Civil Liability Bill [HL]

Lord Keen of Elie Excerpts

Committee: 1st sitting (Hansard continued): House of Lords
Thursday 10th May 2018 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, this is a step back from the legal intricacies of the Bill to reflect on a wider issue. The problem that the Government identify is the high number and cost of RTA whiplash claims. Their policy objective and intended effect are to disincentivise minor exaggerated and fraudulent claims—that is, to bear down on costs by reducing compensation levels for all, and requiring medical evidence before claims are settled. The impact assessment records that the volume of RTA-related PI claims has remained fairly static over the last three years, with rising volumes of traffic, meaning that there are proportionately fewer fatal or serious accidents. It attributes this in part to improvement in vehicle design—for example, integrated seats and headrests. Yet the Department for Transport recorded, for the year ended September 2017, 27,000 killed or seriously injured, with 174,000 casualties of all severities.

Although there was a decrease in settled claims, attributable in part to LASPO reforms, financially settled soft tissue claims for that year totalled some 520,000, whether they were from whiplash or as a result of other road traffic accidents. What seems to be missing in this debate is any form of focus on a wider prevention agenda. It should be about not only reducing costs but avoiding the pain and suffering and sometimes life-changing injuries in the first place. Why are we not raging against the scale of all this, as well as chipping away at monetary compensation levels?

I should point out at this juncture my interest, set out in the register, as president of RoSPA, the safety charity, and am grateful to it for the information it provided. I shall instance just two developments which have the potential to make a difference. In-vehicle monitoring—telematics—is increasingly available in the UK. As noble Lords may be aware, these systems essentially monitor how, when and where a vehicle is driven. The system can provide in-vehicle alerts if pre-set parameters are exceeded. There are obvious benefits for crash reduction circumstances. At present, it is understood that take-up of a variety of different systems is ad hoc and the catalyst, particularly for younger drivers, is reduced insurance premiums. Would not a comprehensive national take-up campaign have a beneficial effect on the real reduction of whiplash, reducing not only costs but the actual medical effects and suffering?

It is understood that next week the European Commission will propose new regulations that will focus on the mandatory fitting of autonomous emergency breaking systems. It has been estimated by the EU new car assessment programme that AEB can prevent up to 38% of rear-end crashes and avoid 1,100 fatalities and 120,000 casualties over the next 10 years. Currently, about 21% of new cars fit AEB as standard. I hesitate to move into issues of the European Commission, but will the Government support those regulations, both before and after Brexit, if that is where we end up?

I am aware that this amendment may be seen as a bit away from the mainstream before us today, but I hold to my point that concerns over levels of compensation for whiplash should be about prevention as much as about having a fair and robust system of compensation. I beg to move.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

I thank the noble Lord for his contribution to the debate and I acknowledge the importance of looking more widely at issues such as road safety in the context of addressing the very issue that this Bill is intended to deal with.

On the question of the European Union regulations, in so far as they have direct effect before exit day, they will form part of retained EU law, and in so far as they do not have direct effect by that date, they will not form part of retained EU law. Going forward, it will be for our domestic legislatures to consider the appropriate steps to take with regard to such measures, and of course they will be conscious of developments in other jurisdictions when addressing that point. I am sorry to revert to an earlier Bill and its progress through this House, but I thought that I ought to address that point directly.

We recognise that the definition of whiplash injury is complex and that there is a need to reconcile the current legal understanding with an accurate medical definition that covers both injuries and symptoms. That is why we developed the definition of a whiplash injury, and the wider reform proposals, with extensive input from expert stakeholders, including medical experts, in order that we could come to a view about the appropriate definition for these purposes. In developing the whiplash reforms, we have considered the impact of improvements in vehicle safety. Indeed, developments in vehicle safety have been one of the features of the analysis and impact assessment that have been carried out. As the Government have mentioned on several occasions, it is surprising that the number of whiplash claims continues to be so high despite the significant improvements in vehicle safety over recent years, including the development of safe seats and head restraints which have had such a material bearing on safety in road traffic cases.

The amendment would enable the Government to take account of advances in vehicle safety and driving techniques when revising the definition in regulations. The noble Lord did not go so far as to incorporate the possibility of increasing numbers of driverless vehicles—but, looking further ahead, that is an additional development that we may have to take into consideration. It is crucial that we retain the ability to continue to amend the definition of whiplash in order to reflect all these developments, some of which may come along far more rapidly than we presently anticipate. That is why in the first instance we propose that the definition should be set out in regulations that can be amended and, in any event, allowing for the suggestion that there should be a more extensive definition in the Bill, it would be essential that there should be the means to amend that definition rapidly in response to changing conditions, and to do so by way of regulations.

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[Lord Beecham (Lab)]

My Lords, I concur with the views expressed and proposals made by the noble Lords, Lord Sharkey and Lord Marks. They are absolutely on the right track, although I do not agree with the provision for the Judicial College guidelines to be taken into account. It will be seen that in the next group, we have an alternative proposal suggesting that the Civil Justice Council should be involved in making the decisions.

In this group, however, there is an amendment in my name and that of my noble friend Lord McKenzie which would restore a degree of discretion for the court to uplift the amount of damages payable where it deems it just to do so in all the circumstances of the case. That would revive the role of the judiciary in assessing damages, at least to some extent, where it felt that the scale proffered under the legislation was inadequate—as noble Lords have already made clear, that seems likely in many cases.

I broadly support the amendments of the noble Lord, Lord Sharkey and Lord Marks, and will revert to one aspect to which I referred in the next group.

[Lord Keen of Elie]

My Lords, I am grateful for the contributions that have been made. It respectfully appears to me that the points made by the noble Lords, Lord Sharkey and Lord Marks, materially bolstered the approach that the Government take in the Bill. Why do I say that? Because it is quite clear that we are addressing a matter of policy and have to do so as such. What ultimately has to be taken here is a political decision, not a judicial determination.

In fairness, I think it was a slip from the noble Lord, Lord Sharkey, but when he talked about the question of whether claims are genuine or not reasonable, he said that it was unquantifiable—and then corrected himself to unquantified. The former is more accurate than the latter.

Let us be clear. More than 80% of road traffic injuries are allegedly whiplash-induced injuries. The vast majority of all personal injury claims are whiplash claims. Over 10 years, the number of whiplash claims has rocketed—yes, it has stabilised a little in the past year or two, but it has still rocketed. At the same time, the number of road traffic accidents reported has dropped by 40%. At the same time, the number of vehicles classified by Thatcham as safe from the perspective of seating and headrests has increased from 18% to 80%.

As some people have said, an industry is going on. As others have suggested, there is a racket. We have a claims culture that has built up—I attribute no blame to any one party; all sides involved have contributed in one way or another to the ballooning of the claims culture. The time has come—indeed, the time may be almost past—when we need to address it as a political issue.

The noble Lord, Lord Sharkey, suggested that somehow we were making a transfer from claimants to motorists. With great respect, a very large proportion of claimants are motorists, so it is not as simple and straightforward as that. Secondly, he talked about the transfer requiring to be justified. The transfer is a consequence of the policy decision we are making to deal with the industry, the claims culture; it is not the purpose of it. It is, as I say, the consequence.

[Lord Sharkey]

In fact, I was asking the noble and learned Lord, with respect, to justify the quantum, but perhaps he is going to deal with that.

[Lord Keen of Elie]

With respect, as I say, the quantum is a consequence of the steps we are taking to address the claims culture. The way in which we are doing it is such that we are confident that the benefits will be passed to consumers in the form of motor insurance premiums.

[Lord Sharkey]

In that case, perhaps the noble and learned Lord could explain exactly how the tariff was constructed—on what basis?

[Lord Keen of Elie]

Yes, I shall come to that. We have had regard to the present level of damages awarded in these cases, we have had regard to expert input about how we can deal with the claims culture that has built up, and we have taken the view on the level of tariff required to implement the policy decision that we have made to deal with this emerging problem.

[Lord Sharkey]

Does the Minister accept that that is not really an explanation? It is simply a statement that the Government have done something. I was asking for the basis on which they arrived at these numbers. In fact, oddly, the numbers changed between the impact assessment and the SI published yesterday. There must be a reason for that; there must have been some discussion. There must be some basis on which these amounts were constructed, but it is not clear from his answer what they are.

[Lord Keen of Elie]

With respect, first, I understand that there was not intended to be a change between the impact assessment and the SI publication. That is why the rather odd difference of 4 point something per cent emerges. I acknowledge that that was not intended.

[Lord Faulks]

My Lords, I am very grateful to the Minister for giving way. Perhaps he will confirm to the House that even the Judicial College guidelines or awards of damages by judges for pain, suffering and loss of amenity are not mathematically calculated; they are figures arrived at doing the best that a judge can to represent the nature of the injury by such an award.

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[Lord Sharkey]

I think this is a misunderstanding. I was not trying to imply that there was an element of certainty involved here. I simply wanted to know how the figures had been arrived at. Why not some other figure? Instead of 235, why not 200? Why not 400? How were these figures arrived at?

[Lord Keen of Elie]

With respect, a judgment had been made having regard to all the information available as to what level should be set for the tariff to address the very problem that we are attempting to deal with. It is not based on some mathematical formula or percentage.

[Baroness Berridge (Con)]

I refer my noble and learned friend to his previous comment which, fairly, recognises that all parties are to blame, which is something that I think he conceded at Second Reading—that the insurance industry shares part of the blame. May I clarify? When he says that all parties are to blame for this, may I clarify that he was not including the genuine claimants, who have become a focus in this House: that they are not to blame for an industry, a racket or whatever created by others?

[Lord Keen of Elie]

Everybody readily acknowledges that point but, with respect, you cannot take 650,000 claims and identify 300,000 that happen to be fraudulent, or 200,000 that happen to be exaggerated. A policy decision has to be made, acknowledging that there are within that very large body of claims perfectly genuine claims, perfectly fraudulent claims, exaggerated claims and minor claims that would never have been brought but for the encouragement of a claims industry that sees the financial benefit of ensuring that people take these claims forward. That is part of the culture that has developed. I noticed that when the noble Lord, Lord Beecham, suffered an unfortunate accident on the Tube and mentioned it in this House, he was asked if he intended to make a claim and said no. One was encouraged by that. People tend to consider that these events can happen; they may be able to point the finger of blame at someone, but they feel that life goes on and it is unnecessary to be distracted by such issues. We have a claims management culture that goes out of its way—many noble Lords have noted it—to encourage people who would otherwise think nothing of a minor injury to come forward and join the bandwagon. Let us emphasise: this is a matter of policy that we are addressing in these circumstances.

[Baroness Primarolo (Lab)]

On that point, the Minister will be aware that the business model for insurance companies is to assist those who they insure, and to make claims against others when it is appropriate. They are part of that industry, and some of them own claims management companies. Will the Minister explain to the House what he undertook in terms of research to make sure that the figures he is basing his assertions on are correct?

[Lord Keen of Elie]

I acknowledge the noble Baroness’s expertise in these areas as a non-executive director of Thompsons Solicitors, and her knowledge of the claims culture that has built up. With respect, in carrying out our work, we looked at the behaviour of the insurance industry in this context. Of course, the insurance industry can operate as an intermediary because, where the claims arise, it passes on the costs to the consumer by way of increased premiums. There have been instances in the past where insurance companies have passed on details of their own insurees’ claims to third parties and that has been exploited. I was quite open earlier in saying that we acknowledge the contribution of a number of different parties to what has developed into an unacceptable claims culture. That is what we are seeking to address in this Bill.

Can I continue just a little further in that context? The first group of amendments from the noble Lords, Lord Sharkey and Lord Marks, proposed that compensation for pain and suffering should be determined by reference to the Judicial College guidelines. Indeed, the second set of amendments proposed to place the tariff amounts into the Bill rather than in regulations made by the Lord Chancellor. All those figures would be significantly higher than those proposed by the Government—indeed, more in line with the amount currently paid out by claim.

I understand that noble Lords feel that the proposed tariff amounts are too low, but we continue to be concerned about the high number and the high cost of these claims in general, and the impact of that on the consumer. Therefore, we have to take a policy view as to how we can disincentivise not just fraudulent claims but what I would call unmeritorious claims—very minor and exaggerated claims. Our view is that it is right to set the tariff through regulations, which will help to control those costs and ensure greater certainty to both claimants and defendants when they come to deal with these claims, remembering that the vast majority of these claims never reach court anyway. They are dealt with before they ever arrive at the door of a court. In addition, we consider that a tariff will provide the flexibility required to change the tariff amounts, in reaction not just to inflation but to changes in the market, if I can gently call them that. We know that we are dealing with a marketplace; it is extremely inventive and can rise again phoenix-like from any statutory provision that we bring forward.

Therefore, we are going to have a tariff of predictable damages, albeit for those who suffer injury with a duration of up to 24 months. That is a relatively minor personal injury, but not one to be dismissed—and we do not seek to dismiss them. The relevant tariff will then be applied. It will be far simpler for someone to take their claim forward and, of course, we then have in place the requirement for an independent medical expert report, albeit in circumstances of dealing with subjective complaints of injury, as the noble Lord, Lord Sharkey, acknowledged. They can be very difficult to determine. If someone comes forward with symptoms, on the basis of a subjective assessment, a report can be made, but it can be very difficult to determine whether those subjective complaints are well based. Indeed, as the noble Earl, Lord Kinnoull, observed, there are claims management companies that would encourage someone to come forward even if he had not suffered any symptoms so far, in the belief that something might emerge in due course. That is why we have taken that approach, albeit we have allowed for the judiciary to have input so that it can, in appropriate or exceptional circumstances, increase the tariff award by up to 20%.

[Lord Marks of Henley-on-Thames]

I just wanted to make this point, but because of the noble and learned Lord’s plea I have perhaps left it a little late, as he has left the question of the figures. He made it clear that a political judgment was made in reaching these figures. The noble Lord, Lord Faulks, asked for clarification that the Judicial College guidelines, on which we rely, were merely an extrapolation from judges’ awards. However, as I expect the noble and learned Lord will accept, there is an element of circularity here because the judges reach their decision as to what is appropriate invariably after having the Judicial College guidelines cited to them, so they feed on themselves and are therefore a fairly carefully worked-out set of figures into which there could be political input.

[Lord Keen of Elie]

With respect, as the noble Lord outlined, they are self-perpetuating figures. Therefore, although we have regard to those guidelines when coming to a view as to where the tariff should be set, that was only one element in deciding the appropriate levels for the tariff itself.

I shall turn for a moment to the amendment proposed by the noble Lord, Lord Beecham, which would provide the court with complete discretion with regard to any percentage increase of exceptional circumstances. We do not consider that that is an appropriate way forward. It would simply lead to an increase in litigation and in the claims culture, so that is why we feel that there should be an appropriate limit on how any exceptional circumstances can be dealt with by the court.

In that context, I should point out that the tariff system is not entirely a novelty. Other European jurisdictions faced with the same claims culture and the same racket, as some people have called it, have introduced tariffs as well, or tables of predictive damages. That includes Italy, Spain and France. In due course both Houses will have the opportunity to debate the details of any regulations that are introduced to put forward the appropriate figures for the tariff, which at present we consider should be in the regulations, if only for the purposes of flexibility.

Again, I want to emphasise that this is essentially a matter of policy to deal with a very particular problem. It is a political decision; it is not one that we consider is for the judges; it is one that is ultimately for the Lord Chancellor to deal with in his capacity as a Minister. It is in these circumstances that I invite the noble Lord to withdraw the amendment.

[Lord Sharkey]

I thank the Minister for the long and comprehensive—and occasionally interrupted—answer. There is an issue here. I accept that it is a political decision, of course, and we are all operating on that basis, but I am still worried and puzzled about the way in which this table of tariffs has been devised. I have heard nothing from the Minister to suggest that it is not arbitrary. In particular, he did not answer my question so perhaps he can do it now. Were the figures devised on the basis of some target saving being set and then working backwards to say what the tariff would be to generate that saving? If that is the case, we ought to be told.

[Lord Keen of Elie]

Can I be clear to the noble Lord? I am not aware of there having been any target saving. As I sought to indicate earlier, this was rather an approach from the other direction: what policy is required? Effective policy is required to deal with the problem facing us.

[Lord Sharkey]

The Minister will forgive me if I say that that sounds a bit like the back of a political envelope. The question still remains. We are interested in what these figures are, and it would help our discussions if we had a clearer idea of how they were arrived at. I am sure that we will want to pursue that as the Bill makes progress. In the meantime, I beg leave to withdraw the amendment.

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[Lord Keen of Elie]

My Lords, I was rather hoping that my noble friend was going to explain the tariff, but that may be for another day.

If I respond shortly, it is not because I dismiss the importance of the amendments that have been moved but because I have already sought to set out the Government’s approach to the tariff, and I hope that will be appreciated. However, I understand the purpose of these probing amendments, in particular the amendment spoken to by the noble Lord, Lord Bassam, which reflects some recommendations from the Bar Council. I will add two short points.

First, as I mentioned before, we allow for the 20% uplift for exceptional circumstances to be placed in the hands of the judiciary. Secondly, in setting the tariff, the Lord Chancellor is going to consult widely and take into account the views of a wide spectrum of interested parties in order to arrive at what is considered, for policy purposes, to be the appropriate levels, both now and in the future. However, we do not consider that it is appropriate to formalise any part of that consultation, for example by reference to consulting the Lord Chief Justice.

I have heard what has been said; it is essentially a development of the previous group of amendments. I appreciate why these additional amendments have been moved, but invite noble Lords to withdraw.

[Lord Beecham]

My Lords, I beg leave to withdraw the amendment.

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[Lord McKenzie of Luton]

My Lords, we have Amendment 26 in this group. I thank my noble friend Lord Young for stepping in to the breach in place of the noble Lord, Lord Berkeley, and for the other contributions that have been made.

[Lord Keen of Elie]

We have not finished the previous group.

[Lord McKenzie of Luton]

I am sorry. I will speak to Amendment 23 only to congratulate my noble friend for stepping into the breach. I thank him and the noble Lord, Lord Butler, for speaking in support of cyclists. We are very happy to support their proposition.

[Lord Keen of Elie]

I am obliged to the noble Lord for supporting their proposition rather than their amendment—which, I venture, is entirely appropriate in the circumstances. Clause 1 goes out of its way to ensure that vulnerable road users such as cyclists or motorcyclists are not encompassed within the ambit of the provisions in Part 1 of the Bill. That has to be made absolutely clear. I entirely endorse the views expressed by the noble Lord, Lord Butler, as to the types of injury normally suffered by cyclists or motorcyclists. It does not tend to be of the whiplash variety, which is why we have ensured that they are not included in the terms of the Bill. In particular, as I say, Clause 1 expressly serves to exclude vulnerable road users of that type.

However, the point that the noble Lord made was more to do with a matter outwith the present Bill, which is the proposal to increase the small claims limit to £5,000 for road traffic cases. That is being mooted. Indeed, that increase was a factor in our approach to the whole issue of whiplash injury—but it was not limited to that. The proposed increase in the small claims limit will apply to all road users, including cyclists and motorcyclists. The Government’s reasons for seeking that increase are not simply limited to whiplash claims and the claims culture that has developed there but reflect the fact that, in our view, low-value road traffic accident claims—whether whiplash or otherwise—are appropriate for the small claims track and are capable of being dealt with in that track, whether they be for whiplash or other forms of road traffic injury.

In that context, I also note that we are developing, with expert input, the claims portal for these small claims so that claimants will find the system far more accessible. I simply seek to emphasise that the Bill does not embrace vulnerable road users such as cyclists. However, our reason for increasing the small claims limit for road traffic accidents in general is not limited simply to the view that that is a means of dealing with the whiplash claims culture; it reflects a wider view that low-value road traffic accident claims can appropriately be dealt with in the small claims track. Of course, where those claims are perceived to be complex, they can be moved from that track into the next track of judicial determination. In these circumstances, I invite the noble Lord to withdraw the amendment—albeit he acknowledges that it was tabled for probing purposes.

[Lord Young of Norwood Green]

I welcome what the noble and learned Lord said—I have found it constructive and helpful. Nevertheless, I still think that there is some concern and, rather than having to return to this on Report, it would be useful if we could meet him for further consultation.

