Joint Committee On Human Rights Seventeenth Report

Appendix 5: Corporate Responsibility Bill

Letter from the Chair to Ms Linda Perham MP

As part of its function to consider human rights in the United Kingdom, the Joint Committee on Human Rights examines all bills introduced to either House with a view to reporting to each House on their compatibility with Convention rights under the Human Rights Act 1998, and with other rights which arise in international law under human rights instruments by which the United Kingdom is bound. The Committee is currently considering the human rights implications of the Corporate Responsibility Bill, which you introduced to the House of Commons.

The Committee is concerned about the possibility that this Bill, by requiring companies to make certain information available to the public and by interfering with the right of a company to use its resources as it sees fit, might interfere with the right to respect for private life under ECHR Article 8 and the right to peaceful enjoyment of possessions under Article 1 of Protocol 1 to the ECHR. The Committee's Legal Adviser wrote to you on 24 July 2002 about a similar Bill which you introduced in the last session: see 26th Report of the Committee (HCP 1295/HL Paper 182 01/02 enclosed). The Committee understands the difficulties which the sponsors of private members' bills, with limited resources, often face in responding to questions from the Committee about the human rights implications of their bills. Nevertheless, without suggesting that you are under any obligation to respond to its concerns, the Committee wants to give you a further opportunity to comment should you wish to do so.

The Committee is likely to be deciding on 17 November 2003 whether to draw the attention of each House to the Bill in similar terms to those of its report of last year, and so would be unable to take account of representations received after 14 November 2003.

5 November 2003

Memorandum from S E Cohen, legal adviser, on behalf of Ms Linda Perham MP

I am writing to you as requested to let you have some general thoughts with regard to the above mentioned Bill and its compatibility or otherwise with the Human Rights Act 1998.

I have noted the various points raised by the Parliamentary Committee in their letter of 24 July 2002 to Linda Perham MP. I propose dealing with the various relevant Convention Rights in turn but before doing so will address the general issue raised of lack of certainty.

As the committee points out The European Convention on Human Rights requires that state to act "in accordance with the law" (Article 1 First Protocol). The principle of legal certainty is inherent in the Convention as a whole.

Some useful guidance on the principle of certainty can be found in the Judgment of the European Court of Human Rights in Sunday Times v United Kingdom (1979) 2 EHRR 245:

"First the law must be adequately accessible: the citizen must be able to have an indication that is adequate in all the circumstances of the legal rules applicable to a given case. Secondly, a norm can not be regarded as a 'law' unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able-if need be with appropriate advice-to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. Those consequences need not be foreseeable with changing circumstances. Accordingly, many laws are inevitably couched in terms which, to a great or lesser extent, are vague and whose interpretation and application are questions of practice."

The Bill has raised concerns with the Committee in relation to the following convention rights:-

1. Right to a fair trial

Article 6 of the Convention applies to both criminal and civil proceedings and can be invoked to protect companies and their officers.

The right to a fair trial in a criminal case incorporates a restriction on self-incrimination which means that prosecuting authorities may not be able to rely on evidence obtained through compulsion. This is the concern raised be the Committee. The privilege against self incrimination is not absolute and guidance can be found in Brown v Stott (2001) 2 WLR 817 where Lord Bingham stated:-

"The jurisprudence of the European Court (of Human Rights) very clearly establishes that while the overall fairness of a criminal trial cannot be compromised, the constituent rights comprised whether expressly or implicitly, within Article 6 are not themselves absolute. Limited qualification of these rights is acceptable if reasonably directed by national authorities towards a clear and proper public objective and if represent no greater qualification than the situation calls for."

The common law recognises a privilege with regard to documents. However the position so far as the Strasbourg jurisprudence is concerned is far from clear. In Funke v France (1993) 16 EHRR 297 the European Court of Human Rights found that a conviction for failure to produce documents was a violation of Article 6 and drew no distinction between the compulsion to produce documents and the answering of questions.

2. Right to respect for private life

The Committee has expressed concern with Clause 5 of the Bill which requires a company to make certain papers available for inspection to the public. However, there would appear to be no Strasbourg case law directly on the point of whether a corporation can claim a right to privacy under Article 8. Such case law as there is would seem to indicate that the right is of a personal nature.

In Hoechst v EC Commission (1989) ECR 2859 the European Court of Justice indicated "the protective scope of (Article 8) is concerned with the development of man's personal freedom.

If Article 8 is engaged et al it would be in its application to "correspondence". This encompasses letters, telephone calls, faxes and other forms of communication such as e-mail. Interference with non-legal "correspondence" is permitted but would have to be justified under Article 8(2) i.e. "in accordance with the law and (as) necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others".

To be compatible with Article 8 should it apply, the Bill and its relevant provisions must be aimed at protecting one or more of the above interests which are exhaustive.

A restriction will be "necessary in a democratic society" only if there is a pressing social need for restriction and the restriction is proportionate to the aim of responding to that need in that it does not go further than is necessary.

Lawyer-client privilege is accorded a high degree of protection by Article 8 and the bill ought perhaps to provide explicit safeguards in this regard.

3. Freedom of Expression

Article 10 can be invoked by both natural and legal persons and includes the right to receive and impart information. It does not make obligatory the disclosure of information.

4. Protection of Property

The requirement in the Bill to consult or to publish reports and assessments before deciding how to deal with property amounts to a control or interference and thus as the Committee points out engages Article 1 of the First Protocol which applies to "every natural or legal person".

An assessment has to be undertaken of whether the right balance has been achieved between 'the demands of the general interest of the community and the requirements of the protection of the individual's fundamental right' (the 'fair balance' test). The application of the test will vary according to the measure in issue and control is harder to justify than an interference and it may arguable the Bill seeks to do the latter rather than the former and accordingly the relevant provision may be easier to justify. There must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. There is no concept of the 'public interest' as such but it is necessary for there to be a legitimate aim in the sense of the Bill and/or its relevant provisions not being 'manifestly without reasonable foundation'.

The scope for review by a court of the object or purpose of a legislative measure of other interference with property is limited. The state has a wide margin of appreciation in implementing social and economic policies and the legislature's judgement as to what is in the public or general interest will usually be respected.

It is worth noting it has been suggested by the Strasbourg Court only interferences which touch on the financial value of property can engage this Convention Right. It may be questioned whether the provisions of the Bill highlighted by the Committee even need to be justified in this regard although the economic interests connected with the running of a business are capable of being protected under Article 1 of the First Protocol.

11 November 2003

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