Legislative Scrutiny: (1) Serious Crime Bill, (2) Criminal Justice and Courts Bill (second Report) and (3) Armed Forces (Service Complaints and Financial Assistance) Bill

Legislative Scrutiny: (1) Serious Crime Bill, (2) Criminal Justice and Courts Bill (second Report) and (3) Armed Forces (Service Complaints and Financial Assistance) Bill - Human Rights Joint Committee Contents

2 The Criminal Justice and Courts Bill

Background

2.1 The Criminal Justice and Courts Bill was introduced in the House of Commons on 5 February 2014 and carried over to the current Session. It had its Second Reading in the Lords on 30 June and completed its Committee stage on 30 July.[64] Report stage in the Lords is scheduled to begin on 20 October, and to continue on 22 and 27 October.

2.2 We reported on the Bill on 11 June and recommended a number of amendments.[65] We also recommended a number of amendments to Part 4 of the Bill in our Report on Judicial Review.[66] Some of the amendments we recommended in those Reports have been debated during the passage of the Bill.

2.3 The Government has also published responses to both of our Reports. The Government response to our Report on Judicial Review was published on 15 July.[67] The Government's response to our legislative scrutiny Report on the Bill was published on 4 September.[68]

2.4 A number of provisions have been added to the Bill in the course of its passage which we did not have the opportunity to scrutinise before publishing our first scrutiny Report on the Bill. We wrote to the Lord Chancellor and Secretary of State for Justice on 16 July asking some further questions about some of the amendments. The Minister responded by letter received on 31 July 2014. The correspondence is available on our website.

2.5 Since the Bill is already at an advanced stage in its progress through both Houses, this second Report on the Bill focuses in particular on those issues which are most likely to be the subject of debate at the Bill's Report stage.

Information provided by the department

2.6 In our first Report on the Bill, we welcomed the usefulness of the Government's ECHR Memorandum, which was thorough and detailed and published at the same time as the Bill itself, in accordance with our recommendations for best practice by departments.[69] However, we regretted the lack of any equivalent prior analysis of the Bill's compatibility with the UN Convention on the Rights of the Child, despite the fact that Part 2 of the Bill in particular has significant implications for the rights of children.[70]

2.7 The Government provided a supplementary ECHR Memorandum on 18 June in relation to amendments which in the Government's view raise human rights issues. The Memorandum is relatively full and detailed and has helped to focus our human rights scrutiny of the amendments on the most significant issues. The department has also responded fully and promptly to our questions in correspondence and has published full and timely responses to both the Committee's legislative scrutiny Report on the Bill and its Report on Judicial Review. While we regret that the Government has not accepted any of our recommendations in relation to this Bill, and we remain concerned about the Government's willingness to conduct UNCRC compatibility assessments prior to a Bill's introduction, we commend the Ministry of Justice for its approach to providing us with the information we need to perform our function of scrutinising legislation for ECHR compatibility, which has continued to be in keeping with our recommendations for best practice.

Review of whole life orders (clauses 2, 3 and 26)

2.8 In our first Report on the Bill we considered the human rights issue of whether UK law as it currently stands provides sufficient opportunity for review of a whole life order,[71] because the Bill brings some terrorism-related offences within the scope of possible whole life orders for the first time. The Bill now also provides, as a result of a Government amendment, that the murder of a police or prison officer in the course of their duty will be in the category of exceptionally serious cases in which the court should normally start by considering a whole life term.[72]

2.9 The Government's supplementary ECHR Memorandum acknowledges that this provision may result in the imposition of an increased number of whole life orders and considers whether this is compatible with Article 3 ECHR as interpreted by the European Court of Human Rights in Vinter v UK. It takes the view that there is no incompatibility with Article 3 ECHR because the Court of Appeal in the case of McLoughlin has "settled the domestic position" by setting out the mechanism for considering applications from whole life order prisoners for release in exceptional circumstances.

