow Secretary of State believes that the law is currently applied equally and free of structural biases. But given the unfortunate politicisation of all this, does the Minister now back the chair of the Sentencing Council, who says that the state should not determine the sentence imposed on an individual offender and that sentencing guidelines of any kind—if they were to be dictated in any way by Ministers—would breach an important principle?
Sir Nicholas Dakin
Certain things are a matter of policy, and they are for the Government and for Parliament. We have had a constructive meeting with the Sentencing Council, a letter is going to the Sentencing Council, and the Sentencing Council will respond. We totally respect the independence of our judiciary.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
Just the other week, the Lord Chancellor made it clear that she does not agree with the direction in which the Sentencing Council is going, and I think we all hope that her meetings with the Sentencing Council will produce results. However, if they do not, will the Minister commit to working across parties? I think there is a real commitment on the Opposition Benches to work with him to bring forward emergency legislation, if that is required.
Sir Nicholas Dakin
I thank the right hon. Member for the constructive tone of his question. I refer him to the point about our not wanting to get ahead of ourselves. We need to allow the process to go forward, and to respect the Sentencing Council’s role in it; we will address things when we need to address them.
Mr Joshua Reynolds (Maidenhead) (LD)
We are in the bizarre position where the body that advises judges on how to judge may decide to go to court for a ruling on whether Ministers have the power to tell judges what to do. What preparation has the Minister’s Department made for that possibility?
Sir Nicholas Dakin
I am afraid that I am becoming a bit repetitive. There is a desire from Opposition Members to rush ahead, and I have great respect for that—[Interruption.] Well, you had 14 years, and what did you do in them? [Interruption.] Sorry, Mr Speaker, not you. Opposition Members are trying to rush ahead; we will take things steadily, at the right pace, with proper respect.
Sir Desmond Swayne (New Forest West) (Con)
On a point of great importance to the Lord Chancellor, she is reduced to asking the Sentencing Council to change its mind. The former Minister for common sense is right. There is a lesson here for all parliamentarians about the way we delegate powers to quangos that then come up with solutions that we clearly find repulsive.
Sir Nicholas Dakin
There was a constructive meeting. If the right hon. Member had been in it, I do not think he would have seen it as somebody “asking”. There was a constructive exchange of views, and there is a proper process in place, which I am confident will come up with the right answer.
Nick Timothy (West Suffolk) (Con)
It is obviously ridiculous that the Justice Secretary is on her knees before a quango, asking it to respect the principle of equality before the law, but this is not the only example. The Judicial College’s equal treatment handbook says:
“to treat some persons equally, we must treat them differently.”
Will the Minister condemn that logic and say, “No, we must not treat defendants differently because of their race or religion”?
Sir Nicholas Dakin
The Government do not believe that there should be differential treatment before the law. The Lord Chancellor has been very clear about that. The “Equal Treatment Bench Book”, to which the hon. Member alludes, is written by and for the judges. Ministers have no involvement whatsoever in its content.
Mr Peter Bedford (Mid Leicestershire) (Con)
Does the Minister agree with me and many of my hon. Friends that policy decisions by unelected non-departmental bodies such as the Sentencing Council are eroding public confidence in our democratic institutions? Will he commit to scrapping such bodies, so that policy is always made by Ministers, who are directly accountable to this House?
Sir Nicholas Dakin
Policy decisions should always be made by this House; the hon. Member is absolutely correct about that. The background to where we are today is that the Sentencing Council consulted the Government of the day, members of whom are now on the Opposition Benches. The members of that Government were asleep at the wheel. Now it is down to this Government, yet again, to pick up the pieces they left for us and sort out their mess.
Lewis Cocking (Broxbourne) (Con)
My constituents are confused about the Justice Secretary’s position. She says she believes that these sentencing guidelines are wrong in principle, and that they amount to differential treatment before the law, but she is in government; she has the power and the tools at her disposal to stop this and change it. Why has she not done so?
Sir Nicholas Dakin
I have tried to explain this, and I will explain it once more. The Justice Secretary, the Lord Chancellor, has been extremely clear that she believes in equality before the law, and she is not happy with the guidelines. That is why she wrote as soon as they were published, unlike Conservative Members, who had sight of them earlier in the consultation. They went further than ignoring them; they responded to them in a very positive way.
Mr Speaker
Order. I know you like to think that in order to keep talking a bit—[Interruption.] One of us is going to sit down; it is not going to be me, Minister. There are other things to do and points of order to follow.
Jim Shannon (Strangford) (DUP)
The Minister is an honourable man, and I have to ask a question on behalf of the victims, if he does not mind. He will understand that any reform of sentencing must have victims at its heart. For most victims, their concern is not the ethnicity of the perpetrator, but the severity of the crime and the lasting impact on their life. Many victims today will feel that the sentencing guidelines play politics with justice. How can victims be assured that justice will mean time served for crimes committed, and will not be based on ethnicity? Justice is blind, and so must sentencing be.
Sir Nicholas Dakin
The hon. Gentleman will not be surprised to learn that I agree with him. The victims Minister, my hon. Friend the Member for Pontypridd (Alex Davies-Jones), is sitting next to me; we take victims very seriously. That is why there is a victims’ representative on the sentencing review panel. We need to make sure that victims are at the centre of whatever we do. I have met too many victims already in this role, and every time I meet them, it is very difficult—a little difficult for me, but hugely difficult for them, because they live this.
Linsey Farnsworth (Amber Valley) (Lab)
It seems like every week we are back here, dealing with culture wars—
Bradley Thomas (Bromsgrove) (Con)
Judging by the lack of action, it appears that the Justice Secretary is comfortable with changes that she has described as two-tier coming into effect in just two weeks. We have heard that she is unhappy; if she really is, can the Minister tell the House and the country what the Secretary of State is doing, other than holding cordial and cosy meetings, to prevent two-tier justice?
Sir Nicholas Dakin
The Lord Chancellor has made her position clear. She immediately met the Sentencing Council, and she is writing to it again to set out her concerns, and the Sentencing Council has committed to responding to them quickly.
Mr Richard Holden (Basildon and Billericay) (Con)
The Minister complains about having to explain the Government’s position, but why can he not just explain to us why the Secretary of State has not fixed this issue yet? It seems that there has been a meeting, but she has not even written a letter in the last three weeks explaining what she wants to happen. That is why I thank you very much indeed, Mr Speaker, for granting this urgent question again. The Minister has not actually fixed the problem that we are all talking about.
Sir Nicholas Dakin
The consultation was held under the previous Government, who not only expressed no concern, but welcomed what the Sentencing Council was doing. Immediately on seeing the guidelines as drafted, the Lord Chancellor acted to sort out the mess left by the Conservative party.
Lincoln Jopp (Spelthorne) (Con)
The Minister says that the situation is completely clear, so I feel like a bit of an idiot for asking for more clarification, but I will anyway. Pre-sentencing reports are allowed to take in further background on the lives of offenders from an
“ethnic minority, cultural minority, and/or faith minority community”.
What is the definition of a cultural minority, and are our veterans considered a cultural minority?
Sir Nicholas Dakin
The hon. Member reads out a phrase that was welcomed by the previous Government, but that the Lord Chancellor is objecting to and talking to the Sentencing Council about.
Mr Andrew Snowden (Fylde) (Con)
On Wednesday, I challenged the Prime Minister directly on two-tier justice, and gave him the opportunity to confirm that he would back the shadow Justice Secretary’s Bill to stop this in its tracks. In his attempts to scramble out of giving that commitment, he said something which has been repeated today: that the previous Government were consulted on and welcomed the guidance. However, the Sentencing Council has already put in writing that the wording is different and so would lead to a materially different outcome. The Government failed to take the opportunity that the shadow Justice Secretary presented them with to block this change. Was the Prime Minister right in what he said, or is the Sentencing Council right? They cannot both be.
Sir Nicholas Dakin
The letter the previous Government wrote to the Sentencing Council during the consultation is clear. The previous Government were not just consulted; they welcomed the guidance. The initial version of the guidance included reference to specific cohorts of offenders, including ethnic minorities.
Robert Jenrick
On a point of order, Mr Speaker. In his response to the urgent question, the Minister has repeatedly told the House that the previous Government approved the guidelines. In particular, he besmirched the name of the former sentencing Minister, my hon. Friend the Member for Orpington (Gareth Bacon). What the Minister said to the House today was wrong. On page 4, paragraph 4, of the Sentencing Council’s letter of 10 March to the Justice Secretary, it made it perfectly clear that the guidelines published under this Government were materially different from those considered by the prior Government. In fact, the Minister’s official was present at the meeting of the Sentencing Council at which this version of the guidelines was signed off. Will he take the opportunity to correct the record? I am afraid that he has misled the House not once, not twice, but on numerous occasions today, and that is quite wrong.
Sir Nicholas Dakin
Further to that point of order, Mr Speaker. I do not believe that I inadvertently misled the House.
Draft Civil Proceedings and Magistrates' Courts Fees (Amendment) Order 2025
Nicholas Dakin Excerpts(3 weeks, 1 day ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I beg to move,
That the Committee has considered the draft Civil Proceedings and Magistrates’ Courts Fees (Amendment) Order 2025.
It is a pleasure to serve under your chairmanship, Sir Edward. This draft order makes a technical amendment to three court and tribunal fees to ensure they can continue to be charged at their current level by His Majesty’s Courts and Tribunals Service. This forms part of a wider set of amendments to 27 fees, the latest estimated costs of which have fallen below their current value. The 24 fees not included in this affirmative instrument will be reduced by a negative instrument that will shortly be laid before Parliament.
