Employment Bill

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Alan Johnson: I am sorry, I missed that point. Perhaps the hon. Gentleman could intervene again.

Brian Cotter: I said originally that there was an issue with regard to the contingency fee form of payment. The arrangement means that if the claim is successful, the person represented gets the money.

Alan Johnson: If the hon. Gentleman is talking about no win, no fee arrangements, which are creeping disturbingly into the employment tribunal system, we will look to take back from the representative only any money gained as a result of representing the case. We will have to cover that important point in regulations, but we have not yet made a final decision.

Mr. Hammond: I am grateful to the Minister for that, and I am grateful to the hon. Member for Weston-super-Mare for raising such an important point. Surely it is precisely the lawyer pursuing a no win, no fee case who is the target of what the Minister seeks to do here.

Is the Minister saying that such a person will be vulnerable for the costs of his misconduct only if his client is successful and he receives a fee? If so, there is a big hole in the system that the Minister is putting in place, because the client will suffer the consequences if his advocate is unsuccessful and loses the case. There will be no fee and consequently he will fall into the category of trade union and citizens advice bureau representatives, rather than that of paid lawyer. [Interruption.]

Alan Johnson: Inspiration has struck me. The hon. Gentleman makes an important point and I think that there is no difference among Committee members on discouraging no-win, no-fee ambulance chasers—for want of a better term. On wasted costs, both parties' costs could be included. I am also persuaded that we should include contingency fees, which will be in the consultation details.

Brian Cotter: I thank the Minister for that response and particularly the last point. I think that that will be addressed. I hope that we have rehearsed the issue sufficiently, but we shall debate another amendment on a similar issue. We must take account of the situation of those representing business and of those from the trade union side. Subject to the correct procedures, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Rob Marris: On a point of order, Mr. Benton. A Committee member said that the Law Society had suggested that amendment. In these delicate times, I should declare that I am a member of the Law Society.

Brian Cotter: I beg to move amendment No. 6, in page 32, line 16, at end insert—

    '( ) The Regulations made under subsection (1A) shall provide that a tribunal may make an order described in paragraphs (a) to (c) if, in the opinion of the tribunal, the representative concerned has acted vexatiously, abusively, disruptively or otherwise unreasonably.'.

The amendment's purpose is to examine the reasons for a tribunal awarding costs. Those reasons are contained in a statutory instrument under the Employment Tribunals Act 1996. Clearly specifying in the Bill the circumstances in which a tribunal can award costs would provide an extra safeguard. It is not adequate that the specifications are contained merely in secondary legislation. Of course, we have made the point, as we have in many other Committees, that statutory instruments such as regulations are not a satisfactory way of dealing with matters, and we shall return to that frequently.

Those bringing a claim, those defending a claim and those representing either party need clarification that costs will be awarded only when a party has acted in particular ways. Awarding costs in that manner will provide an excellent way of deterring unscrupulous applicants from using the tribunal process without good reason.

However, we must ensure that everyone who wishes to bring a claim with good reason is given every opportunity and encouragement to do so. We must not risk deterring applicants on low incomes or with few resources, who might fear that the way in which their case was conducted could result in their having to pay costs to the other party. Of course, it is very difficult for people to conduct cases. I have seen cases in which people win their point, but go on endlessly until they lose the case. They do not realise that they have won the point and go on to irritate the tribunals or judge involved.

Someone who can pay for professional representation will probably be in a better position to present a comprehensive case than someone with little or no access to representation. It is therefore imperative to outline in the Bill the circumstances in which costs can be awarded. That would ensure that costs were awarded according to the motives behind an individual's reason for bringing a case rather than the strength of the presentation. Colleagues will have other points to make, but I rest my case for now.