2.10 In our first Report on the Bill we recommended a probing amendment to the Bill to introduce more legal certainty into the domestic legal framework. Our recommended amendment was debated in the House of Lords on 14 July during the Bill's Committee stage.[73] It was supported by most speakers in the debate, including a number of former Law Lords/members of the Supreme Court, but not pressed to a vote. However, the Government's position remains that there is no need for any further action to give effect to the Vinter judgment because the position in domestic law is now clear after the decision of the Court of Appeal in the case of McLoughlin.[74]

2.11 The amendment we recommended is in our view even more necessary than it was at the time of our first Report, in light of the new provision introduced by the Government to make a whole life order the usual term of imprisonment for murder of a police or prison officer, which is likely to lead to more whole life orders being imposed. We also draw to Parliament's attention the fact that, since our first Report on the Bill, a very recent judgment of the European Court of Human Rights on whole life orders has come to our attention which clearly reinforces our reasoning in that Report about the need for more specific details about the review mechanism that is available in UK law. In a case against Hungary, the European Court said:[75]

1. Although the requisite review is a prospective event necessarily subsequent to the passing of the sentence, a whole life prisoner should not be obliged to wait and serve an indeterminate number of years of his sentence before he can raise the complaint that the legal conditions attaching to his sentence fail to comply with the requirements of Article 3 in this regard. This would be contrary both to legal certainty and to the general principles on victim status within the meaning of that term in Article 34 of the Convention. […] A whole life prisoner is entitled to know, at the outset of his sentence, what he must do to be considered for release and under what conditions, including when a review of his sentence will take place or may be sought.

2.12 In the case itself, the Court was not persuaded that the institution of presidential clemency, without any law or regulation setting out specific guidance as to what kind of conditions or criteria are to be taken into account, or any accompanying eligibility for release on parole, would allow any prisoner to know what he or she must do to be considered for release and under what conditions.[76] The Court therefore found a violation of Article 3 of the Convention.

2.13 We also note that the Government has submitted a revised Action Report to the Committee of Ministers asking it to close its supervision of the case on the basis that the decision of the Court of Appeal in McLoughlin has resolved the issue. The Action Report was submitted to the Committee of Ministers on 27 June 2014 but makes no mention of our Report, published on 11 June 2014, in which we disagreed with the Government's analysis that no further general measures are necessary in order to give effect to the Vinter judgment and recommended an amendment to the current Bill to do so. According to the principle of subsidiarity, which is an inherent part of the ECHR's regime following an adverse judgment by the Court, it is the national authorities, including Parliament, who have the primary responsibility to consider, discuss and decide precisely how to respond to such a judgment, subject to the supervision of the Committee of Ministers. We therefore expect the Committee of Ministers to be informed about any relevant parliamentary consideration of the issue, especially by Parliament's own human rights committee.

2.14 We also note that the Government's Action Report to the Committee of Ministers does not say what the Government intends to do about the relevant Prison Service Order. Whether the Government intends to amend it, withdraw it, or simply leave it as it is, is highly relevant to any assessment of whether UK law now satisfies the requirements of the judgment in Vinter, but so far the Government has not answered directly our questions about its intentions in this respect. We recommend that the Government make clear at the earliest opportunity whether, and if so how, it is proposing to amend the relevant Prison Service Order in light of the Vinter judgment.

2.15 The issue of review of whole life orders having been extensively debated during the Bill's Committee stage, there is little to be gained from tabling another amendment to the same or similar effect at Report stage. We remain of the view that Parliament could remove the ongoing legal uncertainty about the availability of an adequate mechanism for the review of a whole life order by a relatively simple amendment of the existing statutory framework, but to become law that would require the Government's support which will clearly not be forthcoming. Notwithstanding the Government's commitment to the principle of subsidiarity, the matter will now have to be decided by the Committee of Ministers in its supervision of the UK's response to the Vinter judgment, and the Court in its judgment in the pending case of Hutchinson v UK. We expect the Government to bring to the attention of the Committee of Ministers in its next Action Report, and to the Court in its submissions in Hutchinson, the relevant parts of our Reports on this issue and the relevant parliamentary debates on the statutory amendment that we recommended.

