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Mr. Grieve: That leaves me slightly troubled, unless I have misunderstood what the Minister said. Let us suppose that a receiver deals with a property, accidentally and without being negligent, and that he believes—on reasonable grounds—that he is entitled to do that in pursuance of the order, and it then transpires that he should not have touched that particular property and it does not fall within the scope of the order. Under clause 282, the person concerned does not have a right of redress. In that case, where—if anywhere—does the right of redress lie for any damage that that individual may have suffered as a result of the receiver's actions? It is strange that no one is liable to pay compensation to an individual in those circumstances. There is a state-sponsored scheme under which an individual—who is apparently wholly unconnected with the proceedings—suffers damage, and unless that damage is due to negligence, he cannot recover it. That cannot be right.
Mr. Ainsworth rose—
4.15 pm
Mr. Hawkins: On a point of order, Mr. O'Brien. I see on the Annunciator that the Minister who is winding up the debate in the Chamber has started to speak, so I expect that there will soon be a Division in the House. The next time there is a Division while we are in Committee, can we return to the normal convention of having a 15-minute break?
The Chairman: I will give that request serious consideration.
Mr. Ainsworth: The position does not satisfy the hon. Member for Beaconsfield to the degree that he thought it would. In respect of properties that are involved in the case itself, obviously there are compensation procedures. They are provided for under clause 282 and are widely drawn. They give the court the discretion to allow compensation for any loss caused. The case to which the hon. Gentleman refers is
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when neither the property nor the property owner should have been drawn in, but were drawn in by accident, through the activities of an interim receiver who behaved negligently. Under those circumstances, the case must be against the receiver himself, not for the sort of compensation provided under clause 282. That may appear a little harsh, but I am not sure that it is different from what happens to many people in similar circumstances.
Mr. Grieve: It does appear very harsh. I can easily imagine circumstances in which a receiver could make a reasonable mistake. As a result, an individual's property, wholly outside the scope of the order—it is not associated nor recoverable property—is adversely affected. If I understand the Minister correctly, the receiver is immune from any proceedings against him, and there is nowhere else for the individual to look for compensation. I find that extraordinary. With such an extension of administrative power, I would have expected such a person to be covered by the compensation mechanism under clause 282. I invite the Minister to consider very carefully whether that should be included.
Mr. Ainsworth: The hon. Gentleman has made a point that we need to go away and consider. He is talking not about a case in which the interim receiver is negligent and therefore liable to be pursued for that negligence, but about a case in which there is interference. The protection kicks in because there is no case for negligence, so there is no case against the receiver. The individual has been adversely affected yet he has nowhere to go. Let me reflect on the point that the hon. Gentleman has exposed, and I shall come back to him.
Mr. Grieve: I am grateful to the Minister. He is right. When I opened the discussion, I said I wanted to understand the interrelationship between clauses 252 and 282. There were a number of possible grey areas. The hon. Gentleman has resolved nearly all of them, but at the end we were left with a serious omission. I find it most peculiar that in an issue of public policy—and this example involves the most innocent category of person—there is apparently no mechanism for redress.
I suppose that it would be possible to bring a claim against the director, but why subject individuals in these circumstances to that burden when it should be easy to include them within the provisions of clause 282 as an interested party who could come along and ask the court for compensation?
Mr. Ainsworth: I would have thought that we would not reach clause 282 today. The opportunity to reflect on the point that the hon. Gentleman made should arise before we discuss compensation issues.
Mr. Grieve: The Minister is right. Another amendment is gently formulating in my mind.
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On the basis of the Minister's helpful remarks, his response to my point and the identification of a flaw in the legislation that could cause injustice and to which we will return, probably on Tuesday, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 252 ordered to stand part of the Bill.
Schedule 3
Powers of interim receiver or administrator
Mr. Grieve: I beg to move amendment No. 358, in page 262, line 18, leave out subparagraph (2).
Schedule 3 defines the powers of the interim receiver or administrator. A number of points arise from that. Since I tabled the amendment, it is interesting that the Minister has tabled several amendments to schedule 3. That will have an impact on some of the amendments that I tabled, because some of the Government amendments go a long way toward meeting my anxieties. We can examine that as we continue.