No one will be required to pay a higher fee as a result of the changes made by this draft order. It simply changes the legislative power under which the three fees in question are set without amending the amount charged to HMCTS users. The amendments will protect at least £3.5 million a year in estimated income to help ensure that the courts and tribunals remain efficiently and effectively resourced, thereby reducing the overall cost to the taxpayer.
A properly funded and functioning HMCTS is critical to upholding the Lord Chancellor’s statutory duty to protect access to justice. Fees are an essential source of funding for courts and tribunals, with over 300 fees charged for the various administrative and judicial services provided by HMCTS. In line with His Majesty’s Treasury’s “managing public money” principles, most court fees are set to recover no more than the underlying estimate of what it costs HMCTS to run the corresponding service. Others are set deliberately below the cost of service to ensure that access to justice is protected, such as proceedings concerning domestic abuse.
A minority of HMCTS fees are set under what is known as the enhanced power, via section 180 of the Anti-Social Behaviour, Crime and Policing Act 2014. Enhanced fees can lawfully over-recover their underpinning costs to cross-subsidise HMCTS services, for which low or no fees are payable. Following a substantial review of my Department’s costing methodology in relation to court processes, the newly estimated costs of 27 fees were found to have fallen below previous estimates. The revised costing methodology is an improved, more nuanced model that relies on data sources that were not available in the previous methodology.
The powers under which the 27 fees are currently set allow them to recover a maximum of their underlying costs, which means that the fees must either be reduced to their estimated costs or kept as they are, albeit restated under the 2014 Act as enhanced fees. In line with Treasury principles, it is prudent for the Act to be used sparingly when setting fees that over-recover their cost. The Department’s position is therefore that the enhanced power should be reserved for fees that can generate substantial levels of income to cross-subsidise under-recovering parts of HMCTS, provided that doing so has a minimal impact on access to justice. That is why the majority of the 27 fees in question will be reduced, in line with their newly estimated costs, by an upcoming negative instrument, with only three enhanced by this affirmative instrument.
I will explain the services to which the three fees covered by this draft order are attached, and why the Department deems it appropriate that each should be enhanced for the purpose of cross-subsidisation. The first is the 50p fee charged for a council tax liability order. This fee is payable by local authorities to legally demand payment of council tax arrears. HMCTS receives a high volume of CTLO applications each year, which raises significant income to support the running of the courts and tribunals. In 2022-23, 2.1 million CTLOs resulted in £1.1 million of fee income. Enhancing the fee will not only ensure this crucial income is retained, but it will also remove the cost to the taxpayer of adjusting the fee in line with its regularly fluctuating cost.
The second fee is charged at £22 for a warrant of entry. Such warrants are mostly applied for by utility companies to gain legal access to private premises. Similar to CTLOs, high volumes of these warrants are issued each year, generating £7.2 million in fee income for HMCTS in 2022-23 alone. Reducing the fee to cost would place significant financial pressure on the Department at a particularly challenging time.
The third fee relates to ships or goods that are seized in the event of a breach and then sold off at auction. The admiralty court charges several fees, which are payable on the sale of a vessel or goods, but the amount payable varies depending on the value of the ship. The fee relevant to this instrument applies to ships valued over £100,000. Unlike the flat CTLO and warrant of entry fees, this fee is £1 for every £100 of a ship’s value up to £100,000, and it increases by a further 50p for every £100 of the ship’s value above £100,000, with a minimum fee of £205. Although this fee does not attract the same volume as applications for CTLOs or warrants of entry, it still provides an important source of income for HMCTS because some ships are sold for several million pounds, meaning that even low annual volumes can result in the generation of notable overall income.
I reiterate that this draft order merely maintains the status quo by not increasing the value of any of the three fees restated under the 2014 Act. As a result, there is no anticipated impact on users of the courts and tribunals. The negligible bearing this draft order will have on HMCTS users is echoed in the response to the previous Government’s 2023 consultation on a series of updates to court and tribunal fees. The consultation included a proposal to enhance the CTLO fee, but the other two fees in question had not yet been identified as over-recovering at the time of the consultation.
Of those who responded to the proposal, 63% had no view and no further comments to share, and 17% agreed with the proposal, stating that enhancing the fee would not negatively impact users given that its current value of 50p would be retained. The two respondents who disagreed had incorrectly assumed that the fee was being increased.
I reassure Members that the number of variations between costs and fee values being corrected by this draft order and the accompanying negative instrument is considered higher than usual. That is because of the revisions brought about by the Department’s updated costing methodology. Although the costs underpinning HMCTS fees will be reviewed on an annual basis, I do not anticipate the need to amend this many fees each year, thanks to the improvements made by the new methodology. The three fees in question are charged in England and Wales only. This draft order will therefore have no effect on court fees in either Scotland or Northern Ireland.
This draft order can be seen as a corrective statutory instrument that simply delivers minor updates to the statute book for continuity purposes. As such, it does not bring about any practical changes to those affected by court and tribunal fees, and in fact ensures that the fees payable by the relevant court users remain the same. The amendments made by this draft order and its accompanying negative instrument represent the most pragmatic approach to keeping the Department’s fees legislation up to date.
Sir Nicholas Dakin
I thank the hon. Member for Bexhill and Battle for his contribution. He is right that any future changes should have proper scrutiny, like the scrutiny we are providing today, and the Government are always willing to commit to monitoring the impact of such changes such as those made by the draft order. However, I note that these decisions maintain what is currently happening, rather than bringing about any change to charges. All the funds will go directly into the justice system, as he rightly encourages, and fees will always be kept under proper review.
Question put and agreed to.
Oral Answers to Questions
Nicholas Dakin Excerpts(3 weeks, 2 days ago)
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Greg Smith (Mid Buckinghamshire) (Con)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
As the hon. Member will know from his meeting with the Minster for Prisons in the other place, currently there are no plans to release land at Springhill Road. The Ministry of Justice is working closely with local representatives to ensure that we bring benefits to the local community as part of the new prison build.
Greg Smith
I am grateful for the Minister’s answer, and for the Prisons Minister’s time last summer. Notwithstanding our local opposition to a new prison, it is an absurdity that has been going on for years that the MOJ owns the greens, the lampposts and the public lighting on the Springhill Road estate adjacent to HMP Spring Hill, even though they are of no use to the MOJ and there is no benefit to the prison estate. The residents’ association is willing to take those greens and care for them, so that kids can play on them and residents can use them. Will the Minister look again at getting the land transferred, because it is of no benefit to him or his Department?
Sir Nicholas Dakin
Under the last Government, only 500 prison places were created. By contrast, the last Labour Government delivered 27,830. The Lord Chancellor has set out her ambition to deliver 14,000 new places by 2031. Almost 1,500 of those will be provided by the new prison in the hon. Gentleman’s constituency. If he writes to me about the specific concerns of the residents’ association, I will be happy to respond.
Robbie Moore (Keighley and Ilkley) (Con)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
The decision to remand or bail an individual is solely a matter for the independent judiciary. Courts are required to considered the likelihood of absconding as part of that decision. The courts have the power to impose a broad range of robust bail conditions in the bail package, including electronic monitoring, exclusion zones and curfews. This Government are committed to ensuring that criminals face justice and victims have peace of mind and closure.
Robbie Moore
After the conviction of eight men for a string of horrendous child rapes in my constituency, I would like to be able to inform the Secretary of State that all those men were now serving their just punishment. However, two of them absconded from their trial and are believed to be abroad. Their exact whereabouts are an open secret in Keighley. It is a shocking failure of the justice system that those men are still walking free. Does the Minister agree that if a dual or foreign national is charged with disgusting child rape crimes, courts should be required to put terms on their bail that prevent them from leaving the country during their trial, so that they cannot walk free after their horrendous, heinous crimes?
Sir Nicholas Dakin
I understand that the case to which the hon. Gentleman refers took place under the last Government, and the men he referred to were tried in absentia. The Home Secretary set out the steps that the Government are taking to tackle the terrible crimes of child sexual exploitation and abuse, including group-based child sexual exploitation. Through the Crime and Policing Bill, we are legislating to make grooming an aggravating factor in the sentencing of child sexual offences, to ensure that it is properly reflected in the sentencing of perpetrators.
Liz Jarvis (Eastleigh) (LD)
Bobby Dean (Carshalton and Wallington) (LD)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
The Ministry of Justice recognises the benefits of mentoring in resettlement and is currently reviewing our approach to peer mentoring to make sure it is consistent and effective. There are many excellent organisations delivering a range of peer-led rehabilitation support, including Ingeus, Wizer and the Wise Group.
Bobby Dean
At my surgery a couple of weeks ago, I had two fantastic volunteers show up from Sutton Night Watch, a local homeless charity. They had been working with prisoners, both before and after they left their cells, to help them reintegrate into the community. They are doing fantastic work, but they now need to expand. They need more space and more people. Can the Minister explain what support is available to volunteers like them to help them to do their work with prisoners?