[Lord Keen of Elie]

I am perfectly content to meet the noble Lord. As I return to my feet, I am reminded of the regular reading material of the noble Lord, Lord Sharkey, which includes the Insurance Times. I circulated a letter to Peers following Second Reading and it may be referring to that, but I do not recollect having made the sort of concession reported in that material. Unless the noble Lord feels that he can correct me, I am certainly not aware of it. Our position has always been that the original draft of the Bill specifically excluded vulnerable road users. I suspect that it is a case not of journalistic licence but of journalistic error.

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[Baroness Primarolo]

When the Minister considers in the round the comments made by other noble Lords, will he undertake to go away and look specifically at the way in which Scotland has approached this important question of asymmetry in the process? Will he look at whether there is a way of incorporating or dealing with claims in a similar way, without clearly undermining what he has identified as the Government’s policy principles in simply reducing tariffs?

[Lord Keen of Elie]

My Lords, perhaps I may begin with Amendment 26, as put forward by the noble Lord, Lord Beecham, and Amendment 47, put forward by the noble Lords, Lord Marks and Lord Sharkey, and my noble friend Lady Berridge. These amendments seek to secure assurances as to the recoverable cost of a medical report in respect of whiplash injury claims, notwithstanding the increase in the small claims track limit.

The cost of medical reports is currently recoverable in personal injury claims where the defendant insurer has admitted any part of liability. It is intended that these costs will continue to be recoverable following these reforms, including the proposed reform in the small claims track, which is not part of the Bill. I seek to reassure the noble Lord, Lord Marks, in particular that it is intended that that cost will be a recoverable element in each and every case where liability is accepted. My understanding is that the civil procedure rules currently permit the recovery of such a cost; if there is any issue with that, I would be perfectly happy to look at it again to ensure that the rules reflect that position, because that is certainly our intention.

The effect of Amendment 27 would be to require the Civil Procedure Rule Committee to undertake both a review and a consultation in respect of the proposed increase to the small claims track limit for whiplash claims before publishing its decision. I appreciate that the noble Lord, Lord Bassam, is taking us beyond the realms of whiplash claims and I will comment upon his observations in a moment. The Government have already undertaken a consultation on this issue and our policy changed as a result of that consultation. Originally, we proposed raising the small claims track limit to £5,000 for all personal injury claims but, after consultation, we proposed that the track limit should be raised to £5,000 for road traffic accident-related personal injury claims but only to £2,000 for all other personal injury claims, including employer/employee claims. We do not believe that a further consultation on this issue is required, nor that such a requirement should be placed into the Bill.

I observe in passing that the small claims limit for non-personal injury claims is now, I believe, £10,000 and it operates adequately. In respect of the personal injury limit of £1,000, that was set about 10 years ago so even if we were to apply various inflation-linked multipliers, it would be in the region of £1,700 to £2,000, depending upon what index was taken in respect of inflation. As regards personal injury claims in general, it is not going much beyond that.

The proposal in the amendment tabled by the noble Lord, Lord Bassam, is that the increase should be to a maximum of £1,500, as opposed to the increase to £5,000 for road traffic accidents and £2,000 for personal injury claims. In that context, the noble Lord observed that these cases—I believe he was referring to non-road traffic accident cases in particular—can be very complicated. I acknowledge that, but if such a claim is complex, that is a ground for removing it from the small claims process to the fast track. There is already provision for that very situation, so we do not consider that further steps need to be taken.

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[Lord Bassam of Brighton]

Can the Minister assure me that there will be consultation with the trades unions? Given the case he is making, it is important that that should take place. Their experience here is highly relevant.

[Lord Keen of Elie]

Trades unions’ experience is, essentially, filtered through claimant solicitors such as Thompsons, and those being consulted include representatives of both claimant and defendant groups—so that is being done. However, I would be perfectly happy to meet the noble Lord, and such representative groups as he may wish to bring to a meeting, to discuss the proposed increase in the limits on small claims. If he wishes to do that, I shall be perfectly content for him to contact my private office, and we can make suitable arrangements. At this time, however, I invite noble Lords not to press their amendments.

[Lord McKenzie of Luton]

My Lords, I beg leave to withdraw the amendment.

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[Lord Beecham]

My Lords, I am a little concerned at the degree to which political considerations are supposed override our system of justice. This is not the first time it has been mentioned. However, the latest case is perhaps the least acceptable of the recommendations of this kind. Why on earth should Parliament decide on the so-called exceptional circumstances—undefined, of course, for the purposes this debate—on what are already constrained sums to be awarded in damages? It is trespassing too much on the rights of the citizen and the role of the judiciary. I hope that the Minister will concur with that, given his enormous experience of these matters, and, I apprehend, a real interest in justice being effective and available. With all due respect, the amendment moved by the noble Lord undermines both.

[Lord Keen of Elie]

My Lords, I am obliged to my noble friend Lord Hodgson for his amendment. I understand the intent when we are seeking to address a very particular problem. However, I cannot concur with the proposal that we should set in the Bill some limit to the judicial discretion that will be exercised in exceptional circumstances. We have yet to see how exceptional circumstances will develop once the Bill comes into effect. We therefore consider it more appropriate that the percentage increase in tariff should be determined by regulation by the Lord Chancellor in order that he may, from time to time, have regard to developments once the Act is in force. We do not consider it appropriate to constrain that exercise by setting a ceiling in the Bill. For these reasons, I invite my noble friend to withdraw his amendment.

[Lord Hodgson of Astley Abbotts]

I thank my noble and learned friend for that reply. It was not entirely unexpected. I say to the noble Lord, Lord Beecham, that it is nothing to do with access to justice, it is merely limiting judicial discretion. Indeed, the noble Lord accepts that judicial discretion is going to be limited because he is quite happy to have this percentage in regulations which can subsequently be altered one way or another without much parliamentary scrutiny for all the reasons we know. I note the points my noble and learned friend has made, and I beg leave to withdraw the amendment.

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[Lord Beecham]

My Lords, the amendments in this group pray in aid, as it were, for the work of MedCo, a body set up by the Government, I believe in 2015, to facilitate the sourcing of medical reports on injuries of the kind that we are debating under the terms of the Bill. The Ministry of Justice produced a pre-action protocol for what it calls low-value personal injury claims in road traffic accidents. Before that, there was no system at all to effectively source reports, and apparently a practice was developing of some claimant representatives—not necessarily solicitors—and insurers using what are described as “tame” doctors to produce medical reports for the purposes of securing compensation.

The Government set up the MedCo organisation to provide claimants with access to independent medical reporting facilities from reputable sources, which are themselves subject to regulation and control by the MedCo board. Apparently MedCo had a bit of an uneasy period in its early days and there have been a number of reviews, but the principle remains valid. I understand that it is now working better and that there is no channelling of medical reports to, as it were, sympathetic doctors who might be relied on to back up claims that are less than valid. To that extent, the Government’s original idea has proved right.

In relation to the Bill, it appears that there will be a necessity to reconstruct the portal so that litigants in person can access and use the portal themselves. Therefore, it is all the more necessary to ensure that the MedCo system is available and as user-friendly as possible. I hope that the Minister will acknowledge that I am taking the unusual stance of having supported a decision made by the Government some time ago and seeking that it should continue to flourish. I look forward to his acknowledging that this is a good way of serving justice for both sides in such cases, by having thoroughly professional, independent people providing the necessary political evidence, not being paid for a particular kind of evidence—which one suspects can happen and perhaps has happened hitherto, producing some decisions that were, frankly, unjustified. I hope that the noble and learned Lord will build on the position created originally in 2015 by the Government and ensure that it remains applicable and useful under the new regime being developed.

[Lord Keen of Elie]

My Lords—

[Lord Bassam of Brighton]

There are other amendments in this group, are there not?

[Lord Keen of Elie]

There are indeed, and that was why I wondered at the noble Lord’s reticence. If the noble Lord wishes to speak to them, I am not the person to stand between him and the remainder of the Committee.

[Lord Bassam of Brighton]

I am extraordinarily grateful to the noble and learned Lord for his prompt rising, as it were, from a sedentary position. My Amendment 42A is in this group. On the Bill as a whole, in Clause 4 the Government seem to recognise the problem of what are called “pre-med offers”, yet fail to ensure that they are sufficiently discouraged. We are in the same territory here but perhaps not seeking to approach it in the same way. My understanding is that such offers are made to people sometimes at a point of vulnerability following injury and sometimes, it has to be said, in the most cynical of circumstances—when sick pay runs out and after putting in a denial, which, although clearly weak, sometimes worries people.

Lawyers for claimants have a professional duty to put an offer to their client. There are many circumstances in which desperate people ignore the advice to reject that comes with that offer and accept what is offered, however inappropriate the sum is to the injuries that they have suffered. Pre-med offers are not made to be fair or reasonable. The offers are often made by defending insurers to get rid of a case cheaply, and I quite accept that the Government are right to seek to prohibit them. The consequence of acceptance in the absence of a medical report is that if the injured person later develops conditions arising from the accident, they will of course fall back on the NHS to support them. They will have no compensation to get treatment and the cost will fall more widely on society and the taxpayer. Meanwhile, the insurer for the guilty party who caused the injury will have walked away having saved money.

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The Government want to take away free legal help from, we think, about 90% of people injured on the roads and at work. That is a terrible situation and we ought to act as best we can against the insurers. I hope that the Minister will take this issue seriously. It is clearly on the Government’s radar, but we do not think they are approaching it in quite the right way.

[Lord Keen of Elie]

I am obliged to noble Lords. The amendments from the noble Lord, Lord Beecham, would place the requirements for medical reports to be provided by an accredited medical expert selected via the MedCo portal or other experts specified by the Lord Chancellor in regulations. Currently, the Civil Procedure Rules require any initial medical report in support of a whiplash claim to be sought through the MedCo IT portal, which is established and proves, as the noble Lord indicated, the independence and quality of these medical reports. The Civil Procedure Rules also require that all MedCo medical reports must be provided by an accredited medical expert. I am therefore uncertain what additional benefit the amendments would add to that process, because we already have in place the requirement that it should be a MedCo report that is obtained.

Indeed, the amendments could have a negative impact on the success of MedCo as, on one view, it would widen the pool of medical experts to any person with medical qualifications rather than someone who has been accredited specifically for these types of report by MedCo. I may have misunderstood Amendment 41, but that appears to be what its result would be, although that may be unintended. I emphasise that we consider that the creation of MedCo, as adjusted recently, has been a success and will continue to be so. We require that parties should have to go through the MedCo portal for an appropriate independent expert report before these claims are settled.

So I ask the noble Lord to reconsider the terms of the amendment because we do not feel that it adds anything to the Bill. I believe we have a common intention here and it may be that I have misunderstood what lies behind Amendment 41, but at present we believe the present structure of MedCo reports and the portal is appropriate as it stands, and at this stage we would not be prepared to contemplate the amendments that have been moved. If the noble Lord wishes to discuss this matter further with me, I will be content to do so because it may be that I have somehow misunderstood the intent of Amendment 41 in that regard.

I turn to the point raised by the noble Lord, Lord Bassam. We looked at the whole question of how it would be most appropriate to deal with claims that were settled without a MedCo report. That would place the insurer or relevant party settling the claim in breach of their own regulatory requirements, and appropriate steps would be taken. In due course, as we know under the financial regulation Bill that is currently going through, that would be the FCA in respect of claims management companies.

I draw attention to Clause 5(6), which states:

“A breach of section 4 does not make an agreement to settle the whiplash claim in question void or unenforceable”.


We adopted that approach to ensure that the claimant should not suffer at all in circumstances where the person making the settlement did so without the report. In other words, the claimant would be entitled to retain all sums paid in those circumstances. If we make the agreement void, the sector would potentially seek recovery of the sums passed in respect of a void transaction. I appreciate that the noble Lord seeks to qualify that, but it raises complex issues over contract liability. We believe that we have taken the correct approach by ensuring that the person making the settlement, who is a regulated party, will be in breach of their regulatory regime if they do so without a MedCo report, while equally ensuring that the claimant should not suffer because of that misfeasance, and should be able to retain the settlement sum.

We do not believe that there is a major issue in this context with regard to those who are persuaded to settle early but, if that is an issue, it is more widely encountered across personal injury claims as a whole, and we do not see any basis for taking an exceptional route in regard to whiplash injury claims. I hope that that reassures the noble Lord that there is a mechanism to protect the claimant and enforce the requirements of Clause 4 against those who are settling claims.

[Lord Bassam of Brighton]

I am grateful to the noble and learned Lord for his attempt at reassurance. I will reflect on his words, but I may come back with something on Report because I want to ensure that we have that protection there.

[Lord Keen of Elie]

I quite understand the noble Lord’s concern, and I would be willing to consider any further amendment that he puts forward on this in due course. At this stage, I invite the noble Lord to withdraw the amendment.

[Lord Beecham]

I am obliged to the Minister for his invitation, which I will certainly take up. The intention of the amendments is to fill out, as it were, the provisions in Clause 4 relating to regulations to be made by the Lord Chancellor about the appropriate evidence of an injury for the purposes of this clause. It may be that both of us are replicating something that already exists, but we can have a look at it and I am sure it is a matter on which we can reach agreement one way or another. I beg leave to withdraw the amendment.

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[Lord Keen of Elie]

My Lords, clearly these amendments are directed primarily at two areas: first, the review or regulation of the effectiveness of these reforms and the supporting regulations and, secondly, the issue of cold calling. I will deal with each in turn. I am not going to go through the detail of each set because I understand that the force of the amendments is all in one direction on the first point. The amendments as drafted would require reports on these reforms to be published shortly after their implementation. Although I understand the reasoning behind them, I question how effective they would be in their current form. I appreciate, nevertheless, that these are essentially probing amendments and it is in that spirit that I address them.

As has been observed, the insurance sector has made it clear and very public that it has a commitment to pass on savings. Having made that commitment, insurers will be accountable for it in a highly competitive market. Insurers have pointed out how they have passed on to customers the benefits of previous government action to cut the cost of civil litigation without the need for regulation. The Government, of course, are intent on monitoring the reaction of the insurance sector to these reforms and will engage with it in that regard. If the industry as a whole sought to avoid passing on these savings, that would signal that the competitive nature of the market had changed. If that were to happen, I have no doubt that the Financial Conduct Authority and, indeed, the Competition and Markets Authority would wish to investigate.

Nevertheless, I hear the message from around the Committee about the need to put further discipline in place with regard to these savings, and that is a matter that we will consider. As I say, I appreciate what is intended here. The question is how we can effectively bring that about. We have to remember that the insurers are regulated by the FCA already. Oversight is in place with regard to their conduct. With all due respect, I take issue with my noble friend Lady Berridge about there being some conflict between shareholder interest and the interest of customers.

An insurance company requires to rely on its integrity in order to maintain its resilience as an insurer. Any board of directors that abandoned integrity in favour of a larger dividend would find itself not only in conflict with its regulator but, no doubt, in conflict with its own shareholders, who would not appreciate that sort of conduct either, given that it would simply undermine the capital value of their investment. Therefore, I do not believe that there is that conflict of interest at all.

The amendment put forward by the noble Lords, Lord Beecham and Lord McKenzie of Luton, would introduce a formal requirement for Her Majesty’s Treasury to keep under review the ban on cold calling, and the amendment in the names of the noble Lords, Lord Marks and Lord Sharkey, would introduce a formal requirement for the Lord Chancellor to review the effect of cold calling and the ability to introduce regulations for a ban on cold calling. Of course, a ban on cold calling in relation to claims management was introduced in the Financial Guidance and Claims Bill and was agreed by this House quite recently. As noble Lords will be aware, the Bill inserts a provision into the privacy and electronic communications regulations, which govern unsolicited direct marketing calls, to ban such calls in relation to claims management services unless prior consent has been given. The Government consider these to be robust proposals which will add to the package of measures in place for tackling unsolicited marketing calls.

With regard to the use of the material that is obtained, there is of course provision for regulation of the legal profession. The SRA has regulations in place for the acquisition and use of such data, so that matter is already regulated. However, I acknowledge the point made by the noble Lord, Lord Marks, about the difficulty of what I would term “regulating the unregulated”, where cold calling centres are based outside the United Kingdom. I am advised that it is possible to trace more than half the cold calls received in the United Kingdom to one place—essentially a factory—based in Pakistan. But it is fleet of foot: it changes its name and location on a regular basis. That is a formidable challenge and we are seeking to approach it by means of regulating, apart from anything else, the use of the material gleaned by those means.

The amendment put forward by the noble Lord, Lord Beecham, would introduce a formal requirement for the Treasury to make regulations requiring the FCA also to prohibit certain pre-medical offers—I think that that is also in the amendment. Again, we are of the opinion that the Bill deals sufficiently with that issue as well.

As I indicated, I have heard what has been said around the Chamber about the consideration of further measures to ensure that savings are passed on to consumers, and I will give that further consideration before Report. On that basis, I invite the noble Lord to withdraw the amendment.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for that detailed reply. I am sure that these are matters to which we will need to return at a later stage. One of the things that we were seeking to be sure about—and this is, perhaps, an issue that we share with the Lib Dems—is how extensive and how robust across the board are the prohibitions around cold calling. The noble and learned Lord mentioned the SRA. As I recall, when we were debating the financial guidance Bill at Second Reading, the SRA and its activities were held out as being a reason to ban cold calling for personal injury claims. But then one noble Lord in the debate said, “No, there are people getting round that by a number of means”. It is those sorts of issues that we want to be sure about, so that we can look across the piece and see that cold calling—so far as it can possibly be legally achieved within the UK—is dealt with. Having said that, I beg leave to withdraw the amendment.

European Union (Withdrawal) Bill

Lord Keen of Elie Excerpts

Report: 5th sitting (Hansard): House of Lords
Wednesday 2nd May 2018 Lords Chamber

Moved by

[Lord Keen of Elie]

88A: Schedule 2, page 17, line 29, leave out from “under” to end of line 29 and insert “sub-paragraph (1) above”

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, we are dealing here with truly technical amendments to ensure that the provisions of the Bill deliver the intended policy. They achieve two things. The first is to clarify how the requirement for regulations made by devolved Ministers under Schedule 2 to be within devolved competence interacts with the principle of severance applied by the courts.

The normal practice would be that when a Minister makes regulations that include, for instance, 10 different provisions, should one of those provisions be outwith the scope of the power, the courts would not strike down the regulations as a whole, they would simply sever the offending provision and allow the remaining nine provisions to stand as law. Some concerns were raised that the requirements in the Bill might imply that this standard practice should not occur. The amendments therefore make it clear that when a provision is outside devolved competence, only that provision would be ultra vires and not the whole instrument in which the provision is included.

The second purpose of the amendments is to allow for a devolved Minister and a UK Minister acting jointly to make provision that would not be in the competence of the devolved Minister acting alone. It has always been the Government’s intention that the Schedule 2 powers can be exercised jointly to allow us to work together in areas where we may need to make the same or related changes to retained EU law and so that, where appropriate, those changes can be subject to formal scrutiny and approval in both this Parliament and the relevant devolved legislature.

We believe it is right that, for instance, where a UK Minister and a Welsh Minister jointly make regulations in relation to a matter that concerns the England/Wales border, those regulations can include both the provision for England and the provision for Wales, even though it would not be within the Welsh Minister’s competence to make the provision in relation to England if they were acting alone.

We will also be bringing forward at Third Reading a number of further drafting changes to permit combinations of instruments beyond what is normally possible, reflecting the level of joint working that will be needed in relation to these powers. I will be speaking to the Government’s Clause 11 amendments shortly, when we reach the group beginning Amendment 89DA. I am sure noble Lords will appreciate that we have a number of further groups to get through on other parts of the devolution provisions before we reach that debate. The amendments provide what I hope to be welcome legal clarity. They reflect standard practice and the mechanisms for good, collaborative joint working between the Administrations. I beg to move.

[Lord Wallace of Tankerness (LD)]

My Lords, I am grateful to the noble and learned Lord for his explanation of these technical amendments. Can he say whether there is agreement among the devolved Administrations and the UK Government on these amendments?

[Lord Griffiths of Burry Port (Lab)]

My Lords, at last we have reached this stage, although I find it a little off-putting that we are coming to consequential, technical matters before we look at the meaty issue; but that will come, as was said.

