The Parliamentary Under-Secretary of State for Justice (Bridget Prentice): I beg to move,

The Chairman: With this it will be convenient to consider the Civil Procedure (Amendment No. 2) Rules 2008 (S.I., 2008, No. 3085).

Bridget Prentice: It is a delight to serve under your chairmanship, Dr. McCrea. I will do my level best to be as brief as possible, although the rules are quite technical. In the course of my remarks, I hope that I will be able to deal with any questions that hon. Members might have.

The Counter-Terrorism Act 2008 provided for financial restrictions proceedings, which are proceedings on an application to set aside a financial restrictions decision or on any matter arising from such an application. The Civil Procedure (Amendment No. 2) Rules 2008 insert a new part 79 into the Civil Procedure Rules 1998 and set out the procedure for applications to the High Court in England and Wales and any appeal to the Court of Appeal. The Rules of the Supreme Court (Northern Ireland) (Amendment No. 3) 2008 insert new order 116B into the Rules of the Supreme Court (Northern Ireland) 1980 and make corresponding provisions.

Both sets of rules were made by the Lord Chancellor in December last year, shortly after the 2008 Act received Royal Assent. The Lord Chief Justice of England and Wales and the Lord Chief Justice of Northern Ireland were consulted. For England and Wales, amendments are usually made by the civil procedure rule committee, which is statutorily responsible under section 2 of the Civil Procedure Act 1997 for making the relevant rules of court. In Northern Ireland, amendments to the Rules of the Supreme Court (Northern Ireland) 1980 are usually made by the Supreme Court rules committee of Northern Ireland, which is statutorily responsible, under section 55A of the Judicature (Northern Ireland) Act 1978, for making such rules.

To allow the rules to be made as soon as possible, part 6 of the Counter-Terrorism Act 2008 authorised the Lord Chancellor to make rules of court in the first instance, after the Act was passed, subject to consulting the appropriate Lord Chief Justice. All subsequent rules or amendments will be made by either the civil procedure rules committee or the Supreme Court rules committee of Northern Ireland, and they will be subject to the normal rule-making requirements, including the parliamentary negative procedure.

Prior to these rules, there was no specific provision in either the Civil Procedure Rules 1998 or the Rules of the Supreme Court (Northern Ireland) 1980 to deal with financial restrictions proceedings. However, rules are required because it is expected that, although financial restrictions decisions can be based on open or closed material, subsequent court proceedings will frequently involve the use of closed material and special advocates, and the 2008 Act sets out what the rules of court must or may provide, including making rules of court to govern the use of closed material and the use of special advocates.

Closed material has been used as evidence in asset-freezing decisions since 2006, when the Treasury announced its intention to do so if there are strong operational reasons to impose an asset freeze, but insufficient open evidence is available. However, any reliance on that closed material in any subsequent court proceedings relating to such decisions has, until now, been dependent on the court being willing to exercise its inherent jurisdiction to order a closed hearing and the appointment of a special advocate. The question of whether and when the court should exercise its jurisdiction was one of the points at issue in the case of A, K, M, Q and G v. Her Majesty’s Treasury, which was considered by the Court of Appeal last year. The use of special advocates was developed as a means of mitigating disadvantage to a party who has been excluded from a hearing, or from whom information relevant to his or her case is withheld on the grounds that such disclosure would be contrary to the public interest. However, I assure the Committee that the need for a special advocate would arise only if the court could be persuaded that it should consider certain evidence at a closed hearing at which one of the parties, and their legal representatives, would not be present—the special advocate would therefore represent that party’s interests.

However, since the Treasury’s decision in 2006 to rely on closed material in asset-freezing decisions, it has become apparent that many, if not most, subsequent court proceedings relating to such decisions would involve consideration of closed material, without which the Treasury would not be able to defend fully its decisions. It was thus felt that it was appropriate to provide for that by way of legislation and consequent rules of court, rather than by relying simply on the court’s willingness to exercise its inherent jurisdiction. It was felt that that would bring the process into line with other areas where closed evidence is often central to proceedings.