Mandatory sentencing for possession of a knife (clause 27)

2.16 Clause 27 is a new clause in the Bill, the result of a non-Government amendment which was made to the Bill at Report stage in the House of Commons.[77] It provides for a minimum custodial sentence that must be imposed for a second (or further) conviction for possession of a knife or offensive weapon in public or on school premises. The minimum custodial term to be imposed will be 6 months imprisonment for those aged 18 or over when they commit the second offence, and a four month Detention and Training Order ("DTO") for those aged 16 or over but under 18 when they commit the second offence. As the Government indicated that it would not seek to remove the provision from the Bill, we asked the Government to provide its analysis of the human rights implications of the proposed mandatory custodial sentences.[78]

THE RIGHT TO LIBERTY

2.17 The right to liberty (Article 5 ECHR) prohibits deprivation of liberty which is arbitrary in its motivation or effect. In response to our letter, the Government set out its view that the proposed mandatory sentencing is compatible with the right to liberty, stating that the court has the necessary discretion "to refuse to impose the minimum sentence if it considers, having regard to particular circumstances relating to the offender or the offence, that doing so would be unjust; in such a case the court can instead impose the sentence it considers appropriate."[79]

2.18 We note that the language in Clause 27 mirrors that used in section 142 of Legal Aid, Sentencing and Punishment of Offenders Act 2012 ("LASPO"), which introduced minimum sentences for anyone aged 16 and over convicted of using a knife to threaten or endanger others in a public place or school. Ministry of Justice statistics show that courts are continuing to impose both custodial and non-custodial sentences for the new offences introduced by LASPO, which indicates that the provision allows adequate judicial discretion.[80]

2.19 We are satisfied that, for the purposes of assessing the compatibility of the provision with the requirements of human rights law, there appears to be sufficient judicial discretion in relation to the proposed mandatory sentencing provision, and we therefore accept the Government's explanation of its compatibility with the right to liberty.

EQUALITY INFORMATION

2.20 Under the Equality Act 2010, a public authority has to be able to demonstrate that it has paid due regard to its equality obligations.[81] We asked the Government to provide information to show that it has taken into account the potential implications, if any, of the proposed mandatory sentencing on groups of people with protected characteristics. In response, the Government provided information to show that there may be a disparate impact of the provision on black offenders and offenders aged 40 to 49. It further states that young offenders would not be disproportionately affected, and that no other minority ethnic communities would be disproportionately affected.[82]

2.21 The Government did not provide any reasons to explain why it considers the potential differential impact to be justified. In relation to the LASPO offences referred to above, the Government considered that the potential differential effects of the provision on groups of people with protected characteristics were justified given the seriousness of the offences.[83] We are grateful to the Government for providing some equality information in relation to the proposed mandatory sentencing. However, we regret that the Government did not provide any further information to explain the justifications for the potential differential impacts that it has identified on black offenders and offenders aged 40 to 49.

Use of force on children in secure colleges (Part 2 and Schedule 6)

2.22 In our first Report on the Bill we were concerned about the provision in the Bill[84] that provides the authority for a secure college custody officer, "if authorised to do so by secure college rules", to use reasonable force where necessary to ensure good order and discipline on the part of persons detained in a secure college.[85] In our view, any law, whether primary or secondary,[86] authorising the use of force on children and young people for the purposes of good order and discipline gives rise to a clear risk of incompatibility with Articles 3 and 8 ECHR. We recommended that the relevant provision in the Bill should be deleted and the Bill amended to make explicit that secure college rules can only authorise the use of reasonable force on children as a last resort; only for the purposes of preventing harm to the child or others; and only the minimum force necessary should be used.

2.23 In its response to our Report on the Bill the Government agreed with us that "in all cases force should only be used as a last resort, and only the minimum necessary and for the shortest time possible, and subject to strict conditions and safeguards."[87] The issue was also debated during the Bill's Committee stage in the Lords when amendments were proposed which would have given effect to our recommendation.[88] The conditions set out in the amendments, including those recommended by us, were accepted by the Government. The Minister, Lord Faulks, responding to the debate on the amendments, said:

2.24 The Minister also recognised that the term 'good order and discipline' could be said to be too broad in this context, and that the term 'discipline" is perhaps not helpful, as it could imply some element of punishment, and the Government is "clear that any use of force for the purposes of disciplining and punishing is prohibited."[90]

2.25 However, the Government does not agree that all use of force to ensure good order and discipline in all situations where children are involved necessarily engages or infringes Articles 3 and 8 ECHR. It reads the Court of Appeal decision in C v Secretary of State for Justice more narrowly as a decision on its facts, namely that the particular system of restraint being used in Secure Training Centres to ensure good order and discipline at the time was unlawful in light of the particular restraint techniques used. In the Government's view, there may be some narrow situations in which the use of force for good order and discipline is necessary and justified, which are wider than instances where safety is involved.[91] These include, for example, where the young person's actions are detrimental to the "welfare" of themselves or others, or impact on the "stability" or "good order" of the setting.