I would like to pay the respects of those on our Benches to the serious way in which the Government have contributed through the joint ministerial group to the success of the proposals, and thank them for bringing them to us now. I would also like to thank Mark Drakeford from the Welsh Government and Mike Russell from the Scottish Government for the part they played, even if the latter has thus far been unable formally to sign up to the inter-governmental process. As the Minister said, we are going to discuss Clause 11 and neither of us can wait for that. It is coming in more detail later this evening. However, we on these Benches recognise and appreciate the progress that has been made. We have come a long way since the Bill was published and it is against that backdrop that this and subsequent groups of amendments should be considered.

The Labour Party has always been the party of devolution. While we will be watching the Government’s treatment of the devolved Administrations very closely throughout the Brexit process—that is our job—we recognise the genuine progress that has been made and welcome the amendments in this group. They allow United Kingdom and devolved Ministers jointly to exercise powers in Schedule 2 in order to make provisions that could not be made by a devolved Minister acting alone. This clarifies the use of so-called composite instruments, as the Minister said, and we hope paves the way for collaborative working between the devolved Administrations and the UK Government.

Other amendments in the group improve the position regarding ultra vires provision within instruments made under Schedule 2. I believe that the devolved Administrations previously raised concerns with the Government as to whether the courts would permit those parts of an instrument that were within competence to remain law. We are glad that Ministers and officials have responded positively to the appeals from the devolved bodies and that the amendments provide greater clarity for all involved. The group amounts to just one piece in the jigsaw puzzle. I usually start my jigsaws with the edge pieces. This looks like putting a piece in the middle and working around it in due course. It is a piece that these Benches are happy to support.

[Lord Keen of Elie]

My Lords, I am obliged to the noble Lord, Lord Griffiths, and note his comments. The amendments will provide not only clarity but a much needed flexibility when it comes to the application of the schedules.

With respect to the point raised by the noble and learned Lord, Lord Wallace of Tankerness, my understanding is that both devolved Administrations were content with the proposals. Indeed, much of the force for the first group of amendments came from them. I hope that satisfies noble Lords.

Amendment 88A agreed.

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Moved by

[Lord Keen of Elie]

88B: Schedule 2, page 17, line 30, leave out from “8” to end of line 35

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Moved by

[Lord Keen of Elie]

89ZZA: Schedule 2, page 17, line 37, leave out “regulations” and insert “provision”

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Moved by

[Lord Keen of Elie]

89ZA: Schedule 2, page 23, line 14, leave out paragraphs 13 to 20

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Moved by

[Lord Keen of Elie]

89AA: Schedule 2, page 26, line 25, after “taxation” insert “or fees”

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Moved by

[Lord Keen of Elie]

89DA: Clause 11, page 7, line 25, leave out subsections (1) to (3) and insert—
“(1) In section 29(2)(d) of the Scotland Act 1998 (no competence for the Scottish Parliament to legislate incompatibly with EU law) for “with EU law” substitute “in breach of the restriction in section 30A(1)”.(2) After section 30 of that Act (legislative competence: supplementary) insert—“30A Legislative competence: restriction relating to retained EU law(1) An Act of the Scottish Parliament cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown.(2) But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the legislative competence of the Parliament.(3) A Minister of the Crown must not lay for approval before each House of the Parliament of the United Kingdom a draft of a statutory instrument containing regulations under this section unless— (a) the Scottish Parliament has made a consent decision in relation to the laying of the draft, or(b) the 40 day period has ended without the Parliament having made such a decision.(4) For the purposes of subsection (3) a consent decision is—(a) a decision to agree a motion consenting to the laying of the draft,(b) a decision not to agree a motion consenting to the laying of the draft, or(c) a decision to agree a motion refusing to consent to the laying of the draft;and a consent decision is made when the Parliament first makes a decision falling within any of paragraphs (a) to (c) (whether or not it subsequently makes another such decision).(5) A Minister of the Crown who is proposing to lay a draft as mentioned in subsection (3) must—(a) provide a copy of the draft to the Scottish Ministers, and(b) inform the Presiding Officer that a copy has been so provided.(6) See also paragraph 6 of Schedule 7 (duty to make explanatory statement about regulations under this section including a duty to explain any decision to lay a draft without the consent of the Parliament).(7) No regulations may be made under this section after the end of the period of two years beginning with exit day.(8) Subsection (7) does not affect the continuation in force of regulations made under this section at or before the end of the period mentioned in that subsection.(9) Any regulations under this section which are in force at the end of the period of five years beginning with the time at which they came into force are revoked in their application to any Act of the Scottish Parliament which receives Royal Assent after the end of that period.(10) Subsections (3) to (8) do not apply in relation to regulations which only relate to a revocation of a specification.(11) In this section—“the 40 day period” means the period of 40 days beginning with the day on which a copy of the draft instrument is provided to the Scottish Ministers,and, in calculating that period, no account is to be taken of any time during which the Parliament is dissolved or during which it is in recess for more than four days.”(3) In section 108A(2)(e) of the Government of Wales Act 2006 (no competence for the National Assembly for Wales to legislate incompatibly with EU law) for “with EU law” substitute “in breach of the restriction in section 109A(1)”.(3A) After section 109 of that Act (legislative competence: supplementary) insert—“109A Legislative competence: restriction relating to retained EU law(1) An Act of the Assembly cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown.(2) But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the Assembly’s legislative competence. (3) No regulations are to be made under this section unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.(4) A Minister of the Crown must not lay a draft as mentioned in subsection (3) unless—(a) the Assembly has made a consent decision in relation to the laying of the draft, or(b) the 40 day period has ended without the Assembly having made such a decision.(5) For the purposes of subsection (4) a consent decision is—(a) a decision to agree a motion consenting to the laying of the draft,(b) a decision not to agree a motion consenting to the laying of the draft, or(c) a decision to agree a motion refusing to consent to the laying of the draft;and a consent decision is made when the Assembly first makes a decision falling within any of paragraphs (a) to (c)(whether or not it subsequently makes another such decision).(6) A Minister of the Crown who is proposing to lay a draft as mentioned in subsection (3) must—(a) provide a copy of the draft to the Welsh Ministers, and(b) inform the Presiding Officer that a copy has been so provided.(7) See also section 157ZA (duty to make explanatory statement about regulations under this section including a duty to explain any decision to lay a draft without the consent of the Assembly).(8) No regulations may be made under this section after the end of the period of two years beginning with exit day.(9) Subsection (8) does not affect the continuation in force of regulations made under this section at or before the end of the period mentioned in that subsection.(10) Any regulations under this section which are in force at the end of the period of five years beginning with the time at which they came into force are revoked in their application to any Act of the Assembly which receives Royal Assent after the end of that period.(11) Subsections (4) to (9) do not apply in relation to regulations which only relate to a revocation of a specification.(12) In this section—“the 40 day period” means the period of 40 days beginning with the day on which a copy of the draft instrument is provided to the Welsh Ministers,and, in calculating that period, no account is to be taken of any time during which the Assembly is dissolved or during which it is in recess for more than four days.”(3B) In section 6(2)(d) of the Northern Ireland Act 1998 (no competence for the Northern Ireland Assembly to legislate incompatibly with EU law) for “incompatible with EU law” substitute “in breach of the restriction in section 6A(1)”.(3C) After section 6 of that Act (legislative competence) insert—“6A Restriction relating to retained EU law(1) An Act of the Assembly cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown. (2) But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the legislative competence of the Assembly.(3) A Minister of the Crown must not lay for approval before each House of Parliament a draft of a statutory instrument containing regulations under this section unless—(a) the Assembly has made a consent decision in relation to the laying of the draft, or(b) the 40 day period has ended without the Assembly having made such a decision.(4) For the purposes of subsection (3) a consent decision is—(a) a decision to agree a motion consenting to the laying of the draft,(b) a decision not to agree a motion consenting to the laying of the draft, or(c) a decision to agree a motion refusing to consent to the laying of the draft;and a consent decision is made when the Assembly first makes a decision falling within any of paragraphs (a) to (c)(whether or not it subsequently makes another such decision).(5) A Minister of the Crown who is proposing to lay a draft as mentioned in subsection (3) must—(a) provide a copy of the draft to the relevant Northern Ireland department, and(b) inform the Presiding Officer that a copy has been so provided.(6) See also section 96A (duty to make explanatory statement about regulations under this section including a duty to explain any decision to lay a draft without the consent of the Assembly).(7) No regulations may be made under this section after the end of the period of two years beginning with exit day.(8) Subsection (7) does not affect the continuation in force of regulations made under this section at or before the end of the period mentioned in that subsection.(9) Any regulations under this section which are in force at the end of the period of five years beginning with the time at which they came into force are revoked in their application to any Act of the Assembly which receives Royal Assent after the end of that period.(10) Subsections (3) to (8) do not apply in relation to regulations which only relate to a revocation of a specification.(11) Regulations under this section may include such supplementary, incidental, consequential, transitional, transitory or saving provision as the Minister of the Crown making them considers appropriate.(12) In this section—“the relevant Northern Ireland department” means such Northern Ireland department as the Minister of the Crown concerned considers appropriate;“the 40 day period” means the period of 40 days beginning with the day on which a copy of the draft instrument is provided to the relevant Northern Ireland department,and, in calculating that period, no account is to be taken of any time during which the Assembly is dissolved or during which it is in recess for more than four days.””

[Lord Keen of Elie]

My Lords, to be clear, the noble and learned Lord, Lord Wallace, indicated that he was not going to move Amendment 89, but government amendment 89AA was to follow from that amendment so I would just like to address our amendment in order to avoid confusion. I am afraid that this is like one of those smart restaurants where you get a series of amuse-bouches before you get to the main course.

Amendment 89AA replicates the restriction that we have already applied to Clause 9 on the withdrawal agreement power in relation to imposing fees and charges for the corresponding power for devolved Ministers. This follows exactly the same rationale as the Clause 9 power. It has never been our intention for these powers to be used to impose fees; that is the preserve of the bespoke Schedule 4 powers, which are exercisable by devolved Ministers and should be subject to the limits that apply to those powers. This same restriction has already been applied to both the correcting power in Clause 7 and its Schedule 2 equivalent. The devolved Administrations were informed in advance of our intention to apply this restriction to that power and have agreed to its effect, so I hope noble Lords will support the amendment.

I turn to Amendment 89DA and the group that follows it. I thank noble Lords for their constructive engagement on this important issue during the passage of the Bill. The Government have now tabled a comprehensive set of amendments to Clause 11. We have worked with the Scottish and Welsh Governments to develop them, and noble Lords will recognise that we have drawn heavily on their consideration of our initial amendments in Committee. I put on record our thanks to this House, and to the Scottish and Welsh Governments for their endeavours in crafting these amendments. We are immensely pleased that the Welsh Government have agreed this approach and I am of course disappointed that the Scottish Government have not. I hope they will sign up in due course.

The intention behind Clause 11 as originally drafted was to provide maximum legal certainty across the UK to our communities and businesses after EU exit in areas that are subject to a common EU framework. As the Welsh Government aptly put it,

“it is essential to provide legislative continuity at the point at which the UK leaves the EU”.

We know, of course, that the EU has common legislative arrangements across a vast range of areas, but we must now decide in which policy areas we may need to continue those common arrangements legislatively, informally or not at all. To provide the time to do that work and provide assurances that there would not be immediate divergence across the UK, the original Clause 11 sought to freeze the law in all those areas.

We are all familiar with the views of the devolved institutions on this clause, and of course the Government have accepted the case for a more targeted and proportionate approach. This has been supported by the work that we have been doing with the devolved Administrations on assessing these current frameworks. Since we agreed the framework principles, which set out why common approaches may be needed across more than one part of the UK, our Governments have worked closely to analyse those policy areas that sit across devolved competence and EU law.

Noble Lords will recall that in March we published our initial analysis. It demonstrated that our work with the devolved Administrations indicated that legislative frameworks may be needed, in whole or in part, in only 24 of the 153 areas that had been identified, and 82 areas could be managed through more informal, non-legislative arrangements. The remaining 49 areas would likely require no further arrangements at all. We also agree that where common approaches are needed, they cannot all be designed and implemented by exit day. So it continues to make sense to maintain existing frameworks and provide certainty over which areas may be subject to change in the future, but we can and should do this in a more measured way.

Our amendments in Committee set out targeted mechanisms for doing so, following discussions with the Scottish and Welsh Governments. We have carried forward the basic proposition from Committee and have built on that in the amendments that we have put forward today. Our amendments would see powers returning from the EU in otherwise devolved areas pass directly to the devolved institutions. Where a common legislative framework may be required, we propose to freeze the current arrangements to provide the time to establish our own framework for the UK. This would apply only to those policy areas that have been explicitly frozen through regulations, rather than across all policy areas where EU law currently creates common frameworks. That was the proposal that we put forward in Committee and that we had been discussing with the Welsh and Scottish Governments. We withdrew our amendments because discussions with those Governments were ongoing and we were committed to continuing them. Our Committee proposal was a substantial, but not a final, offer. It meant that noble Lords were able to debate the very latest proposition and inform those discussions.

One theme raised here and by the devolved Administrations was consent. The devolved Administrations thought it right that there was a role for the devolved legislatures in deciding whether specific areas should be the subject of a freeze. We also heard that in the debate in this House. This House agreed that a role for the devolved legislatures was important in this process, but that it must be balanced against preserving the right—indeed, I would say, the responsibility —of the United Kingdom Parliament to act, where there may be a cross-United Kingdom impact. Only the UK Parliament can do that.

The Government listened carefully to the submissions on this matter and reflected them in discussion with the devolved Administrations over Easter. We have amended the Committee proposal. We shall seek to agree which areas should be subject to a freeze. This is part of the bigger frameworks question that we continue to progress.

We should also have the view of the devolved legislatures, not just the Administrations. Our amendments ensure that, before the UK Government may lay regulations in draft in this House, they must have sent them to the devolved Administrations and sought the consent of the legislatures. The devolved legislatures will have 40 days in which to decide whether to give or withhold consent for the regulations. Only after that decision is given or the 40 days have passed can the United Kingdom Government lay the regulations before Parliament. This process is built on collaborative working. It favours agreement for freezing areas, but also recognises that if agreement cannot be reached, it must be for the UK Parliament to decide what is in the interests of the UK as a whole.

We believe that this approach should minimise areas of disagreement, as we have also developed a comprehensive intergovernmental agreement that supports and complements the legislative amendments we are considering today. It emphasises that we will work on these regulations together and in advance of sending them to the devolved Administrations formally.

Where there is unavoidable disagreement and the United Kingdom Government consider that they must proceed in the absence of consent from a devolved legislature, UK Ministers would be under an express legal duty to provide this Parliament with a Statement, and, if provided, a statement from the devolved Administration on why consent was not being granted. The UK Minister will be under a duty to explain to Parliament why the Government consider that they must proceed without that consent. Parliament will decide on the case presented: whether it is indeed in the best interests of the United Kingdom to freeze a specific policy while we implement new arrangements.

I should also remind noble Lords of the additional reporting duties on UK Ministers. I do not wish to repeat the detail that I provided to the House on them in Committee. Needless to say, they ensure heightened accountability by providing transparency to the process of developing frameworks, the use of the regulation-making powers and where frameworks are maintained in the short term. They will also require us to report on those principles that underpin this work, the principles agreed between the United Kingdom, Scottish and Welsh Governments at the Joint Ministerial Committee in October last year. Through this, our work on future frameworks is open to the scrutiny of this Parliament and of the devolved legislatures.

The other key change to the amendments that I should mention, as compared to the proposals that noble Lords considered in Committee, is the addition of sunset provisions for both the new powers and the regulations made under them. This was raised explicitly by noble Lords in Committee. We have always said that any freeze under Clause 11 would be temporary. The amendments place that beyond doubt by making it explicit in law.

I am grateful to noble Lords for the constructive manner in which they have engaged with the question of sunsets. In particular, I must give due credit to the noble and learned Lord, Lord Wallace, for the tenacity with which he has pursued this, including by tabling his amendments. I hope that he will be satisfied that his concerns in this respect have been addressed and will feel able not to press those amendments.

The powers last for only two years from exit day. This aligns them with the other powers in the Bill and makes certain that they will not be an ongoing mechanism for limiting competence. The regulations will also be time-limited. We have had in-depth discussions with the devolved Administrations on how long is needed to determine and implement our future frameworks. We have settled on a period of five years from when regulations come into force.

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I note that the noble and learned Lord, Lord Mackay, in presenting his amendment in Committee, and in his earlier contribution, highlighted the necessity for Parliament to act as a backstop if, despite collaborative processes designed to lead to agreement between the UK and the devolved Governments, discussions ended in deadlock. This contention, which commanded widespread support across the House in Committee, is one at the heart of our current constitutional settlement. We rejoice at the place we have reached, which is honest, open and takes things forward. In the spirit of wanting a legal system that is functioning, and well, the day after Brexit, it is a noteworthy contribution to that progress.

[Lord Keen of Elie]

I am most obliged to noble Lords for their contributions to this debate. I am essentially moving a series of very complex and extensive amendments to the Bill, from Amendment 89DA through to Amendment 92AD, with consequential amendments from Amendment 89DB through to Amendment 117C. The noble and learned Lord, Lord Wallace, has moved his own amendments on sunsetting constraints, which I shall address; and the noble and learned Lord, Lord Hope, has moved extensive amendments from Amendment 89DAA through to Amendment 92BBA—and, indeed, could have extended his Motion for amendment further than that, I suspect.

At the heart of this lies a simple principle. The EU has developed and maintained a single market for the benefit of the members of the Union. As we exit the EU, we are anxious to maintain a single market for the benefit of the union of the United Kingdom. That is what it comes to. In doing that, we must of course respect the devolution settlement and the position of the devolved entities and parliaments, whether in Scotland, Wales or Northern Ireland—even though at present it is not sitting as an Executive, which we acknowledge.

I am not going to address the original Clause 11. Noble Lords have expressed their views on that and I do not need to either add to them or necessarily rebut them; we are anxious to move on, and to move this amendment. What are we intent on doing? Well, I would counter the suggestion from the noble Lord, Lord Wigley, that this is a power grab. Such rhetoric has been thrown about before, of course, and I do not feel that it would advance matters to engage with that sort of rhetoric. I just remind noble Lords of the terms of the amendment itself. If your Lordships have the Marshalled List of amendments, at page 7—or, for the noble Lord, Lord Wigley, page 8, where it refers to Wales—I simply read out proposed new Clause 30A(1):

“An Act of the Scottish Parliament cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown”.


We know that there is then an elaborate process for the making of those regulations; the noble Lord, Lord Thomas of Gresford, referred to the stages that would be gone through in the making of those regulations. Let us then look at subsection (2):

“But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the legislative competence of the Parliament”.


There is no intention here to intrude upon the existing legislative competence of the parliaments. But of course, as powers come back, it is necessary to consider which of those powers have to be maintained in order that we can have a functioning internal market in the United Kingdom. That is the objective and what we seek to do. All powers pass to the devolved Administrations on exit day where no regulations have been made under the proposed amendment. That is the right policy outcome that we have agreed with the Welsh Government and which we still seek to agree— I emphasise still—with the Scottish Government.

That takes us on to the question of how the frameworks have been arrived at. Noble Lords will recollect that, at the Joint Ministerial Committee in October last year, the principles to be applied were agreed by all those attending: the Welsh Government, the Scottish Government and the United Kingdom Government. I just add in response to a point raised by the noble and learned Lord, Lord Wallace, that where he finds reference in the amendments to “principles”, that refers to the principles that were agreed at that stage and are carried over in the agreements. At the present time, we have identified 24 areas of retained EU law—or what will be retained EU law—where we require frameworks to maintain an internal United Kingdom market. There is debate about some additional areas, which will have to be addressed in due course. We have focused our attention now on 24; it may be fewer at the end of the day, as we talk our way through them, because they apply only to particular areas of policy, not to one general area. We are not talking about agriculture or fisheries, we are talking about discrete aspects of these policy areas that are perceived to be necessary in order to maintain the UK internal market.

Perhaps before I move on, because a number of noble Lords have raised the point, I should address the question of how the regulations will operate. That can be seen from the proposed amendment, and there are two elements to it. Proposed subsection (7) says:

“No regulations may be made under this section after the end of the period of two years beginning with exit day”.