Sir Nicholas Dakin
I applaud the work that the hon. Member describes. It is certainly the sort of work that needs to continue. Overall, the levels of homelessness and rough sleeping that we have inherited are far too high. We are working closely with the Ministry of Housing, Communities and Local Government to develop a long-term strategy to put us back on track to end homelessness. If he wishes to write to me about that particular case, I will follow it up.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
As part of the Justice Committee’s work on rehabilitation, I have come across some excellent projects on preventing reoffending, such as Revolving Doors, Peer Support and Key4Life, that use reformed ex-offenders as mentors. On a visit to Wormwood Scrubs prison last month, I saw the Right Course restaurant, which gets almost 60% of its trainees into employment on release. What are the Government doing to support and expand successful rehabilitation projects like these?
Sir Nicholas Dakin
I thank the Chair of the Select Committee for his identification of these very good actions that are going on within the prison estate. The Prison Service is keen to encourage all this sort of activity, and I will follow this up with my hon. Friend directly.
Sir Nicholas Dakin
The sentencing review’s interim report describes the situation at the moment, and it is the first stage of that independent review’s addressing this long-standing issue. Frankly, this is something that the Conservatives spent the last 14 years avoiding tackling. That is—[Interruption.] I will leave it there.
Dr Mullan
The House will have heard very starkly that the Minister did not offer me any clarity. I can help him by telling him that there is not one word anywhere on the expectations of victims of crime and their families—[Interruption.] Not one word. Worse than that, it cherry-picks evidence from reports to support a narrative that an ill-informed public do not know what they want and do not understand. Does the Minister agree that for that review to have any credibility whatsoever, it must engage seriously with what victims and the public want when it comes to the use of prison for the punishment of serious offenders?
Sir Nicholas Dakin
We heard fully the commitment from the Under-Secretary of State for Justice, my hon. Friend the Member for Pontypridd (Alex Davies-Jones), and the Lord Chancellor that victims are front and centre of our approach to fixing the mess that the Conservatives left us. There is a victims representative on the panel, as the hon. Member well knows. Victims were fully involved and engaged in this. I have sadly met too many victims in this role, and I have encouraged all of them to contribute to the report and committed to them that they will be fully involved in the implementation of the report. Instead of carping from the sidelines trying to get cheap soundbites, it is about time the Conservatives rolled their sleeves up and tried to help us sort out their mess.
Paula Barker (Liverpool Wavertree) (Lab)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
The Government’s plan to support women offenders is clear and ambitious. To reduce the number of women going to prison, our new women’s justice board will support the implementation of the plan. This Government have taken immediate action to ensure that girls will never again be held in youth offender institutions following the publication last week of Susannah Hancock’s review into girls in the youth estate.
Liz Twist
Self-harm in prisons is now at the highest rate ever recorded. In women’s prisons, the rates are eight times higher than in men’s prisons—shockingly, one in three female prisoners has self-harmed. Does my hon. Friend share my deep concern about those figures, and what is the Department doing to tackle that issue effectively?
Sir Nicholas Dakin
I certainly share my hon. Friend’s deep concern about that issue, which she is right to raise. Good relationships between staff and prisoners are essential in our efforts to identify and manage the risks of suicide and self-harm. We are providing specialist support to establishments rolling out tailored investments, including specialised training for new officers, recruiting psychologists to support women, and piloting a compassion-focused therapy group designed for women.
Joe Robertson (Isle of Wight East) (Con)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
This Government inherited a prison system on the verge of collapse. Under the last Government, in 14 years only 500 prison places were produced. Under the last Labour Government, there was a net increase of 27,830 prison places in 13 years. We are redoubling our efforts to match that number.
Lewis Atkinson
The prison capacity crisis that this Government inherited has resulted in persistent offenders not feeling the deterrent effect of a custody option being realistically available. Can the Minister tell us how this Government’s prison building plans will restore a level of deterrence to the system and ensure that capacity is available in time to remove active offenders from the streets?
Sir Nicholas Dakin
Where they were blocking, we are building, building, building. HMP Millsike, the UK’s first all-electric prison, will open in just a few weeks and deliver 1,500 places. Just last week, the Prisons Minister in the other place attended a groundbreaking at HMP Highpoint, and we have already secured full planning permission for a new prison in Leicestershire and outline planning permission for a new prison in Buckinghamshire. We are getting on with the job.
Gavin Robinson (Belfast East) (DUP)
The Minister will know that the increase in prisoner numbers is often because of the logjam within the Crown court system, and there are too many on remand who are then convicted and released with time served, with no opportunity for rehabilitation or mentoring. Will he confirm that that forms part of the sentencing review or the Leveson review?
Sir Nicholas Dakin
That is why we are doing this big system relook. The right hon. Member is right to draw attention to this. We are going to tackle it and sort it out.
Rebecca Paul (Reigate) (Con)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I thank the hon. Member for drawing attention to the terrible legacy we inherited from the previous Government. The Prisons Minister in the other place has personally visited three of the prisons that have recently received urgent notifications—Wandsworth, Winchester and Manchester—and plans to visit the fourth as soon as possible. He has strengthened the UN process and meets regularly with governors and senior officials to challenge them and assure himself that sufficient progress is being made.
Rebecca Paul
I thank the Minister for that answer. Prison officers do an important job, and I thank every officer at Downview Prison in Banstead. It is extremely concerning that the number of assaults on staff at Downview more than doubled between 2023 and 2024. What steps is he taking to ensure that officers are protected in their day-to-day jobs?
Sir Nicholas Dakin
As the hon. Member rightly says, prison officers do an outstanding job. The work of the Prison Service is to make sure they are properly supported and protected in that role, and that is what is going on.
Mr Lee Dillon (Newbury) (LD)
Ian Lavery (Blyth and Ashington) (Lab)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
We recognise the unique and challenging role that prison officers play in protecting the public and reducing reoffending. The Lord Chancellor has requested advice from officials on the pension age of prison officers, and we will continue to engage with trade unions as we work through this complex issue while considering the wider fiscal context. I am meeting the hon. Member for Aberdeenshire North and Moray East (Seamus Logan) to discuss this important issue next week, and I am very happy for my hon. Friend to join that meeting if he wishes.
Paula Barker (Liverpool Wavertree) (Lab)
Sir Nicholas Dakin
My hon. Friend makes a very good point, and the Ministry of Justice will play a full part in the inter-ministerial group.
Esther McVey (Tatton) (Con)
I welcome the Secretary of State’s attempts to prevent the Sentencing Council from changing the sentencing process, which would lead to a two-tier justice system. If, however, the council will not budge—as appears to be the case—a two-tier justice system will arrive in just 21 days, contradicting the key principle of the legal system that everyone should be equal before the law without discrimination. Will the Secretary of State introduce legislation immediately to ensure that that two-tier justice system does not come about?
Warinder Juss (Wolverhampton West) (Lab)
Last week, at a Justice Committee hearing, it was confirmed that an effective probation service is essential to the rehabilitation of offenders and to prevent reoffending. However, over the years the service has been under immense strain owing to increased demand. What steps is the Secretary of State taking to ensure that probation officers have manageable caseloads, and that support is provided for their mental health and wellbeing to avoid high levels of stress and burnout, and also to help with the recruitment and retention of staff?
Sir Nicholas Dakin
Let me take this opportunity to pay tribute to the probation service. My hon. Friend is right to draw attention to the chaotic running of the service under the last Government. We are actively monitoring the effectiveness of the probation reset policy and assessing its impact on workload capacity, the time saved, and the increased focus on individuals posing the highest risk to public safety. We recognise the significant pressure that probation officers have been under, which is why comprehensive wellbeing support models have been put in place across our services, including dedicated wellbeing leads for both prison and probation services.
Mr Joshua Reynolds (Maidenhead) (LD)
What work is the Secretary of State doing with the Victims’ Commissioner to ensure that the families of British citizens who are murdered abroad have the same rights as the families of homicide victims in the United Kingdom?
Brian Leishman (Alloa and Grangemouth) (Lab)
Prison maintenance privatisation has been a complete and utter disaster. When will it be taken back in-house?
Sir Nicholas Dakin
We are investing approximately £500 million over two years in prison and probation service maintenance to improve conditions across our estate, but it is fair to say we have inherited a system in serious need of repair. The estimated cost of bringing the prison estate to a fair condition and maintaining it till the end of the decade is £2.8 billion. The programme is now under way, and we hope that we will make as much progress as possible.
Several hon. Members rose—
Reform of Private Family Law Hearings
Nicholas Dakin Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I congratulate the hon. Member for Solihull West and Shirley (Dr Shastri-Hurst) on securing this important debate, and I applaud the thoughtful and considered way that he has approached a very challenging area. I think we all want to mitigate the disruption and pain that family law hearings cause to children, and he is correct to say that we all want to have children’s best interests as the anchor point in everything we do. I applaud the way that he set out his concerns.
It is well known that family breakdowns are almost always challenging. At times, disputes are unavoidable and often intense, with children caught in the middle. The family court plays a crucial role in resolving such disputes. I want to clarify that magistrates who sit in the family court are formally referred to as “lay justices”. However, for the purposes of today’s debate, I will use the term “family magistrates”, as it is more widely recognised.
The hon. Member is well aware that the family justice system in England and Wales relies on the work that family magistrates do to ensure that the most vulnerable members of society, particularly children, are protected and that their best interests are prioritised. I welcome his words about the importance of magistrates in our justice system, even though he has concerns about the role that they play in this particular area.
Although family magistrates do not have formal legal qualifications, they undergo a rigorous selection and a comprehensive training process that is provided by the Judicial College, and it is worth noting that family magistrates were involved in family proceedings long before the inception of the family court in 2014. Before that, family magistrates in the civil and county courts would sit on family proceedings and make decisions about arrangements for children. There is a long history of that in our law.