2.26 The Government also points out, correctly, that the use of reasonable force for maintaining good order and discipline is provided for elsewhere in legislation, for example in schools. Section 93 of the Education and Inspections Act 2006 provides that members of staff in schools may use such force as is reasonable in the circumstances for the purpose of preventing a pupil from prejudicing the maintenance of good order and discipline at the school. We note that this statutory provision pre-dated the Court of Appeal's detailed consideration of the compatibility of the phrase with the child's rights under Article 3 and 8 ECHR in C v Secretary of State for Justice in 2008, and the statutory wording must now be read in the light of that judgment.

2.27 Although the Government appeared sympathetic to the motivation behind the amendments we recommended, it did not agree to any of them, nor did it offer to bring forward its own amendments at Report stage. On the contrary, the Government has indicated that it will be continuing with its public consultation on the secure college rules, including the Government's proposals relating to the use of force for the purposes of good order and discipline.

2.28 We welcome the Government's unequivocal acceptance that any use of force for the purposes of disciplining and punishing is prohibited; that force should only ever be used as a last resort; and that the minimum amount of force should be used for the minimum time possible, and subject to strict conditions and safeguards. We are disappointed, however, that the Government has so far refused to amend the Bill to make this clear on the face of the Bill and to remove the legal uncertainty that would be created by the wording of the Bill as it currently stands, which expressly enables the making of secure college rules which authorise a secure college custody officer to use reasonable force where necessary to ensure good order and discipline.

2.29 We are concerned by the vagueness of the Government's references to "maintaining a stable environment" and protecting the "welfare" of the child and others as permissible justifications for the use of force. The law is clear that the use of force on children can only ever be justified in order to protect the child or others from harm, and can never be justified for the purposes of good order and discipline. We recommend that the Bill be amended to make this absolutely clear on the face of the legislation. The following amendment would give effect to this recommendation:

Page 97, line 28, leave out para. 10 and insert—

A secure college custody officer may use reasonable force only as a last resort and to the minimum extent necessary for the purposes of preventing harm to the child or others.

Striking out personal injury claims involving fundamental dishonesty (clause 49)

2.30 At the Bill's Report stage in the Commons, Government amendments were agreed (without debate) which require a court to dismiss in its entirety a claim for damages for personal injury if it is satisfied, on the balance of probabilities, that the claimant has been "fundamentally dishonest" in relation to the claim, or a related claim.[92] If satisfied as to the claimant's fundamental dishonesty, the court "must" dismiss the whole claim, including any element in respect of which the claimant has genuinely suffered loss.[93] The court has a discretion not to dismiss the claim if "satisfied that the claimant would suffer substantial injustice if the claim were dismissed."[94]

2.31 The clause effectively reverses a decision of the Supreme Court which held that the court has jurisdiction to strike out a claim for abuse of process even after the trial of an action but that, as a matter of principle, it should do so only in very exceptional circumstances.[95] The Supreme Court accepted that all reasonable steps should be taken to deter fraudulent claims, but did not accept that, unless such claims are struck out in their entirety, such claims will not be deterred. The Supreme Court considered there to be many ways in which deterrence can be achieved, such as ensuring that the dishonesty does not increase the award of damages, making orders for costs, reducing interest, bringing proceedings for contempt and criminal proceedings. The Government disagrees with this decision and amended the Bill to strengthen the law so that dismissal of the claim in its entirety should become the norm in such cases.

2.32 The Government's supplementary ECHR Memorandum rightly identifies the two human rights issues that this raises: compatibility with the right to peaceful enjoyment of possessions in Article 1 Protocol 1, and in particular the right not to be deprived of property without compensation; and compatibility with the right to a fair trial in Article 6 ECHR, and specifically whether the standard of proof required in relation to fundamental dishonesty should be the civil or the criminal standard. The Government accepts that the effect of the new rule will be to deprive the claimant of property, but it considers such deprivation to be justified by the public policy in deterring fraudulent claims and therefore compatible with Article 1 Protocol 1. It also considers that the civil standard is acceptable, because there is no quasi-criminal element to the proposal, which, in the Government's view, falls squarely on the "civil" side of the line.

