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Lord Lester of Herne Hill: My Lords, the advantage of not being in government is that you can move quickly. The disadvantage of being in government is that it reminds one of the prehistoric animal called the diplodocus. Noble Lords will remember that if you trod on this beast's tail, it took five seconds for the message of pain to reach its head. The problem is that one has to consult widely, and I sympathise with that.

I want, with respect, to correct one thing. It is not just a question of Article 13 of the Treaty of the European Union. The four freedoms—freedom of
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labour, of services, and the other freedoms—that were under the original treaty, not under Article 13, must all be enjoyed without discrimination based on nationality. That is why one needs to put this right. But I appreciate that there needs to be further consultation across Whitehall and I hope that the diplodocus will eventually move in the other place. On that basis, I beg leave to withdraw the amendment.

Baroness Ashton of Upholland: My Lords, before the noble Lord sits down, I thank him for the correction. I will feed that back. Whenever he treads on my toes, I feel the pain instantly.

Amendment No. 6, as an amendment to Amendment No. 5, by leave, withdrawn.

[Amendments Nos. 7 and 8, as amendments to Amendment No. 5, not moved.]

On Question, Amendment No. 5 agreed to.

Baroness O'Cathain moved Amendment No. 9:

(1) This section applies where the Commission is—
(a) conducting an investigation under section 20, or
(b) issuing an unlawful act notice under section 21, or
(c) making an application to a court under section 22(6), or
(d) making an application to a court under section 24, or
(e) bringing proceedings under section 25, or
(f) giving legal assistance to an individual under section 28, or
(g) bringing an application for judicial review under section 30, or
(h) issuing a compliance notice, or making an application to a court, under section 32.
(2) In a case to which this section applies, where the defendant in a court or tribunal case or the subject of the notice or investigation is—
(a) an individual, or
(b) a charity, or
(c) an organisation of the type mentioned in section 57 of this Act,
the individual, charity or organisation shall be granted legal assistance paid for out of central funds to enable them to respond to the case, the notice or the investigation.
(3) The Lord Chancellor shall make regulations providing for payment out of central funds for the provision of such legal assistance.
(4) The sections listed in subsection (1) of this section shall not come into force until the regulations mentioned in subsection (3) have been laid before and approved by resolution of each House of Parliament."

The noble Baroness said: My Lords, I return briefly to my concerns about providing some form of legal aid for charities and religious groups who find themselves on the wrong end of legal action backed by the new Equality Commission.

I am grateful to the noble Baroness, Lady Ashton, who took time last week to discuss my concerns. She is a brilliant Minister who makes you feel she is listening to you—and I know she is. Even when she declined to amend the Bill to meet my concerns, she still managed
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to make me feel as if I was coming away with something. That is quite a skill. Not only does she deserve the honorary degree she received yesterday, on which I congratulate her, but if there were such a thing as an honorary degree in diplomacy she should get that too.

However, I remain anxious that, in a legal action over a controversial issue of religious liberties, the enormous financial and legal resources of the commission could be ranged on one side of a legal dispute, leaving a defendant on the other side with limited financial resources at a considerable disadvantage. A church or religious charity being sued would be left passing round the offering plate to raise money to pay lawyers. In these circumstances, even a bad case could make a lot of progress. It could even succeed. The inequality of resources could result in a miscarriage of justice.

The noble Baroness, Lady Ashton, does not think that I need to be concerned about any of these things. She does not believe that the commission would ever use its legal powers other than in the most gross and obvious case of discrimination that everyone would think deserved to be outlawed. I hope she is right. But the noble Baroness came to my aid and suggested that if I tabled these amendments she would make statements on the record which would, if I understood her correctly, give a steer to the commission to ensure that it does not use its legal powers in inappropriate ways against religious charities. I am happy to do so.

I will sit down and invite the Minister to give her reassurance before withdrawing my amendment. But before I do so, I ask the Minister to respond to a particular argument that I raised on Report. I have received legal advice which suggests that, where human rights issues are at stake, creating a massive inequality in legal resources between the parties—as the Bill does by providing legal assistance to one side but not to the other—may breach the European Convention on Human Rights. I should be very grateful to hear the Minister's response to that legal argument. I beg to move.

Baroness Ashton of Upholland: My Lords, I am very grateful to the noble Baroness for giving her time last week to discuss these issues. I sought to reassure her and I intend that the noble Baroness goes away with something. We do not expect the commission to pick on organisations or to deal with them inappropriately. I am determined—as I am sure are colleagues across government—that the way in which we set up the commission will ensure that it is very clear about its work and focus.

The noble Baroness is absolutely right to consider that that is all well and good but to ask what would happen if the situation which she mentioned occurred and to ask what safeguards would be in place. I sympathise with the noble Baroness's concern that small organisations, whether charities, religious charities or small businesses, fear being treated inappropriately and oppressively by the commission. However, as I said, we need not fear that happening. The Federation of Small Businesses warmly welcomes
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the commission, as have many other organisations, including faith bodies and charities. However, I shall explain some of the processes involved and I hope that will enable the noble Baroness to feel more comfortable about the measure.