Similar considerations apply in the case of decisions taken under part 2 of the Anti-terrorism, Crime and Security Act 2001. The new powers introduced in schedule 7 to the Counter-Terrorism Act 2008 may also involve decisions being taken on the basis of closed material, and for the Treasury to defend fully such decisions, the court would need to consider closed material. Accordingly, it was felt that challenges to decisions taken under those powers should also be made subject to the new procedures.

Special advocates are appointed by the Attorney-General. The fundamental feature of all special advocate systems is that once the special advocate has received closed material, all direct communication between the special advocate and the party whose interest that advocate is representing, and their legal representatives, must cease, unless the court has given its consent.

In relation to other proceedings, the Government have established very similar statutory procedures involving closed material and the use of special advocates. These include proceedings before the Special Immigration Appeals Commission and control order proceedings in the High Court.

The new amendments to the Civil Procedure Rules 1998 and the Rules of the Supreme Court (Northern Ireland) 1980 are based on the general principle that, subject to the new rules on financial restrictions proceedings, the other provisions of the 1998 and 1980 rules should apply to these proceedings and any subsequent appeals, subject to any necessary modifications. Such modifications and disapplication of parts of the 1998 rules and orders of the 1980 rules have been minimised as far as possible.

The overriding objective in part 1 of the 1998 rules and order 1 of the 1980 rules, which require the court to deal with cases justly, is to be read as including a requirement that the court in financial restriction proceedings will ensure that information is not disclosed contrary to the public interest. A similar modification to the overriding objective already exists in relation to control order proceedings. Some general rules about evidence and disclosure are also disapplied in favour of the rules dealing with financial restrictions proceedings.

New part 79 and new order 116B, which relate to financial restrictions proceedings, are divided into four sections. Section 1 of new part 79, and part I of order 116B, contain rules about scope and application. In particular, the overriding objective in part 1 of the 1998 rules and order 1 of the 1980 rules has been modified in relation to financial restrictions proceedings to place a duty on the court to ensure that information is not disclosed contrary to the public interest.

Section 2 of new part 79 contains rules about the court procedure relating to applications to set aside a financial restrictions decision. Section 3 modifies the general provisions governing appeals to the Court of Appeal and provides that part 52 of the Civil Procedure Rules 1998 applies to an appeal to the Court of Appeal against an order of the High Court in financial restrictions proceedings. Appeals under this section are subject to rule 79.2.

Similarly, part III of new order 116B modifies the general provisions governing appeals to the Court of Appeal. It also makes specific provision in respect of appeals in financial restrictions proceedings, which is modelled on the appeal provisions in the Civil Procedure Rules 1998. Appeals under this part are subject to rule 2 and part 4 of the order. Finally, section 4 of new part 79, and part IV of new order 116B, include provision for closed material, special advocates, and evidence and disclosure.

As technical as all that is, I hope that the Committee feels able to support the new rules, which have been made under the aegis of the Lord Chancellor.

Mr. Henry Bellingham (North-West Norfolk) (Con): It is a pleasure to serve under your chairmanship for the first time, Dr. McCrea. I thank the Minister for her lucid and concise explanation of these technical rules. She has put fairly technical issues into layman’s language very adeptly.

I declare an interest as a barrister. I shall be brief because I am conscious that other Members want to speak. My hon. Friend the Member for Belfast, North, in particular, might have a special interest in this subject.

The measures implement the financial restrictions proceedings measures in part 6 of the Counter-Terrorism Act 2008. We were broadly supportive of the measures in that Act, with a few notable exceptions. One weakness of the United Nations terrorism orders was that challenges to asset freezes had to be made by judicial review, and there was a similar drawback to part 2 of the Anti-terrorism, Crime and Security Act 2001. It is therefore positive news that the 2008 Act gives parties the right to challenge freezing orders in the High Court. We are looking partly at freezing orders today, but mainly at financial restrictions proceedings, which are directions or orders that stop short of outright freezing.

I should like to press the Minister on a few of the areas that she has covered. As she has explained, the 2008 Act provides powers to make rules of court, particularly to ensure that information is not disclosed in financial restrictions proceedings where such disclosure would be

I do not expect the Minister to give much away, but will she give us examples of what would not be in the public interest? That is down to a decision of the court, and I should like to know whether similar arrangements apply in Northern Ireland as in our High Court. Here, guidelines are available to judges; what guidelines do judges in the Province have to ensure that they decide consistently what is or is not in the public interest?