Family magistrates are recruited from the community and bring a diverse range of impartial perspectives and experiences to the court. This diversity helps to ensure decisions are fair. It is crucial that we recognise and preserve their contribution to the family justice system for several compelling reasons, especially in the light of the arguments made by the hon. Gentleman in both his recent article and this debate, suggesting that family magistrates should no longer be able to make child arrangement orders. The House will know that these are family court orders that detail arrangements for a child, including where the child will live and how they will spend time with each parent. The hon. Gentleman has clearly spelled out some of the implications.
The Government appreciate the concerns raised by the hon. Gentleman regarding the training of magistrates. However, we believe the existing system has safeguards in place, which I will outline to offer reassurance not only to him but to everyone listening to this debate. I am talking about the training that magistrates receive, the role of the justices’ legal adviser, and the robust protocols the family court has for allocating and reallocating cases.
I can assure the hon. Gentleman that the quality of training provided to magistrates is of a high standard. To safeguard their independence from Government, the statutory responsibility for training family magistrates rests with the Lady Chief Justice, as set out in the Constitutional Reform Act 2005. These responsibilities are exercised through the Judicial College, which offers a comprehensive training programme to equip family magistrates with the necessary skills and knowledge to handle the intricacies of private law children’s cases effectively. This training ensures that family magistrates are prepared to make informed decisions that prioritise the welfare of the children involved. Further information on the college’s training programme can be found on the judiciary’s website.
When sitting in the family court, family magistrates are supported by the justices’ legal advisers, who are qualified to provide advice on the law and procedures that family magistrates must follow, and who are also subject to an ongoing family training requirement. All judges, including family magistrates who hear applications for child arrangement orders, are obligated by the Children Act 1989 to have the child’s welfare as their paramount consideration and must undergo extensive training. To be appointed as a family magistrate, each individual must undertake training on determining the best interests of the child, navigating the welfare checklists, and ways of communicating with people in court, particularly where there is high conflict.
Let me emphasise and underline the role of justices’ legal advisers in assisting family magistrates in these cases. A panel of family magistrates decides cases with the presence and involvement of the justices’ legal adviser. The recent case law, Derbyshire County Council v. Marsden, confirms that these advisers play
“an integral, and legally required, part of the decision making process.”
Justices’ legal advisers provide essential guidance and support to family magistrates, ensuring that decisions are made with a thorough understanding of the complexities of family law, and always prioritising the best interests of the children involved.
Nor are family magistrates operating in a vacuum. They rely on assessments carried out by trained professionals for arrangement orders, prohibited steps orders and other key rulings when making arrangements for children. This collaborative approach enhances the quality of the family court’s decisions in these very sensitive cases.
Family magistrates do not deal with the most complex cases in the family court. Established rules and guidance determine the appropriate level of judiciary based on a number of factors, including the complexity of the case. Cases involving certain complexities will be immediately allocated to other tiers of the judiciary—district judges, circuit judges and, at the most serious level, High Court judges—in accordance with the issued guidance. It is like a lift that the judiciary enter at the appropriate level.
The judiciary, including family magistrates, have an ongoing duty to keep allocation decisions under review, particularly if further information is received from the parties and the Children and Family Court Advisory and Support Service. The case can then be reallocated to a more appropriate level of judge depending on the complexity and the issues in the case, and that can happen in the course of proceedings. The system ensures that magistrates handle appropriate cases for which they are trained, while more complex cases are managed at a different level of the judiciary, depending on the issues in the case. The mechanism not only maintains the efficiency of the legal process, but ensures that justice is served appropriately.
Family magistrates also play an essential role in the effective functioning of our family justice system. The number of outstanding cases in the system has grown since 2018, and the average time taken for cases reached a high of 47 weeks in 2023 under the previous Government, which is similar to the data the hon. Member shared earlier. While we have taken steps to address the underlying issues, which means we are on track to reduce the outstanding caseload by more than 10%, there are still significant challenges facing the system. Family magistrates routinely deal with a number of cases about children. Removing that capacity from the system would fundamentally undermine the effective administration of justice, but more than that, the resultant delays in resolving cases would have a profound impact on the wellbeing of the children involved and on parents seeking to resolve their issues.
Furthermore, the Government remain committed to reforming private family law processes where appropriate. Just last week, the Government announced that our new pathfinder model of private family law proceedings will be extended to mid and west Wales in March and to West Yorkshire in June. It is a significant reimagining of private law proceedings, with dedicated support for domestic abuse survivors, up-front multi-agency information sharing and a greater emphasis on the voice of the child through the production of a child impact report. Those proceedings allow our judges, including family magistrates, to have a much richer understanding of a family’s circumstances from the outset and ensure that parties are fully supported by professionals.
It is clear that family magistrates are indispensable in hearing private law children’s cases. Their collaboration with justices’ legal advisers, the quality of their training, the mechanisms for allocating and reallocating difficult cases and their contribution in alleviating the burden on all our judges are all critical factors that contribute to a more efficient and effective legal system. By maintaining the involvement of family magistrates in those cases, we can ensure that the best interests of our children, which are what we are all focused on, are upheld and that justice is delivered in a timely and compassionate manner.
Question put and agreed to.
Arbitration Bill [Lords]
Nicholas Dakin ExcerptsTuesday 11th February 2025
(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
It is a pleasure to serve with you in the Chair, Ms Nokes.
On account of the Bill’s 18 clauses being grouped together, I will speak to them in numerical order. I begin with clause 1, which contains one of the Bill’s key reforms: provision for determining the governing law of an arbitration agreement. This is important because different governing laws may give different answers to important questions such as who is party to the agreement and whether the type of dispute is capable of being arbitrated.
Clause 1 will determine the governing law of the arbitration agreement by replacing the common law approach established in Enka v. Chubb with a new statutory rule. The law governing the arbitration agreement will be the law expressly chosen by the parties. Otherwise, it will be the law of the seat. By way of simple illustration, if someone arbitrates in London, by default the applicable law would be English law.
Whereas the common law approach is complex and uncertain, the new approach in clause 1 is simple and predictable. It reduces the prospect of satellite litigation to determine governing law, which can be slow and costly. Where the arbitration takes place in London, as is the choice in so many international arbitrations, by default the arbitration will be fully supported by English law.
For the avoidance of doubt, I would like to add that an express choice of law to govern the main contract rather than the arbitration agreement is not enough. Clause 1 will not apply where the agreement is derived from standing offers of arbitration contained in treaties or foreign domestic legislation, as with investor-state arbitration, for example, as these are better underpinned by international law and foreign domestic law respectively.
Clauses 2, 3 and 4 make provision in relation to the arbitral tribunal. Clause 2 requires an arbitrator to disclose circumstances that might reasonably give rise to justifiable doubts as to their impartiality. It will apply prior to the arbitrator’s appointment, when they are being approached with a view to appointment. It will be a continuing duty that also applies after their appointment. This codifies the duty of disclosure recognised by the Supreme Court in its decision in Halliburton v. Chubb and will enhance trust in arbitration.
Clauses 3 and 4 will reassure arbitrators that they can take the right decisions in their proceedings without fear of reprisal from a disappointed party. Clause 3 provides that an arbitrator will not be liable for the costs of an application to court for their removal unless the arbitrator has acted in bad faith. Clause 4 provides that an arbitrator’s resignation does not give rise to any liability unless the resignation is shown by a complainant to be unreasonable.
Clauses 5 and 6 both concern jurisdiction. There are two ways for a party to question the jurisdiction of the arbitral tribunal. One way is to wait until the tribunal has issued a ruling and then challenge that ruling under section 67 of the Arbitration Act 1996, which allows a challenge to an arbitral award on the basis that the tribunal lacked jurisdiction. The other is is by invoking section 32 of that Act, which allows the court to decide whether the tribunal has jurisdiction as a preliminary point.
Clause 5 makes clear that if the tribunal has already ruled on its jurisdiction, any challenge must be brought through section 67. Clause 6 provides that where the arbitral tribunal or court rules that the tribunal has no jurisdiction, that tribunal can nevertheless award the costs of the arbitration proceedings up until that point. This will ensure that if a party wrongly starts arbitration, they can still be held responsible for the wasted costs incurred.
Clauses 7, 8 and 9 deal with arbitral proceedings and the powers of the court. Clause 7 will confer an express power on arbitrators to make an award on a summary basis—that is, adopting an expedited procedure—to dispose of an issue where an arbitrating party has no real prospect of succeeding on that issue. This aligns with the summary judgments available in court proceedings and will deliver more efficient arbitrations. This power can be exercised on application by any of the parties. The procedure to be adopted is not prescribed. It will instead be a matter for the arbitrator to decide on a case by case basis after consulting with the arbitrating parties.
Clause 8 concerns emergency arbitrators. Arbitral rules sometimes provide a regime for the appointment of emergency arbitrators on an interim basis. Such arbitrators can make orders on urgent matters, such as the preservation of evidence, pending the constitution of the full arbitral tribunal. Emergency arbitrators were not commonplace when the 1996 Act was drafted, so it is important that we now expressly empower them. Clause 8 will provide that failing to comply with an order made by the emergency arbitrator will have the same consequences as those for a normal arbitrator.
Clause 9 concerns interim court powers exercisable in support of arbitral proceedings. Under section 44 of the 1996 Act, the court can make orders in support of arbitration proceedings on certain matters—for example, the taking of witness evidence, the preservation of evidence, sales of goods and interim injunctions. Clause 9 will amend section 44 to make it clear that such court orders are also available against third parties. For example, the court will be able to make an order preserving assets against a third party such as a bank. This will mirror the position in court proceedings.
