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Lord Wedderburn of Charlton: My Lords, before my noble friend sits down, perhaps I may ask him two questions. First, of course the Litigants in Person Act applies to litigants in person, but are we to understand that the Government intend Clause 22(2) to apply to respondent companies which are represented as well as to respondent companies with all their managers, secretaries and so on represented?

Secondly, does not my noble friend agree that nothing in the Litigants in Person Act would extend the range of costs awardable in the tribunal? Section 1 of the Litigants in Person Act—and I shall read the whole of it if my noble friend wishes, but perhaps I may summarise—states that where costs are ordered to be paid a claim can be made for work done or other expenses. "Where costs are ordered to be paid" would depend on the discretion of the tribunal under its regulations. It has nothing whatever to do with extending the range of costs in the tribunal; it provides the possibility, which the Government wish for, to add what we may for convenience call "preparation time" to the range of costs. These are costs, why not say so?

Lord McIntosh of Haringey: My Lords, those are two specific questions. The first is: do our provisions apply to companies which are represented? Clearly, companies which are represented have incurred costs. Therefore, they will make any claim under "costs" rather than "preparation time". They cannot do both.

The second question was whether the application to this Bill of the Litigation in Persons Act would extend the range. I never claimed that it would extend the range of applications for costs. What I said was that the use of the Litigants in Person Act would be more complicated and bureaucratic; it would also discriminate unfairly against applicants, and particularly against unemployed applicants and those using voluntary advice—who, strictly speaking therefore, would not be litigants in person.

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I understood from a gesture that there was some disagreement about my claim that the Law Society supported the Government on this matter. Perhaps I may quote from the Law Society briefing:

"Given the nature of employment tribunals, it may be legitimate to allow tribunals to include awards for non-legal costs. Current arrangements are not ideal in this respect, as they can only assist those who have chosen to pay for legal assistance".

Lord McCarthy: My Lords, before the noble Lord sits down, will he look at two later paragraphs in the Law Society's submission setting out its present position. It goes on to say:

"The government amendment"—

that is, Amendment No. 16—

"does not address this point directly, but it does make the structure fairer as between the parties. It allows the parties to claim non-legal costs but only as an alternative".

That is fine. It then continues:

"The amendment remains a rough and ready solution, but it is in our view fairer than the existing provisions in the Bill".

In other words, the Law Society believes that the Government have improved the situation but not solved it.

Lord Wedderburn of Charlton: That is right.

Lord McIntosh of Haringey: My Lords, I was claiming Law Society support for our provisions here as against the litigants in person provision. We can debate Amendment No. 16 when we come to it.

Lord McCarthy: Hear, hear!

Baroness Turner of Camden: My Lords, I am not very happy, as I am sure my noble friend the Minister will appreciate, with the response to the amendment.

As my noble friend Lord Wedderburn has pointed out, the employment tribunals would still have discretion under the provisions of our amendment. I am very surprised that the views of Judge Prophet should have been dismissed in such a casual way by the Minister. He is a well-known expert in his field and has been president of the employment tribunals for a very long time. His advice should be listened to and treated with a great deal more respect.

Lord Wedderburn of Charlton: Hear, hear!

Baroness Turner of Camden: My Lords, I still feel that my union was right to press for the provision in Clause 22(2) to be removed from the Bill altogether. Our main concern—which was the concern of NACAB and others—was that the mere existence of a payment for preparation costs was extra intimidation and could be utilised as such against claimants who might otherwise want to pursue cases. NACAB has provided examples of cases where that has been done simply because costs can be awarded. Solicitors acting for companies will often try to intimidate employees so that they do not proceed with cases which they have attempted to start in tribunals.

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There is little point in pressing the amendment to a Division now. However, I feel strongly about the matter, as do external organisations. We shall have to re-examine this provision before the Bill leaves this House. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

1.45 p.m.

Lord Wedderburn of Charlton moved Amendment No. 15:

Page 33, line 1, leave out "payment" and insert "special payment by way of costs or expenses"

The noble Lord said: My Lords, in a sense, this amendment is partly an exercise in practicality and partly an exercise in logic. In Grand Committee, the noble Lord, Lord McIntosh confirmed that the new award for preparation time would be made only in circumstances in which a costs award may be made at present. On 18th March (at col. CWH 134), his answer to my noble friend Lord McCarthy was as follows:

"The noble Lord answered his own question in quoting the Explanatory Notes".

He went on to quote from the Explanatory Notes:

"It is also intended that the new awards could be made only in the circumstances in which a costs award may be made at present; that is, where the party has behaved unreasonably in some way".