2.33 As this clause in the Bill invites Parliament to take the constitutionally significant step of reversing a judgment of the Supreme Court on a matter concerning the fundamental right of access to court to obtain legal remedies, and the House of Commons was given no opportunity to debate the issue, we asked the Government for a more detailed explanation of why, in its view, the court's inherent jurisdiction to strike out a claim for abuse of process, and the availability of other criminal alternatives, are not sufficient to deal with the problem of dishonest claims.

2.34 In response, the Government said that it believes that the Supreme Court's approach of only striking out claims for abuse of process in very exceptional circumstances does not provide a sufficiently strong disincentive to deter people from bringing grossly exaggerated and dishonest claims. It considers that the law should be strengthened as proposed in clause 49 so that dismissal of the claim in its entirety becomes the default position in such cases.

"The Government considers that the provisions of Article 1, Protocol 1, do not require that the power must only be confined to "very exceptional" circumstances and that the balance struck in this clause is fair and proportionate. The discretion provided under clause 49(2) not to dismiss the claim where this would cause substantial injustice to the claimant will ensure that the courts have the flexibility to apply the provisions fairly and proportionately in the particular circumstances of an individual case."

2.35 We welcome the Government's clarification that it intends the courts to retain the flexibility to apply the provisions "fairly and proportionately" in the particular circumstances of an individual case. We accept the Government's analysis of the compatibility of the clause with the right to peaceful enjoyment of possessions in Article 1 Protocol 1 in light of the Government's clarification of the purpose of the judicial discretion expressly preserved by clause 49(2).

2.36 The Bill also makes express provision for any deprivation of damages to be taken into account by any subsequent sentencing court, to make sure, in the words of the supplementary ECHR Memorandum, that there is no risk of the claimant being "over-punished". In light of that recognition of the risk of double punishment, we also asked the Government for its justification for using the civil standard of proof in relation to fundamental dishonesty, when other provisions in the Bill implicitly acknowledge the criminal nature of the sanction of dismissal of the claim.

2.37 In reply, the Government merely repeated its analysis set out in its supplementary ECHR Memorandum, that a civil standard of proof is appropriate because the clause does not have a criminal or quasi-criminal element, and relied on the analogy of confiscation of the proceeds of crime, in which the accused is deprived of property which is the proceeds of criminal behaviour of which he has not been convicted.

2.38 In our view, the Bill's explicit recognition, in clause 49(7), of the need to avoid double punishment is strongly indicative of the quasi-criminal nature of the sanction imposed by the dismissal of the claim. The criminal standard of proof (beyond reasonable doubt), and not the civil standard (balance of probabilities), should therefore apply to the question of whether the claimant has been fundamentally dishonest and we recommend that the Bill be amended accordingly. The following amendment would give effect to this recommendation:

Page 48, line 16, after 'satisfied' leave out 'on the balance of probabilities' and insert 'beyond reasonable doubt'

Revenge pornography

2.39 Non-government amendments were tabled at Lords Committee stage concerning 'revenge pornography'.[96] The term is used to describe the situation in which an individual publishes or distributes sexually explicit pictures of another person without their consent. The issue is whether there is a gap in the criminal law, which fails to provide adequate protection to the right to respect for private life of the victims of this practice, who are predominantly women.

2.40 In response to our letter asking the Government about this issue, the Secretary of State for Justice acknowledged that the behaviour in question can be very distressing, humiliating and damaging to the victim, and he confirmed that the Government is looking urgently at the best way to address the issue. He also promised to provide us with the Government's analysis of the human rights implications if a decision is taken to legislate on the issue.[97] We note that in the meantime the Crown Prosecution Service has updated its legal guidance to explain how current legislation can be used to prosecute instances of revenge pornography.[98]

2.41 We welcome the Government's commitment to giving further consideration to the need for specific legislation in order to provide better protection for the privacy of victims of the emerging practice of 'revenge pornography'. We agree with the Government that this requires detailed and careful consideration, and we welcome the Minister's assurance that we will be provided with the Government's analysis of the human rights implications of any new offence in due course.