Clauses 10, 11 and 12 concern powers of the court in relation to an arbitral award. An arbitral tribunal can issue an award on whether it has jurisdiction, and it can issue an award on the merits of the dispute. Either type of award can be challenged under section 67 of the Arbitration Act 1996 on the basis that the arbitral tribunal did not have jurisdiction. Clause 10 will equip the courts with the full suite of remedies for section 67 challenges. When the court has a jurisdiction challenge in front of it, it will have two new options: to declare the arbitral award to be of no effect, or to return the matter to the arbitral tribunal for consideration so that a revised award can be made. These remedies already exist for other challenges, for serious irregularities and for appeals on points of law, so this provision fixes something of an inconsistency in the 1996 Act.
Clause 11 also amends section 67 of the 1996 Act. It will confer a power for rules of court to provide that, unless necessary in the interests of justice, there should be no new grounds of objection and no new evidence put before the court unless it was not reasonably possible to put them before the tribunal. The amendments made to section 67 by clause 11 also provide that evidence taken by an arbitral tribunal should not be reheard by the court. This will avoid these challenges from becoming full re-hearings, departing from the precedent set in the case of Dallah v. Pakistan. Re-hearings can involve duplication of time and costs, and it can be unfair to allow a party who lost before the tribunal a complete rerun.
Clause 12 amends section 70 of the 1996 Act, which governs how arbitral awards can be challenged before the courts. It will clarify that the 28-day time limit for such a challenge will start running only after any arbitral process of appeal or correction has concluded.
Clause 13 concerns appeals from High Court decisions and corrects a rare drafting error in the 1996 Act. Section 18 of the Senior Courts Act 1981 and section 35 of the Judicature (Northern Ireland) Act 1978 were amended by the 1996 Act. When read at face value, those sections currently suggest that High Court decisions made under the 1996 Act can be appealed to the Court of Appeal only if expressly permitted in the 1996 Act.
Chris Vince (Harlow) (Lab/Co-op)
It is clear from what my hon. Friend is saying that the Bill is welcomed by the legal sector. What engagement has he had with the legal sector and relevant stakeholders?
Sir Nicholas Dakin
There has been massive engagement with parties interested in this Bill. The Bill began in the last Parliament, to which I am grateful for the work already done. It began in the Lords, who engaged fully with parties at that stage. The Lords have had to restart the Bill in the new Parliament, so they have had two bites at the cherry, and all the feedback from stakeholders has been very positive. I thank my hon. Friend for drawing that out in this debate.
Josh Babarinde (Eastbourne) (LD)
I rise in support of this Bill, which introduces important measures to modernise our arbitration framework. We Liberal Democrats welcome the approach that the Government have taken in refining the Bill’s provisions to ensure clarity and effectiveness.
Clause 1 is a key part of this new Bill, and we are fond of the changes made following the recommendations from the Special Public Bill Committee in the previous Parliament. For example, the Committee proposed removing two words to prevent undue confusion, and I am pleased that the Government have accepted that recommendation. In addition, the Government have further clarified that investor state arbitration agreements derived from treaties or non-UK legislation will not be subject to the default rule, which is a welcome and sensible step that is necessary to bring greater legal clarity to the process.
I also welcome the five amendments to clause 11, which enable procedural reforms under section 67 of the 1996 Act. These changes respond directly to concerns raised in the last Committee, and strike the right balance between efficiency and fairness in arbitration proceedings.
Further improvements were made in the other place, where the Government tabled amendments to clause 13 to correct drafting issues, which have been mentioned, and to ensure that access to the Court of Appeal aligns with established case law. These amendments received cross-party support and I am pleased to reinforce the Liberal Democrats’ support for them today.
This Bill strengthens the UK’s arbitration framework by improving clarity, ensuring fairness and refining procedures. We support its passage and urge the House to do the same. We do not expect any problems with that.
Sir Nicholas Dakin
I give my sincere thanks to hon. and right hon. Members on both sides of the House for their contributions today to what has been a succinct and precise debate. We are all agreed that this is an important step forward, and I am particularly grateful to the Opposition spokesman, the hon. Member for Bexhill and Battle (Dr Mullan), and the Liberal Democrat spokesman, the hon. Member for Eastbourne (Josh Babarinde), for welcoming the improvements to the Bill and recognising that they have been the work of many people in the Lords and the Commons as well as of contributors from outside, as my hon. Friend the Member for Harlow (Chris Vince) reminded us earlier.
The hon. Member for Bexhill and Battle raised the important issue of corruption. As I mentioned during the Bill’s Second Reading debate, arbitral corruption is not the result of our domestic framework, which provides several effective remedies to quash corrupt practices. We support sector initiatives to enhance anti-corruption practices such as the International Chamber of Commerce’s anti-corruption taskforce, and we will push for the adoption of best practices as they are developed.
The hon. Member also raised third party litigation and funding issues. The Government have carefully considered the impact of the UK Supreme Court judgment in Paccar, and have decided to wait for the outcome of the Civil Justice Council review before deciding whether to legislate. A comprehensive review of the market will allow us to take a wider range of factors into account. Following the Paccar judgment, concerns have been raised about the need for greater regulation of litigation funding agreements and greater safeguards for claimants. This is therefore an opportune moment to review the status of the market. The review is being undertaken by the Civil Justice Council, supported by a wider consultation group of experts across this area. The final report and recommendations will be published in the summer of 2025, after which the Government will consider the way forward.
The hon. Member also mentioned mandated mediation, and I will try to pick that up as well. The Government agree that dispute resolution, such as mediation, has a key role to play in ending disputes more quickly and cheaply. This is why all parties to a small money claim in the county court are now required to attend a free one-hour mediation appointment with His Majesty’s Courts and Tribunals Service’s small claims mediation service as an integrated step in the litigation journey. This reform will help thousands of people and businesses each year to resolve their legal disputes without the need for a court battle. We will continue to work to drive the uptake of dispute resolution throughout the justice system to allow parties to resolve their disputes more consensually and at an earlier stage.
That concludes my responses to the points raised during the Committee of the whole House. I once again thank all those who have contributed to the debate.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 18 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Third Reading
Sir Nicholas Dakin
I beg to move, That the Bill be now read the Third time.
Let me first thank all Members of this House and the other place who have spoken in support of this important Bill and the reforms within it. I am particularly grateful for the support expressed on Second Reading by the hon. Members for Bexhill and Battle (Dr Mullan), and for Didcot and Wantage (Olly Glover); the hon. Member for Eastbourne (Josh Babarinde) has added his approval today as well. I am also grateful to all the hon. and right hon. Members who contributed to this afternoon’s Committee proceedings. It is encouraging to see enthusiasm on both sides of the House for further improving our already world-leading arbitral framework, and for the business that those changes will generate.
I also thank the many noble Lords who have given this Bill and its predecessor in the last Parliament such thoughtful consideration. Without their input and expertise, the Bill would not be so finely tuned. I pay tribute to the former special Public Bill Committee, which marshalled expert evidence from the sector, the judiciary and the world of academia. That Committee was ably and expertly led by Lord Thomas of Cwmgiedd. I am also grateful to all the other noble and learned Lords who have contributed to the passage of both Arbitration Bills in the other place, particularly Lord Hacking, Lord Wolfson of Tredegar, Lord Verdirame, Lord Beith, Lord Hoffmann, Lord Hope of Craighead and Lord Mance. I wish to give special mention to Lord Bellamy, who first introduced these important reforms to Parliament as a Justice Minister under the previous Government.
Of course, we owe a debt of gratitude to the Law Commission for its exceptional work reviewing the Arbitration Act 1996 and recommending the reforms that are being taken forward in the Bill. Professor Sarah Green and her colleagues at the commission have led what can only be described as a masterclass in public consultation and law reform. I particularly thank Dr Nathan Tamblyn for his work leading the commission’s review, and for the support he gave the Ministry of Justice in taking forward this legislation. It is fair to say that no one knows the Arbitration Bill better than Nathan. His contributions to this area of the law will, no doubt, have a long-lasting and positive effect.
This Bill has greatly benefited from the input of experts and practitioners from across the arbitration community. Their contributions were made both through the Law Commission consultations and during evidence-taking by the former Arbitration Bill’s special Public Bill Committee. As has been recognised by both Houses, it is vital that our modernised arbitral law works effectively in practice. This has been made possible by the involvement of those who will use this legislation once it comes into force.
Lastly, I put on record my thanks to the officials who have worked on this Bill since it was introduced in the last Parliament. I thank the policy lead, Lee Pedder, the Bill manager, Iona Bonaventura, and Helen Hall from the Office of the Parliamentary Counsel. I also thank my excellent private secretary, Gillian Atkinson.
I conclude by highlighting again the importance of this Bill for the arbitration sector and for UK economic growth more generally. We have a proud history of arbitration on these shores—a point that I covered in some detail on Second Reading. Since the 1996 Act came into force almost 30 years ago, the UK has been the chosen arbitral location for many thousands of disputes from across the world. This House can be confident that the modernisation in the Bill will enable our jurisdiction to continue playing that vital role for many years. This is very much a growth Bill—a growth Bill from a growth Government. I therefore commend the Bill to the House.
