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Lord Kingsland: My Lords, that is precisely my point. That is why I rise to speak, as I rose to speak previously. The House is clearly agreed that the procedure that I decided to follow is the appropriate procedure for your Lordships' House.
I think I was saying to the Minister that he was stressing the value, informality and speed of these proceedings. Nevertheless, the result of these informal, speedy proceedings may mean the unfair ruin of an authorised person. Therefore, the fact that these proceedings are informal does not mean that the protections under the convention, such as they are, ought not to apply.
The noble Lord said that the criminal provisions of Article 6 do not apply to disciplinary proceedings. I readily accept that that may be true, although it may not be true. That remains a matter of debate between those lawyers who are experts in this field.
However, it is not true to say that just because a matter is not a criminal matter for the purposes of Article 6, it should not nevertheless attract, in appropriate circumstances, legal assistance. My point is that, irrespective of whether disciplinary proceedings are criminal, a party who faces a trenchant punishment for being held to be in breach of the rules should, in appropriate circumstances, be the beneficiary of legal assistance.
I believe it to be further reinforced by the fact that the money that would be paid for such legal assistance comes from the authorised bodies themselves. The money does not come from the state. It comes from the pool of money that is provided by the City to the FSA. I contend, therefore, a fortiori that an authorised person, who is unable to provide for his own defence in a disciplinary proceeding, ought to have the support of the money that he himself, and the body that he worked for, paid to the FSA to provide the legal assistance which he requests.
I know that this matter will remain an issue between us throughout the afternoon and evening as regards other parts of the Bill. For that reason, at this stage I prefer to withdraw the amendment rather than press it. I beg leave to withdraw the amendment.
The noble Lord said: My Lords, I can deal with this matter extremely quickly. The issue here is simple. If an authorised body has paid money into the legal assistance scheme, it is our contention that it should be entitled to get it back in circumstances where there is a surplus, irrespective of whether that authorised body has any other debts which it owes; in other words, there should be no set-off against a surplus of legal assistance funds. I beg to move.
Lord McIntosh of Haringey: My Lords, the effect of opposition Amendment No. 149B would be, unfortunately, to reduce the flexibility of how funding for legal assistance is collected and distributed. As the noble Lord, Lord Kingsland, said in speaking to the previous amendment, the legal assistance scheme will be paid for by levies raised by the FSA from authorised persons. The Lord Chancellor will determine the costs of the scheme and set the total which the FSA is required to raise in levies from authorised persons for a particular period. The FSA will decide on the best way to apportion this cost.
One cannot forecast precisely the amount required for legal assistance in any forthcoming period. Subsection (1) of Clause 133 provides for levies to cover anticipated or actual costs. This enables the levy to be set on as accurate a basis as possible for the forthcoming period. If the forecast of anticipated costs is an overestimate, subsection (7) enables the FSA to distribute the money back to the authorised community. Paragraph (a) allows it actively to repay the money directly to those who paid the levy, while paragraph (b), which the amendment seeks to delete, allows it instead to reduce amounts which those persons are required to pay. Paragraph (c) allows for a combination of those methods. If we retain paragraph (a), but not paragraphs (b) or (c), the FSA would have to distribute small amounts which it can much more sensibly and economically offset against the following year's fees or levy for invoicing purposes. Removing options (b) and (c) could lead to excessive costs being incurred sending out cheques for derisory amounts.
Of course, the FSA will need to exercise its discretion. I am afraid that the amendment would simply make it more difficult for the FSA to exercise a perfectly reasonable, justifiable and economical discretion.
Lord Kingsland: My Lords, I am disappointed at the Minister's reply. In my submission, the legal assistance provision should be kept quite distinct from the general administrative budget. However, at this juncture, I do not think that it would be appropriate for me to ask the opinion of the House. Therefore, I beg leave to withdraw the amendment.
Lord Kingsland: My Lords, I beg the pardon of the House. I think that I said that I did not wish to test the opinion of the House and, therefore, wished to withdraw the amendment. I am sorry if I am even more inarticulate than usual this afternoon.
The noble Lord said: My Lords, first I thank the Minister for having generously taken the time to meet the Association of British Insurers and the British Bankers' Association, together with myself, to discuss the definition of "consumer". To quote my noble friend Lord Kingsland, I was being offered the "Lord Hunt of Wirral facility". I have never been able to probe exactly what this means, but if it means the generosity of the Minister I thank him publicly for that. I, Mr Leighton and Mr Mason felt that we had an opportunity to air concerns about the definition of "consumer".
The definition is, of course, used throughout the Bill and is more generic than the normal use of "consumer" in that it extends to any user of an authorised person's services. In that context, the Minister will be aware that I have expressed some concern that it therefore extends to those who do not directly use the services of an authorised person but are nevertheless affected by the use of those services by another, for example, the clients of a fund manager or the beneficiaries of life insurance.
Although the wording currently found in Clause 135(7)(b)(ii) undoubtedly covers the situation of a trust beneficiary, I believe that it widens the scope of the definition too far by moving away from some kind of causation (derived from or otherwise attributable to) to a general adverse effect. I believe that I gave the Minister examples of third parties with no direct rights under liability insurance policies; small shareholders or employees, who may feel that their rights are adversely affected by the take-over activities of a pension fund user or fund manager; or, once mortgage lending has become a regulated activity, neighbours affected by a new purchaser with a mortgage. I also gave the Minister an example of someone who may be affected in some way by an environmental incident. Their rights obviously would exist if there was valid insurance; they would not exist if there was not.
If I might explain to the House, the Minister has tried to allay my fears by saying, "You have to read any definition within the Long Title of the Bill". I agree that the provisions in any Bill have to be read in the
I am rather surprised that the Government have not moved a little more on this point as a result of the useful debate we had in Committee. Clause 135 is the provision in the Bill which sets out the authority's general rule making power. Rules made under Clause 135 apply to authorised persons. The governing principle for making these rules is that they must be,
The definition of "consumers" is to be found in Clause 135(7) and it is used elsewhere in the Bill. It is therefore of some importance. The amendment proposed is intended only to clarify the position.
The amendment seeks to correct what appears to be, quite simply, an omission. If this is not done, it would be possible to argue that subsection (8) is intended to have a more general application. One possible consequence is that all the beneficiaries of a trust--including potential beneficiaries under a discretionary trust--where the trustee is an authorised person, may be considered to be customers of that authorised person because, under subsection (8), they are to be treated as using the services of the authorised person. We assume that this is not the intention and that subsection (8) should apply only for the purposes of the "consumer" definition in subsection (7). We should simply like to have the issue clarified, hence our amendment.
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