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Lord Wedderburn of Charlton: My Lords, I support the amendment in the name of my noble friend Lady Turner. Despite the hour, it seems to me that this is a very important debate for thousands of workers and their employers. Whatever fault lies on any of us--and perhaps we all share it--this is the first occasion when we have been able to debate properly the Government's intentions and with my noble and learned friend Lord Archer what has come to be called the "safety valve" which is necessary against perverse awards.

The Minister was kind enough to write to me on 7th January explaining that the Government saw one virtue in my noble and learned friend's amendment, which is to facilitate references to the European Court of Justice. In so far as it does that, it has our full support.

As regards domestic law there was a choice as to whether or not to apply appellate rights to Scottish courts alone. In our amendment to the main amendment, the central question is why now, at the last hurdle, we are forced to invent in domestic law a special jurisdiction for appeals to the Court of Session and the Employment Appeal Tribunal in Scotland, while leaving in England only applications based on a modified Section 68 of the Arbitration Act? I comment, as my noble friends did, that applications of that sort under

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Section 68 are not precisely the same as what is usually called a right of appeal. I shall come back to that point in a moment.

I am very grateful to my noble and learned friend for referring to Section 68 in its full glory. I wholly accept that at that stage of the debate on Report he was under intolerable pressure to get on with a complicated argument which it was not possible then to rehearse in full, although we can do so now.

As I have already said, I did not--I claim no particular merit for this--in one sense forget Section 108 which states that the Arbitration Act for the most part shall not apply to Scotland. However, my noble friends and I felt that it was legitimate to rely on the speeches made (particularly by the Minister because making orders is a matter for the Secretary of State) to ensure that any problem that arose could be adjusted by a modification order under Clause 7(6).

In other words, nothing was said either at Second Reading, in Committee--it certainly was not said by us in Committee--or on Report about there being a need for a special procedure for Scotland because an order of modification for Section 68 was not available. I do not accept that it was not available. I suspect that no Scots lawyers are present, but such advice as I have been able to acquire is that an order could have been made in the same terms. I say "in the same terms" advisedly because if it was not to be made under Section 68 and Clause 7, it could have been made in the order bringing the scheme into force by quill pen, as it were, rather than by reference on a keyboard.

The Minister can use the order authorising the scheme as part of the jurisdiction. That was not excluded from such an order. Either the argument about Scots law is right, which I contest, or, if it is wrong, there is a double possibility for the Minister to make a suitable order.

My noble friend the Minister kindly wrote to me last week saying that today's amendment in the name of my noble and learned friend would, after the modifications to be made in the order,

"allow the arbitration scheme to work in the same way North and South of the Border".

Whatever the argument in Scots law, if that is the objective, why cannot we have in the Bill the same scheme for both jurisdictions? Surely the Minister has an obligation to tell us today exactly why he cannot modify Section 68 and adjust any orders that he is to make when the Bill goes through rather than have what most would see as separate Scots and English provisions. I quite understand that there may be some difficult argument behind the veil, as it were.

However, the matter goes further than that. In another letter to me, on 15th December--I join in the tributes that we pay to the Minister for his powers of keeping up with the correspondence which has quite outgunned us--the Minister spoke of his intent to allow,

"challenges on the ground of material irregularities".

I join my noble friend in asking whether that is still regarded as possible.

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Today my noble and learned friend and the Government have struck out on a totally new route. The Minister wrote to me on 7th January saying that after the necessary orders, in the result,

"the two schemes will be the same".

Even allowing for a certain licence in the phraseology, the two schemes will not be the same--and not only for the reasons given by my noble friend Lady Turner, but also because the courts in Scotland will be given a right of appeal whereas in England there is a right to make applications. A right of appeal normally includes at any rate some points of law. If the two things are meant to be the same, perhaps when the Bill goes to another place the wording can be made the same. It is not very elegant to call the same thing by two different words, especially when in law the two are different.

However, there is a deeper cause for concern. This is rather more a personal view. The Government and ACAS--especially ACAS, it seems to me--have gone into this enterprise with a fixed belief--some would say with virtually a closed mind--that they will not permit any appeals on any questions of law in pursuit of what is called "finality". Of course, arbitration awards should in general be final, but not if they are unlawful or ultra vires. I do not think that any lawyer would expect to find finality in an award with an unlawful base. Why should the law control the arbitrator who unfortunately makes a serious irregularity in his procedure, but exercise no control whatever over an award based on a fallacious interpretation of the applicable law which, under the Bill, is to be found on unfair dismissal in Part X of the Employment Rights Act?

The ACAS memorandum drawn up for your Lordships states that awards must be legally enforceable but that there will be no right of appeal on a point of law. I am not alone in finding that bizarre. It is an extremist ambition for "finality" which will give rise to one of the more important and striking own goals to have been scored by a Bill in recent times.

Why do I say that? If it is found that on its face an award does not apply the principles of Part X of the 1996 Act on unfair dismissal in England at any rate and perhaps in Scotland--we do not yet know what the right of appeal will be in Scotland--there will be no room for an appeal on the point of law. Suppose that an arbitrator awards damages, compensation and a right to reinstatement on that basis. What should the employer be advised to do? We all know what advice he should receive if he is serious in fighting the case. Many of these matters tend to be test cases for a large number of workers. He will be advised to go to a place where his legal rights and public functions are protected. He will apply to the High Court for judicial review. The arbitrator does not simply fulfil a private arrangement. It is consensual but it is a public function under a scheme drawn up by statute and is manifestly appropriate for judicial review if the facts so give effect. But neither of the parties has given consent that embraces an award that goes outside Part X on unfair dismissal.

There is therefore every prospect from the Government's perspective that whoever is right--unless "appeal" in Scotland means an appeal in the normal

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sense--sooner or later (one cannot say when) there will be an extended series of applications for judicial review in the High Court which will increase rather than decrease the same legalism which its sponsors wish to avoid. I refer to the authoritative study of Professor Linda Dickens, which pointed out a few years ago that what is crucial about legalism is not so much the jurisdiction of the appeal body but the nature of it. That was why we began the long series of debates on the Bill by trying to get the jurisdiction of the EAT extended. That is perhaps now more likely than it was in Committee.

There is a double paradox in the point. In the Arbitration Act, Section 69 permits a limited range of appeals on points of law against arbitral awards with the leave of the High Court and only where the question is one of general public importance. My noble and learned friend referred to Sections 67, 68 and 69. I am sure that they were considered. However, we have never had it explained to us why only Section 68 should be looked at. If one must give up the objections to Section 68, what is wrong with Section 69, which is about the narrowest form of application against an error of law that one can possibly imagine? It is narrower than normal judicial review and it is one that we still say should go to the employment appeal tribunal north and south of the Border.

The progress of this legislation will provide legal archaeologists with research work for years to come. It is hoped that this amendment to the amendment will lead my noble and learned friend and the Government to have another dispassionate look at the clause, especially during the remaining stages of the Bill elsewhere, so as to establish the same basic law north and south of the Border, not one that is built upon hidden arguments as far as the Bill is concerned like some legal Rubik's cube but one that is unambiguous so that the two systems of law are the same on the face of the Bill.

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