Prison Capacity Review
Nicholas Dakin Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
My noble Friend, the Minister of State for Justice (Lord Timpson), has made the following statement:
Unlike the previous Government, this Government have a plan to ensure we are never again in a position where we have more prisoners than prison places. We have launched the independent sentencing review to ensure that our future prison system is sustainable, in balance and that there is always space in prison for dangerous offenders. In December, we published the 10-year prison capacity strategy and the first annual statement on prison capacity. Our strategy is detailed, setting our commitment to build the 14,000 places the last Government failed to deliver, with the aim of completing the build programme by 2031. Our plan is realistic, recognising that prison building is complex. We are also committed to improving transparency via the publication of an annual statement on prison capacity.
The Lord Chancellor announced that we would be launching a review into the handling of prison capacity. The previous Government’s approach to the criminal justice system was flawed and this review will consider the reasons why prison supply and demand did not meet, making recommendations that may help future Governments avoid the cycle of repeated prison capacity crises, helping to guide our strategy.
Specifically, the review will consider strategic supply and demand choices and how these choices affected remaining prison capacity. It will shine a light on relevant decision making and an analysis of impacts on the wider criminal justice system. Alongside this written ministerial statement, the terms of reference for the review have been published on www.gov.uk.
The Lord Chancellor has appointed Dame Anne Owers to lead the review. Her extensive knowledge of the criminal justice system means that this review will be conducted to the highest standards. The review will report its findings in spring 2025.
[HCWS426]
Justice
Nicholas Dakin Excerpts(1 month, 4 weeks ago)
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Sir Nicholas Dakin
I am getting towards the end of going through the clauses. In fact, I have come to the last and final clause that I wish to comment upon, clause 15, as you had probably worked out, Madam Deputy Speaker, because that usually comes after clause 14. [Laughter.] There is no clause 16, so clause 15 is the final clause.
[Official Report, 29 January 2025; Vol. 761, c. 335.]
Written correction submitted by the Under-Secretary of State for Justice, the hon. Member for Scunthorpe (Sir Nicholas Dakin):
Sir Nicholas Dakin
I am getting towards the end of going through the clauses. In fact, I have come to the last and final clause that I wish to comment upon, clause 15, as you had probably worked out, Madam Deputy Speaker, because that usually comes after clause 14. [Laughter.] Clause 15 is the final clause I will speak to today.
Victims and Prisons Act 2024: Commencement of Parts 1 and 4
Nicholas Dakin Excerpts(2 months ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I am pleased to announce that today the Government have commenced the first tranche of victim-related measures in the Victims and Prisoners Act 2024. This underscores the Government’s commitment to ensuring that victims receive the vital information and support they need. As well as provisions that inform the meaning of part 1 of the Act, such as the definition of “victim”, we are also commencing the following measures:
First, we have commenced the obligation on those who provide victims code services to comply with the victims code unless there is a good reason not to. This underlines our commitment to ensuring victims receive the service that they deserve under the victims code, and that agencies are held to account for delivering this.
Secondly, we have commenced new measures that will help the Victims Commissioner to better hold bodies accountable for how they are delivering for victims. This includes:
bringing new bodies into the commissioner’s remit, including the criminal justice inspectorates and additional Government Departments;
requiring that those subject to the code compliance duty in section 5 of the Act to co-operate with the commissioner, for example, complying with reasonable requests for data or access when requested, so far as it is appropriate and reasonably practicable;
making clear that the commissioner can include recommendations in their statutory reports, whether made annually or to the Secretary of State throughout the year; and requiring that those within the commissioner’s remit respond to recommendations made in those reports where relevant to them within 56 days; and requiring criminal justice inspectorates to consult the commissioner when developing their inspection frameworks and programmes.
Together, these measures will enable the commissioner to gain a deeper understanding of the victims landscape. They will also foster greater transparency and accountability between authorities, encouraging good practice and respectful treatment of victims.
Finally, we have commenced the measure that will simplify the complaints process for victims who need to escalate their complaints. Where victims of crime want to make complaints to the Parliamentary Health Services Ombudsman (PHSO) relating to their experience as a victim, this measure removes the so-called “MP-filter” which required victims to make these complaints via their Member of Parliament. The measure also enables those acting on behalf of a victim to bypass the filter and make the victim’s complaint directly. This means victims can choose whether to make their complaint themselves, or through an MP or other trusted person if they prefer.
By implementing this initial tranche of measures, we are laying a stronger foundation for victims to have confidence that they will receive the information and support they need and deserve. We will continue to build on this foundation through the Government’s manifesto commitments to increase the powers of the Victims Commissioner and introduce independent legal advisers for rape victims, ensuring there is more accountability where the needs of victims are not being met.
[HCWS393]
Arbitration Bill [Lords]
Nicholas Dakin ExcerptsWednesday 29th January 2025
(2 months ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I beg to move, That the Bill be now read a Second time.
I am pleased to be opening this Second Reading debate on the Government’s Arbitration Bill. This legislation is a direct response to recommendations made by the Law Commission of England and Wales in its report on arbitral reform, published in September 2023. If enacted, the Bill will make targeted reforms to the Arbitration Act 1996, which governs arbitration in England, Wales and Northern Ireland. Scotland has its own devolved arbitral framework under the Arbitration (Scotland) Act 2010, which this Bill will not affect.
Arbitration is a major area of business activity. For example, the Chartered Institute of Arbitrators, headquartered in London, has more than 17,000 members across 149 countries. As the House will know, arbitration is greatly valued by individuals and businesses alike as an alternative to going to court, giving parties the ability to appoint a private tribunal to resolve disputes by issuing a binding and enforceable award. For example, when parties enter into a commercial contract, it is common to find a clause that provides that any disputes will be resolved through arbitration in this great capital city of London, rather than through litigation in court. That is often true even where a contract has no other connection to the UK, such is the prestige of arbitration here. Furthermore, thanks to an international convention commonly called the New York convention, which dates from 1958, arbitration awards made in the UK can be enforced anywhere in the world. Studies suggest that such enforcement is often faster and more reliable than seeking to enforce court judgments.
The New York convention may date from 1958, but arbitration has been a feature of our justice system for centuries. Arbitration was a common way of settling disputes back in Anglo-Saxon times. It was largely a public affair, with enforcement through community pressure. By Norman times, parties could choose their arbitrator, someone known to both sides and well placed to facilitate a reconciliation. In the 14th century—[Interruption.] The Opposition spokesman, the hon. Member for Bexhill and Battle (Dr Mullan), is enjoying my little canter through the historical background, which I am sure the massed attendance this afternoon is also enjoying. In the 14th century, the mayor and aldermen of London set up, in effect, an arbitration centre here in this great city. This also provided services to foreign traders whose disputes had no other connection to England. Arbitration then grew in Elizabethan times, and by the mid-18th century arbitration clauses were very common, as were professional arbitrators.
It is said that our first arbitration Act, the Arbitration Act 1698, was single-handedly drafted by the famous political philosopher John Locke after he had been tasked by the then Board of Trade to devise a scheme that would help merchants to reach a satisfactory settlement of their disputes. John Locke’s arbitral framework fitted on one or two sides of paper, which is a real achievement, is it not? If only we could emulate that today, but things have got more complicated and therefore more precise. Arbitration has come a long way since then, though we salute John Locke and his efforts in setting us on this journey.
Today, arbitration happens in a very wide range of settings, from rent reviews through commodity trades and shipping to international commercial contracts and investor claims against states. In each instance, it enables parties to resolve the dispute at hand and move on from it. The parties can choose a neutral venue to resolve their dispute. They can choose trusted arbitrators or arbitral institutions to preside over the proceedings. I add with emphasis that some of the world’s leading trade and arbitral institutions are headquartered here in London. I may have mentioned that before, but we need to be proud of it. They range from the aforementioned Chartered Institute of Arbitrators and the London Court of International Arbitration to important specialist organisations concerned with matters such as shipping and trade in grains, oils and sugars.
Parties can tailor the arbitration process to their own needs, which results in an award that is internationally enforceable. At the same time, the process is respected for its integrity—at least, that is the position here in the UK, thanks in large measure to the regulation of arbitration through the Arbitration Act 1996. The Act ensures that arbitration is conducted in a way that is impartial, fair and without unnecessary cost and delay. The English courts, which command much respect worldwide, retain a supervisory jurisdiction.
Building on its extensive history of arbitration, and thanks to its legislative framework, London has become the world’s leading destination for international arbitration. It is highly respected as a neutral venue for resolving disputes across the world, something in which we all rightly take immense pride. In fact, the Law Commission estimates that at least 5,000 arbitrations take place in England and Wales each year, directly contributing at least £2.5 billion a year to our economy in fees alone. So arbitration and the Bill are part of our growth agenda for our great country. However, as arbitration is a largely private affair, we may speculate that its direct value is likely to be even greater than that £2.5 billion.
Arbitration is also an important offering in our country’s international business package, one that includes legal services, banking, insurance and trade. It is a great advantage of our jurisdiction that business can be done here in the knowledge that when legal disputes arise, they can be resolved swiftly and fairly. We enjoy a worldwide reputation for the quality, independence and ethics of our legal professions. It is therefore no surprise that arbitration here in London is a showcase for that, or that it is very much in demand.
Given that the Arbitration Act 1996 is approaching 30 years of age, the previous Government rightly asked the Law Commission to undertake a thorough review of the legislation back in 2021. It was tasked with determining whether the 1996 Act required amendment to reflect modern practices and maintain its effectiveness in a growing global market when competing jurisdictions had already updated their own arbitral frameworks. The Law Commission was painstaking in its review, carrying out the commission given to it by the previous Government, and I pay tribute to the members of the Law Commission for their painstaking work on this matter, from which we all benefit.