That is the first period of two years. If no regulations have been made in respect of what is perceived to be a necessary framework, no regulations will be made. Proposed subsection (9) says:

“Any regulations under this section which are in force at the end of the period of five years beginning with the time at which they came into force are revoked in their application to any Act of the Scottish Parliament which receives Royal Assent after the end of that period”.


Therefore, in so far as we have not taken that forward, these powers will then revert to the appropriate authority.

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[Lord Wallace of Tankerness]

It seems that we have an explanation. Were officials of the Scottish Government involved in that and, if in-depth work has been done, would the Minister help the House by publishing it?

[Lord Keen of Elie]

I am not in a position to say that such work would be published, because of course it has been on the basis of engagement between officials dealing with this. I do not believe that there is any official report to that effect; it is just a matter of the product of engagement between officials negotiating these matters. Therefore I cannot indicate that we will publish anything in that regard. That is to try to explain the position with regard to the sunset clauses in the regulations. I turn to the question—

[Lord Thomas of Gresford]

The Minister was about to tell us about the gap my noble friend introduced between exit day and the making of the regulations.

[Lord Keen of Elie]

I am obliged to the noble Lord. There may be a situation in which powers go to the devolved Administrations and yet they do not deal with those powers, and it may be considered that upon further consideration there are additional areas where frameworks ought to be based on a UK-wide determination and where regulations would be made. But as the noble Lord himself observed, that regulation-making process would involve us consulting the Scottish and Welsh Governments—and, I hope at that stage, a Northern Ireland Executive—so that we could secure their consent. Only if there was a failure to secure the consent would the matter go forward to this Parliament, with two clear safeguards. First, the Minister of the Crown would have to explain to Parliament why he was seeking to make those regulations without the consent of a devolved Administration, and secondly, there would be an opportunity for the devolved Administration to make their representations to this Parliament as to why they felt it appropriate to withhold their consent. But, as I said, there may be a period after exit when it occurs to parties that it might be appropriate to proceed in that way.

Turning to the question of where we are with the Scottish Government, I begin by saying that the door—

[Lord Kerr of Kinlochard (CB)]

Before the noble and learned Lord moves on, did I miss it or has he answered the point made by the noble and learned Lord, Lord Mackay, on when the sun will rise before it spins across the sky for five years? When does it start? Is it with the particular regulation?

[Lord Keen of Elie]

I am obliged to the noble Lord, Lord Kerr. My understanding is that the five-year period will commence from the point at which the regulation is made.

[Lord Kerr of Kinlochard]

So in practice we could be looking quite a long way ahead—it is five plus X.

[Lord Keen of Elie]

I am tempted to mention here the noble Countess, Lady Mar.

[Noble Lords]

Oh!

[Lord Keen of Elie]

But I will not. If the noble Lord wishes me to elaborate on the operation of the sunset clauses, I would be quite content to write to him. At this stage, perhaps I can continue—with the encouragement of the noble Lord, Lord Griffiths—to address the question of the Scottish Government.

We are extremely grateful that we have achieved consensus with the Welsh Government and will be able to take this forward with their wholehearted agreement. I will come on to one or two points raised by the noble and learned Lord, Lord Morris, in a moment. As far as we are concerned, the door is still open for the Scottish Government, and we would be anxious to see them come through it so that we can take this forward with the agreement of all the Administrations in the United Kingdom. However, we are where we are at the present time. As regards their proposed amendments, they would, by different routes, result in a situation in which one of the devolved Administrations would effectively hold a veto over the implementation of UK-wide legislation for the maintenance of the UK internal market. That, I respectfully suggest, could not and would not be appropriate.

The exit from the EU raises complex questions with regard to the construction and application of the Scotland Act 1998 because, in 1998, such an exit was never contemplated. Reference has been made to Schedules 4 and 5 to the Scotland Act 1998 and the mechanisms for their amendment, but, as we were reminded by the noble and learned Lord, Lord Wallace, those are not the only mechanisms that impact upon the competence of the Scottish Parliament. We have to look at the terms of Section 29 of the 1998 Act, which as the noble and learned Lords, Lord Wallace and Lord Mackay, observed raises issues with regard to territoriality in respect of the competence of the Scottish Parliament. I do not want to go into the detail of that at present, but one notices that its competence is limited in that respect, and by reference to EU law as well. Therefore, we do not consider that, at the end of the day, we can appropriately accept a situation in which the devolved Administration can exercise a veto over the exercise of power by the United Kingdom Parliament in situations where it is being exercised for the benefit of the UK as a whole. I hope that that goes some way to explaining, without looking at the complexities of the 1998 Act, why we do not feel we are in a position to accept the position expressed by the Scottish Government on this point.

We simply regret the fact that, despite the very significant efforts—I underline “significant”—of the representatives of the Welsh Government and the Scottish Government in producing an outline agreement, it has not been possible to persuade the Scottish Government to join us on that point.

The noble Lord, Lord Wigley, suggested that this might reflect a lack of trust. As I have observed on previous occasions, this is not an issue of trust. This is an issue of constitutional propriety. Whatever view one takes of the devolved settlement and of where we are with regard to the legislation on that, at the end of the day it is not appropriate to accept that one of the devolved Administrations could effectively exercise a veto over legislation for the benefit of the other members of the Union—namely England, Wales and Northern Ireland.

[Lord Wigley]

I thank the Minister for the detail in which he is responding to this debate and the work that he has undertaken. None the less, there may be issues such as the sheep meat regime, which we have used in a number of circumstances as an example where the differential impact of policies in one area such as Wales may be much greater than the impact in other areas. To that extent, the wishes of the Welsh Government in that context should have a greater weight, in the same way as when Welsh Ministers represent the UK in the Council of Ministers to discuss the sheep meat regime. Is it not possible to fine-tune the Government’s proposals to enable that happen?

[Lord Keen of Elie]

With respect, I must say that it is our clear intention, which is reflected in the memorandum of understanding in the agreement, that we will engage with the devolved Administrations in the consideration of these framework agreements and their application. Of course, these matters will be taken into account at that stage. But I do not consider it appropriate to bring that sort of granular detail into this Bill, which is designed for a very specific purpose. I hear what the noble Lord says and, clearly, we wish to proceed on the basis of mutual respect and understanding with the other devolved Administrations.

In that context, I underline the point in response to a query raised by the noble and learned Lord, Lord Hope, speaking, I understand, on behalf of the Scottish Government who are not otherwise represented in this House. There is no question of this process under Clause 11 being somehow the thin end of the wedge so far as the devolution settlement is concerned. The devolution settlement is a reality of our constitutional situation and one that we extended under the 2016 Act, really quite recently, in light of the Smith review. We continue to respect, understand and wish to apply the devolution settlement. But it is a devolution settlement that has to work for everyone in the United Kingdom. I return to the point that it cannot work for everyone in the United Kingdom if one devolved Assembly or Government assume that they have the ability to exercise what amounts to a veto over legislation that is relevant, pertinent and important to the entirety of the United Kingdom.

I move on to address one or two additional points raised by noble Lords in respect of these matters. The noble and learned Lord, Lord Morris of Aberavon, referred to finance and whether the Welsh Government had missed a trick. I do not believe that they did for a moment. Indeed, they put themselves one step ahead by embracing this agreement and the amendment. But the noble and learned Lord raised a point about funding. He is right to point out that our agreement for the Welsh Government does not speak to funding but that is not to say that funding has been forgotten or put to one side. Clearly, it is a matter that will be addressed. We recognise the importance, for example, of the Barnett formula. We understand why there is concern, particularly about agricultural funding under CAP Pillar 1 under the current EU budget that runs to 2020. We have provided a degree of certainty by promising to continue to commit the same total cash funds for farm support across the UK until 2022. At present, the Secretary of State for the Environment is in close discussion with his counterparts in the Welsh and Scottish Governments on exactly how our agricultural systems should work outside of the EU. I stress that that is not a matter for this Bill. This is the Bill that provides for our exit and our exit alone, so I hope that the noble and learned Lord will accept that. He raised the question of public procurement—again, these issues are not for this Bill but we are clearly conscious of them and they will have to be addressed.

The noble Lord, Lord Griffiths, also raised the question of whether further areas might be the subject of reservation under the freezing provisions of the amendment. We have identified 24 areas for frameworks but a number of other areas that could be the subject of regulations going forward are still subject to discussion. I acknowledge that. Noble Lords may recollect that we published the list of frameworks and included not only the 24 areas I have referred to, but a further 12 where there is ongoing discussion about how they will be addressed and resolved.

I am conscious that I have not answered every question that has been posed. If noble Lords are concerned that I have not addressed a point that still concerns them about Clause 11, as amended, I would be content to receive their queries and write to them. In the event that I write to any noble Lords on this issue or any issue relating to this clause, I will place a copy in the Library. I seek to reassure noble Lords on that point. With that, I will formally move each amendment. I am sorry—the noble and learned Lord, Lord Hope, has to reply.

[Lord Hope of Craighead]

My Lords, it is for me to say what will happen to my Amendment 89DAA, which is an amendment to Amendment 89DA, moved by the noble and learned Lord the Minister.

I want to make a few short points. First, I want to pick up on a remark made by the noble Lord, Lord Thomas of Gresford, that he will not accept the opprobrium that was visited on the Scottish Ministers for the way they conducted themselves in these negotiations. Having had discussions with Michael Russell and the Lord Advocate—like the noble and learned Lord, Lord Mackay of Clashfern—the points I put forward in my introduction to my amendment were sincerely held. Those points were not made to cause trouble. The Lord Advocate in particular gave advice on his reading of the Scotland Act; Michael Russell, for his part, was entirely genuine in his points about principle as well. That should be clearly understood.

When I was in practice at the Scottish Bar, I was junior to the noble and learned Lord, Lord Mackay of Clashfern. As he pointed out, if I appeared with him, I would speak first; it would then be his function, as my senior, to speak second. Quite frequently, I found that when he spoke, he refined the kind of argument that I was attempting to put forward. It took on a slightly different—rather more attractive, perhaps—appearance after he had refined it. As he pointed out in his speech, the points that I made about the construction of Section 30 and the other sections do not really apply in the situation with which we are dealing here. I was grateful for his remark that the situation is unique and not seeking in any way to undermine the devolution settlement. I am extremely grateful to the Minister for making the same point that there is no question of this being the thin end of the wedge or in any way seeking to undermine the devolution settlement, to which he wishes to adhere. These remarks should help a lot in reassuring those in Scotland on how they should approach the continuing discussions. I was glad to hear from the Minister that the door is still open; I think that the Scottish point of view still regards the door as open too.

Perhaps this debate has refined things and shown that the purist argument—that of principle—does not really apply here. This is not about trying to construct the market that we were trying to construct in 1998, which was done by separating out the bits that mattered for that market into Schedule 5 so that they were clearly identified. We are dealing with a different, rather more subtle, situation in trying, as the Minister said, to create a functioning internal market with what has come back to us from Europe. That requires a rather more subtle approach that is not really dealt with in the Scotland Act, for understandable reasons. That being so, I hope very much that the way forward will be pointed by our discussion this evening. Without any further ado, I beg leave to withdraw my amendment.

[Lord Keen of Elie]

My Lords, I intervene to raise a point that I have spoken to the clerk about. Noble Lords might recollect that earlier in the evening I gave a passing imitation of a rabbit in headlights. The reason for that was that it appeared to me that the amendments in group three had been moved and agreed without me speaking to them—which is absolutely ideal, as far as I am concerned. They are highly technical amendments, but I felt I should mention that to the House, lest any noble Lord wishes me to speak to them. As I said, they have been agreed, but noble Lords did not have an opportunity to hear my dulcet tones on the subject.

Amendment 89DAA, as an amendment to Amendment 89DA, withdrawn.

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[Lord Hope of Craighead]

My Lords, I have put my name down in support of the amendment. The arguments which led me to do that are those which I set out when I was moving my amendment earlier this evening, so I need not take up the time of the House in repeating them. What I said earlier is the full explanation as to why I put my name down.

[Lord Keen of Elie]

My Lords, I thank the noble Lord for his amendments, which are pertinent given the different positions of the Scottish and Welsh Governments and the imminent timing of votes in their legislatures that will address consent.

The Government have been clear that they wish to make the positive case for consent for this Bill. We have not just talked about our commitment to making that case but have shown it. We have engaged in extensive discussions with the devolved Administrations and have now introduced the amendment to Clause 11 that we have just discussed at some length to try to meet the expectations of the devolved legislatures. I hope that the noble Lord, Lord Wigley, will accept that our commitment to the legislative consent process is reflected in the agreement that we struck with the Welsh Government last week.

This is the legislative consent process in action. We have put forward policy objectives; we have worked through the differences, and we have found an appropriate compromise. As a result, the Welsh Government have recommended that the National Assembly for Wales grant legislative consent to the Bill when it votes on this matter, I believe, on 15 May. The Welsh Government agree that our amendments now strike the right balance between providing legal certainty and maximising assurances to the devolved legislatures on how we will jointly manage the process of powers returning from the EU in otherwise devolved areas. Of course we are disappointed that we have not been able to reach the same agreement with the Scottish Government, but this, I suggest, is not for want of trying. I stress again that time remains for the Scottish Government to join this agreement, so that we can all demonstrate that we have done what we consider to be the responsible thing in this context.

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[Lord Wigley]

I ask for one point of clarification from the Minister. Does he not accept that there is a real danger of confusion in the public mind between allowing a consent order and actually getting consent? In other words, the process can be one where consent is given, is not given or is refused, but whichever of those three outcomes it is, the process can still go on for a parliamentary resolution here by order; and we know that orders, in the House of Commons and here, go through on the nod most of the time. Is that not a deception, giving the impression that there is a consent mechanism when, in fact, it is a pretty meaningless one?

[Lord Keen of Elie]

I simply do not accept the noble Lord’s characterisation of the matter. It is clearly the case that where consent, for example, was sought and not obtained, it would be necessary for the Minister of the Crown to address that, very clearly and specifically. There would be the opportunity, as there always is, for the devolved Administration to make their own views clear as to why they had declined consent. I do not believe that this is in any sense deceptive, misleading or a mirage. These are constitutional requirements that are adhered to and that will be adhered to. It would not be appropriate to introduce the sort of amendment moved by the noble Lord that would, in effect, tie the hands of this sovereign Parliament, so far as this exit process is concerned. Whatever view one might take about the merits of exit, that is neither here nor there. This is a constitutional principle with regard to the sovereign Parliament of the United Kingdom when it comes to legislate for the benefit of the entirety of the United Kingdom. I therefore urge the noble Lord to withdraw his amendment, and indicate that I would not expect to return to this matter at Third Reading.

[Lord Wigley]

I am very grateful to the Minister. I have heard that form of words from his colleagues in the past. Clearly, this is a matter on which there may be a difference of opinion. I realise the need for there to be coherence on a UK scale but there are matters which have a specific effect in Wales, Scotland or Northern Ireland where their interests need to be taken into account. Clearly, we are not going to make progress on this tonight. Therefore, on the basis of the discussion we have had, I beg leave to withdraw the amendment.

Non-Disclosure Agreements

Lord Keen of Elie Excerpts

Tuesday 1st May 2018 Lords Chamber

[Baroness Kennedy of The Shaws]

To ask Her Majesty's Government what steps they are taking to ensure that non-disclosure agreements are not used to cover up criminal behaviour or silence victims, and that there are no financial or other consequences imposed when a breach of an agreement is in the public interest.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, non-disclosure agreements cannot prevent any disclosure required or protected by law. A court could find a non-disclosure agreement to be void or decline to give effect to it for reasons of public policy. The Government are looking at the structures around non-disclosure agreements and the evidence coming forward about how they are being used.

[Baroness Kennedy of The Shaws (Lab)]

Noble Lords will know that after the great surge of disclosure when Harvey Weinstein’s sexual abuse came to light, those very serious allegations gave light to many other instances of women in the workplace experiencing sexual abuse and drew attention to bullying experienced by men and women both. A light has been shone on the fact that non-disclosure agreements are used all too often to silence complainants who have experienced harassment of a sexual nature that sometimes falls short of criminal behaviour. Do the Government agree that they should give a clear statement, and, if possible, bring legislation, to say that it is not right to use non-disclosure agreements in this way for the purpose of silencing complaint?

The second matter is that we also know that many employment contracts now contain a clause to say that there has to be recourse to arbitration if there are any complaints or matters of dispute to avoid court hearings. Again, that silencing is often used to prevent those who are suffering harassment and abuse in the workplace from taking their cases forward. Should something not be done about that?

[Lord Keen of Elie]

My Lords, the Employment Rights Act 1996 makes two things clear. First, if an employee does not get independent legal advice regarding such an agreement it will be void. Secondly, it ensures that where a non-disclosure agreement has been entered into it does not affect the right of the employee to make a protected disclosure—that is, a disclosure that pertains to various forms of wrongdoing and is made to a protected party.

[Lord Thomas of Gresford (LD)]

But protected disclosure does not cover all forms of sexual harassment or harassment in the workplace. Is there not a duty on lawyers to make it clear to their clients, whether employers or employees, that non-disclosure clauses in contracts of employment or settlement agreements cannot be used to conceal criminal conduct or to prevent the reporting of conduct that amounts to sexual harassment, particularly where it involves an abuse of power by a senior over a junior or where it is repeated and habitual?

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[Lord Keen of Elie]

My Lords, the Protection from Harassment Act 1997 includes the matter of sexual harassment. On the need to disclose to employees their rights in this context, I reiterate that, to have an enforceable non-disclosure agreement, it is necessary that the employee should have been given the opportunity to take independent legal advice.

[Lord Soley (Lab)]

By chance I recently came across the case of an employee of a charitable body that operated in the private and public sectors and had contracts with employees that prevented them taking away any correspondence between themselves and the employer in the event of their leaving for any purpose at all, as far as I could understand the contract. I wonder whether that is lawful. I should add that the case was in Scotland. I am not sure whether the same laws apply in Scotland in this case as would apply in England. Can the Minister offer the House any guidance on whether such a contractual arrangement between an employer and employee is legal?

[Lord Keen of Elie]

My Lords, I cannot comment in detail on the particular case outlined, but there are legitimate reasons why an employer would wish to retain correspondence or other confidential information pertaining either to its business or to its charitable functions and not wish it to be taken away. There can be a legitimate basis for such a provision.

[Lord Watts (Lab)]

My Lords, are not large amounts of money often paid to individuals which may satisfy that individual but are not in the public interest? Should we not do away with some of these disclosure deals?

[Lord Keen of Elie]

My Lords, in circumstances where a person accepts a sum of money which is beyond reasonable indemnity for any loss they have suffered on the grounds that they will not disclose wrongdoing or a criminal offence, they themselves are liable to commit a criminal offence.

[Baroness Chakrabarti (Lab)]

My Lords, the Minister will remember, I think, a very similar Question being asked on 22 January. It is now a glorious May Day. Given the complexities and competing public concerns around this issue, might the Government not consider setting out a clear timetable for clarity in policy and potential legislation in this area?

[Lord Keen of Elie]

My Lords, the House of Commons Women and Equalities Select Committee is currently conducting an inquiry into sexual harassment in the workplace and has taken evidence about the misuse of NDAs in that context. The Government want to see what the committee has to say about that before reaching their own conclusions. In other words, we will make an informed decision on the matter.

[Lord Faulks (Con)]

My Lords, I am sure that the whole House deprecates the use of non-disclosure agreements to bully employees or former employees, and appreciates that the Government are looking carefully at this. However, does my noble and learned friend agree that non-disclosure agreements originally came into being to protect, quite legitimately, trade secrets and other matters that it was in the interest of both parties should remain secret? I hope that the Government will bear that in mind when deciding what to do in this area.

[Lord Keen of Elie]

My Lords, my noble friend is absolutely correct: non-disclosure agreements have an entirely legitimate use, particularly in the context of protecting confidential information of an employer upon the departure of an employee.

Employment Tribunal Hearings

Lord Keen of Elie Excerpts

Thursday 26th April 2018 Lords Chamber

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, we wish to ensure that employment cases are dealt with swiftly and effectively. We are taking action to deal with the tribunals’ increased case load. This includes setting aside extra days for judges to hear tribunal cases, as well as developing plans to recruit more tribunal judges. We continue to monitor the situation closely.