Contempt of Court

2.42 In our first Report on the Bill we expressed concern about the lack of safeguards on the face of the Bill against the arbitrary or disproportionate exercise of the Attorney General's power to require material to be taken down from websites or lose the benefit of the statutory defence to the strict liability rule for contempt of court.[99]

2.43 The Government subsequently removed the strict liability contempt provisions from the Bill, citing, amongst other things, our concerns about the clause set out in our Report on the Bill.[100]

2.44 We welcome the removal of these provisions from the Bill and commend the former Attorney General for his willingness to listen to and act on reasoned concerns about the human rights compatibility of the provisions.

Judicial review (Part 4)

2.45 In our Reports on Judicial Review and on the Bill we recommended a number of amendments to Part 4 of the Bill, in particular concerning three matters:

The likelihood of a substantially different outcome for the applicant[101]
Interveners and costs[102]
Capping of costs.[103]

2.46 Most of our recommended amendments to Part 4 were tabled and debated both at Report stage in the Commons and Committee stage in the Lords. The Government resisted them all.

2.47 In the Government's response to our Report on Judicial Review it continues to oppose our recommendations in relation to Part 4 of the Bill, with one exception, in relation to interveners and costs. On that matter, while the Government maintains its position and opposes our recommendation, it has indicated that it is "looking seriously at how to help make sure that interveners consider carefully the cost implications of intervening while not deterring those that intervene in appropriate cases."[104]

2.48 At Committee stage in the Lords, opposition to the judicial review clauses standing part of the Bill attracted widespread support from across the House, including from many retired judges on the cross benches, but the issue was not pressed to a vote.[105]

PROCEDURAL DEFECTS AND SUBSTANTIVE OUTCOMES (CLAUSE 70)

2.49 We concluded in our Report on Judicial Review that the Government had failed to make out the case for changing the way in which courts currently exercise their discretion to consider, at both the permission and the remedy stage, whether a procedural flaw in decision-making would have made any difference to the outcome. We recommended that this clause[106] either be deleted from the Bill, or amended so as to reflect the current approach of the courts. The Government resisted those amendments at Report Stage in the Commons and continues to reject our recommendations in its response to our Report,[107] relying on the arguments it has previously made in support of this change to the law.

2.50 The amendments to clause 70 that we recommended in our Report on judicial review to make it reflect the current approach of the courts have been tabled by Lord Pannick, Lord Woolf, Lord Carlile and Lord Beecham and we support those amendments for the reasons we gave in our earlier Report on Judicial Review.

INTERVENERS AND COSTS (CLAUSE 73)

2.51 We were concerned in our Report on judicial review that the Bill's provisions on interveners and costs[108] will operate as a significant deterrent to interventions in judicial review cases because of the risk of liability for other parties' costs, regardless of the outcome of the case and the contribution to that outcome made by the intervention. We recommended that the relevant sub-clauses be deleted from the Bill, restoring the judicial discretion in relation to interveners and costs which currently exists.

2.52 The Government in its response to our Report said that it considers that the clause does not remove judicial discretion, and that it remains a matter for the court in an individual case to decide whether or not to make an order for costs against an intervener if it is in the interests of justice to do so.

2.53 We do not agree with the Government that the clause as currently drafted leaves the court with a discretion to decide whether or not to make an order for costs against an intervener according to what the interests of justice require. The Bill as currently drafted imposes a statutory duty on courts to order an intervener to pay the costs incurred by other parties, unless there are "exceptional circumstances" that make it inappropriate to do so.[109]

2.54 We welcome the Government's acknowledgment of the disquiet that has been caused by this clause and its willingness to consider how to achieve its objectives without deterring those that intervene in appropriate cases. We note however, that no Government amendment has so far been forthcoming.

2.55 Lords Pannick, Woolf, Carlile of Berriew and Beecham have tabled an amendment for consideration at Lords Report stage which would replace the relevant parts of the provision currently made in clause 73 of the Bill with a clear and simple provision that would put beyond doubt that in judicial review proceedings in which an intervener is permitted by the court to intervene, the High Court and the Court of Appeal have a discretion to order the intervener to pay the costs of any other party to the proceedings, and to order any party to the proceedings to pay the intervener's costs.

