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Baroness Noakes: I am all in favour of disciplining lawyers.

On Question, amendment agreed to.

Lord Goldsmith moved Amendments Nos. A146 and A147:

On Question, amendments agreed to.

Schedule 2, as amended, agreed to.

Clause 624 agreed to.

Clause 625 [Panel's duty of co-operation]:

[Amendment No. A147A not moved.]

Clause 625 agreed to.

Clause 626 [Hearings and appeals]:

Lord Hodgson of Astley Abbotts moved Amendment No. A147AA:

The noble Lord said: In moving Amendment No. A147AA, I shall speak to a group of amendments—Amendments Nos. A147AB, A147AC and A154D. It would be helpful if I could also speak to Amendments Nos. 147AD and A154ZA, which are the next two on the groupings list. As I explained to the officials before our proceedings began, I think that we have amendment fatigue. We want these amendments to be grouped and I believe that separate debates on them would waste the time of the Committee and that of the noble and learned Lord the Attorney-General, so, if I may, I shall deal with those as we go on.

4.30 pm

This group of amendments concerns the addition of a new clause after Clause 626. All the amendments are consequential. The amendments are the result of representations from a major City fund management group. As drafted, the Bill delegates to the panel all power to create the rules relating to the establishment
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and operation of the appeal board. Is it appropriate to leave all rule-making to the panel alone? After all, the appeal board is the body which will adjudicate on the panel's decisions which will have proved to be controversial. There must be an argument for some distance to be established between the panel and its appeal board. As a comparison, nobody suggests that it would be appropriate for the Charity Commission to nominate the members of the Charity Appeal Tribunal or to lay down its procedures. Instead, the Lord Chancellor chooses the members of the tribunal and makes rules about the practices and procedures to be followed. That the Bill simply states that the appeal board must be an "independent tribunal" is insufficient. It would be better if it set out some broad parameters within which the panel could make rules. This would guarantee not only the actual independence of the tribunal but also the appearance of independence, which is a vital aspect of judicial offices in a democracy.

These amendments could buttress significantly the position of the panel. By their very nature, the cases which reach the appeal board will have been fiercely contested and the decision taken by the panel controversial. In such cases, it is surely to the panel's advantage to have an appeal board which, beyond peradventure, is seen to be completely independent. It is to no one's advantage, least of all the panel's, for anybody to be able to make a suggestion of a stitch-up.

The amendments seek to lay out a framework for this independence, while leaving the detailed rule creation to the panel. The new clause to be inserted addresses the key issues of: the number of members of the appeal board; who appoints them; the timetable for appeals; the powers of the board; and the binding nature of its decisions. It is intended that these provisions will enable the panel to create rules within which a clearly independent appeal board can sit and function crisply, promptly and with authority.

Amendments Nos. A147AD, A154ZA and A154D, referring to the appeal process, make it clear that an appeal to the board is explicitly envisaged before panel decisions can become final. I beg to move.

Lord Goldsmith: I am happy to have a single debate about the amendments, but I need to deal with them separately because there is a difference between Amendments Nos. A147AA, A147AB, A147AC and A154D and Amendments Nos. A147AD and A154ZA. The first group of amendments, as I understand them, would insert an obligation on the Takeover Panel to establish rules for the operation of the Takeover Appeal Board. We have not wanted to do that precisely because of the need for the independence of the Takeover Appeal Board to which the noble Lord referred. In terms of the powers of the panel, the Bill states that the panel may—not must—provide certain matters. Clause 626(3) states it has to provide for a right of appeal to an independent tribunal. The rules may contain certain other provisions, but not provisions about how the appeal board conducts its affairs. That is for the appeal board to determine. The firm view that was taken was that it
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ought to be for the Takeover Appeal Board to lay down its own rules for the hearings that it conducts, as I understand that it does at the moment. Therefore, precisely because of the independence to which the noble Lord rightly refers, I resist that fundamental part of the amendment.

There is an additional point to be made on Amendment No. A154D. Again as I apprehend the effect of the amendment, it would require an appeal to be made to the Takeover Appeal Board before it was possible to go to the court. While it may be right in particular cases that the appeal board should be seized, as it were, first before the court, it is not obvious that that should always be the case. For example, what if the panel needs to apply urgently to the court for enforcement of its decision or to obtain an injunction? If I correctly understand the effect of the amendment, there would have to be an appeal to the Takeover Appeal Board first, and that could slow down the process, which could be very much to the detriment of the necessary action that the panel has to take.

I turn to the second group of amendments—Amendments Nos. A147AD and A154ZA—which, similarly, I resist. They seek to require specific rules in relation to appeals so far as concerns sanctions. We see no reason to depart from the approach taken generally in Part 22—that is, to apply a light touch and leave matters to be fleshed out by detailed rules of the panel and the appeal board. I do not see that it would be right to spell out more of the appeal board's rules in this Bill.

Lord Hodgson of Astley Abbotts: I am grateful to the noble and learned Lord. Perhaps I may deal first with the last two amendments. The reason that we sought to make these amendments to Clauses 627 and 629—

The Deputy Chairman of Committees: We shall have to adjourn for 10 minutes.

[The Sitting was suspended for a Division in the House from 4.38 to 4.48 pm.]

The Deputy Chairman of Committees: The 10 minutes have elapsed and, by a miracle, all the main spokesmen are back in their seats.

Lord Hodgson of Astley Abbotts: The noble and learned Lord had just replied to the group of amendments. He dealt with Amendments Nos. A147AD and A154ZA separately, which I understand. We wished to insert those two specific references to the appeal procedure into Clauses 627 and 629, which are about sanctions and compensation—both important clauses in this part of the Bill. We thought that where the Bill says:

it was worth inserting after that,

That was the reason for aiming at those two particular clauses.

Lord Goldsmith: Having heard that very helpful explanation, I do not think that it is necessary to make reference to the appeal procedures here. They are dealt
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with in Clause 626, which provides that there is to be right of appeal against the decision of the hearings committee. There seems no necessity to have some special reference to that again when one comes to the sanctions.

Lord Hodgson of Astley Abbotts: I hear the noble and learned Lord's response. We did not understand that the hearings committee established its own rules; it was suggested to us that the panel made the rules for the hearings committee, but the noble and learned Lord said that the hearings committee made the rules.

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