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Lord McCarthy: My Lords, I do not apologise for the fact that we are debating this issue again and that we have to debate the issue taking into account the general case for preparation compensation because that is what the Minister has just done. He has once again traversed the general ground. He made much of the fact that we are not totally opposed to the notion of preparation compensation if it is introduced in the proper way and if, for example, it were to be clearly confined to self-represented parties. But that is not what the Bill says.
So the Minister has made a general case but he does not take into account our qualifications. This is remarkably reminiscent of Clause 39, and the objections we raised to the form of the measure, its precise way of being done and the consequences of that. That is why I am afraid I must return to what the Law Society says. The noble Lord quotes from the Law Society in a very selective way. The Law Society is saying not that employers will necessarily misuse the system—perhaps they will do so—but that whether or not they do so, the system, the structure and the words of the Bill are designed in such a way, whether intentionally or unintentionally, as to prefer and benefit the employer. That is what the Law Society
says. The Minister quoted one part of the document from the Law Society and I shall quote another part. It said:
- "The Law Society welcome this Government amendment to the Bill".
- "We considered that the existing provision in the Bill risked creating a calculation mechanism"—
- "that was structurally unfair to applicants".
- "In our view, applicants would have been exposed to the risk of a greater costs award than the respondent in almost every case. That is because in most cases, an 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".
The Bill currently says that tribunals could order a party,
- "to make a payment to any other party in respect of the time spent by that other party"—
- "in preparing his"—
However, the amendment will alter that. The Bill will state that the tribunal may allow,
- "time spent in preparing that other party's case".
2.15 p.m.
Lord McIntosh of Haringey: My Lords, I have not heard opposition to the amendment. I have heard criticism about the motivation for the original formulation of the clause and the reserved way in which the Law Society welcomed the amendment—and I acknowledge its reservations. However, I have heard no comments suggesting that the amendment should not be included in the Bill.
Lord Wedderburn of Charlton: My Lords, my noble friend said—Hansard will reveal this—that the objection is that the Bill, which states,
- "time spent by that other party",
- "time spent in preparing that other party's case".
Indeed, I understood, as did my noble friend, that the Minister agreed that time spent by managers, in-house lawyers, personnel directors and secretaries could all be charged under the amendment as,
- "time spent in preparing that other party's case".
Lord McCarthy: My Lords, the Minister will discover that what he said—
Lord Rotherwick: My Lords, as I understand it——
Lord McCarthy: My Lords, the Minister referred to staff on the case; "staff" is plural.
Lord Rotherwick: My Lords, perhaps the noble Lord, Lord Bassam, should make the point.
Lord Bassam of Brighton: My Lords, it is only right that I remind your Lordships' House that on Report there should not be an intervention after the Minister has risen to speak.
Lord McIntosh of Haringey: My Lords, it is my amendment and I am perfectly happy. I am responding to the comments that were made. I took an intervention but I really do not think that it was well founded. I set out in some detail what the rather minor Amendment No. 16 meant and how it should be interpreted.
If I repeat the exact words that I used, it will be clear that I have already answered the concerns that have just been raised. We intend that awards of preparation time which are made to respondents who employ staff—yes, that is what I said—should be able to take account of time spent by those staff on the case. I also said that although the current wording of the clause would allow this in the case of a corporate respondent, since it can only act through its employees—in other words, there is no other way in which a corporate respondent could incur preparation time—there was a doubt about the position of a sole trader. That is why the amendment was tabled and that is the only effect that it will have. I hope that the amendment will be agreed to.
On Question, amendment agreed to.
Lord McIntosh of Haringey moved Amendment No. 17:
- Page 33, line 2, at end insert—
On Question, amendment agreed to.
Clause 23 [Employment Appeal Tribunal]:
[Amendments Nos. 19 and 20 not moved.]
The Deputy Speaker (Lord Dean of Harptree): My Lords, if Amendment No. 21 is agreed to, I cannot call Amendments Nos. 22 to 24.
Lord Wedderburn of Charlton moved Amendment No. 21:
The noble Lord said: My Lords, under this clause we turn to the matter of conciliation. The ACAS provision of conciliation is one of the most valuable parts of the present administration of industrial justice. The number of conciliated cases has increased regularly and they are one of the answers to the so-called "compensation culture". Employees have played their part in an increasing number of conciliated settlements.