[Lord Beecham (Lab)]

My Lords, this issue was drawn to my attention by a newspaper headline—in the Times, not the Morning Star—entitled “Tribunals gridlocked by surge in claims”. Among the many cases cited by the trade union USDAW and Thompsons Solicitors was a case in London, which happened in November 2017 and will be heard in January 2019, and a case in Watford, listed for a three-day hearing in January 2018 but postponed until September due to “having overbooked and a lack of judicial resources”. Is the Minister aware that ACAS conciliators have reported that they are overwhelmed by the increase in claims? For example, solicitors in Newcastle have been unable to get through to speak to anyone for two weeks. In detail, what steps do the Government intend to take, and within what timescale, to ensure that the maxim “justice delayed is justice denied” is no longer exemplified in the workings of the employment tribunal system as a result of what the Supreme Court ruled was its unlawful and unconstitutional imposition of fees of up to £1,200?

[Lord Keen of Elie]

On the last point, the Supreme Court determined that it was lawful to charge fees for the tribunal; it was the level of fees that was considered disproportionate. The time taken for tribunal cases was in the region of 26 to 28 weeks per case for resolution. That has increased to about 33 weeks because there was a significant increase in applications to the tribunals after the decision in July 2017. We have put in place a process for recruiting a further 54 tribunal judges for employment tribunals, which should increase capacity by about 44%. In addition, we are now taking steps to increase the number of fee-paid judges in the tribunal system; indeed, fee-paid judge sittings have increased by 180% since July 2017. We are also conscious of the need to employ additional staff in employment tribunals; that is being undertaken at the present time. I apologise for the length of my answer, but I felt I should give the noble Lord’s question a full response.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, in the impact assessment supporting the 2013 fees order, the Government said that they were unable to predict how many employment tribunal claims would be deterred by the introduction of the fees but that they should deter unmeritorious claims. We now know that there was a 75% drop in claims following their introduction, with absolutely no effect on their success rate, and that this massive backlog has built up following their abolition. Will the noble and learned Lord accept that this is clear evidence that high tribunal and court fees deter meritorious claims and so reduce access to justice? Will he assure the House that any future impact assessments on this topic will have regard to such evidence?

--- Later in debate ---

[Lord Keen of Elie]

When the coalition Government introduced tribunal fees to employment tribunals, they did so in the belief that they were taking a proportionate step to meet the costs of our courts and tribunals. Indeed, the totality of fees income is still less than half the cost of our courts and tribunals. Going forward, we will be conscious of the need to ensure access to justice—a point made by Lord Reed in his judgment in the UNISON case.

[Lord Howarth of Newport (Lab)]

My Lords, is the Minister aware that there is considerable sympathy for him having to keep returning to this House to defend the indefensible situation that the Treasury, being apparently unaware that justice delayed is justice denied and that access to justice is beyond price, has imposed on his department? What does he think of the Treasury’s custom of hiding behind the skirts of the spending departments?

[Lord Keen of Elie]

My Lords, in what may be my last statement from the Dispatch Box, I observe that the Treasury has had to respond to the dramatic economic turnaround that occurred after 2008. That has had an impact on spending departments, but we require to maintain a coherent economic policy for the whole country.

Probation: Voluntary Sector

Lord Keen of Elie Excerpts

Tuesday 24th April 2018 Lords Chamber

[Lord Ramsbotham]

To ask Her Majesty’s Government whether they plan to increase the contribution made by the voluntary sector to the delivery of probation services, following publication on 17 April of the report by HM Chief Inspector of Probation, Probation Supply Chains.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the report of 17 April from Dame Glenys Stacey is one for which we are grateful. The voluntary and charitable sector has a viable role to play in helping to reform offenders. We recognise that community rehabilitation companies have faced financial challenges, which means that many of them have not been able to develop their engagement with the voluntary sector to the extent envisaged. We will carefully consider the inspectorate’s recommendations as we work to improve probation services.

[Lord Ramsbotham (CB)]

My Lords, I thank the Minister for that Answer. The Chief Inspector of Probation has repeatedly drawn attention to the failure of the transforming rehabilitation reforms—rushed, rather than thought through, by Chris Grayling—to protect the public or satisfy the needs of offenders under probation supervision. In her latest report, she draws attention to the reduction of the contribution contracted from the voluntary sector, an essential partner under the old system, and the failure of community rehabilitation companies to analyse the needs of those under their supervision, a given for all former probation trusts. Can the Minister please tell the House what the Government are doing to rectify this, and whether the chief inspector’s particular recommendations to the Ministry of Justice and Her Majesty’s Prison and Probation Service will be actioned?

--- Later in debate ---

[Lord Keen of Elie]

My Lords, if I may, I will quote from the chief inspector’s report of 17 April:

“We found that the quality of services was variable, but reasonable overall”.


We intend that the service should be more than reasonable, and we are considering her recommendations.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, the report demonstrates that probation services have been going badly wrong, with a failure to involve the voluntary sector on anything like the scale envisaged. Allowing the community rehabilitation companies to design and implement their own delivery models was a mistake and has led to uneven and inadequate delivery. Do the Government now plan to tie CRCs to more rigorous contracts by variation, or on renewal? Might this not also enable CRCs to provide much more in the way of needed services to the National Probation Service?

[Lord Keen of Elie]

My Lords, the community rehabilitation companies faced unexpected difficulties when it was found that the financial float of those companies was less than had been planned for. We have already discussed the terms of the contracts with the CRCs and they are the subject of further consideration. We are certainly determined that there should be a diverse provision so far as probation is concerned, and one that does involve third sector organisations.

[Lord Beecham (Lab)]

The chief inspector has stated that the present system is fundamentally flawed and that she doubts whether the service can ever be restored to the standard we should accept. Will the Government now join with her, the relevant trade unions and the judiciary to examine how the performance and reputation of a critical part of our system can be restored?

[Lord Keen of Elie]

My Lords, with regard to the present provision it should be noted that the community rehabilitation companies have reduced the number of people reoffending. Indeed, our reforms mean that they are monitoring 40,000 offenders who had previously been released with no supervision.

[Baroness Corston (Lab)]

My Lords, will the Minister accept that one of the reasons why it is very difficult to know what is going on in the community rehabilitation companies is that, under the Grayling legislation, as it was previously referred to, they are specifically excluded from the Freedom of Information Act?

[Lord Keen of Elie]

My Lords, I do not consider that a material consideration, given that they are subject to the very report that we are discussing presently, Dame Stacey’s report of 17 April.

[Lord Beith (LD)]

My Lords, the Minister should not speak about unexpected difficulties, given that the likelihood that the amount of work going to the CRCs would be lower than the Government predicted was something of which the Justice Committee warned, along with many other things.

--- Later in debate ---

[Lord Keen of Elie]

My Lords, the flow of work between the NPS and the CRCs was indeed lower than the Government had anticipated when they implemented these measures.

[Lord Beecham]

My Lords, could the Minister perhaps answer the question that I put to him? Will the Government sit down with the trade unions and the judiciary to deal with the crisis in the system?

[Lord Keen of Elie]

My Lords, with respect to this reference to crisis, I remind the noble Lord of what the chief inspector said in her report:

“We found that the quality of services was variable, but reasonable overall”.


We aim to improve that. We do not intend to sit down at present with particular parties, but we are addressing the recommendations in the chief inspector’s report, which is the proper way forward.

[Lord Bassam of Brighton (Lab)]

My Lords, perhaps the Minister can tell us what the current recidivism rate is.

[Lord Keen of Elie]

I am not in a position to answer such a general proposition but I will undertake to check the relevant statistics in that area and to write to the noble Lord in due course. I will of course place a copy of the letter in the Library.

[Lord Harris of Haringey (Lab)]

My Lords, the Minister said that, for some reason, the CRCs did not need to be subject to the Freedom of Information Act because there was a chief inspector. Could he explain exactly why the chief inspector is a substitute for citizens posing questions to and seeking information from the CRCs?

[Lord Keen of Elie]

It may not be a substitute for citizens seeking information, but it is a means of ensuring that the conduct of the CRCs and the results of their work are put into the public domain by those who have a clear understanding of how the work should be performed, and are the subject of published reports.

Civil Liability Bill [HL]

Lord Keen of Elie Excerpts

2nd reading (Hansard): House of Lords
Tuesday 24th April 2018 Lords Chamber

Moved by

[Lord Keen of Elie]

That the Bill be now read a second time.

Relevant document: 22nd Report from the Delegated Powers Committee

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the Bill makes important changes to our personal injury compensation system. It is about making that system fairer, more certain and more sustainable in the future for claimants, defendants, the taxpayer and motorists. This builds on our wider reforms to cut the cost of civil justice claims and strengthen the regulation of claims management companies.

The first part of the Bill will deliver a key manifesto pledge: to support hard-working families by bringing down the cost of living through a crackdown on exaggerated and fraudulent whiplash claims, which lead to higher insurance costs. The second part of the Bill will provide a fairer method for setting the personal injury discount rate. It will, for the first time, use a new, regular, more transparent mechanism in which the Lord Chancellor consults independent experts before setting the rate. We aim to provide full compensation for seriously injured claimants while being fair to those, particularly the National Health Service, who bear the cost of paying. We believe that the Bill will provide a compensation system that meets the rightful needs of claimants while saving the public money, both as consumers and taxpayers. About three-quarters of the United Kingdom motor and liability insurance market has already committed publicly, through a letter published on 20 March, to ensure that any savings resulting from enactment of the Bill will be passed on to the public.

I begin with the issue of whiplash. DWP data shows that around 650,000 RTA-related personal injury claims were made in 2017-18. That is nearly 200,000 more than in 2005-06—a rise of 40%. If we take the 10 years following 2005-06, the rise is around 70%. We estimate that around 85% of these are for whiplash-related injuries—higher than in any other European jurisdiction —yet Department for Transport figures show that in the decade up to 2016-17, reported road traffic accidents went from around 190,000 to around 135,000—a fall of 30%. Many claims will, of course, be genuine and the Government would never seek to deny justice to those who suffer injury; it is absolutely right that individuals are compensated for genuine injuries. However, by 2016-17, there were around 670,000 whiplash claims in the United Kingdom. That number is too high and the costs to motorists and consumers too great. It comes despite major improvements in motoring safety, such as the increased use of integrated seat and head restraints. We must ask ourselves what is going wrong.

The reality is that some of these claims are not genuine. Last year the insurance industry identified 69,000 motor insurance claims that it considered fraudulent. By their very nature, these claims are difficult to detect, so I ask the House to consider that the problem goes much further than this already significant number. That the number is so high is indicative of an ever-pervading compensation culture in this country. The knock-on effect of this has been to drive up insurance premiums. I would go as far as to say that, for some, it has become socially acceptable to make a whiplash claim for little or no injury. Noble Lords may have seen examples in the media of exaggerated or fraudulent whiplash claims, such as the man making a claim after his car was slowly reversed into in a supermarket car park. It transpired that he was not in the car at the time.

As the House will no doubt agree, the purpose is to compensate those for whom genuine injury has occurred. Our reforms seek to reduce and control the costs of whiplash claims and to disincentivise people making fraudulent or unmeritorious claims. The level of compensation paid out for such claims is, in the Government’s view, out of all proportion to any genuine injury suffered, especially when balanced against its effect on the price of premiums paid by ordinary motorists. Insurance industry figures show that in 2017 car insurance premiums rose at the fastest rate ever. Though there are other contributing factors, without reform to whiplash claims those increases are estimated by the ABI to continue at an alarming rate—potentially 10% per year. For many people—particularly those in rural communities—owning a car is not a choice: it is a necessity. Higher insurance premiums hit young and elderly motorists particularly hard. That is why we pledged in our manifesto to bring down the cost of motoring. The Bill can and will do that.

The measures in the Bill relating to whiplash will therefore address a number of issues. They will introduce a ban on settling whiplash claims without medical evidence. This will discourage fraudulent claims and encourage insurers to investigate claims properly, providing fairness and certainty for claimants, so they do not feel pressurised into accepting an offer before knowing the true extent of their injuries. They will provide for a new system of fixed tariffs for payments for pain, suffering and “loss of amenity” in whiplash claims. This will give claimants proportionate compensation while controlling the costs of claims. The final tariff figures will be set in regulations to be debated via the affirmative procedure by Parliament following Royal Assent. The judiciary will have discretion to increase the compensation payable in exceptional circumstances, with the cap set in supporting regulations. The whiplash reform programme also includes measures not in the scope of this Bill, to increase the small claims track limit for road traffic accident personal injury claims to £5,000 and for all other personal injury claims to £2,000.

The measures in the whole reform programme are fair and proportionate. They will prevent fraudulent and unmeritorious whiplash claims from driving up insurances costs, allowing insurers to pass on savings of about £1.1.billion a year to consumers. This would mean an average reduction in car insurance premiums for consumers of around £35 a year. As a Government we fully intend to hold the market to account in making sure that happens.

I now turn to the second part of the Bill, the personal injury discount rate. Fairness and sustainability are at the heart of our reforms. With any change to the system for compensating the seriously injured, we must keep in mind the person behind every claim. The Government continue to support the aim that seriously injured people should receive 100% compensation to meet expected future financial losses, including medical and care costs. The way compensation is calculated must be fair to both claimants and defendants, including the National Health Service.

This Bill will reform the personal injury discount rate, which adjusts a compensation lump sum to allow for the return a claimant is expected to receive by investing it over the period of the award. Currently at minus 0.75%, we have one of lowest rates in the world. In Germany, it is 4%; in France it is 1.2%, and in Ireland it is 1%. The current rate consistently compensates for injury at more than the 100% required by law. Awards currently average 120% to 125% even after management costs and tax. This is putting huge pressure on the National Health Service in claims for clinical negligence. Last year, the NHS spent £1.7 billion on such cases, a cost that has almost doubled since 2010-11, with an unsustainable average increase of 11.5% every year.

The current legal framework requires the Lord Chancellor to assume claimants to be very risk-averse investors, and the discount rate has been set since 1998 with reference to returns on very low-risk investments—index-linked UK gilts. This is unrealistic. In reality, claimants do not behave as very low-risk investors; they invest their compensation in diversified low-risk portfolios and on average receive higher returns than is assumed under the present law. This results in inflated payments for claims which overly penalise defendants.

Every pound spent on overcompensation could instead be spent on front-line public services: in our hospitals, our schools and our Armed Forces. We will therefore do a number of things in the Bill. We will provide for the discount rate to be set in future by reference to how evidence indicates claimants actually invest, giving a more realistic rate that will mean that injured parties with low-risk investment appetites still receive full and fair compensation and ensure that defendants, including the NHS, are not left shouldering the burden of overcompensation.

We shall provide for the first time that the Lord Chancellor should set the rate regularly—at least every three years—and must do so after expert advice from an independent panel which protects the interests of claimants, as well as defendants, by ensuring that the rate is grounded in investment practices and market conditions.

Transparency and fairness in setting the rate were two of the main concerns voiced by the Justice Select Committee, and we have responded to that in setting out our position in the Bill. Changes to the discount rate will affect only lump-sum payments for future financial loss. They will not affect periodical payment orders, which account for a significant proportion of the compensation paid for future loss in the cases involving the most serious and long-term injuries.

Periodical payment orders are annual, risk-free payments providing a steady stream of income which is not affected by the discount rate, allowing claimants to plan for their long-term needs. PPOs are available from the National Health Service in all negligence cases, including those involving brain damage during birth, and in almost all cases where the defendant is insured by a UK-regulated insurer. A court is able to provide protection by ordering a PPO where it believes that it is in the claimant’s interest. In any event, for serious long-term injuries, claimants will continue to be able to rely on the National Health Service as any other person would.

These reforms will reduce spending pressure on the NHS. The NHS Confederation and other influential medical bodies have described how the change last year in the discount rate exacerbated the financial impacts of clinical negligence claims. These higher litigation costs against the NHS are now unsustainable.

This fairer approach to setting the discount rate could, assuming a rate between 0% and 1%, save the taxpayer between £250 million and £550 million per year and, in turn, mean savings to insurers of between £0.5 billion and £1.5 billion per year, to be passed on to consumers in the form of lower insurance premiums.

Alongside our wider work to reform the civil justice system and, through the Financial Guidance and Claims Bill, strengthen the regulatory regime for claims management companies and ban cold calling, the reforms contained in the Civil Liability Bill are needed to put personal injury payments on a fair, more certain and sustainable footing for the future. In turn, they will save the NHS and consumer money. Legislating to ensure that genuine whiplash claims are backed by medical evidence, and that claimants receive proportionate compensation, will reduce the number and cost of whiplash claims. This will allow insurers to pass on savings to consumers, and, as I have said, three-quarters of the UK motor and liability insurance market has already publicly committed to doing so.

In changing the system by which the discount rate is set we want to continue to ensure fairness, so that those who suffer catastrophic personal injury get 100% compensation, within a more informed and transparent system in which the rate is set by the Lord Chancellor at regular intervals, with the benefit of independent expert advice, in the interest of claimants. I commend the Bill to the House and I beg to move.

--- Later in debate ---

[Lord Keen of Elie]

My Lords, I thank the whole House for all the contributions on the Bill today. I might not answer every query posed during this stage of consideration, but—and I hope this reflects the steps that we have taken already—I would be perfectly open to, and would welcome, meeting any of your Lordships who wish to engage with me and officials prior to Committee to discuss particular issues. That is an invitation I hope at least some noble Lords will consider taking up if they have any queries.

Clearly, there are different views about the state of the Bill at this stage, but I could not accept the observation made by the noble Lord, Lord Cromwell, that it is rough-hewn. Respectfully, it appears to me that a great deal of work has been done to prepare for the issues that we shall have to address. I will look at those issues in two parts, as does the Bill, and begin with whiplash.

The noble Lord, Lord Beecham, took issue with some of the statistics and suggested that perhaps matters had turned, but let us be candid. I shall not use some of the terminology used by noble Lords about a racket or anything else. What we have is a very obvious and clear trend in the development of claims for road-traffic-based whiplash injury. It has been going on for more than 10 years. The consequences are very clear and obvious; it may well be that we should have considered acting sooner to address this issue, but act we must and that is what we intend to do.

The New England Journal of Medicine recently carried out an analysis of the incidence of whiplash injury and the availability of compensation. It discovered a very obvious correlation between the availability of compensation and the incidence of whiplash claims reported in road traffic cases. The noble Earl, Lord Kinnoull, observed that when he attended meetings with the reinsurers Munich Re in Germany it had alluded to the situation in the United Kingdom, which is quite exceptional. Unless Scandinavians have much thicker necks than us in this part of the world, there is little to conclude except that a claims culture has developed, because the incidence of these claims in that part of the world is very different from our own.

We therefore have to address how these claims will be contained in the wider public interest and, ultimately, in the consumer interest. However, I do not suggest that any one part of the community is wholly or solely to blame for the situation we now find ourselves in. For example, I do not demur from the suggestion that insurers have been complicit in the development of this claims culture over the past 10 years or more in their willingness to avoid undue expense and simply to settle claims without the necessity for any form of real evidence. Many noble Lords have experience of that themselves.

However, there is some rationale to the way in which we are attempting to approach this matter, and it includes the reference to proposed changes in the small claims limit as well. The idea of a tariff is not entirely novel; such an approach has already been taken in Italy and in Spain, where they faced a similar claims culture. We are, first, bringing together a tariff and, secondly, making it a requirement that no claim can be settled without a medical report, or MedCo report. I discern that there is almost universal approval for that step. Thirdly, we have agreed that the claims portal for small claims will be reviewed, which the noble Lord, Lord Marks, suggested would be required, to make it accessible to claimants themselves when they come to make claims. It will of course be simpler for them to make that claim in circumstances where they know that there is, beyond the issue of liability, a tariff that determines the damages for pain and suffering. I emphasise those damages because this does nothing in respect of the claims for wage loss and other outgoings incurred by claimants in the circumstances.

I will also take up a point mentioned by the noble Lord, Lord Marks, with regard to the cost as compared with the tariff of damages at the very lower end. I understand that where liability is accepted, the cost of the MedCo report will be a relevant recoverable cost, no matter whether this is in the small claims court or otherwise. Another question that has been raised is how the original cost of the MedCo report is funded, and we are looking at that and discussing it with interested parties at present. However, there will be no material issue over the recovery of the MedCo report cost itself, which the noble Lord identified as in the region of £180 plus VAT.