2.56 We support the amendment to clause 73 tabled by Lord Pannick, which would achieve the objective of our original recommendation by restoring the judicial discretion which currently exists.

CAPPING OF COSTS ('PROTECTIVE COSTS ORDERS') (CLAUSES 74-75)

2.57 In our Report on Judicial Review, we welcomed the provisions in the Bill which put costs-capping (also known as 'protective costs orders') on a statutory footing, as a recognition, in principle, of the importance of the practice in order to ensure practical and effective access to justice in cases which raise issues of significant public interest.[110] We did not consider the Government to have produced any evidence to support the Lord Chancellor's assertion that protective costs orders had become "the norm rather than the exception", or that they are being too widely made by the courts. However, we considered the proposed new statutory code to be an accurate reflection of the common law principles developed by the courts in cases concerning protective costs orders, with one important exception: the new restriction that a costs-capping order may only be made by the court "if leave to apply for judicial review has been granted."[111] We considered this to be too great a restriction on the availability of cost-capping orders, which would undermine effective access to justice and we recommended that courts should continue to have the power to make such orders at any stage of judicial review proceedings, including at the permission stage.

2.58 The Government, in its response to our Report, rejects our recommendation.[112] It says that it recognises the value of cost-capping orders in exceptional cases where there is a strong public interest that the issues in the claim are resolved, but "remains strongly of the view that unmeritorious judicial review claims should not have the benefit of costs protection at the taxpayer's expense." In the Government's view, preventing the availability of costs-capping orders until after permission is granted will place a proportionate burden on applicants to bear the pre-permission costs where permission is not granted. Where permission is granted, it argues, the costs-capping order will still apply to costs incurred during the permission stage, and in meritorious cases the applicant will therefore still benefit from the full protection of a costs-capping order.

2.59 The Government's argument that the taxpayer should not be expected to fund costs protection in unmeritorious cases has an attractive plausibility. However, the practical problem with restricting cost-capping orders to cases in which permission has been granted is that meritorious public interest cases will not be brought because applicants cannot take the risk of exposure to pre-permission costs. As the Bingham Centre for the Rule of Law made clear in the course of our inquiry into the Government's proposed judicial review reforms, pre-permission costs can be very substantial (as much as £30,000 in some cases), and the risk of exposure to such a substantial costs liability will mean that meritorious public interest challenges that would otherwise be brought will not be brought. That is why, in the relatively small number of public interest challenges in which a costs-capping order is sought by the applicant, an "interim" costs-capping order is often asked for by the applicant on the papers, as part of an application for interim relief, and this sometimes results in the making of a protective costs order before permission is granted, for example in cases where the application for permission is adjourned to an oral hearing. Before such an interim costs-capping order is made, the judge must still be satisfied that all of the relevant conditions for the making of such an exceptional order are met.

2.60 We remain of the view expressed in our Report on judicial review that restricting the availability of costs-capping orders to cases in which permission has been granted would be a disincentive to meritorious public interest challenges being brought, and we maintain our recommendation that the Bill be amended to remove this restriction.

2.61 In our Report we recommended an amendment to the Bill that would have removed the post-permission restriction and preserved the current position whereby the court can make a costs-capping order at any stage in the proceedings, including pre-permission. We note that an amendment has been tabled by Lords Pannick, Woolf, Carlile of Berriew and Beecham which would, amongst other things, remove clause 74(3) from the Bill altogether, which would have the same effect as our previous recommended amendment. For the reasons explained above we support Lord Pannick's amendment removing clause 74(3) from the Bill, which would preserve the court's current power to make a costs-capping order at any stage of judicial review proceedings, including before permission is granted.

2.62 We also expressed concern in our Report on Judicial Review about the 'Henry VIII clause' in the Bill which gives the Lord Chancellor the power, exercisable by affirmative order, to amend the Act by changing the matters to which the court must have regard when deciding whether proceedings are "public interest proceedings". We considered such a power to have serious implications for the separation of powers between the Executive and the judiciary and we recommended that the relevant clauses be deleted from the Bill.