Subsections (2) and (4) of Clause 24 contain a problem which suggested to us that they should be omitted from the Bill. We argued that in Grand Committee but, as the Companion suggests, we now bring back that argument on Report. The subsections remove the duty on ACAS to continue conciliating after a certain time, although they leave ACAS with the power to do so. It would be extraordinary if they removed the power of ACAS to conciliate. But, of course, a duty to conciliate prompts in the minds of those who are most expert at this process that they had better keep an eye on things and listen carefully to see whether anything more can be done.
We do not understand why that sensitivity of ACAS—the duty to conciliate—should be reduced to a mere power. I want to be fair to the Government's case in relation to this matter, partly because I am not sure that I understand it. Perhaps I may make my point by way of quotations. In Grand Committee my noble friend Lord McIntosh said that the Government were,
My noble friend added to that when he said:
On that and on other occasions in Grand Committee, we asked the Government what work they have carried out to decide whether that new limitation on ACAS would increase the number of settlements. They did not appear to have done any, but perhaps they have now. If so, perhaps the Minister can produce the results.
As I understand it, there is no document from ACAS asking for this provision. It is not based on any research. There is simply a notion that it may increase the number of settlements. We do not believe that that is likely. We believe that late settlement is a feature of many systems of justice. Perhaps I may quote the Legal Action Group brief on Clause 24:
Leaving the tribunals for a moment, recently a case in the High Court was settled as the judge began his judgment. That is a late settlement but it was a settlement of the case and was valuable in itself. I and my noble friends do not understand why the Government have introduced a clause limiting the duty of ACAS to conciliate simply on the prospect that it may produce more settlements, when there is no evidence whatever that it will; there is no research and no suggestion from all the bodies concerned. Right, left and centre, bodies like the Legal Action Group and others, who are experienced in the administration of the tribunals, suggest that that would not contribute. The Legal Action Group says that it would be most inappropriate to introduce such a provision into the tribunals' practice.
I have re-read everything that was said in Grand Committee on this subject. I ask the Minister to add to it. I ask him not simply to read the same brief as was
"(2) If employment tribunal procedure regulations include—
(a) provision of the kind mentioned in subsection (1), and
(b) provision of the kind mentioned in section 13(1)(a),
they shall also include provision to prevent an employment tribunal exercising its powers under both kinds of provision in favour of the same person in the same proceedings.""
Page 33, line 34, leave out subsections (2) to (4).
"trying to diminish what is called settlement on the steps of the tribunal".—[Official Report, 18/3/02; col. CWH 140.]
I understand that that is their aim, although I say immediately that a settlement on the steps of the tribunal in terms of reducing the number of hearings is helpful. I believe that that was also one of the subsidiary objectives in regard to settlements outside the tribunal.
"I am very modest in my expectations . . . of this clause"—
that is, Clause 24. He continued:
"By focusing attention on a period in which conciliation is the first priority, there is a possibility that there may be some reduction in last-minute settlements".—[Official Report, 18/3/02; col. CWH 144.]
That accords with the Explanatory Notes and all the previous government documents. Perhaps I may quote a sentence from the Explanatory Notes:
"The clause provides that ACAS's duty to conciliate cases reverts to a power to conciliate . . . The effect will be that once the conciliation period is over, the conciliation officer can judge whether to continue to conciliate the case, or to pass it back to the Employment Tribunal Service . . . so that a time and place can be fixed for a hearing".
However, the conciliation period will have gone. In Routes to Resolution, the case was put as follows in paragraph 4.9:
"A clear period for conciliation with limited scope for extension might focus the parties' minds within that period on whether they were interested in reaching an amicable settlement or not. When the period ended if no settlement was reached, ACAS could extend it if . . . there was still a reasonable prospect of an early settlement being reached".
Of course, it has the power, but it has no duty to continue to be interested in the case. It may increase the number of settlements.
"Late settlement often happens because of late disclosure of documents or other evidence allowing the strengths and/or weaknesses of the applicant's claim to be clarified. A fixed period for conciliation is inappropriate unless tribunals manage cases so as to ensure that early disclosure of evidence takes place. Putting pressure on parties to settle without full knowledge of the facts of the case is not conducive to justice".
That is a most important point.
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