The Minister mentioned rules to govern the use of special advocates, or security-vetted barristers. Will she tell us more about those advocates? Do they go through standard security clearance—the positive vetting procedure—or is some special procedure in place? Does that apply only to members of the Bar, or can solicitor-advocates also apply to be special advocates in that context? Will she tell us more about how that procedure works?

The rules may make provision for proceedings to be determined without a hearing. I know that the Minister, and Her Majesty’s Government generally, are keen to speed up the machinery and dispensation of justice across the UK, but is not that going a little too far? Will she explain why the rules are so far-reaching that they allow proceedings to be carried on with and determined without a hearing taking place at all? Perhaps she will also explain—I know that this happens in other courts in the kingdom—why the rules will enable the court to conduct proceedings for a particular case without the party in question, or his or her legal representative, being present. There might be extreme cases when the party cannot be represented or contacted, when they are offshore, or when they are perhaps refusing to co-operate with the proceedings in question. However, we must be very careful indeed about allowing a case to go forward without one of the key parties being represented, either in person or by a barrister or lawyer. Will the Minister tell the Committee whether any safeguards will be put in place to prevent that particular rule from being abused in the future?

I see that these rules will not apply to small businesses, so I would just like to push the Minister a little on that issue. My hon. Friend the Member for Belfast, North will be more aware of this than I am, but terrorists and extremists from both sides of the community in the Province often use corporate vehicles, or small-and-medium-sized-enterprise fronts, for smuggling, protection rackets or drug distribution. Perhaps the Minister will elaborate, because it surprises me that these rules do not apply to SMEs or incorporated vehicles of any kind.

Having put those few questions, I want to thank the Minister again for explaining these measures very clearly. The Conservatives supported the vast majority of the 2008 Act, and I am pleased to say that this aspect was one that we were able to support in full when it was before the House last year. I wish the Minister well with the implementation of these rules.

Tom Brake (Carshalton and Wallington) (LD): It is a pleasure to serve under your chairmanship, Dr. McCrea. I do not intend to delay the Committee for more than a couple of minutes, if that.

I listened to the Minister very carefully and found what she said most illuminating. The spokesman for the official Opposition, the hon. Member for North-West Norfolk, posed some challenging questions for the Minister and I will listen very carefully to her responses. The way in which it will be determined that the disclosure of information would or would not be in the public interest is a significant issue, so I will be interested to hear about the guidelines that will be put in place to address it.

The hon. Gentleman asked other important questions. However, on the basis that I have been advised that these measures are not controversial, I will certainly not seek to delay their progress.

Mr. Nigel Dodds (Belfast, North) (DUP): I join others in expressing delight at serving under your chairmanship, Dr. McCrea, and at taking part in the Committee.

Like others, I thank the Minister for her explanation of these very technical rules and their application, both on this side of the water and in Northern Ireland. I also thank the hon. Member for North-West Norfolk for the way in which he posed several valid and useful questions, and I will be interested to hear the Minister’s response. Obviously, we are aware of the background to these pieces of subordinate legislation. We also understand the reasons behind the introduction of the primary legislation and financial restrictions proceedings in general.

Of course, there are always concerns when rules of court are being laid down that make it clear that there will be a very big departure from the normal rules of evidence and so on, especially when it comes to requiring proceedings to be determined without a hearing and when it might be possible for proceedings to take place without the full particulars of the reason for decisions to which the proceedings relate being given to a party or his legal representative, other than the Treasury. Those points certainly raise serious fundamental questions about the legal process. It is important that we receive a full assurance from the Minister that these kinds of processes and procedures will be followed only in the most strictly defined circumstances.

We understand the reason for the use of special advocates and for the introduction of security-vetted barristers. We know that these rules before us will enable the court to conduct proceedings in the absence of any party or their legal representative, again other than the Treasury. It would be useful to have clarification from the Minister as to whether that would include a special advocate in such circumstances. Could proceedings take place without the party concerned having any kind of legal representation or notice whatsoever? I would be grateful if the Minister could explain the process further.