That, then, is the background. There are other potential targets. The noble Lord, Lord Beecham, referred to the conduct of claims management companies, and I will say a little about that. As noble Lords will be aware, we are already taking steps through the Financial Guidance and Claims Bill, which is making its way through the other place, to address some of the difficulties that arise with regard to claims management companies. First, their regulation will go to the FCA. As the noble Earl, Lord Kinnoull, observed, that is a regulator with teeth, and we consider it properly positioned to deal with claims management companies. There will also be the means to limit the percentage that claims management companies can take from a claimant when they deal with a claim, to try to control their activities in that regard.

We have of course been concerned with the issue of cold calling, which I suspect has bedevilled virtually all of us at one point or another. The Information Commissioner is concerned with that as well. One of the difficulties, and this was touched upon in the course of debate, is how to regulate the unregulated. One of the real difficulties is that in the context of cold calling, we have seen the claims management companies, or those who carry out this cold calling, move out of the United Kingdom and carry out this conduct from abroad. It is a very simple thing for them to do, and it is a very difficult thing for us to stop. That is why you have to look at alternative routes to addressing the wider issue that we have to deal with. We are certainly concerned that we need to control the activities of the claims management companies, although they alone are not responsible for the way in which this whole industry of whiplash claims has developed.

I notice that the noble Lord, Lord Monks, who I appreciate is not entirely sympathetic to the Government’s position on this, did make a passing remark in the context of other claims, such as workplace claims. He said the abuse was a lot less than in road traffic accident cases, but implicitly he accepts the existence of abuse in the context of RTA cases, and I believe that is almost universally acknowledged. We seek to address that in Part 1 of the Bill. We consider that we are taking a proportionate approach. Yes, it distinguishes whiplash-type injuries that occur in a road traffic context from other forms of accident or injury, but that is because we have to address a particular mischief. That is what we are doing with Part 1 of the Bill. It appears to us that this is the sensible and considered way forward in order to control this situation.

I note that the Delegated Powers Committee has made a number of recommendations with regard to Part 1 of the Bill. We do not entirely agree with its recommendations, but I have noted the concern expressed by noble Lords about the question of defining whiplash injury. The intention was to have a degree of flexibility, so that if the claims industry developed in a particular direction in response to legislation, we were equipped to deal quite rapidly with that. It may be that noble Lords would like to see rather more in the way of definition so far as whiplash is concerned, and I take on board the observations that have been made.

There is also the question of the tariff, and of course an illustrative tariff was provided in the papers that were produced along with the original Bill and to which reference has been made. We consider that being able to regulate the tariff by the affirmative procedure is a more flexible way of being able to respond to changes. But, again, I hear what noble Lords say and we will have to consider that going forward.

I would like to respond to a number of points made by the noble Lord, Lord Sharkey. First of all, I hope I have made clear that medical report costs are recoverable. There was a suggestion that they were not. He referred to the position of other parties such as cyclists being caught, but they are not brought within the tariff on the basis of Part 1 of the Bill. To answer that particular point, they are specifically excluded at Clause 1.

I would like to move on to Part 2, the question of the discount rate, and address a number of points. First of all, it appears to be generally understood that we do need to put in place a means by which the discount rate can be determined and reviewed on a regular basis in order that we do not encounter the sort of situation we had in 2017, when we saw it go from 2.5% to minus 0.75%. I wholly agree with the observations of the noble Earl, Lord Kinnoull, that the present discount does not realistically reflect the way in which a party—any party—is going to invest funds going forward. Therefore, we have to bring this back into a realistic scenario.

The objective—here I address a number of points made by the noble Lord, Lord Cromwell—is not to have representatives of various interested parties partaking in an exercise of trying to agree a rate. The whole point of the structure in Part 2 is that there should be an expert panel, not a representative panel. The noble Lord asked about there being a fair balance of representation on the panel, but that is not the intention or the objective. The idea is that we should have an expert panel to advise the Lord Chancellor.

The intention is that that should be an open exercise so that, for example, the way in which the expert panel reports to the Lord Chancellor will be open. Indeed, in our response to the Justice Select Committee, the Lord Chancellor observed that he would be publishing the recommendations of the panel’s report in circumstances where he received it and was to act upon it. In due course, he will also be required to explain the way in which he fixes the discount rate. Indeed, he will be amenable to judicial review in carrying out that function, so that there will be ultimately an oversight of the way in which he discharges that duty. We consider it appropriate that that should be done openly and effectively in that way.

Clearly, it will be important that the discount rate should be reviewed at regular intervals. We have alighted upon the period of three years for review after considering various representations, but I have heard the references to five years as a review period and the interesting alternative mentioned by the noble Lord, Lord Marks, of essentially having an expert panel meeting at regular intervals to consider whether there are circumstances that might require a proper review of the discount rate. We would be open to discussing these alternatives to see how we can effectively ensure that the discount rate continues to reflect the reality of investment.

On the point of investment, I believe there is general consensus that we should move from the very-low risk level to the idea of a low level of risk for investment. That is not to suggest that claimants are going to become stockbrokers—I really do not feel that that is a proper reflection of the situation at all. The intention in Part 2 of the Bill is to bookmark the place in which the expert committee will address the question of how the discount rate should be fixed. It is to give the panel a degree of flexibility in that context between, at one end, very low risk and, at the other end, low risk by an investor who is not concerned about having to provide for their future care.

On the question of future care, which arises most particularly in the context of clinical negligence cases and the subsequent cases of severe injury that very often arise from that, there is always the difficulty of determining not only what the appropriate discount should be but, as noble Lords have observed, what life expectancy may be. That is always an estimate. You could almost say that you invariably get it wrong; you can never be sure that you have got it right. That is why we consider that PPOs are a very important option available to claimants. Looking at the data that has been gathered in arranging guidance for the Bill, we have noted that their use is essentially limited to cases where claims exceed £1 million, and more generally £5 million. They are not always taken up, and one of the problems with the present discount rate is that it would tend to discourage claimants and their advisers from taking up PPOs. But clearly, if you want certainty with regard to future care, one way to secure it is to agree to a PPO, and we would wish to encourage them.

We have to underline, however, that PPOs are not universally available. For example, I understand that the Medical Defence Union, which is a mutual, is not in a position to guarantee future payment of a PPO and therefore not in position to provide them. However, that may alter as we look at the question of indemnity arrangements—for example, in respect of general practitioners—which we are doing at the present time. We certainly wish to encourage the use of PPOs and are looking at providing guidance to claimants and their advisers, in order to ensure that they are taken up in appropriate circumstances.

One further issue that has been raised by a number of your Lordships is Section 2(4) of the 1948 Act. We recognise the question that is being raised about this and the appropriateness of maintaining that. Presently, Section 2(4) of the 1948 Act would not fall within the scope of the Bill. I appreciate that, if we were to amend the long title of the Bill, we might be able to bring the matter within scope, but there is a concern that the repeal of Section 2(4) potentially raises issues that will have to be the subject of consultation with interested parties. We are concerned that we need to act promptly, particularly with regard to the discount rate, and it would be unfortunate if that process was materially slowed because of an attempt to bring Section 2(4) and its repeal into the present Bill. I hear what noble Lords have said and am not unsympathetic to the suggestion that the time has come to revisit that provision and understand why we need to maintain it. My concern is that attempting to bring it into the Bill at this stage could have unfortunate consequences for the way in which we are trying to deal with the discount rate.

On that last point, I appreciate the concern about the delay in respect of the discount rate. We are proposing to carry out the first review as swiftly as possible. I understand that we are aiming for April 2019, not 2020 as has been suggested. There is a 90-day period and then a 180-day period. There is a need to have an expert panel in place, but considerable steps may be taken in anticipation of the Bill passing to ensure that we have the machinery in place for the swift appointment of an expert panel, so that the review can be carried out as soon as possible. I will take further advice from officials on the question of how far we can go with that sort of preparation prior to Royal Assent of the Bill, in order to move swiftly on that matter.

I appreciate that I have not addressed all of the queries that have been raised this afternoon. In the time available, I regret that I will not be able to do that but, as I said at the outset, I am open to meetings with noble Lords who wish to raise questions on the Bill prior to Committee, and I would welcome the opportunity to engage with them. I beg to move.

Bill read a second time and committed to a Committee of the Whole House.

Legal Aid

Lord Keen of Elie Excerpts

Thursday 19th April 2018 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist]

To ask Her Majesty’s Government what steps they are taking to ensure sufficient availability of legal aid.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, we recognise that the availability of legal aid is an important part of maintaining access to justice. The Government remain committed to targeting legal aid to those who need it, while balancing that with the cost to the taxpayer. As the Lord Chancellor has confirmed, we will conduct an evidence-based review of LASPO and will publish our findings later this year.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the Minister for his reply, and I am conscious that this is not the first time this Question has been asked, but it is generally acknowledged, in particular by legally trained Chancellors, that the quality of advocacy provided by properly trained barristers is of a significantly higher quality than that which is provided by others in court. Does the Minister agree that not only is the criminal Bar an essential part of the criminal justice system but it also requires adequate fees to function properly?

--- Later in debate ---

[Lord Keen of Elie]

My Lords, we agree that the criminal Bar is one of the vital pillars underpinning the rule of law and that its contribution should be fairly rewarded.

[Lord Beecham (Lab)]

My Lords, there are two forms of advice desert in relation to the current legal aid system. One is geographic, where legal advice is simply unavailable because there are no longer legal aid practitioners to provide it, and the other is in relation to particularly sensitive and important areas, such as housing or family law, where the number of cases receiving legal help since LASPO has dropped from 200,000 to 40,000 in the last financial year. Will the long-awaited LASPO review address these problems? Do the Government have an open mind in relation to the possible restoration of legal aid and advice currently denied to people of limited means, with the added benefit of reducing the pressure on the courts system from the growing number of unrepresented parties to proceedings?

[Lord Keen of Elie]

My Lords, with particular reference to housing, at present 133 of the 134 housing and debt procurement areas for legal aid have provision, and in addition there is provision for telephone advice in the context of housing issues that are covered by LASPO. Our review will embrace all the issues that are being raised by interested groups and will take account of the observations made by the noble Lord, Lord Low, and the noble Lord, Lord Bach, in their respective reports.

[Baroness Butler-Sloss (CB)]

My Lords, when the Government inquiry takes place, will it please look at the situation of the criminal Bar, which is currently in very real trouble? The noble Baroness made an important point about the very good advocacy of the criminal Bar. It is under real threat and is an issue which the Government have to look at.

[Lord Keen of Elie]

We are conscious of the contribution that the criminal Bar makes. The noble and learned Baroness is alluding to developments with regard to recent changes to the advocates’ graduated fee scheme. That scheme was developed in conjunction with the profession, in particular the Bar Council. The changes are intended to create a simpler and more modern pay system which better reflects the reality of the work being done. As regards the question of an inquiry, a review by the Lord Chancellor is ongoing and we intend to report on it in the course of this year.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, the impact assessment for LASPO anticipated annual savings of £450 million. In fact, annual savings have been running at about £950 million. Last month’s terms of reference for the LASPO review commit the Government to ensuring that legal aid is,

“available to those who need it”.

Given that this aim is clearly not currently being achieved, will the Government make these extra savings of £500 million available to fund any proposals made on the review for extra legal aid spending? Has that been made clear to officials conducting the review within the department?

--- Later in debate ---

[Lord Keen of Elie]

My Lords, the coalition Government introduced LAPSO in order to ensure that legal aid was directed at those who most require it. The figure of £950 million arises only in the context of a comparison between 2010 and 2016. In that period, legal aid expenditure fell by about £950 million, or 38% in real terms.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, is it intended that the review will cover third-party litigation funding? Third-party litigation funding is a useful access to justice, but too often the division of any awards of damages between those who provide the funding and those in whose name the cases are being brought are obscure. Would it not be a good idea if the courts had the power to require the disclosure of such terms to ensure fairness between all the parties?

[Lord Keen of Elie]

My Lords, the matter of third-party litigation funding is of course a matter of contract between two parties, and the Government would be slow to interfere in that contractual process.

[Lord Howarth of Newport (Lab)]

My Lords, further to the excellent question from my noble friend Lord Beecham, will the Government now at last admit that they have denied access to justice to hundreds of thousands of people, with cuts to legal aid taking people with social security, homelessness, mental health and other extremely important issues out of scope; widespread confusion as to who remains eligible; difficulty in proving financial eligibility; and a very damaging fall in the number of legal aid providers? How does the Minister explain the collapse in the number of private practice and not-for-profit organisations undertaking legal aid work? Will the Government now act to restore access to justice as a basic right of citizenship?

[Lord Keen of Elie]

My Lords, we recognise the need for access to justice; it is a fundamental common-law right. We seek to ensure that there is a legal aid scheme that is affordable but allows for access to justice. That scheme is currently the subject of review by the Ministry of Justice.

[Lord Watts (Lab)]

My Lords, does the Minister agree with that famous saying, “British justice is the best in the world if you can afford it”? Do we not need a different legal system that makes it possible for ordinary people to pursue cases in the courts?

[Lord Keen of Elie]

My Lords, I am not familiar with that particular comment.

Worboys Case and the Parole Board

Lord Keen of Elie Excerpts

Wednesday 28th March 2018 Lords Chamber

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, with the leave of the House, I will repeat a Statement made by my right honourable friend the Lord Chancellor and Secretary of State for Justice. The Statement is as follows:

“With permission, Mr Speaker, I should like to make a Statement on the High Court judgment handed down this morning in the case relating to the Parole Board decision to release John Radford, formerly known as John Worboys.

This is an important and unprecedented case. The President of the Queen’s Bench Division, Sir Brian Leveson, the most senior judge who heard this case, said it is wholly exceptional. It is the first time that a Parole Board decision to release a prisoner has been challenged and the first time that the rules on the non-disclosure of Parole Board decisions have been called into question.

The judgment quashes the Parole Board’s decision to release Worboys and finds that Rule 25 of the Parole Board rules is unlawful. This means that Worboys’ case will now be resubmitted to the Parole Board. A new panel will be constituted and updated evidence on his risk from prison and probation professionals will be provided. The panel will then assess anew whether Worboys is suitable for release. Those victims covered by the victim contact scheme will be fully informed and involved in this process. My department also has to reformulate the Parole Board’s rules to allow more transparency around decision-making and reasoning.

It is clear that there was widespread concern about the decision by the Parole Board to release Worboys. As I have previously told the House, I share these concerns and consequently I welcome this judgment. I want to congratulate the victims who brought the judicial review and to reiterate my heartfelt sympathy for all victims who have suffered as a result of Worboys’ hideous crimes.

I want to set out, in greater detail than I have previously been able, the reasons why I did not bring a judicial review. As I told the House on 19 January, I looked carefully at whether I could challenge this decision. It would have been unprecedented for the Secretary of State to bring a judicial review against the Parole Board—a body which is independent but for which my department is responsible. I took expert legal advice from leading counsel on whether I should bring a challenge. The bar for judicial review is set high. I considered whether the decision was legally irrational—in other words, a decision which no reasonable Parole Board could have made. The advice I received was that such an argument was highly unlikely to succeed, and indeed this argument did not succeed. However, the victims succeeded in a different argument. They challenged that, while Ministry of Justice officials opposed release, they should have done more to put forward all the relevant material on other offending. They also highlighted very significant failures on the part of the Parole Board to make all the necessary inquiries and so fully take into account wider evidence about Worboys’ offending.

I also received advice on the failure of process argument and was advised that this was not one that I, as Secretary of State, would have been able successfully to advance. The victims were better placed to make this argument and this was the argument on which they have won their case. It is right that the actions of ministry officials, as well as the Parole Board, in this important and unusual case have been laid open to judicial scrutiny.

I have always said I fully support the right of victims to bring this action. I have been very concerned at every point not to do anything to hinder the victims’ right to challenge and to bring their arguments and their personal evidence before the court. Indeed, the judgment suggests that, had I brought a case, the standing of the victims might have been compromised.

The court’s findings around how this decision was reached give rise to serious concerns. The court has found that the ‘credibility and reliability’ of Worboys’ account in relation to his previous offending behaviour,

‘was not probed to any extent, if at all’,

by the Parole Board, and that, although the Parole Board was entitled to make inquiries of the police in relation to his offending, it did not do so. These are serious failings which need serious action to address. In these circumstances, I have accepted Professor Nick Hardwick’s resignation as chair of the organisation.

I am also taking the following actions: instructing my officials to issue new guidance that all relevant evidence of past offending should be included in the dossiers submitted to the Parole Board, including possibly police evidence, so that it can be robustly tested in each Parole Board hearing; putting in place robust procedures to check that every dossier sent by HMPPS to the Parole Board contains every necessary piece of evidence, including sentencing remarks or other relevant material from previous trials or other civil legal action; boosting the role of the Secretary of State’s representative at Parole Board hearings, with a greater presumption that they should be present for more complex cases where HM Prison and Probation Service is arguing strongly against release; working with the Parole Board to review the composition of panels so that the Parole Board includes greater judicial expertise for complex, high-profile cases, particularly where multiple victims are involved or where there is a significant dispute between expert witnesses as to their suitability for release; and developing more specialist training for Parole Board panel members.

The judgment also found that the blanket ban on the transparency of Parole Board proceedings was unlawful. I accept the finding of the court and will not be challenging this. It was my view from the beginning that very good reasons would be needed to persuade me that we should continue with a law that does not allow any transparency. I am now considering how the rule should be reformulated.

When I addressed the House on this matter in January, I said that I had commissioned a review into how victims were involved in Parole Board decisions, into the transparency of the Parole Board and into whether there should be a way of challenging Parole Board decisions. That work has been continuing for the past two and a half months. Given the very serious issues identified in this case, I can announce today that I intend to conduct further work to examine the Parole Board rules in their entirety.

As a result of the work that has been completed to date, I have already decided to abolish Rule 25 in its current form and will do so as soon as possible after the Easter Recess. This will enable us to provide for the Parole Board to make available summaries of the decisions they make to victims. In addition, I will bring forward proposals for Parole Board decisions to be challenged through an internal review mechanism, where a separate judge-led panel will look again at cases that meet a designated criterion. I intend to consult on the detail of these proposals by the end of April, alongside other proposals to improve the way that victims are kept informed about the parole process.

I am grateful to Baroness Newlove for her help with this part of the review and to Dame Glenys Stacey for her helpful suggestions and review of the way that victim liaison operated in this case. I will come back to the House with further proposals as they are developed.

In conclusion, let no one doubt the seriousness with which I take the issues raised by this morning’s judgment, nor the bravery of the victims who brought this case to court. I commend this Statement to the House”.

--- Later in debate ---

[Lord Keen of Elie]

I am obliged to the noble Baroness and the noble Lord for their observations on this matter. We are all agreed that we have to maintain the independence of the Parole Board: that is certainly our intention. Transparency came up early in this process as a matter that had to be the subject of review. Indeed, my right honourable friend’s predecessor announced on 9 January this year that he intended to institute inquiries into the question of Rule 25. Those inquiries have effectively concluded and, as I indicated, we intend to bring forward proposals with regard to Rule 25 by the end of April. The detail of that is not something that I can address because we have yet to formulate an alternative rule that allows for the appropriate level of transparency. As to the further, more detailed review that is to touch on victims, for example, and their position, we fully intend that such a review should be completed by the summer. I cannot give a cast-iron guarantee, but that is certainly our intention. We recognise the importance and the urgency of this work.

I turn to the questions raised by the noble Lord, Lord Marks. The question about the evidence of past offending raises the issue of reports of other offences for which an individual has not been tried or convicted. The court commented on that in its judgment and indicated that such evidence should be before the Parole Board, not in order that it should make its own determination of guilt or innocence but so that it could utilise that material in engaging with the party seeking parole and test their honesty and candour with regard to their previous offending. It is in that context that I anticipate this material being used. Particular note is taken of the interests of victims and the question of notification: that will be addressed in the course of the forthcoming review, as well as the question of how the Secretary of State’s representatives will take a more enhanced role in these matters. That will be a matter for consideration.

