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First, the courts, in exercising their discretion as to whether to include provision for costs in an order, will act in a way that is reasonable and proportionate. We anticipate that costs will be assessed by the court on the basis of the expected costs of the authorised monitor which is employed. The court can provide that the organisation will have to pay some or all of

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the costs of the monitor. It will be open to the organisation to appeal against the inclusion of such a term in the order in the usual way. Finally, provision will then be made for an appeal against the quantum of the costs themselves through the order-making power in the new clause.

Lastly, I apologise again for the lateness in introducing the amendment, but it is one which we believe can help to make a difference in a very specific and targeted way to the success of law enforcement’s fight against serious criminals. As a result, while I regret its lateness, we would have been remiss indeed not to bring forward the amendments in the way that we have. I trust that the House will feel able to accept them.

Moved, That the House do agree with the Commons in their Amendment No. 32.—(Lord Bassam of Brighton.)

4 pm

Lord Thomas of Gresford rose to move Amendment No. 32A, as an amendment to the Motion that this House do agree with the Commons in their Amendment No. 32, leave out “agree” and insert “disagree”.

The noble Lord said: My Lords, the Minister has been good enough to apologise for the late delivery of these amendments during the passage of the Bill. It started here and went through all its stages and then went to the House of Commons and went through all its stages, but the first intimation that we had of this clause, which the Minister described as a substantial innovation, was by a letter dated 15 October—a week last Monday—that was received the following day. That gave no time for any outside interests to consider the way in which they should respond to the Government’s amendment. We on these Benches say that it is quite unacceptable in principle that amendments should be delivered so late that debate becomes simply a brief discussion between Members of this House without outside involvement. This was thrust upon the Commons in such a way that it had no time to respond.

Turning to the merits of the matter, the Minister referred to Professor Macrory and has put some store by his views as expressed in his report Regulatory Justice: Sanctioning in a post-Hampton world. Professor Macrory was concerned with the best way of regulating what goes wrong in business. He said:

Indeed, he insisted that the only cases that should be prosecuted are those where there is evidence of intent, knowledge, recklessness or gross negligence. Otherwise, the sanctions that should be imposed upon a business should be otherwise than through the criminal courts.

How does the Bill respond to Macrory, bearing in mind that the amendment was produced only last week? The Bill introduces serious crime prevention

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orders. We have opposed them on principle because, like ASBOs, they require a civil standard of proof and permit hearsay evidence and civil procedures to be used for the making of the order. However, they apply not just to those who have been convicted of crime, but to those who facilitate the commission by another person of a serious offence. Clause 5 states that the court must ignore the intentions or any other aspect of the mental state at the time of the company or personality against whom an order is made. Similarly, an order can be made not only if a person facilitates the commission of a serious offence but also if he conducts himself in a way that is likely to facilitate the commission by himself or another person of a serious offence. Again, the court must ignore his intentions or any other aspect of his mental state at the time. So while Macrory in his report is saying that we should not use criminal prosecutions for businesses unless there is intent, recklessness, gross negligence or so on, the Bill introduces the concept of penal orders being made against people who do not really know what has happened. Provided that it can be proved on a balance of probabilities, with hearsay evidence, that they have conducted themselves in a way that is likely to facilitate a criminal offence, the order can be made. As I have said, it can be made against corporations, companies, partnerships and associations of one sort or another.

Subsection (1) of the proposed new clause states:

such as the Serious Organised Crime Agency, the Director of Public Prosecutions or the police—

It does not attempt to say who the specified person is or to create a class of people who can be employed for these purposes, nor does it suggest what monitoring services or what description of monitoring services the authors of the amendment have in mind.

However, the real sting in the tail is that if an order is made against a business which, as I have pointed out, does not require it to be party to a crime but merely to have facilitated it in some way, knowingly or unknowingly, the costs of the monitoring will fall on them. The proposed new clause in Amendment No. 33, which is to be taken with that proposed in Amendment No. 32, places no limitation on the costs. Therefore, at the very end of the parliamentary process, a Bill is introduced that imposes on a business, its partners and its principles a monitoring order and the payment of unspecified costs that may be incurred in its imposition.