There are times and circumstances when it is absolutely vital that swift action—indeed, draconian action—is taken in relation to people’s assets and financial restrictions. This subordinate legislation is helpful because it lays down rules that did not exist. Previously, one had to go for a judicial review.

Finally, I note that the 2008 Act gave the Lord Chancellor the power to make the rules in the first instance, after which, in Northern Ireland’s case, power reverts to the Supreme Court rules committee. Will the Minister outline what consultation—apart from that which she mentioned with the Lord Chief Justice of Northern Ireland—has taken place with the Supreme Court rules committee on the Rules of the Supreme Court (Northern Ireland) (Amendment No. 3) 2008?

Bridget Prentice: I am grateful to all Opposition Members who have spoken for the constructive way in which they have approached the matter. I appreciate the fact that we are, more or less, of one mind about how to take things forward. I hope that I shall be able to answer their fundamental questions.

The hon. Member for North-West Norfolk asked what might or might not be in the public interest, and others reiterated the question. The phraseology is always difficult to define, and it is best to give examples. I have two: if the information, once revealed, would divulge security services sources; and if disclosure might adversely affect international relations. It would be up to the court to decide on a case-by-case basis what it felt was, or was not, in the public interest, and the definition is based on that which we used for control orders. That is the best way to explain it. Again, if disclosure adversely affected an ongoing investigation, the court might take that into account when considering the public interest.

The hon. Gentleman and others asked about special advocates, positive vetting and who the advocates would be. They are appointed by the Attorney-General. They tend to be barristers—there is no reason why a solicitor-advocate could not be a special advocate, although I am not aware of any at the moment—and they are basically subject to more or less the same vetting as civil servants, with one or two procedural differences that are appropriate to their profession.

The hon. Gentleman also asked about special advocates and someone not being represented. It is important that safeguards are in place. If the court rules that material should not be disclosed, it must consider requiring the Treasury to provide a summary of the material, and any such summary must not itself contain any material whose disclosure would be contrary to the public interest. If the Treasury were not to receive the court’s permission to withdraw sensitive material, it would obviously elect not to disclose it. If that were to happen, the rules of court would allow the court either to direct that the Treasury may not rely on the material, or, if the Treasury’s case was adversely affected, to make such concessions as the court specified. That is one disclosure safeguard.

There is another safeguard with regard to the role of the special advocate. The special advocate represents the interest of the applicant, including by receiving and making submissions on closed-source evidence that the applicant or his representative cannot see. The special advocate, of course, is not a representative in the same sense as in the relationship between client and solicitor or barrister, but he has to act in a way that gives the individual the opportunity to have proper pleadings and a fair trial. It is very much still part of the rules of court that the court and the special advocate act in a manner that would not be incompatible with the right of an applicant to a fair hearing.

The hon. Member for Belfast, North—I was there on Monday and had a busy but enjoyable time meeting the Lord Chief Justice, the Law Society and the Bar, among others—asked about consultation and the rules committee. The Lord Chief Justice of Northern Ireland was consulted on the rules as far as was required in Northern Ireland, but the rules committee itself has not been consulted. It might well have something further to say, and I am sure that the Lord Chief Justice will, in his expert way, be more than able to assure it that this is the proper way to deal with the matter.

As far as England and Wales are concerned, not only was the Lord Chief Justice consulted, but he in turn consulted the Master of the Rolls and Lord Justice Moore-Bick, who chairs the civil procedure rules committee. Perhaps there has been slightly more consultation in England and Wales than there has been in Northern Ireland.

I hope that I have answered all hon. Members’ questions. However, I will look through Hansard and, should it be necessary, I will write to the Committee with further detailed explanations. On that basis, I ask the Committee to support the rules.

Mr. Bellingham: The Minister answered the questions very well. The only one that I believe she did not touch on is about the rules that enable proceedings to be determined without a hearing. I am worried that that could happen, with a hearing bypassed completely. Will she explain how that could be allowed to happen, or perhaps drop us a note about it?

Bridget Prentice: I cannot find the answer in this mass of paper. If I may, I shall write to the Committee to give reassurance about what would happen should such circumstances arise.