The amendment would delete paragraph 2(2). Paragraph 1 provides that the administrator has the power to seize property to which the order applies. Paragraph 2 says:
That strikes me as rather a wide power. Rather than making a speech about that, I want the Minister to explain and justify its presence. The amendment is probing, and if he can reassure me about the sub-paragraph, I will be content for it to remain in the Bill. It rang alarm bells in my mind, and I want him to explain it.
Mr. Bob Ainsworth: When an interim receiving order is made under clause 251, the court must appoint an interim receiver who will have both a management and an investigative function. Clause 252 introduces schedule 3, which lists some of the more significant powers that a court may choose to confer on the interim receiver in order for him to perform his function.
Paragraph 2(1) of schedule 3 provides that the court may authorise the interim receiver to obtain information or to require a person to answer any question. Paragraph 2(2) provides that a requirement imposed on a person as a result of the exercise of that power is to have effect in spite of any restriction on the disclosure of information, however that is imposed.
Mr. Grieve: I shall help the Minister on his way. I was, perhaps, elliptical in opening the debate. Where does legal professional privilege stand in respect of the clause? That is an example, but it is not the only one.
Mr. Ainsworth: There may be a particular example. Let us come to that.
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The most obvious restriction in this situation would be a breach of confidentiality. If information is held in confidence by, for example, a bank, a person could sue for damages for breach of confidentiality if the bank disclosed the information, subject to the defences that apply. Paragraph 2(2) overrides that. The amendment would remove paragraph 2(2) from schedule 3, which would prevent the receiver from receiving any information relevant to the restriction applying.
As I said, the role of an interim receiver will be key to the operation of civil recovery. One of his main functions will be to investigate the origins of the property and any other property that may have been generated by the same unlawful conduct. To carry that out effectively, he may require powers to obtain information as set out in schedule 3. Currently, the court may therefore authorise the interim receiver to require persons to answer questions irrespective of restrictions on the disclosure of information that would otherwise apply. That power might be used, for example, to direct a respondent to provide information about property that is or may be the subject of the order.
I can confirm that the wording does not affect the position of legal professional privilege. I am assured that the duty to disclose that may be imposed under the Bill is subject to protection in the public interest of legal professional privilege. That protection applies automatically to all High Court proceedings and does not therefore need to be included in the Bill. If other restrictions on disclosure were to apply to the power that the court may give to the interim receiver, his abilities would be unduly fettered. We do not therefore accept that the restriction should apply as a matter of course.
Section 35(1) of the Data Protection Act 1998 provides an exemption whereby a disclosure is required by order of a court. I understand that that exemption would cover the situation in which disclosure is required by a receiver acting under a court order. If, however, the interim receiver seeks to exercise his power in a way that causes any person concern, that person may apply to the court and ask it to give directions to the receiver on the exercise of his functions. Legal advice is protected, and the individual can go back to the court to challenge the disclosures of information that are being imposed. Other than that, there is no need to fetter the requirement to disclose information to an interim receiver. I hope that the hon. Member for Beaconsfield will accept that.
Mr. Grieve: I listened carefully to the Minister, and I am mindful that I may have this wrong and his reassurance may be sufficient. The schedule gives what appears to be a wholly unfettered power to the receiver or administrator to demand information of any person. I am mindful of the drafting practice outlined by the Minister, whereby it is not necessary to indicate the ordinary fetters that would apply in civil litigation and High Court practice, and he may be right.
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However, I am not wholly reassured. If he talks to his officials, and writes me a letter detailing exactly why that is the case, he may persuade me, but I am worried.
When one reads the provision, it does not look nice—schedule 3 gives the impression of providing an unfettered power. Therefore, I shall reluctantly press the amendment to a vote, just to register my concern about a schedule in a statute giving a power of that kind to anybody. It bothers me. If the Minister can persuade me otherwise, or if he wants to respond now, let him do so. At the moment, however, that provision appears contrary to the sort of principles that I would have expected.
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