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Lord Phillips of Sudbury: My Lords, before the Minister passes on from this part of her speech, will she refer back to what Miss Melanie Johnson said about the ECHR, because she did not refer to it?

Baroness Scotland of Asthal: My Lords, I did refer to it, but I am happy to do that. The noble Lord said, in relation to the ECHR, that there is provision if the applicant wishes to waive the publicity and have it in private. In due course, I shall come to Rule 17, which we argue does just that in terms of how Article 6 was intended to operate.

Viscount Bledisloe: My Lords, before the noble Baroness moves on from the words of the noble Lord, Lord Bach, can she explain to us how, not as a matter of semantics but as a matter of substance, one prevents a taint, pending the determination of an appeal, by preventing publication of the conviction by the convicting body but allowing total publicity of the hearing against that conviction? How does that prevent taint until the appeal is determined, which is what the noble Lord, Lord Bach, said?

Baroness Scotland of Asthal: My Lords, it enables a constraint to be put on the FSA--the authority--not to so act, whereas it enables the court to exercise its judicial judgment, first, as to whether to decide that the matter should be heard in private and, secondly, which part of the hearing should be heard in private and how disclosure should be managed. Therefore, it does not impinge improperly on the exercise of the tribunal's discretion or the exercise of the discretion of the Court of Appeal. However, it does constrain the FSA from publicising those matters in any other way. We argue that that must be right.

Perhaps it would help your Lordships if I were to refer to Rule 17, which makes plain how the hearing should be provided for. In that rule, "the hearing" means any hearing under the rules. Sub-paragraph (3) is of importance. It states:

    (i) the interests of morals, public order, national security or the protection of the private lives of the parties; or

    (ii) any unfairness to the applicant or prejudice to the interests of consumers that might result from a hearing in public,

    if, in either case, the Tribunal is satisfied that a hearing in private would not prejudice the interests of justice".

Therefore, a very flexible tool can be used by the tribunal.

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If, as the noble Lord, Lord Kingsland, suggests--I believe that he has set his case rather high--terrible consequences would flow for the public and for the financial institution as a result of publicity, I am sure that the institution would be able to employ the most eloquent advocate to voice that concern on its behalf and to make a sufficiently persuasive application to the tribunal for the argument to hold water.

Lord Kingsland: My Lords, I am most grateful to the noble Baroness for giving way. I am prepared to accept that there are other points of view on this matter. However, they were not aired in the debate on the Bill because both the Government and the Opposition appeared to agree about them at that time. The point of this Motion is not to address the substance of the arguments one way or the other; the point is to say to the Government, "You never gave us an opportunity to talk about them at all during the Bill".

Baroness Scotland of Asthal: My Lords, I hear what the noble Lord says; I simply do not agree with him. There was such an opportunity, but it was not taken and the matter was not discussed. However, there was an opportunity to consider the rules. They were considered after they were first published in January, although I accept that that was after the Committee stage. There was a consultation period and these matters were examined. I see that the noble Lord is agitated. I do not know whether he wants to intervene a second time.

Lord Kingsland: My Lords, the rules were published only several months after the Bill became law. No public circulation of the draft rules was made until long after the Act was on the statute book.

Baroness Scotland of Asthal: My Lords, I know that the vexed question of the letter has been raised. However, with regard to what was circulated, I understand that the noble Lord says that he did not receive a copy, and I do not seek to say that he misleads on that. I understand, too, that the noble Lord, Lord Saatchi, says that he did not receive his copy. However, the Government believed that what was circulated was in general currency, and, on its face, it stated that the hearings would be held in public. The original draft of the rule did not have the specificity of the later rule, as set out in Rule 17. But Rule 21, as it was at that time, provided that the hearings would be heard in public.

Therefore, I hear what the noble Lord says but, simply and frankly, I say that we do not agree. There was a Division. The noble Lord, Lord Bach, did not mislead the House. I understand that there may have been a misunderstanding and, of course, I bitterly regret that such a misunderstanding appears genuinely to have occurred.

Lord Kingsland: My Lords, I have never said that the noble Lord, Lord Bach, misled the House. I took great care in my opening remarks to cast no aspersions on the noble Lord. It appears that the noble Lord, Lord

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Bach, genuinely believed what he said. I suspect that what happened is that the noble Lord's position was the Government's position until responsibility for these matters shifted from the Treasury to the Lord Chancellor's Department. However, that is merely a speculation. The noble Lord, Lord Bach, was quite splendid throughout the passage of the Bill. He had a very heavy task to fulfil, and I do not believe that any of my noble friends had any complaint about the noble Lord.

Baroness Scotland of Asthal: My Lords, perhaps I may deal with the speculation. There has been no shift in policy. The Government are united in that regard. Her Majesty's Treasury is clear that it had understood that hearings would be held in public. That was consistent with the position at that time. I do not know how often the noble Lord wants to rise but I am happy to sit down again.

Lord Kingsland: My Lords, perhaps I may humbly say to the noble Baroness that having an exchange such as this is a good way in which to clear up the issues between us. When the Bill was originally published by the Government, it reversed a presumption in the Financial Services Act 1986 and the Banking Act 1987 by suggesting that the hearings should be held in public. It was only as a result of the progress report of the Joint Committee of the noble Lord, Lord Burns, in March 1999, that the Government thought again. When the Bill finally came to another place, the original draft had been changed to exclude the proposal that the tribunal hearing should be in public. Therefore, to that extent, the Opposition were perfectly entitled to draw the conclusion that the Government would support private hearings at independent tribunals.

Baroness Scotland of Asthal: My Lords, again, I hear what the noble Lord says, but I am left with saying "no", "no" and thrice "no". The Government have not changed their position. We have thought about the matter long and hard. The position advocated in the draft rules, which we hoped had been circulated properly on 14th March, made clear that we had intended the hearings to be held in public. The rules were redrawn. Rule 21 became Rule 19 and, finally, was expressed as Rule 17. In each manifestation the principle was retained that a public hearing would be preferred, although there was extensive provision for the exercise of judicial discretion by a properly constructed, independent tribunal which would discharge the duties properly.

My noble friend Lord McIntosh was right. When he signed his statement of compatibility, pursuant to Section 19, it was in contemplation that the Lord Chancellor would bring forward rules in relation to the tribunal. I can assure your Lordships that the Lord Chancellor has no intention of bringing forward rules which would not be compatible with Article 6. The rules that we have brought forward are compatible with Article 6; that was always the intention.

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I say most humbly that I regret very much that there appears to have been a misunderstanding. I accept the genuineness of that misunderstanding although, regrettably, I cannot accept that the Government behaved badly or deserve a bloody nose--I was invited by the noble Lord, Lord Newby, to do so. I am genuinely concerned about the fact that this misunderstanding has occurred. Until this stage, the way in which the scrutiny of the Bill had been undertaken was exemplary--the procedure was working at its best.

Although I express that regret, I cannot say that there is any reason for noble Lords to think that the Prayer should be supported, and I invite noble Lords not to so pray. If I may respectfully say so, I also invite all noble Lords to consider very carefully the Government's explanation. If noble Lords feel that compatibility with Article 6 would be put at risk, I invite them to vote with their conscience.

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