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Lord McIntosh of Haringey: My Lords, I made it clear that that is the easy bit. It is the other side of the coin that is more difficult.

Lord Fraser of Carmyllie: My Lords, the noble Lord is at long last right on this matter. That is the important point that we are seeking to make.

I believe that the relationship between the two clauses is important and I was therefore strongly minded to divide the House on the matter. However, I hope that my faith is not misplaced. While I did not entirely agree with the amendment moved by the noble Lords, Lord Eatwell and Lord Lipsey, they seemed to understand what is important about establishing a clear and unequivocal relationship between Clause 115 and the code in Clause 116. I am still at a loss to

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understand why the Government cannot bring forward their own amendments in order to put the matter beyond doubt.

I hope that between now and the next stage of the Bill the Minister will consult with those who are concerned about it. If he does not know that I am not alone in having these concerns, he ought to consult more widely. In the, I hope not vain, expectation that he will do just that, or that the noble Lords, Lord Eatwell and Lord Lipsey, may have greater powers of persuasion on the Minister, it is with considerable reluctance that I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 133BB and 133BC not moved.]

Clause 119 [Power to impose penalties in cases of market abuse]:

Lord Kingsland moved Amendment No. 133C:

    Page 58, line 37, after ("If") insert ("the court on the application of").

The noble Lord said: My Lords, as the Minister will doubtless remember, this amendment and the others in this group were tabled in Committee. They seek to extract from the Government a reaction to the proposition that the imposition of a penalty by the FSA following an investigation is likely to be a contravention of the European Convention on Human Rights.

As I understand the jurisprudence of the court, a clear distinction is made between the investigative function and the function of adjudication and penalising. If the Minister follows through the logic of that jurisprudence, he will see the incompatibility of the authority either imposing or even recommending a penalty at the end of an investigation. It is in that context that these amendments have been tabled. I beg to move.

Lord McIntosh of Haringey: My Lords, this is a long list of opposition amendments with a number of government amendments in the middle. In the case of market abuse penalties, in principle there is no reason to insist that a penalty of this kind can be imposed only through the medium of the courts following an application to them by the FSA. The noble and learned Lord, Lord Donaldson, made that point when we discussed similar amendments in Committee. When there was a debate on whether the regime was criminal or non-criminal--and I am afraid that we have agreed to differ on that point--the noble and learned Lord said:

    "I make it clear that I do not agree with the noble Lord, Lord Kingsland. Despite the fact that I believe this matter falls under criminal law, it does not follow that one ought to refer it to the courts".

The reason why the Bill provides for reference to the tribunal rather than application to the courts is that we consider that there are positive advantages for all concerned in that approach. The tribunal will deal solely with financial services cases. The Lord Chancellor will be able to appoint to it people with

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appropriate knowledge and experience. Over time, we can expect the tribunal to build up a considerable body of expertise in financial services, as other tribunals have done in other areas. As it will be concerned solely with referral from the FSA, the tribunal will also provide a quick and relatively inexpensive route for cases to be heard.

Although we would lose some of those comparative advantages by providing that market abuse penalties could be imposed only by the courts, I cannot see what we would gain. The Bill provides plenty of safeguards if a person wishes to contest the decision of the FSA to impose a penalty on him. The tribunal is a first-instance tribunal. It is able to look at all the facts and consider all the merits of a case. It is not inferior to the courts. It will be run as part of the court service; its members will be appointed by the Lord Chancellor; and it will ensure that people enjoy their right to a full and fair hearing under Article 6 of the European Convention on Human Rights, with which it will be fully compliant. Our amendments to this clause simply align the procedures through which the FSA must go if it proposes to impose a penalty or publish a statement about market abuse with the procedures applying more generally in the Bill.

