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10 pm
Norman Baker: I have listened to the Minister carefully. The Human Rights Committee report was published only this month. What steps has the Minister taken to seek legal advice subsequent to the report's publication to check his initial conclusions, which were reached before the report was published?
Mr. Ainsworth: I am not a lawyer, as the hon. Gentleman knows, and neither is he. I have taken legal advice on the Bill, as appropriate, from when I assumed responsibility for it last summer. I continue to take legal advice on the Bill and anything that has an impact on it, and I assure the hon. Gentleman that I will continue to do so. He writes me off as a cavalier person who is not the least interested in human rights considerations but wants only to catch criminals, whatever the expense. That is a caricature. I accept that we have a very real problem and that we need to deal with it. The proportionality and need for the legislation are an important part of the argument about whether it is compliant with the European convention on human rights.
We considered some time ago whether to limit the retrospective nature of the scheme to a defined period of time. Our preliminary view was that we should not. However, we made it clear in the Command Paper issued earlier this year that we wanted to think about it further.
We concluded that while we wanted to ensure that civil recovery proceedings will be as effective as possible, the introduction of a limitation period would nevertheless be appropriate. We have therefore specified that it should be 12 years.Amendments Nos. 201 and 60 deal with issues that we tramped all over in Committee. We believe that the balance of probabilities is the appropriate test. Amendment No. 201 contains a formulation about giving the benefit of the doubt to the person whose property is subject to these proceedings. Amendment No. 60 calls for the application of the civil standard of proof.
As we said at length in Committee, the balance of probabilities is the normal standard of proof applicable to civil proceedings. However, some limited civil proceedings attract the criminal standard of proof. Amendment No. 60 would therefore make the position less clear in our view. The wording in the Bill achieves what we intend to do in a way that a reference to the standard applicable to civil proceedings would not. Some civil proceedings, notably the applications for contempt of court, attract the criminal standard of proof.
In Committee, I quoted from Lord Justice Nicholls' comments that the balance of probabilities is not a rigid but a flexible standard. The burden of proof will be on the director to prove his case on the balance of probabilities. In cash forfeiture proceedings, the burden will be on Customs and Excise or on the police to prove on the balance of probabilities.
The wording in amendment No. 201 does not, to our knowledge, appear in any other legislation. Therefore, when clarity is important, it would be highly undesirable to introduce anything into the Bill that would prejudice that clarity.
I want to talk about amendments Nos. 59 and 163 at some length, as there has been considerable discussion about them. Clause 252 gives the enforcement authority the basic power to bring civil recovery proceedings, and it explains what they are for and against whom proceedings may be brought. The person against whom proceedings may be brought is immediately the subject of the obligations imposed on the enforcement authority by clause 252(2)(a). The phrase
- "any person who the authority thinks holds recoverable property"
That phrase does not do what amendment No. 59 seems to want it to do: it does not introduce a free-standing test that the authority would have to satisfy even to start civil recovery proceedings, and which could be used by a respondent by way of an extra round of challenge to undermine the authority's position at the outset. That is not how civil litigation normally works. A claimant does not need to pass the test of having reasonable grounds before bringing a claim.
The director cannot begin civil recovery proceedings on a whim, as was suggested by Opposition Members. High Court proceedings are a serious undertaking. The director is under a statutory obligation to exercise his functions efficiently and effectively. He cannot use public money unreasonably, and in any event, as a public
authority he is bound by public and human rights law. He is not allowed to go on escapades of his own. No purpose is to be served by making unnecessary and disruptive preliminary challenges before a case can be looked at properly.There are two paths down which the authority can travel. If an interim receiving order is to be sought, a good arguable case will have to be made, and if the authority proceeds straight to issuing a claim form, the full basis for the claim must be set out. As soon as a civil recovery action begins to affect anyone, mechanisms are in place to allow a respondent to challenge it.
Amendments Nos. 61 and 164 are unnecessary, because the Bill already provides that a court may not make a recovery order in the circumstances set out in them. Clause 311(9) explicitly provides that property is not recoverable if it has been taken into account in deciding the amount of a person's benefit from criminal conduct for the purpose of making a confiscation order. Clause 282(8) provides that, if property has been taken into account for the purpose of making a confiscation order and the enforcement authority subsequently seeks a recovery order in respect of related property, the confiscation order will be treated as a recovery order for the purposes of the clause. Not only is the original property that was taken into account for confiscation purposes not recoverable; any property that represents the original property is not recoverable either.
In speaking to amendment No. 61, the hon. Member for Beaconsfield suggested that even property considered in confiscation should not be potentially liable to civil recovery. I do not want to discuss that issue now, but he will recall that I wrote to him and the rest of the Committee, setting out at length the argument that property that is considered part of the confiscation case might nevertheless be brought within the ambit of civil recovery. Those arguments have not been refuted.
Government amendment No. 133 deals with an issue raised in Committee. It limits the power of entry to premises to which an interim order applies. I agreed in Committee that the power was too widely drawn and the amendment limits it to entering such premises as may be specified by the court in an interim recovery order.
Government amendments Nos. 114 and 235 provide that any court in which other proceedings are pending in respect of property that is, or may be, subject to an interim receiving order may stay the proceedings or impose its own terms on how they should continue. Before exercising that power, the court must give the enforcement authority and the interim receiver the right to be heard. Amendment No. 114 also requires the court to give any other person who may be affected by the order an opportunity to be heard before it exercises the power, and amendment No. 235 makes equivalent provision for Scotland.
Government amendment No. 286 applies where an interim administrator is to be independent of both parties. It makes it clear that he must not be a member of staff of the Scottish Administration. Amendment No. 287 is purely a drafting change. Amendments Nos. 116 to 119 are technical.
Amendment No. 62 would provide an avenue for compensation to a person whose property is not included in an interim receiving or administration order, but who has suffered loss or damage because the receiver or
administrator reasonably, but mistakenly, dealt with his property. We discussed that point at some length in Committee, and I indicated that I would give it further thought. I understand the concern that has been expressed, but I am not persuaded that there is a case for the sort of change that the amendment would make to compensation provisions.I accept that that may leave a category of persons with no avenue for compensation, but I have difficulty in envisaging circumstances in which that might happen without anyone being liable. Exonerating the receiver from liability in circumstances in which his action was based on a reasonable belief and where he was not negligent in causing loss or damage is the normal position in civil law. Liability normally assumes fault, and strict liability is very much the exception. We do not see the point in putting liability on the receiver in the circumstances outlined.
The question arises of whether we should provide another avenue for compensation. That might happen on the basis that because someone applied for an interim receiving order or administration order, they would be liable if the receiver or administrator dealt with property not covered by the order. The normal position is that a person does not become liable as a result of actions taken in respect of property not subject to proceedings. We would therefore be providing an unusual form of Crown insurance to those affected by the actions of an interim receiver in civil recovery cases if we agreed to the amendment. Compensation provisions in clause 287 mean that civil recovery proceedings follow the normal pattern for civil recovery actions.
The other Government amendments are minor and allow us to update Scottish legislation by bringing it into line with that which applies in England and Wales. They have no effective policy implications.
I ask hon. Members to understand that although the Bill contains many powers, those under part 5 are key to it. If we succeed in keeping them within the realms of civil recovery, they will enable us to take effective action against a group of people who for a long period have managed to put their ill-gotten gains beyond the reach of the law. The powers are needed. They are justified and they will do a great deal in respect of our ability to deal with those matters. Hon. Members raise important issues, but I ask them to consider the other side of the argument.
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