As for training, we were not saying that the training was deficient in the past, but we believe it can be improved. That will again be the subject of the forthcoming review. The noble Baroness also asked what material was and was not before the Parole Board. I should say that the judge’s sentencing comments should, as a matter of procedure, have been before the Parole Board. That is a failing on the part of HM Prison and Probation Service, which should have been providing the material to the Parole Board. There is other material that the Parole Board could have called for, and which the court clearly felt it should have called for, that it did not call for. Clearly, we have taken that into account when deciding on the need for further review in this area. Beyond that, I would not like to make any further comment, except that in light of Nick Hardwick’s resignation it may be that new leadership will bring about change in itself, so far as the conduct of the Parole Board is concerned.

[Lord Woolf (CB)]

My Lords, I shall take up the last point that the noble and learned Lord made in answering the questions raised a few moments ago. Nick Hardwick has been an outstanding contributor to criminal justice in this country. I say that knowing that other Members of this House who have occupied the highest judicial posts in this country share that view, even though they have been closely involved in criminal justice as Lord Chief Justice. I have not spoken to the noble and learned Lord, Lord Phillips, but I have spoken to the others and they confirm that that is the case. It was not mentioned in the Statement that has just been read out that Nick Hardwick indicated that his role in this matter was extraordinarily limited. Although the Parole Board may have been at fault, as indicated in the judgment, it is right to say there was no personal criticism of its chairman. I am sure the House accepts that being a member of a parole board is an extraordinarily difficult task. A parole board can act only on the information given to it. In those circumstances, I ask the Minister to make clear that the view I have just indicated about Nick Hardwick is accepted by the Lord Chancellor and Minister of Justice. It is right that it was made clear to him that he should resign, albeit that he thought he would have been able to carry on perfectly well in the role. Bearing in mind the importance of the Parole Board, this is a most important matter.

[Lord Keen of Elie]

I am obliged to the noble and learned Lord, Lord Woolf, for his observations and readily concur with his comments on the contribution that Professor Nick Hardwick has made to criminal justice in this country. I say that without qualification. Clearly a situation had arisen in which there had to be consideration, both by the Secretary of State and by Professor Nick Hardwick, of whether it would be tenable for him to continue in the present circumstances. In light of that, he tendered his resignation. Again, I repeat, I accept without qualification the comments made about his considerable contribution to criminal justice in this country.

[Baroness Newlove (Con)]

My Lords, this has been a successful day for victims and they have received justice, but we must not forget how hard this journey has been for them. They have had huge pressure on their shoulders. It has not been an easy fight and is still not an easy fight. I ask my noble and learned friend to think that it cannot be right that offenders have legal teams to take them through the parole system, yet the victims have had to crowdfund through the internet to get a legal team to represent them. Surely the Government will look at this so that it never happens again.

My other point is that, if Worboys appeals this judgment, I want it understood that all the victims in this case should be given the right information, including those who did not go to trial but had their evidence put on file. It is more important that we do not see the same situation again, where victims are scared and do not feel safe for their lives.

[Lord Keen of Elie]

I am obliged for the observations of my noble friend Lady Newlove. I should like to repeat the appreciation of the department and the Lord Chancellor for the work she has done in leading engagement with victims in the inquiry to date. That has been extremely important. Under the present victims’ scheme, those who are the victims of an offence for which there has been a conviction are automatically engaged in the victim engagement scheme. Where the victim of a reported offence did not proceed to trial or conviction, however, the position is different. We shall look at that matter in the forthcoming review.

[Lord Blunkett (Lab)]

My Lords, in endorsing the words of the noble Baroness, Lady Newlove, the ruling of the High Court, and the transparency, training and other measures that will flow from it, I wish also to endorse what the noble and learned Lord, Lord Woolf, said. I was responsible for appointing Nick Hardwick to his first major public appointment 15 years ago, to head the Independent Police Complaints Commission. He has been a great public servant. He has done a superb job in modernising and reforming the Parole Board, with great difficulty, and we owe him a debt of gratitude.

[Lord Keen of Elie]

I entirely accept the observations of the noble Lord.

[Lord Grabiner (CB)]

We have focused attention—quite properly, in my view—on the performance of the Parole Board, but there is a separate and rather important aspect of this very shocking case. As I understand it, the CPS had available to it a good deal of material which was not then the subject of prosecution. That may have had a real impact on the sentence that was ultimately imposed upon Worboys; in fact, I am sure that it did. Can the Minister assure us that the performance of the CPS in this story and in future possible prosecutions and investigations will be carefully looked at? If you do not charge what you should charge, you often end up with the wrong result.

[Lord Keen of Elie]

I note the observations of the noble Lord. Clearly, the role of the CPS in the conduct of the prosecution of Worboys is a matter of some concern. The CPS takes these decisions independently and clearly, that independence has to be respected. Worboys was the subject of an IPP sentence, albeit one that was liable to open the door to review before the Parole Board. I cannot give an undertaking at this time of any formal inquiry into the role of the CPS with regard to the original prosecution decisions that were taken, but I note what the noble Lord has said.

[Viscount Hailsham (Con)]

My Lords, I welcome what my noble and learned friend has said about the action that has been taken. With regard to enhancing the role of the Secretary of State at the meetings of the Parole Board, I suggest that in complex cases he gives consideration to using a special counsel, who might, after all, also be able to articulate the views of the victims. I remind him of the practice that was adopted when I was a very junior Minister in the Home Office reviewing the tariffs in life sentence cases, which was to obtain the up-to-date observations of the trial judge, if available—and, if I may say so, the Lord Chief Justice.

[Lord Keen of Elie]

I note the observations of my noble friend Lord Hailsham. Clearly, these considerations will be taken into account in the review process that is being carried out.

[Lord Beith (LD)]

My Lords, I welcome the High Court decision and the fact that it showed up the really serious errors made by both the Parole Board and the Ministry of Justice. But I take it that the Minister agrees that these errors should not blind us to the proper role and importance of the parole system within our criminal justice system and, indeed, as the noble and learned Lord, Lord Woolf, rightly pointed out, to the contribution, which the Minister has already acknowledged, that Nick Hardwick has made in several positions—bearing in mind also that Nick Hardwick argued that the transparency we are all now calling for was not allowed by law and should have been.

[Lord Keen of Elie]

Well, indeed. I am obliged to the noble Lord for his observations in that regard. As I indicated earlier, it had occurred to my right honourable friend’s predecessor, almost as soon as this matter came to his attention, that Rule 25 really did need to be looked at and given further consideration because of the impact it had on the perception of proceedings. Regarding the proceedings of the Parole Board itself, clearly, there are hundreds of individuals involved and engaged in that process. It is critically important as part of our criminal justice system and it is equally important that it should remain independent of the Executive.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, in my experience, when criminals convicted of serious offences and serving long sentences are released, it is generally to an open prison so that they can be further assessed. Why did this not happen in Worboys’ case?

[Lord Keen of Elie]

I am not able to answer that question but the point the noble Lord makes is entirely accurate because, generally speaking, the issues for the Parole Board to consider are, first, whether it should release into an open prison environment and, thereafter, whether there should be release on licence.

[Lord Judge (CB)]

My Lords, what is the proposal to improve the arrangements by which the victims in this case are provided legal aid?

[Lord Keen of Elie]

There are no immediate proposals in that regard. As the noble and learned Lord is aware, the LASPO provisions are currently under review.

[Lord Davies of Stamford (Lab)]

My Lords, the head of the Parole Board has resigned and, as usual, the Secretary of State and the Government sail on with apparent impunity. However, the failings revealed by this case—the excessive secrecy, the failure to consult victims, the apparent inadequacy of training and the failure to look at previous offences—were part of the system’s structure for years and years. They should have been known about—if, indeed, they were not—and the Government should have addressed them a long time ago. Has the noble and learned Lord persuaded himself that the Government have no responsibility at all for these shortcomings?

--- Later in debate ---

[Lord Keen of Elie]

With respect, I have not suggested that the Government consider themselves as having no responsibility in respect of the matters disclosed in the Worboys judicial review.

[Lord Goldsmith (Lab)]

My Lords, I want to raise one question about the funding for this appeal. Quite rightly, noble Lords have commented that it is inappropriate that the victims should have had to crowdfund in order to challenge this decision. From the Statement that the noble and learned Lord made, I understand that the Secretary of State for Justice himself had some impediment to bringing a claim—I am not talking about the substance of his claim here. Why did the Attorney-General not consider it to be part of his job to challenge the decision? After all, it is the Attorney-General who challenges inappropriate sentences and, to some extent, has responsibility for looking after victims. Would that not have reduced the problems, such that the Government, through what is in many ways the independent office of the Attorney-General, could have stepped in to bring this matter before the courts?

[Lord Keen of Elie]

The noble and learned Lord makes an interesting suggestion. It is not a point which I recollect being addressed at the time, and the matter was looked at from the perspective of the Secretary of State for Justice. As the noble and learned Lord implicitly acknowledges, the Secretary of State was in something of a difficult position, given that the Parole Board—albeit an independent entity—has a link to the Ministry of Justice. But I take on board the noble and learned Lord’s observation.

[Lord Selkirk of Douglas (Con)]

Does my noble and learned friend accept that his assertion that there will be a review of procedures with a view to keeping them properly up to date is extremely welcome? Does he agree that in very anxious cases of this nature, the protection of the public must be considered paramount?

[Lord Keen of Elie]

Of course, the protection of the public is an all-embracing requirement, but there are certain things which require particular consideration. These include the interests of the victims.

[Lord Christopher (Lab)]

Will the noble and learned Lord reflect for a moment on the fact that this case, awful though it was, may well lead to changes being made which have unexpected consequences? I suggest that he go back to the original papers from when the Parole Board was set up to see precisely what its purpose was and was not intended to be. There is another side to this matter which has not been aired today—and I understand why not: the interests of offenders who are, one hopes, working towards release by parole. If that confidence in the Parole Board stops, considerable damage may well be done to the position and the penal system—of prisons with numbers of prisoners we have never seen before. If we go back and look at the papers, we may be able to provide something better which does not give rise to a whole rash of cases for all sorts of offences. In particular, confidentiality is very valuable in many cases of offenders coming before the Parole Board.

[Lord Keen of Elie]

My Lords, we are concerned that we maintain a balance between the aims of the parole process and the interests of the victims of serious crime. In the context of any review, that balance will be at the forefront of our minds. The Parole Board has always been conscious of the need to take account of the future of offenders who are in prison. We do not operate a system of permanent internment—there comes a time when offenders are deemed safe for release on licence—but clearly the process by which we arrive at these conclusions has to be the subject of continued assessment and, in this instance, further review.

[Baroness Hussein-Ece (LD)]

My Lords, only a fraction of crimes of sexual violence such as rapes ever come to court and end with successful convictions. How can the Government ensure that women will still be encouraged to come forward to seek and get justice if they are the victims of such crimes, given the way that Worboys’ victims have been treated in this total failure? Victims of these appalling crimes have had to crowdfund. I am sure that Members in this House have seen these brave women come forward and exactly what they have gone through in giving evidence and being interviewed. There are women who have not had justice at all yet and were told not to push it, since the sentencing of Worboys would somehow reflect the true nature of the crime and the numbers of women affected. How can the Ministry of Justice ensure that women will come forward, and that these women will receive justice in the end?

[Lord Keen of Elie]

Clearly, it is a matter of concern for the entire justice system that victims, particularly of these sorts of serious crimes, should not feel inhibited in coming forward and reporting them. We have seen issues arise regarding the way these complaints were handled on some occasions by the police; those resulted in civil litigation, which has now concluded. We have also seen the issue raised of the CPS in the context of the number of prosecutions actually undertaken in the Worboys case. Clearly, we must keep these matters under review in the context of ensuring that victims of such crimes are willing to come forward and report offences, and appreciate that they will receive justice at the end of the day.

[Lord Cormack (Con)]

Can my noble and learned friend assure the House that this deeply unfortunate case will not result in undue delay in looking at other prisoners who are on indeterminate sentences? That issue has been raised many times in this House, not least by the noble and learned Lord, Lord Brown of Eaton-under-Heywood.

[Lord Keen of Elie]

Clearly, the Worboys case will not be allowed to displace further consideration of the position of IPP prisoners. That issue is raised regularly in this House. We have had it under active consideration and continue to have it under consideration.

[Lord Harris of Haringey (Lab)]

The noble and learned Lord has told us repeatedly of the importance of the Parole Board’s independence, and he responded positively to all the statements made around the House about the integrity of and contribution made by its outgoing chairman. Can he therefore explain the thinking of the Secretary of State that Nick Hardwick’s position was untenable, essentially requiring him to resign? Is that not incompatible with his statements about the independence of the Parole Board?

[Lord Keen of Elie]

I do not regard the position taken by my right honourable friend as inconsistent with the independence of the Parole Board. He took a view on the matter following the decision of the High Court, and he expressed that view to Professor Nick Hardwick, who tendered his resignation.

[Lord Campbell of Pittenweem (LD)]

My Lords, may I take the Advocate-General back to the question of legal aid? Had the legal aid scheme provided for assistance in cases of this kind, it would none the less have had to apply the test of reasonable prospects of success, or probable cause. Given that the Secretary of State received advice to the effect that there was no probable cause, that could well have resulted in the victims making an application for legal aid but still being turned down.

[Lord Keen of Elie]

That is of course potentially the case, although I would observe that the High Court’s decision eventually turned on a different point from the issue of rationality: the failure to take account of material information that should have been before the Parole Board. Beyond that, I would not seek to speculate as to the outcome of a legal aid application, but the point the noble Lord makes is entirely sound.

European Union (Withdrawal) Bill

Lord Keen of Elie Excerpts

Committee: 11th sitting (Hansard - continued): House of Lords
Wednesday 28th March 2018 Lords Chamber

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, at one stage I thought that, for the first time in many days, I was going to agree with the noble Lord, Lord Adonis, but then he went and spoiled it.

Many people—today, yesterday, a year ago—wanted to remain EU citizens, but more people decided that they did not. That is where we find ourselves today. I do not seek to elaborate on that. I understand the strength of feeling from many people who did not want to see us leave the EU, but the reality is that we will. The consequence of that is clear and has been made clear by the noble Baroness, Lady Hayter, and the noble Lords, Lord Adonis and Lord Kerr: pursuant to Article 20, EU citizenship is an addition to the citizenship of a member state.

[Lord Dykes (CB)]

I apologise for interrupting at this juncture because the Minister has only just begun his interesting speech. He asserted that people voted decisively in favour of Brexit and therefore also against being European citizens. As far as I recall, that did not really come up in the campaign, so how many of those people would have known about EU citizenship arising from the Maastricht treaty a long time ago?

[Lord Keen of Elie]

It is so utterly basic to the issue that it is difficult to conceive of many, if any, people who did not understand the nature and consequences of Brexit, so I will not elaborate on that.

I want to come back to remarks made by the noble Lord, Lord Adonis, as well as the noble Lord, Lord Wigley, in an earlier debate. We have debated this already in Committee in the context of another amendment. The noble Lord, Lord Adonis, mentioned Northern Ireland. Clearly, where one meets certain residency tests in Northern Ireland, one is eligible to apply for a passport from the Republic of Ireland Government. By that means, membership of an EU state can be retained and one can remain an EU citizen. As I indicated in an earlier debate, there are two areas of opinion in Northern Ireland: there are people who are perfectly happy—indeed, anxious—to secure a passport from Dublin and people who have no desire to do so.

[Lord Adonis]

I am afraid I must disappoint the noble and learned Lord because I think we are continuing to agree. However, I asked him why he will not extend the right to apply for an Irish passport to those of us on the mainland.

[Lord Keen of Elie]

It is not in my gift. It would be a matter for international treaty negotiation between the United Kingdom and the Republic of Ireland. It is for Ireland to decide who it will admit as citizens of the Republic; it is not for us to demand. That is the answer to the noble Lord’s point.

[Baroness Altmann (Con)]

As a point of interest, perhaps one should recommend to all pregnant mothers in Great Britain that they might consider going over to Northern Ireland to have their babies.

[Lord Keen of Elie]

I am not going to indulge in an issue regarding maternity at this stage. Let us try to keep focus on the amendment, shall we?

We are all aware of the issue and we are also aware of the agreement that has been entered into to protect the rights of EU citizens and their family members living in the UK and of UK nationals living in the EU until the end of the implementation period, set at 31 December 2020. During the implementation period, individuals will still be fully covered by the EU acquis. UK nationals will be able to continue to move around the EU 27 member states and will have the freedom to move to another member state to live and work, as long as they do so before the end of the implementation period.

That reminds me of the point made by the noble Lord, Lord Kerr, about Article 32 of the withdrawal agreement. The position is this: what was proposed in Article 32 was removed as there was no actual agreement on that point. Therefore, there was no reason to have a legal text covering a point that was not the subject of agreement. The United Kingdom pushed strongly for the inclusion of ongoing movement rights during the first phase of the negotiations, but the European Union was not yet ready to include them. Of course, it remains an issue that we wish to pursue. We have already made that clear.

To come back to the amendment itself, it is simply not feasible for us to set upon a course of negotiation that is doomed to failure. We cannot secure EU citizenship for citizens of the United Kingdom after we leave the EU. That is the short point to be made. Therefore, the amendment would set the Government on a course of negotiation that would effectively prevent the present Bill—

[Lord Davies of Stamford]

My Lords—

[Lord Keen of Elie]

I shall just finish the sentence, so will the noble Lord please sit down? It would effectively prevent the present Bill getting on to the statute book and achieving its intended purpose: to ensure legal certainty at the point at which we leave the European Union.

[Lord Wigley]

I am very sorry to hear that this would prevent the Bill reaching the statute book. Notwithstanding those feelings, I ask the noble and learned Lord to address the point I raised in my earlier comment about the 1969 Vienna Convention on the Law of Treaties that that convention,

“will be binding on all remaining Member States, the UK, and the EU itself post Brexit”.

Does he accept that the convention,

“ensures that the status and rights of those EU citizens resident in the territory of the Union and those resident in the UK will continue”,

after Brexit?

[Lord Keen of Elie]

I hope the noble Lord did not pay good money for that opinion. He will perhaps elaborate on the position in due course, but I do not accept that proposition.

[Lord Wigley]

I will not come back after this intervention, but has he read the document to which I referred, or have experts in his department done so?

[Lord Keen of Elie]

I have not read the opinion in question, but I am not unfamiliar with the terms of the Vienna convention on treaties.

[Lord Wigley]

If between now and Report he or his advisers have an opportunity to read that opinion and, having done so, feel that what has been said in a Chamber does not fully reflect the situation, will he be prepared to come back at a later stage?

[Lord Keen of Elie]

I am perfectly content to look at the opinion.

[Lord Davies of Stamford]

I will take up a point that the noble and learned Lord was making before he took the very sensible and helpful intervention from the noble Lord, Lord Wigley. We all accept—I explicitly accepted it in my remarks—that EU citizenship is not within the Government’s gift. I accept, too, that there is no practical possibility of the Government negotiating it in foreseeable circumstances with the EU. What I am asking for and what I hope the noble and learned Lord can offer on behalf of the Government is that they will place no obstacle in the way and will do anything that appears possible to facilitate and support any move by any of us to try to achieve from the European Union some recognition of the fact that we are European citizens and we will continue to feel that way even after Brexit, if Brexit, unfortunately, takes place.

[Lord Keen of Elie]

The reality is that if Brexit takes place we will not continue to be EU citizens.

[Lord Wigley]

My Lords, I am very grateful to everyone who has participated in this short debate, particularly to the noble Earl, Lord Clancarty, who I am sorry I relegated in my earlier reference. I also thank the noble Lord, Lord Adonis, with whom I usually fully agree on these matters, although it was encouraging to hear that there may be alternatives by not pursuing this Bill. I thank the noble Baronesses, Lady Smith, Lady McIntosh and Lady Hayter, and the noble Lords, Lord Davies, Lord Kerr and Lord Roberts of Llandudno, for their comments. I think I have got as far as I am likely to get on this. I was grateful to the Minister for saying that he is prepared to look at the opinion to which I have been referring. I can ask no more than that, and on that basis, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Keen of Elie]

My Lords, I am obliged to the noble and learned Lord, Lord Goldsmith, for raising the issue of Clause 6 in the context of the implementation period that is referred to in his amendment. Reference is made repeatedly to the transition period; yes, we recognise that there is to be an implementation period, as it is termed, if that and everything else is agreed. But nothing is agreed until everything is agreed, so we do not yet have that implementation period. We desire it and recognise that the EU also sees its significance. That is why we were able to express matters as we have in the March text—the multi-coloured text to which the noble and learned Lord referred. I agree with his reference to Articles 82 to 85 in that context and the point that they are on white, because they express a proposal and not a concluded agreement on those points. That is what I want to underline at this stage.