Amendments Nos. 134 and 136 simply align the wording of Clauses 122 and 123 with that which applies elsewhere in the Bill in respect of penalties and statements. Amendments Nos. 135 and 137 delete subsection (3) of both clauses. This provision is necessary in order to avoid multiple notices and multiple rights of referral to the tribunal in respect of the same matter by the same person. The reason that those subsections are being deleted is because they are no longer needed following the introduction of Clause 388 in Committee. Clause 388(2) has the same effect as subsection (3) of Clauses 122 and 123. I commend the government amendments in this group to the House and urge the noble Lord not to press his amendments.

Lord Kingsland: My Lords, I have listened with great care to what the Minister has said and I shall reflect on it before considering whether to return to this matter at Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 133CA not moved.]

[Amendments Nos. 133D and 133E not moved.]

Lord Kingsland moved Amendment No. 133F:

    Page 59, line 7, at end insert ("or

("(c) in relation to market abuse which satisfies the condition set out in section 115(2)(b) or the condition in section 115(2)(c), he did not anticipate that his behaviour would satisfy that condition.").

The noble Lord said: My Lords, I beg to move.

10.31 p.m.

On Question, Whether the said amendment (No. 133F) shall be agreed to?

18 Apr 2000 : Column 687

Their Lordships divided: Contents, 18; Not-Contents, 81.

Division No. 2


Anelay of St. Johns, B.
Astor of Hever, L.
Blatch, B.
Boardman, L.
Brougham and Vaux, L.
Burnham, L. [Teller]
Byford, B.
Elton, L.
Fraser of Carmyllie, L.
Henley, L. [Teller]
Kingsland, L.
Lyell, L.
Mackay of Ardbrecknish, L.
Mancroft, L.
Marlesford, L.
Newton of Braintree, L.
Northbrook, L.
Shrewsbury, E.


Acton, L.
Addington, L.
Alli, L.
Archer of Sandwell, L.
Bach, L.
Blackstone, B.
Borrie, L.
Bragg, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carter, L. [Teller]
Christopher, L.
Clarke of Hampstead, L.
Cocks of Hartcliffe, L.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L.
Desai, L.
Dixon, L.
Donoughue, L.
Dubs, L.
Eatwell, L.
Elder, L.
Evans of Parkside, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gavron, L.
Gladwin of Clee, L.
Goldsmith, L.
Goudie, B.
Gould of Potternewton, B.
Grenfell, L.
Hardy of Wath, L.
Harris of Richmond, B.
Harrison, L.
Hayman, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Irvine of Lairg, L. (Lord Chancellor)
Jay of Paddington, B. (Lord Privy Seal)
Judd, L.
Kirkhill, L.
Lea of Crondall, L.
Lipsey, L.
McCarthy, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Massey of Darwen, B.
Miller of Chilthorne Domer, B.
Morris of Castle Morris, L.
Newby, L.
Nicol, B.
Pitkeathley, B.
Plant of Highfield, L.
Prys-Davies, L.
Ramsay of Cartvale, B.
Rea, L.
Sawyer, L.
Scotland of Asthal, B.
Sharman, L.
Simon, V.
Smith of Leigh, L.
Symons of Vernham Dean, B.
Thornton, B.
Tomlinson, L.
Wedderburn of Charlton, L.
Whitaker, B.
Whitty, L.
Williams of Mostyn, L.
Woolmer of Leeds, L.
Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

18 Apr 2000 : Column 687

10.40 p.m.

[Amendments Nos. 133G and 133H not moved.]

Clause 120 [Statement of policy]:

[Amendments Nos. 133J to 133N not moved.]

Clause 122 [Warning notices]:

18 Apr 2000 : Column 688

[Amendment No. 133P not moved.]

Lord McIntosh of Haringey moved Amendment No. 134:

    Page 60, line 23, leave out subsection (2) and insert--

("(2) A warning notice about a proposal to impose a penalty must state the amount of the proposed penalty.
(2A) A warning notice about a proposal to publish a statement must set out the terms of the proposed statement.").

The noble Lord said: I beg to move.

[Amendments Nos. 134A to 134D, as amendments to Amendment No. 134, not moved.]

On Question, Amendment No. 134 agreed to.

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