Alan Johnson: I agree with the sentiments expressed by the hon. Member for Weston-super-Mare, but he is seeking to build into the Bill something that is best placed in regulations. The amendment is unnecessary: the subsection already permits the Secretary of State to make regulations to allow tribunals to make orders for wasted costs. Regulations are the right and proper place for the details. We agree that changes may be necessary in future, but if the provision is written into the Bill it will be fixed and we will lose the flexibility of effecting change through regulations. The regulations will be effected through the affirmative resolution procedure. I see no value in building the provisions into the Bill. I agree with the sentiment, but regulations, not the Bill, are the best means of achieving it.

Brian Cotter: I am happy to accept the Minister's answer. We may return to the issue later. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Hammond: I beg to move amendment No. 11, in page 32, line 16, at end insert—

    '(d) to prevent a representative of a party to proceedings before it who is subject to an order under subsections (b) or (c) above from recovering any such costs or expenses or allowances (as the case may be) from the person represented.'.

The Chairman: With this we may take the following amendments:

No. 13, in page 32, line 16, at end insert—

    '(de) to ensure that the cost of any disallowance ordered under paragraph (a) above is met by the representative and not the person represented.'.

No. 22, in clause 23, page 32, line 41, at end insert—

    '(de) to ensure that the cost of any disallowance ordered under paragraph (a) above is met by the representative and not the person represented.'.

No. 23, in clause 23, page 32, line 41, at end insert—

    '(c) to prevent a representative of a party to proceedings before it who is subject to an order under paragraph (b) above from recovering such costs or expenses from the person represented.'.

Mr. Hammond: The purpose of this group of amendments is to probe the Government's intentions on orders against representatives and the mechanics of how the provisions will work. I also hope to explore, together with other members of the Committee, the consequences for charging regimes. The hon. Member for Weston-super-Mare has already alluded to the possibility that practice will amend itself to fit around the regulations—and, perhaps in some cases, subvert them.

Amendment No. 11 would allow the regulations to provide powers for the employment tribunal to ensure that costs awarded against a representative are not recovered from the person represented. If they were, that would undermine the purpose of the Bill. Amendment No. 22 would achieve the same purpose in relation to employment appeal tribunals, and amendment No. 13 relates to paragraph (a) of new subsection (1A), where the tribunal orders a disallowance of all or part of the costs or expenses of a representative. The amendment may be inelegantly phrased—I acknowledge that before the Minister picks me up for inadequate drafting—but it is designed to probe how the Minister will ensure in practice that the penalty is borne by the representative.

How far will the tribunal be able to probe the private contractual arrangements between a party and his representative? How will the Government ensure in practice that persons represented are not forced to sign away the benefits introduced by the regulations? Have the Government assessed the impact on fees and the availability of legal advice? If representatives are exposed to additional jeopardy and potential costs, they may try to protect themselves by making different arrangements with clients, charging higher fees or being unprepared to undertake certain categories of work. What evaluation has the Department of Trade and Industry conducted of that?

11 am

Rob Marris: Amendments Nos. 13 and 22 would amend the parallel provisions of new section 13(1A)(a) and new section 34(2)(a) on the employment and employment appeal tribunals. I suggest to the hon. Member for Runnymede and Weybridge that the amendments are misconceived. A tribunal or appeal tribunal may disallow costs on the basis that a representative's conduct in proceedings wasted time. However, if that representative were following instructions on how to conduct those proceedings on behalf of the, probably losing, party, it is possible—and not rare—that costs would be disallowed, but it would not be the paid representative's fault. That is different from the situation covered by new section 13(1A)(b) and new section 34(2)(b).

Mr. Hammond: I understand the hon. Gentleman's comments, but I am not sure why it is different. How can he be sure that in situations covered by paragraph (b) the solicitor is not merely following his client's instructions, which I imagine that he is bound to do?

Rob Marris: I cannot be sure, but I am sure that, if the Minister's power to make regulations approved by Parliament is fettered in the way suggested by amendments Nos. 13 and 22, that could have unintended consequences. I do not think that those consequences are what the hon. Member for Runnymede and Weybridge would want in the scenario that I outlined.

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