An initial consultation paper was published in September 2022. It laid out the Law Commission’s analysis of the law as it stood and proposed a small number of areas for reform. That consultation received responses from abroad and from an expert base of consultees including individual practitioners, academics, specialist bodies and international firms and institutions, as well as from our judiciary. Taking this feedback on board, the Law Commission refined its proposals and published a second consultation paper in March 2023. After yet another round of engagement, final proposals and a draft Bill were published in September 2023.
As I said, this process has been painstaking and thorough, and we need to credit everybody involved, including the Conservatives for their leadership of the process during that time. It is a testament to the longevity and flexibility of our arbitral framework that only targeted updates were recommended, with the Law Commission concluding that while some modernisation of the 1996 Act was needed and desirable, root and branch reform was not. And it is testament to the Law Commission’s thorough consultation that the Bill commands such support in the arbitral and legal sectors.
I cannot resist adding that the work has been watched carefully by our competitor jurisdictions abroad. The Law Commission’s report was cited by the Singapore court of its own initiative, and in the last few months, seeing the positive developments here, France has announced a need to review its own arbitration laws. We lead the way, and this Bill will ensure that we stay ahead.
As hon. and right hon. Members will be aware, the previous Government introduced an Arbitration Bill in 2023 that also sought to implement the Law Commission’s recommendations. That Bill had made its way through Committee in the other place when Parliament was dissolved for the general election. The legal sector was emphatic in expressing the view that the proposed reforms are vital for updating the arbitral framework and making sure that our jurisdiction remains competitive.
We are first in global class on arbitration, and this Bill will ensure that we stay first in global class. The Government agree wholeheartedly with the legal sector’s view, not least because of our commitment to fostering economic growth in our country. As such, this Bill was introduced in the other place at the very earliest opportunity in July 2024, as one of the first acts of this Government after the general election. I am pleased to see the Bill finally arrive in this House, as I am sure you are, Madam Deputy Speaker.
It is worth saying that the 1996 Act boasts some key strengths. It provides flexible procedures that allow parties to shape proceedings to best suit them. Parties can, for example, arbitrate their dispute with one of our jurisdiction’s many world-leading arbitral institutions, which have developed procedures that parties trust will deliver a fair and timely outcome.
Our current framework also permits effective recourse to our courts, where needed. Parties can request that our courts determine a preliminary matter in the arbitration, such as jurisdiction, or later challenge an award produced by arbitration. Arbitrators can similarly apply to the courts to assist their proceedings, such as by enforcing their orders. At the same time, the regime of court support is carefully balanced to prevent parties from dragging their feet and re-litigating cases. This gives parties huge confidence that arbitrations taking place in our jurisdiction are both efficient and fair.
Many of this Bill’s reforms are designed to build on the strengths of the 1996 Act. I will now go through the key clauses, because I can tell that Members are deeply interested in checking through the detail so that, should we move to a vote, we know exactly what we are voting on.
Sir Nicholas Dakin
I am pleased to see the Opposition spokesman give me a willing eye of encouragement, for which I am duly grateful.
I start at the beginning. Clause 1 will make it much simpler to determine what law applies to an arbitration agreement. Currently, the rules for identifying the governing law are found in the common law and a recent Supreme Court decision. That decision shows both immense learning and the complexity of the current approach. The Supreme Court was split in its judgment, and its approach was different from that of the Court of Appeal, which used an approach different from that at first instance.
Instead, to make the law clearer and more predictable, clause 1 provides that the governing law will align with the legal location—that is, the seat—of the arbitration by default. This will ensure that arbitrations, where seated in England and Wales and Northern Ireland, will be fully supported by our law, which is among the most supportive of arbitration globally.
Clause 2 codifies a duty for arbitrators to disclose circumstances that may cause doubts as to their impartiality. This will codify the common law and align domestic law with international best practice, such as the United Nations Commission on International Trade Law model law, which our expert lawyers had a major hand in drafting. The model law’s influence can be found in other jurisdictions as far apart as Scotland and Switzerland. It will promote trust in arbitration by promoting trust in the integrity and impartiality of arbitrators.
Clause 3 and, in the interest of briskness, clause 4 will support arbitrators in making impartial and proper decisions by extending their immunity against liability when they resign for good reason or are removed for no fault of their own. This will support arbitrators to make robust and impartial decisions without fear.
Clause 5 clarifies the two pathways for a party that wants to challenge the jurisdiction of the arbitrators—that wants to question whether the dispute should be arbitrated at all. The party can either apply to the court for an early ruling, or it can wait until the award is issued and then go to court. Clause 5 clarifies that it cannot do both. It is either/or.
Clause 6 ensures that, where arbitrators agree that they should not be hearing a dispute after all, they can still award the costs incurred up to that point against the party that generated those costs.
Clause 7 will allow arbitrators to adopt expedited procedures to dispense with issues that have no real prospect of success. This aligns with summary judgments available in court proceedings and will make arbitrations more efficient.
We move seamlessly to clause 8, which will help emergency arbitrators. Emergency arbitrators are appointed on a temporary basis while a full tribunal is being established—that process can sometimes take weeks. They are, therefore, very important to arbitrations. They are often tasked with vital preliminary matters, such as preserving evidence or assets, and are important to ensuring that arbitrations can proceed smoothly. As the practice of emergency arbitrators post-dates the 1996 Act, our framework did not make explicit provision for them, so looking again gives us an opportunity to examine their role.
Clause 8 empowers emergency arbitrators to handle urgent matters better and ensure compliance with their directions by equipping them with final orders and court enforcement. That will give emergency arbitrators the same pathways to enforce their orders as other arbitrators, and will enhance their effectiveness.
Clause 9 provides that court orders made in support of arbitral proceedings can be made against third parties, which aligns with the position in court proceedings. For example, it would enable a party to arbitration to get an order freezing assets held by a third party, such as a bank.
Clause 10 ensures that when a party challenges an arbitral award at court, the court has the full range of remedies available, regardless of the pathway. This clause irons out discrepancies that courts and practitioners have otherwise sought to work around.
Clause 11 provides more efficient court challenges to the tribunals jurisdiction through rules of court that would prohibit repeating evidence and arguments already debated in front of the tribunal. That will avoid such challenges becoming full re-hearings, reducing costs and delays.
I can deal with clause 12 pretty quickly, you will be pleased to know, Madam Deputy Speaker. Clause 12 ensures that the time limit for challenging awards is consistent across the Act.
Clause 13 corrects a rare example of a drafting error. What the Act meant to say was that court orders could be appealed, but in some cases there would be restrictions. What it actually said was that court orders could be appealed only where there were restrictions. To its credit, the Judicial Committee of the House of Lords spotted this error and interpreted the statute as it was meant to be read. We have taken this opportunity to correct the drafting to reflect the judicial ruling, as a useful bit of tidying up.
Clause 14 streamlines the requirements for applying to court to obtain preliminary rulings from the court on questions of law, or on whether the arbitrators have jurisdiction to hear the dispute. Early rulings, such as those from expert judges, can save time and cost.
I am getting towards the end of going through the clauses. In fact, I have come to the last and final clause that I wish to comment upon, clause 15, as you had probably worked out, Madam Deputy Speaker, because that usually comes after clause 14. [Laughter.] There is no clause 16, so clause 15 is the final clause. Clause 15 repeals provisions that were never brought into force, simply to tidy up the Act. Those provisions would have meant slight differences in approach between domestic arbitrations and international arbitrations. In the event, they were never used or needed, never brought into force and there remains no demand for them. Our arbitration law is first class and applies equally to domestic and international arbitrations, so removing the provisions is a helpful way to tidy things up.
In sum, the Bill will greatly approve the arbitral process in our jurisdiction and further cement our position as a top global business destination, where legal disputes can be resolved fairly and quickly. The Bill has already gone through the other place, where it received considerable examination and support from noble and learned Members, including many experienced arbitrators. There are, apparently, a lot of experienced arbitrators in the other place, and they brought their knowledge, experience and expertise to the debate, for which we are very grateful.
Indeed, I emphasise that the Bill has been reviewed by Members of the other place not once, but twice. The first time, scrutiny was provided by a Committee, led by the noble and learned Lord Thomas of Cwmgiedd, that took further evidence from expert stakeholders. The several technical improvements made to the previous Bill because of that work are retained in this Bill. This time, the Bill was reviewed on the Floor of the other place, where the Government amended clause 13 to fix a long-standing error in our framework on arbitral appeals.
I have been quite thorough in covering the ground. I hope all Members feel they have got a good understanding of the issues behind the Bill and why we need to take the steps that I am urging the whole House to take.
To conclude, I second the remarks made by Lord Thomas on Third Reading:
“We must find a means of doing this very rapidly, as we must keep English law—I say English law deliberately—attractive and at the forefront of use internationally, for the benefit of our whole economy.”
—[Official Report, House of Lords, 6 November 2024; Vol. 840, c. 1499.]
I hope the House agrees, and will give the Bill a Second Reading.
Madam Deputy Speaker (Ms Nusrat Ghani)
A tour de force. I call the shadow Minister.