I asked officials to scale up what is spent by the commissions at present on supporting legal cases in employment tribunals, which is where the bulk of these issues are dealt with. The relevant figure is about 4.5 per cent, which is not huge given that supporting legal cases in employment tribunals is a core, fundamental part of the commissions' work. I believe that it is about right. In a budget of £70 million—if the officials have done their arithmetic correctly, which I am sure they have—the relevant figure is just over £3 million. About 250 significant cases are supported by the three commissions every year. I believe that figure will apply also to the new commission. Therefore, we are not talking about huge resources or huge numbers of cases. However, part of the fundamental purpose of the commission is to support cases as it will tackle discrimination where it arises.

The first safeguard is that the commission's job is to be sensitive to its stakeholders. If it fails to do that, it will lose authority and support. Sensitivity to stakeholders includes the fact that the commission needs to think very carefully about how it uses its resources. We have not set out in the budget particular sums that need to be spent on X or Y in view of the concept of independence that we discussed previously. However, it is very important that those involved in the commission, and those, including Parliament, who set it up, feel confident that it is using its resources efficiently and well. That is an important safeguard. As noble Lords will know from the Bill, the commission will need to consult on its strategic plan, including its legal and regulatory strategy. That is also an important safeguard.

However, I recognise that a small organisation could find itself defending an action brought by the commission. However, the checks and balances in the system ensure that a body in that situation is not disadvantaged. As the noble Baroness and I discussed—I know that the noble Baroness accepts this—most of these discrimination proceedings are brought in employment tribunals. Over the years employment tribunals' processes have increasingly been designed to ensure that the procedures which are used are very straightforward. We make formal representation unnecessary. In addition, in both the courts and tribunals clerks or judges or tribunal members themselves would seek to assist a person who was unrepresented with matters of procedure. If a case brought before the court or tribunal is vexatious, or does not disclose a cause of action, procedures exist that would allow the case to be terminated. Procedures are now in place in employment tribunals to sift out claims that cannot be substantiated. That, again, is an important safeguard. A tribunal application will be accepted only if the aggrieved party has been through the statutory grievance procedure with the employer,
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as required by recent reform to employment legislation, maximising the opportunity to have a non-judicial outcome.

Similarly, there are also procedures that allow a successful respondent in court to claim the costs of their defence. The bulk of these cases are dealt with in the employment tribunal, with straightforward procedures, no need for representation, and a sifting process to ensure that these are real cases and real claims and that vexatious claims are dismissed. Where a case might go to court, it is possible to claim the cost of the defence, which is important.

I also outlined on Report the safeguards built in when the commission exercises its other regulatory powers; for example, to compel evidence in the course of an investigation. In looking at devising these powers, we thought carefully about the need to ensure that there is a fair process for those who are subject to enforcement action. We believe that we have achieved a reasonable balance. The commission will be a public body and will be subject to review in the courts if it seeks to act unreasonably or unlawfully by the nature of it being a public body.

As the noble Baroness is aware, legal aid will be available to any individual facing proceedings in the county court, subject to the statutory means and merits tests. The noble Baroness, Lady O'Cathain, referred to the case of Steel and Morris v the United Kingdom. In that case—I refer to it because of the question the noble Baroness specifically asked me—the European Court of Human Rights ruled that the inability of the applicant to get legal aid had breached their right to a fair trial under Article 6. The court highlighted the exceptional nature of that case: at 313 days the longest in English legal history, 40,000 pages of evidence, 130 witnesses giving oral evidence, and a 762 page substantive judgment. In this "exceptionally demanding" case—as the court described it—a fair trial was not possible if one side lacked the resources to be represented or to cover the costs of mounting a defence.

That is why, in the Access to Justice Act 1999, the Government made exceptional funding available in cases which would normally be excluded from public funding. A grant would be made by Ministers if it was recommended by the Legal Services Commission and if the case has a significant wider public interest or an overwhelming importance to the client, or if it would be practically impossible for the client to defend the proceedings. The Steel and Morris decision was made in an exceptionally demanding case with an extreme disparity of resources, and we believe that the exceptional funding scheme remedies the deficiency in the legal aid regime that brought that about.

I have thought carefully about the proposal for a new fund that would provide legal assistance for an individual, a charity, or religious or belief organisation, subject to the commission's powers. But as I said on Report and as I have said to the noble Baroness, there are difficulties about the proposal, not least—and I make no bones about it—because of the pressures on legal aid funding, the need to control that
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and the other good causes that would, in a sense, come forward. It would have to be an establishment of a fund at the expense of other priorities.

I hope that all the safeguards I have now outlined will give the noble Baroness some comfort. I refer to the way the commission will be set up, the way that it is meant to deal with these issues, the approach it must take to its stakeholders, the way in which we would expect it to deal with its regulatory powers and the way in which the courts and tribunals now operate. I see very little danger, but if there were a danger I have already outlined what could happen. I say categorically that it is not our intention that the commission will be able to use any of its powers to pick on individuals, charities, religious or belief organisations or small firms. On that basis I hope that the noble Baroness will feel able to withdraw her amendment.

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