As I have said during Committee on a number of occasions, this Bill is to ensure that there is a functioning UK statute book on day one, regardless of the outcome of negotiations. In his speech on the implementation period, the Secretary of State was clear that it will allow—if it is finally agreed—a strictly time-limited role for the European Court of Justice, in keeping with the EU’s existing structures.

I am sensitive to the fact that unlike some other amendments, the provisions of this amendment are conditional upon the implementation period being part of the withdrawal agreement. Accordingly, they do not fully prejudge the outcome of negotiations and I acknowledge the delicacy of the drafting of the noble and learned Lord, Lord Goldsmith, in that respect. However, that does not change what we have asserted consistently: that the details of the implementation period will be legislated for in the withdrawal agreement and the implementation Bill. We have always been clear that the major elements of the withdrawal agreement will be implemented in that Bill and not in this Bill.

[Lord Dykes]

Presumably that means, too, that because there are so many gigantic individual subjects to be agreed in the implementation period, it would be perfectly feasible for the Union and the United Kingdom in further negotiations to agree on a longer period in order to get through all the complicated material, which the Government still say will be easy to do but will be extremely difficult.

[Lord Keen of Elie]

The Government’s objective is to conclude a withdrawal agreement by October of this year. That has been stated on a number of occasions and it is in that context that we intend that the present Bill should deal with the situation, whether or not there is a withdrawal agreement or an implementation period. As and when a withdrawal agreement is concluded, it will be dealt with in the withdrawal agreement and implementation Bill. Clearly, if we enter into an international treaty with the EU 27 in respect of these matters, we will respect that international treaty and our obligations inherent in it and, in accordance with the duality principle, draw down those obligations into our domestic law, using the withdrawal agreement and implementation Bill. I suggest that it is inconceivable that we would not seek to do that.

[Lord Beith]

The noble and learned Lord has been quite clear that it will be the withdrawal Bill that is the mechanism. Is he saying that it will be that Bill and not the use of the statutory instrument powers to be found elsewhere in this Bill which will enable him to modify or repeal its sections when it is an Act?

[Lord Keen of Elie]

We have been clear that the withdrawal agreement and implementation Bill will legislate for the withdrawal agreement. That may involve us amending the terms of the present Bill, but we should remember that the present Bill is intended to accommodate the situations where there is a withdrawal agreement and where there is no withdrawal agreement and therefore no implementation period. It is to bring certainty to the statute book in that context. Clearly, there may be a situation in which we have to bring forward amendments to the present Bill in the second withdrawal agreement Bill. I recognise that.

[Lord Kerr of Kinlochard]

The Minister has just been paying tribute to the delicacy of the drafting of the noble and learned Lord, Lord Goldsmith, whose language in this amendment copes with both eventualities. It sets out the contingency that there is a transitional agreement. I do not see the difficulty.

[Lord Keen of Elie]

It is not a question of difficulty; it is a question of how we have decided to approach dealing with this in a legislative manner. The intention is that the present Bill will legislate for legal certainty whether there is or is not a withdrawal agreement. In the event of a withdrawal agreement, we will legislate to ensure that in the withdrawal agreement and implementation Bill the terms of the present Bill will be brought into line with the terms of the withdrawal agreement in order that we can discharge our international legal obligations. We have consistently pointed out that that is the approach being taken to legislation in this context. It is really quite inconceivable to suppose that the Government are going to enter into a withdrawal agreement and then not implement that international legal obligation in our domestic law. That is the intention. It is simply a question of the order in which these things are being done, and it has always been maintained, and will be maintained, that it is not for this Bill to deal with the eventuality or the prospect of the implementation period.

[Baroness Ludford (LD)]

Does the Minister not appreciate the absurdity some of us feel? As the noble Lord, Lord Hannay, pointed out, we are being marched to the top of a hill that the Government have already abandoned. We are being asked to legislate in terms that are contrary to government policy and strategy in the Brexit negotiations, which leaves one feeling in a somewhat surreal position.

[Lord Keen of Elie]

I sympathise with the idea of being left in a somewhat surreal position. As I said at the outset of my remarks, nothing is agreed until everything is agreed, so while we have the anticipation and desire to secure an implementation period, nothing is agreed until everything is agreed.

[Lord Cormack (Con)]

Does my noble friend not think of Sir Thomas More:

“I trust I make myself obscure”?

--- Later in debate ---

[Lord Keen of Elie]

I often think of Sir Thomas More, but not on this occasion.

[Lord Hannay of Chiswick]

I find it rather hard from the Cross Benches and as a non-politician to make this point, but I wonder whether the Minister has considered what the Government are proposing to do. They are proposing to offer in an Act of Parliament signed into law by the Queen something which they know is not going to happen. They have offered that up; their supporters will, no doubt, rise cheering to their feet; and then, three or six months later, they will repeal that part of the Act, at which point there will be cries of betrayal and perfidy—and those are probably rather mild words compared with the ones that will be used by the Daily Mail and others. Have the Minister and his colleagues not given any thought to that? Is not the simple thing to do to accept the amendment, and then there will be no betrayal and no perfidy, or if there is it will have been done already?

[Lord Keen of Elie]

There is no betrayal and no perfidy, but I feel misrepresented by the noble Lord because he said “knowing that there will be an agreement”. We do not know for certain that there will be an agreement. Nothing is agreed until everything is agreed. Of course, we have an aspiration; we seek to secure the implementation period, and when we do we will then legislate for that in the withdrawal agreement and implementation Bill. Meanwhile, this Bill is designed and intended to accommodate the situation in which there may not be such an agreement.

[Lord Wallace of Saltaire (LD)]

I hate to add to the surreal nature of this, but the formula “Nothing is agreed until everything is agreed” seems incompatible with negotiating a transitional agreement during which we recognise we will agree only a small number of things and carry on negotiating. It seems to me that the Government should now drop the mantra that nothing is agreed until everything is agreed, because we are actively pursuing, if I understand the Government’s case, a transitional partial agreement, during which a number of commitments will be made but a number of the fundamental issues of our future relationship with the European Union will remain entirely unclear and will be negotiated in the two or perhaps three or more years afterwards.

[Lord Keen of Elie]

My Lords, we are engaged in a bilateral negotiation; it has not yet concluded. This Bill is designed to accommodate the situation in which there may not be a conclusion to that negotiation, as well as a situation in which there may be. In the event of the latter case, the withdrawal agreement and implementation Bill will bring the legislation into line with the statute book.

[Baroness Altmann]

Will my noble and learned friend clarify for the Committee, if nothing is agreed until everything is agreed and we may not go into a transition period, how it can possibly make sense to have 29 March written into the Bill?

[Lord Keen of Elie]

Because that addresses a distinct issue, which is the exit date from the EU. It is quite distinct from the question whether we are able to finally conclude an implementation period, which it is our intention to do. Let us be clear about that. The EU has also indicated its intention to do it as well. But we are engaged in a bilateral negotiation.

[Lord Pannick]

It is plain and obvious that nothing is agreed, but can the noble and learned Lord be clear with the Committee about the Government’s position in relation to negotiating this transitional implementation period? Do they now accept that they are no longer seeking to impose any red line relating to the jurisdiction of the Court of Justice during that implementation period?

[Lord Keen of Elie]

I am not sure I agree with the term “red lines”; it is not one that I am inclined to use. I am never quite sure what they are. Our position is that during an implementation period, if and when finally agreed, we will accept that there is a role for the European Court of Justice. Indeed, it is outlined in the EU’s own proposals for the agreement at Articles 82 through to 85. As the noble and learned Lord indicated, that is not yet the subject of final confirmation between the two parties but it is what is anticipated.

On a related point, during that period, I agree with the noble and learned Lord, Lord Hope, that as we cease to be a member state we will cease to have the right to have a judge in the Court of Justice of the European Union. That must follow. However, we will have the right to make interventions in cases that pertain to the United Kingdom.

[Lord Goldsmith]

My Lords, there have been moments during the 11 Committee days that we have had so far on this Bill when I felt a little sorry for the noble and learned Lord opposite for the positions that he was being expected to argue by those behind him and in other places, but never more sorry than I am today. This is the most absurd situation. We have offered him an amendment and I am grateful for the description given by the noble Lord, Lord Kerr of Kinlochard, as delicate. It does not presume even that there are transitional arrangements. It simply says that, if there are transitional arrangements, this is what will happen. I cannot understand why it is not accepted. I had hoped on this 11th final day of Committee that we would have a breakthrough.

--- Later in debate ---

[Lord Goldsmith]

My Lords, I support the amendment. There is not much to add to what the noble Lord, Lord Pannick, said about what the amendment does and why it is necessary, nor to add to the questions he asked or to those then added by the noble Lord, Lord Beith, which in particular picked up issues with regard to the devolved Administrations.

We know that a major theme in your Lordships’ House, rightly, has been how powers are to be exercised, recognising that there may be circumstances in which they have to be exercised. Notwithstanding that, on the whole this Committee has rightly taken the view—or we hope that we will see it take the view, certainly from the interventions and contributions that have been made throughout the Committee—that this is a matter where proper parliamentary scrutiny is required. There may well be a role for certain delegated legislation, but please let us not add to it with still yet another way in which things can be done which avoid that full parliamentary scrutiny.

I hope that the Minister, when he responds, will be able to say something reassuring, both answering the questions posed by the noble Lords, Lord Pannick and Lord Beith, and saying why we need not be concerned and that the Government will content themselves with relying on those delegated powers that will be specific to the Bill, once this Committee and the other place have determined just what those delegated powers should be.

[Lord Keen of Elie]

I am obliged to noble Lords. I begin by making two observations. These amendments are linked closely to the issue we have already debated in Committee of the status of retained EU law and how we deal with it in the context of its status. As has been indicated previously in Committee, the Government have been listening and considering that, and we intend to come back to the House on the matter before Report. I mention that because it is a relevant backdrop to what we are considering at this stage.

On the points raised by the noble Lord, Lord Beith, essentially, the powers in paragraph 3 of Schedule 8 are, first of all, designed to remove what I might term the shadow of European law from what will be domestic legislation. However, more particularly, the noble Lord raised a point about the devolution issues and quoted from the Explanatory Notes. I understand that the section of the Explanatory Notes that he refers to addresses Clause 11 prior to its recent amendment. I appreciate that we then withdrew that amendment, but the Explanatory Notes should be read in that context. Essentially, therefore, we have moved on because of the decision to flip Clause 11—I think that was the term used—so I ask the noble Lord to look at the proposed amendment to Clause 11 to understand the context in which we now want to deal with this point.

[Lord Beith]

The noble and learned Lord is being reasonable, but he is inviting us to presume that we have moved on when we have not yet done so. The Government have indicated a willingness to look further at the Clause 11 issues and come back with something new. However, when we compare that discussion to the one we just had, it is a bit odd now to be invited to behave as if something has happened which has not happened yet.

[Lord Keen of Elie]

I understand the noble Lord’s point. He appreciates the statements of intent that we have made with regard to Clause 11. Although we withdrew the amendment to Clause 11, it was tendered and withdrawn for a particular purpose, in order to ensure that it could be finalised before Report. I hope that that addresses the noble Lord’s concern about the terms of the Explanatory Note that he quoted.

We have discussed on previous occasions in Committee the risk of ossifying the statute book and how that has to be balanced against checking the ability of the Government to propose changes to retained EU law. Clearly, as I indicated, the Government have heard the debates on the question of how we should treat the status of retained EU law, and we intend to come back on that. However, we must make provision for how delegated powers outside the Bill will interact with retained direct EU legislation. To do nothing would create uncertainty and potentially—by putting it beyond the reach even of Henry VIII powers that can modify Acts of Parliament—risk placing retained EU law on a pedestal of protection beyond even the elevated position of primary legislation. That is why I say that the two issues are linked: how we deal with the status of retained EU law but also carry on with our domestic powers to deal with the entire scope of our domestic legislation, including that which is going to be defined as retained EU law.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, since we have returned to the subject of Henry VIII powers, I would like to inform the Minister that, after this morning’s discussion on the Statute of Proclamations, I looked up the Wikipedia entry—my historical memory of this being relatively limited—and discovered that Thomas Cromwell’s original proposals for the Statute of Proclamations passed through the House of Commons unamended, but they were amended in the House of Lords. Does the Minister think that is a relevant precedent?

[Lord Keen of Elie]

Of course, our constitutional position has altered over the last few years—say, the last 500—and, at the end of the day, we see ourselves as, essentially, an amending House. I understand the noble Lord’s point but, in that context, we also understand the precedence of the other place with regard to the final passage of legislation. Therefore, our primary tasks in this context are scrutiny and comment.

The Government have always said that this Bill is not the place for radical policy change. Essentially, what we want to do at this stage is preserve the existing domestic powers to amend legislation pursuant to paragraph 3 of Schedule 8, in order that we can address issues with regard to retained EU law. But the manner in which those powers will ultimately be deployed will depend on the outcome of our consideration of the question of what status we confer on retained EU law. Given that that is an ongoing issue, I invite the noble Lord at this stage to withdraw his amendment. He may, of course, choose to return to it once he has seen our proposals with regard to retained EU law, but it appears to me that the two issues are inextricably linked.

[Lord Goldsmith]

Before the noble Lord announces the fate of his amendment, I have a question for the Minister. He said several times that there is a connection here with what will happen to EU retained law and what status it will have. We have had full debates on that, as he rightly says. We have heard from the noble Baroness, Lady Bowles; we have heard from the Constitution Committee; we have heard a rather different proposal from the noble and learned Lord, Lord Brown of Eaton-under-Heywood, who is not in his place at the moment. My question is simply: when will we know what the Government’s decision is? I hope that they will not stick—because they cannot stick—to the idea that it will be simply for Ministers to decide as we go along the status of a particular piece of retained law. When will we know the Government’s position? That might enable us to advance not only on that point but on points such as the one being debated at the moment. Can the Minister give us an answer as to dates?

[Lord Keen of Elie]

I cannot give the noble and learned Lord an answer as to dates, but clearly we are concerned to ensure that any proposals we have to make are in place in time for consideration by the whole House before Report.

[Lord Pannick]

I am grateful to the noble and learned Lord, who I have always regarded as a true Renaissance Minister in all respects. I am very pleased to hear him confirm that the Government are seriously considering the issue of the legal status of retained EU law. The Committee of the House will look forward to seeing amendments from the Government in that respect. I am far less persuaded of the need to include in this Bill paragraphs 3(1) and 5(1) of Schedule 8, in addition to all the other extensive powers which the Government—and Ministers—will be giving themselves to amend retained EU law, under Clauses 7, 8, 9 and 17. The question is: why is it necessary also to include these powers in Schedule 8?

The concern, as the Minister will understand, is that future Ministers may decide that it is much more convenient to use the extensive, unrestricted powers in Schedule 8 than to comply with whatever restrictions are imposed by this House, by the other place—by Parliament—on the powers to modify under Clauses 7, 8, 9 and 17. So we might need to come back to this matter on Report.

I was also interested to hear the Minister say in his reply that the Bill is not the place for “radical policy change”. I will remind him of that when we debate the amendments—which no doubt will be put forward on Report—to take out the provisions in the Bill that remove from retained EU law the European Union charter of rights. I beg leave to withdraw the amendment.

Media: Press Sustainability

Lord Keen of Elie Excerpts

Thursday 22nd March 2018 Lords Chamber

[Lord Stevenson of Balmacara]

To ask Her Majesty's Government whether the recently launched review of press sustainability in the United Kingdom will have the power to call for evidence; whether all such evidence received will be published; and whether all meetings held as part of the review will be public.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the Cairncross review into the sustainability of the national and local press is being led by an external chair, Dame Frances Cairncross, with support from an advisory panel. It is not a statutory inquiry and will therefore not have the statutory powers to compel witnesses to give evidence, nor will it be required to hold meetings in public. Dame Frances will determine the process for gathering evidence in due course.

[Lord Stevenson of Balmacara (Lab)]

I am obliged to the Minister and congratulate him on his ability to switch effortlessly from subject to subject overnight; it is almost legendary. I welcome the review, and congratulate the department on its distinguished choice of chair and on assembling what looks like a knowledgeable and expert advisory panel. I am sorry that the evidence is not going to be published automatically and that the hearings will not be in public, but I hope that the chair will see the wisdom of doing that and look forward to seeing how events develop. Does the Minister agree that, given that the aim of the review is to secure high-quality journalism, the remit is oddly framed with its focus on the market environment and on consumers rather than citizens? Given the recent news, will he confirm that section 1.5 of the remit will allow the review to investigate and report on the ways in which social media have clearly been influencing opinion ahead of elections and referenda? If not, who will look at that?

[Lord Keen of Elie]

My Lords, the review will examine the role and impact not only of digital search engines but of social media platforms and other digital content aggregation platforms which have an impact on press sustainability.

[Lord Lexden (Con)]

Will the concerns and needs of the local press, so vital for local democracy, be prominent in the work of the review?

[Lord Keen of Elie]

Ultimately, the scope of the review will be a matter for the chair. It is going to be an independent, expert review but clearly it is intended to address the issue of the local press, where we have seen such impact from digital media in the past 10 years.

[Lord Soley (Lab)]

Does the Minister accept that the press will not be able to go back to its old role of doing news in small bits? It will need to do a deeper analysis and to focus on what is true news and go deeper into it. Some newspapers are beginning to do that—not before time. Will he take on board the importance of the British public being able to get in-depth and thoughtful news, as well as instant news? The two are important, but they are different.

[Lord Keen of Elie]

My Lords, we fully recognise and accept the importance of such developments and, indeed, it is one means by which we can address the insidious development of fake news.

[Lord Razzall (LD)]

I am sure that the noble and learned Lord is aware that it is five years since Parliament endorsed the Leveson royal charter. It is some progress to have the sustainability review, but is he confident that press regulation is really working?

[Lord Keen of Elie]

Yes.

[The Earl of Listowel (CB)]

Will the review look at the initial training of journalists and their continual professional development, to ensure that they get all the support that they need?

[Lord Keen of Elie]

I am not in a position to anticipate how Dame Frances is going to proceed with the review.

[Lord Robathan (Con)]

My Lords, have Her Majesty’s Government made any assessment of the funding of Impress by Mr Max Mosley?

[Lord Keen of Elie]

We recognise that Impress is now recognised by the PRP and that some but not many newspapers at a national level have engaged with it. We also recognise the importance of IPSO and, indeed, of those newspapers, such as the Guardian and the Financial Times, which have instigated their own independent review positions.

[Lord Inglewood (Con)]

My Lords, I declare an interest as someone who was a director of a local media company until a month ago, when it sold up. Could my noble and learned friend please explain to the House what in fact the Government mean by sustainability in this context?

[Lord Keen of Elie]

We have to identify a model by which the local and national press can continue to deliver what is required of an independent and informed news source. That has been the subject of change, clearly; we have passed from the days when a piece of journalism could be accompanied by an advertisement and, therefore, self-sustaining. We have to look at how we can sustain our media in future.

[Lord McNally (LD)]

My Lords, will the Minister not consider that his one-word reply to my noble friend Lord Razzall holds only till the next newspaper scandal hits us? Will he not accept that we still have a media self-regulating in its own self-interest, and that the abandonment of Leveson 2 is a massive missed opportunity, given that data is now today’s headline?

[Lord Keen of Elie]

No.

[Lord Blunkett (Lab)]

My Lords, will the Minister comment on the excellent scheme that is the levy on the BBC for local democratic reporting, and whether some of the very large international platforms should not have a levy on them to ensure that we can expand such a scheme?

[Lord Keen of Elie]

I entirely agree with the noble Lord’s observations with regard to the BBC scheme and its outreach to local news. The extension to a levy has been considered and is being looked at.

[Lord Cormack (Con)]

My Lords, my question is further to the very important point made by my noble friend Lord Lexden. Will Dame Frances give at least equal attention to the local press, which is the lifeblood of many local communities?

[Lord Keen of Elie]

Dame Frances will determine the scope and depth of her review but, clearly, that will include the important element of the local press.