2.63 The Government rejected our recommendation, arguing that the provision is "sensible and necessary for the practical application of the test of what are public interest proceedings."[113] It says that the approach to when a costs-capping order should be made has been judicially developed, and the power to amend the list of matters to which the judiciary must have regard will enable the Lord Chancellor to respond quickly and flexibly, without the need for legislation, where changes are required. The Government "is clear that the power will not undermine the separation of powers", nor affect the judiciary's discretion to apply the criteria in practice.

2.64 We remain concerned about the implications for the separation of powers of giving the Lord Chancellor such a sweeping power to, in effect, re-define "public interest proceedings" by changing the matters to which courts must have regard. The Lord Chancellor and Secretary of State for Justice is himself often the defendant in judicial review proceedings, and is sometimes the subject of a costs-capping order in such proceedings. In the recent successful challenge to the lawfulness of the Lord Chancellor's residence test for legal aid,[114] for example, the High Court made a costs-capping order in favour of the Public Law Project which brought the proceedings and asked for the order on the grounds that without such costs protection it would be unable to proceed with the case because of the size of the costs risk.[115] The Henry VIII clause in the Bill would enable the Lord Chancellor to change the law, by order, to seek to prevent costs-capping orders being made against him in similar cases in the future, by seeking to influence what the courts consider to count as "public interest proceedings". Giving the Lord Chancellor such a power gives rise to the tensions with his duty to uphold the rule of law and protect the independence of the judiciary about which we expressed concerned in our Report on Judicial Review.

2.65 We recommended that the relevant provisions of the Bill[116] which give the Lord Chancellor the power to redefine public interest proceedings be deleted. Lord Pannick has tabled an amendment which would do precisely that and we support that amendment.

2.66 In our Report on Judicial Review, we also expressed concern about the Bill's provision[117] on reciprocal costs-capping, or "cross-capping", which imposes a mandatory requirement on courts to order a cross-cap when they make a costs-capping order in favour of an applicant for judicial review.[118] A cross-cap, or reciprocal costs cap, is an order limiting or removing the liability of the defendant to pay the applicant's costs if the judicial review succeeds. We were concerned in particular by the fact that the Bill makes it a duty on the court to make such an order, rather than introducing a presumption, and we recommended an amendment to the Bill which would preserve some judicial discretion when deciding what costs order to make in the circumstances of a particular case.

2.67 The Government rejected our recommendation, maintaining that it is right that, where an applicant for judicial review is protected from the full costs consequences of bringing a claim, the publicly funded defendant is also afforded "proportionate protection".[119] Significantly, the Government also clarified its intention behind the cross-capping provision in the Bill. It said that

a mandatory cross cap for the defendant's costs does not remove the court's discretion over costs. The amount of the cap is not prescribed, and so remains a matter for the judge in the individual case who may choose to set the cross-cap at a much higher level to reflect the status and circumstances of the parties. The Government considers that this gives sufficient flexibility to address an imbalance in the parties' financial positions and preserves judicial discretion.

2.68 We welcome the Government's clarification of the intention behind the mandatory cross-cap provision in the Bill. In particular we welcome the Government's acceptance that the relevant principle is proportionate protection for both parties, and that judicial discretion remains to set the cross-cap at a different level from the cap on the costs which can be recovered from the defendant, to reflect any imbalance in the parties' financial position. This clarification makes it unnecessary to proceed with the amendment that we previously recommended to this provision of the Bill.

64 The Bill spent five days in Committee in the Lords, on 14, 21, 23, 28 and 30 July. Back

65 Fourteenth Report of Session 2013-14, Legislative Scrutiny: (1) Criminal Justice and Courts Bill and (2) Deregulation Bill, HL Paper 189/HC1293. Back

66 Thirteenth Report of Session 2013-14, The implications for access to justice of the Government's proposals to reform judicial review, HL Paper 174/HC 868. Back

67 Cm 8896. Back

68 CM 8928. Back

69 First Report, para. 1.3. Back

70 First Report, paras 1.4-1.7. Back

71 First Report, paras 1.16-1.30. Back

72 Clause 26. Back

73 HL Deb 14 July 2014 cxx-xx. Back

74 Government response to the Committee's Report on the Bill, para. 13. Back

75 Laszlo Magyar v Hungary (App. No. 73593/10, 20 May 2014), at para. 53. Back