Sir Nicholas Dakin
I thank all Members for their contributions. I thank the Conservative spokesperson for recognising, as we do, the work of Lord Bellamy, Lord Hacking and other peers in the other place, as well as everybody who has contributed to where we are today. I also very much welcome what the Liberal Democrats spokesman said on the tackling of issues through the process—that is, giving greater confidence about tackling corruption risk and the issues around the right of appeal. I am grateful for the constructive way in which this debate has been pursued.
The Bill mirrors that of the last Government’s, save for two changes, which I will note here for completeness. The first, as I mentioned in my opening speech, was the amendment to clause 13 to better reflect the case law on appeals. The drafting error it fixed was in section 18 of the Senior Courts Act 1981 and in section 35 of its Northern Ireland equivalent, the Judicature (Northern Ireland) Act 1978. That suggested that appeals to the court of appeal under part 1 of the Arbitration Act 1996 would only be permitted if expressly permitted in the 1996 Act. However, case law established that the intended regime for appeals under the 1996 Act was to permit appeals to the Court of Appeal, unless there is provision in the 1996 Act that adds an explicit restriction on those appeals. I hope that deals with that issue.
Clause 13 therefore corrects the drafting error identified in the House of Lords’ judgment in Inco Europe v. First Choice Distribution and makes it clear that appeals from High Court decisions under part 1 of the Arbitration Act 1996 may, subject to provision in that part, be made to the Court of Appeal. A slight amendment to the long title was also required to reflect that change.
The second change was to clause 1, which we made prior to the Bill’s introduction to Parliament. That was to address concerns about the effect on arbitrations between investors and states, in particular those that follow from an open invitation to arbitrate made in a trade agreement or in domestic legislation. The current position is that those arbitrations are governed by international law and foreign domestic law. Sector feedback made clear that that is what should continue. Our change therefore provides that new section 6A(1) of the Arbitration Act 1996 does not apply to arbitration agreements derived from standing offers to arbitrate contained in treaties or non-UK legislation. [Interruption.] Does the hon. Member for North Bedfordshire (Richard Fuller) wish to interject?
Sir Nicholas Dakin
I just a pause for a little reflection while I gather my thoughts on the other issues to do with arbitral corruption. I am sure the hon. Member for North Bedfordshire, for whom I have the highest regard, would not want me to skimp on dealing with arbitral corruption, which has been raised by both the speakers in the debate so far.
Sir Nicholas Dakin
I am encouraged by his nodding.
We take corruption very seriously. However, we have concluded that arbitral corruption is not caused by any issue with our domestic arbitral framework. The Arbitration Act 1996 and common law already provide remedies to deal with corrupt conduct. The courts are empowered to set aside arbitral awards where there are serious irregularities, as they have done recently in the well-known case of Nigeria v. P&ID. Furthermore, arbitrators are under a statutory duty to be impartial and to reach a fair resolution of the dispute. They can issue an award that prevents the corrupt party from benefiting. Although arbitration procedures are often private, corruption can be exposed. Common law allows an exception to confidentiality when disclosure is in the public interest.
However, there is a need for arbitral practitioners and institutions across the world to ensure that their practices are continually developing to weed out attempts to exploit them. We shall support and keep track of initiatives that are under way, such as that of the International Chamber of Commerce’s anti-corruption taskforce. We will engage with the sector to adopt the very best practices as they are developed. I hope that that assures the shadow Minister and the hon. Member for Didcot and Wantage (Olly Glover).
I give my sincere thanks to right hon. and hon. Members who have contributed to the debate. It has been a measured and helpful debate, which underscores the broad support for this legislative programme. I am happy to have heard so much support for this Bill, particularly those contributions that emphasise its importance to economic growth. Our legal services are a vital element of our economy both for creating favourable domestic business conditions and for attracting investment in the UK. And this Government will continue to support them.
I re-emphasise that these reforms are very much appreciated. Many businesses will be deciding whether to designate London as their seat of arbitration versus competitors such as Singapore, Hong Kong, Sweden or Dubai, which have updated their arbitral frameworks in recent times. This decision is not just to settle disputes via arbitration now. Arbitration agreements are often pre-emptive, so these businesses will be making a decision as to where and how disputes may be settled many years in the future.
For the past quarter of a century, our Arbitration Act and our law have been a key draw, making our shores the natural choice for arbitration. In 1996, we created a truly world-leading legislative framework, which contributed to London becoming the preferred forum for arbitration proceedings across the globe. We must maintain our leading position and continue to attract businesses to ensure economic growth. It was therefore important that these measures sought only to improve the arbitral process and promote trust in arbitration. It would have been no good had these reforms created red tape—we would not want to see that.
Arbitration must remain a quicker and a more flexible means by which to resolve a legal dispute versus going to court. But also it is key to promote trust in arbitration to ensure that proceedings on our shores remain robust and respected internationally. The Law Commission needs to be commended for doing such a brilliant job—a superb job—reviewing our framework line by line and seeing where improvements can be made. This Bill contains, as I have said, the expertise and wisdom of myriad practitioners, experts, firms, judges and others.
I will, if I may, indulge in sharing some of the supportive quotes from the sector about the Law Commission’s work.
Sir Nicholas Dakin
I have only a few. [Laughter.] The House would be the poorer for not hearing these quotes—[Hon. Members: “Hear, hear.”] I feel that it is important to share them. More are available, but I will restrict myself to just a few. The Bar Council said:
“We welcome the Law Commission’s characteristically careful and balanced review of the Arbitration Act, and we support the proposals for reform which it makes. It is extremely important that the government finds parliamentary time,”—
we are doing that—
“for the short bill which the Law Commission proposes. London has a well-deserved reputation as the foremost centre”—
the foremost centre—
“for international arbitration. It is important to legislate to make the modest changes to the arbitration regime which the Law Commission has recommended in order to maintain and enhance that reputation.”
The Chartered Institute of Arbitrators said that it welcomes
“the proposed changes, the majority of which are in line with our recommendations, which were informed by input from our membership… It is a sign of the Arbitration Act 1996’s strength and value that only specific changes to ensure that Act remains current have been recommended as opposed to an overhaul. As well as underpinning the attractiveness and competitiveness of London as an arbitration seat, the Act forms the basis of legislation in many other jurisdictions, lending global significance to this development.”
The Chartered Institute of Arbitrators
“worked closely with the UK Law Commission to inform the review. We support regular review of such legislation to ensure arbitration remains effective, fit for purpose, and a viable means of justice in a modern world.”
White & Case LLP said that
“we expect that the amendments proposed by the Law Commission will promote the efficiency and finality of arbitration proceedings, whilst not unnecessarily introducing drastic reform to existing legislation. The Report therefore is to be welcomed as a positive, incremental step in maintaining London’s position as a major centre for international arbitration and dispute resolution more generally.”
The last quote is one of many positive comments that have been received on what we are doing today and on the Law Commission’s work. Herbert Smith Freehills LLP said:
“There can be no suggestion that any changes are being made for change’s sake. The Law Commission has respected the importance of this legislation and sought only to make changes that are necessary…If enacted into law, they will continue to ensure that the arbitration legislation of England and Wales maintains its market-leading status.”
That is what we all want, Madam Deputy Speaker. We want this Arbitration Bill, which began under the previous Government and was completed under this Government, to maintain our market-leading status. We are determined to do that by working together across this House.
Those are, I assure the House, only a small sample of those who engage with, and support, the Law Commission’s review. However, I will also highlight that these comments were made almost a year and a half ago now on the publication of the Law Commission’s final report. Although it is indeed the case that law reform can take some time, this Government are committed to ensuring that these reforms find their way on to our statute book as quickly as possible.
We must ensure that the Bill faces no further delay. These measures must now proceed at pace through the House. Dispute resolution matters. Disputes that go unresolved are bad for the parties and have knock-on consequences for everyone else. At best, disputes distract from firms getting on with their business and individuals getting on with their lives. At worst, the slow and stressful impact of legal disputes can have much greater impacts elsewhere. Businesses may have money tied up in litigation that could and should go towards investment. Individuals may find that a protracted court battle, with its costs and delays, may lead to sickness, which of course will have its own knock-on effect on economic productivity.
Resolving disputes allows everyone to move forward—all the more so if disputes can be resolved by a process that is trusted and respected and that can be tailored flexibly to the needs of those involved. It is no wonder that arbitration has proved such a popular method for resolving disputes in the UK and why UK arbitration has proved such a popular method for resolving disputes worldwide.
I will also take a moment to compliment the other excellent forms of dispute resolution on our shores. In the construction sector, many disputes will by default go to an expedited adjudication with experts, allowing for a quick determination that enables the project to proceed without further delay. We also boast an excellent network of ombudsmen, which deal with all manner of disputes, including consumer matters. We also have a growing mediation sector, which, in both commercial and family matters, is expert at facilitating negotiation between parties to come to a truly consensual resolution to disputes.
The Bill will enact long-awaited reforms to our arbitration law framework, which will enable more efficient dispute resolution for domestic and international parties alike. It will attract international legal business and promote UK economic growth—not just directly because arbitrations happen here, but because it promotes the UK as a one-stop shop for business. Our arbitrations are respected, and so too are our lawyers engaged in arbitrations—lawyers who are then engaged for transactional businesses; business that is funded by our banks, underwritten by our insurers and mediated through our trading houses; and trading houses that also offer arbitral services in a mutually reinforcing offering.
The Bill ensures that our arbitration law is cutting edge. As I have said, it has attracted attention the world over, serving as a reminder of why the UK remains a premier destination internationally for businesses everywhere. The Bill is therefore of great importance to the legal services sector and to the Government. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.