The amendment suggests that if the new awards are to be made only in cases where costs can be awarded, the Bill should state what they are. They are a different form—a new form—of costs. Underlying the amendment is a doubt—expressed often enough in Grand Committee—as to whether this wholly new animal in the zoo of awards in employment tribunals is really necessary. I call Clause 22(2) the "siren clause". I am thinking of Mr Pecksniff, who could not remember the name of,

"those fabulous animals (pagan I regret to say) who used to sing in the water".

His first attempt was "oysters". That was not right. His second attempt was "swans". Then he said: wait a minute, I know—"sirens". The new preparation awards are sirens. They are not costs; they are not oysters; they are not swans; they are not compensation; they are some new kind of award. Yet they are to be awarded only when costs can be awarded.

It is true that a later amendment attempts to sort out the matter by stipulating either the one or the other. We shall debate that when we come to it. There are other problems with that amendment. I am sorry that my noble friend moved on to it, but, as he said, we shall discuss it when we come to it.

The Law Society pointed out in its original briefing— and repeats in this briefing—a fundamental point about Clause 22(2). The provision is no threat—any more than was our amendment to it, moved by my noble friend—to the unemployed or to any other applicant. Clause 22(2) is a threat to applicants by reason of what employers may threaten. I do not say "will threaten", but unscrupulous employers, as the Law Society states,

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may well apply this subsection in a way that is "disproportionately unfair" to applicants. It sets out the reason:

"In most cases the applicant's claim for costs will be limited to the value of his or her time, whereas a respondent's claim could in many cases include compensation for the time of several people".

In Grand Committee, we discussed who those people were. The list included: managers; personnel managers—who are employed to do the work anyway; in-house lawyers—cases have arisen under the Litigants in Person Act involving in-house lawyers; and secretaries. In other words, the claims made for preparation time for a case may be very expensive indeed. Even as costs, they could rise to several thousands pounds.

What is the real reason why the Government will not call these oysters "oysters", but insist on calling them what in effect are sirens leading employment tribunal practice on to the rocks? Do they want people not to claim for the real preparation time in a case—because that would be too onerous in terms of record-keeping? I must say, it is an astonishing argument. Are they saying: you do not have to keep any records; you simply claim for preparation time—and we will tell you, on the Government's scale, how much you can get?

Is that their reason for not accepting the amendment—as I suspect they will not, because they have tabled an amendment of their own? Let us have that out on the face of the argument. Is the real reason why they will not state that this special form of costs are costs—or "expenses" in Scotland—so that employers can claim, not their real costs, because record-keeping would be too onerous, but costs only on the scale set out by the Government? Although some employers' organisations have expressed pleasure at the provision, I am slightly surprised that they have not asked the Government what the scale is likely to be. Is it likely to be the £9.25 an hour maximum that is awardable under the Litigants in Person (Costs and Expenses) Act 1975? Is that the kind of charge that the Government envisage? If so, some employers will get a rude shock.

There is another question and another reason why it is vital to identify these costs as costs in the Bill. They are oysters and they should be known as oysters, not as some other new animal or fish. Although my noble friend generously accepted in Grand Committee that they would be awardable only in situations in which costs are awardable, neither he nor anyone else can answer the fact that in Routes to Resolution and in their response to consultation, from which I quote, the Government said:

"The Government believes it is right that those affected by weak and vexatious cases, applicants or respondents, are compensated for the time spent preparing their case".

A weak case is very different from a vexatious case. We shall come back to that when we discuss striking out. A weak case is quite different, even on the definitions offered by the surveys, which have been a most unsatisfactory feature of the whole debate. On any definition, a weak case is nowhere near a vexatious, misconceived, unreasonable, frivolous or even contumacious case, which has come into the discussion.

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I assume that weak cases will not attract an order of preparation time. That is my third question for the Minister. By saying that they will be awarded only where costs are awardable, the Government have retracted from the position in Routes to Resolution and the response to consultation.

Lastly, the citizens advice bureaux have expressed a strong fear about the clause. Their document says:

"We fear that the potential for a party's preparation time to be reflected in costs awards will simply strengthen the ability of employers' legal representatives to so intimidate tribunal applicants with threats of action for costs quoting the maximum that may be available".

These are new awards. The civil courts seem not to know of such awards—at least there are no records to show so. My noble and learned friend the Lord Chancellor said in a recent Written Answer to me that no records were kept of such awards and it is not known on what principles they would be made, even if some have been made, which some people get at but nobody knows about. If they are to be added, let them be added for what they are. Oysters are oysters and costs are costs. Let us have it stated that preparation time is a form of cost.

My noble friend the Minister has referred to the coming amendments. This amendment is not inimical to the government amendments. It is particularly phrased so that this will be a special award of costs. The government amendments could follow and apply to Clause 22(2) without any problem if the Minister insists. The aim of the amendment is to make it clear that costs are costs. If these are to be awarded, let us say so and then we will know that they are limited to vexatious, unreasonable and misconceived applications. I beg to move.

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