If we had had the opportunity to work through and amend the clause, and to consider the policy issues behind it, we might have arrived through the parliamentary process at an acceptable provision, but we find ourselves with a clause that imposes onerous and difficult provisions on the businesses concerned. That is quite contrary to Macrory. Although my

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learned friend quoted Macrory, he did not go to the principles that he represents and imposed on businesses these great burdens. I beg to move.

Moved, as an amendment to the Motion that this House do agree with the Commons in their Amendment No. 32, leave out “agree” and insert “disagree”—(Lord Thomas of Gresford.)

Baroness Hanham: My Lords, I join the noble Lord, Lord Thomas of Gresford, in expressing concern about how the amendments arrived in this House. The Minister gave a handsome apology, and so he should have done. This is a desperately late stage to introduce extremely important amendments to the Bill. We are always being told about procedure in this House; in fact, Third Reading has become by and large a brief session because of the way in which procedures have been tightened by the Government. Therefore, it seems only correct and logical that where procedures exist, the Government follow them and do not leave us all in the serious situation of having to look at these amendments, which, as the noble Lord, Lord Thomas, said, will have a great impact on businesses.

If it were not for the fact that there are some measures in the Bill with which we agree, I should be very inclined to agree with the amendment of the noble Lord, Lord Thomas. I am not going to, but that does not stop me saying what I think needs to be said about these amendments. First, there is no time to give them proper scrutiny. We cannot do that today. We can make our observations, and no doubt the Minister will hazard some response to some of the questions we ask, but the fact is that this part of the Bill will go through unscrutinised either by the House of Commons or this House. Most of our role is to ensure that legislation is properly scrutinised where quite often it gets a brief scrutiny in the House of Commons. We have been denied that opportunity. Therefore, I believe that this part of the legislation will be less than adequate as a result.

As has already been said, these amendments introduce substantial additions to the serious crime prevention orders, and they could, as the noble Lord, Lord Thomas, said, place untenable burdens on companies simply because they happen to be unlucky enough to get tangled up, perhaps unwittingly, in a web of serious crime perpetrated by another body or individual. They will then have a monitor beamed in and will have to foot the likely extremely expensive bill for that monitor.

I appreciate the provision in subsection (7) that requires the court to consider the likely damage that would be caused by inflicting an authorised monitor on a company, especially on a small or medium-sized business. Will the Minister explain what the Government expect would constitute an inappropriate set of circumstances that would prevent an authorised monitor being sent in and the company having to bear the costs? There is nothing that says that the court may not inflict a monitor if it considers the potential payment to be punitive. I look to the Minister to reassure us that there has been adequate consultation not only with industry and business but also with the High Court on these issues. If the consultation has not

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taken place, will the Minister commit the Government to undertaking post-legislative consultation with the courts before these provisions are implemented so that it could be made clear that any punitive fine dressed up as costs is absolutely unacceptable?

It is appropriate that these orders should not apply to companies unless they have been subject already to a serious crime prevention order. While everybody in the passage of the Bill has had their criticisms of serious crime prevention orders and how they are meted out, they are now going to be part of the legislation; that is that, so we will have to deal with them. However, these amendments seriously extend the application of the serious crime prevention orders, turning them into a far more punitive measure than they were before. Can the Minister elaborate on what percentage of serious crime prevention orders would come with monitoring orders? It would be helpful if he could give us an indication of a situation in which these orders might apply.

The amendment proposes to force companies to admit an authorised monitor, but it makes no mention or definition of what an authorised monitor may or may not be. Can the Minister confirm who will be an authorised monitor? Who will choose the monitoring service, and what checks, balances and accountability will be placed on bodies that will effectively be doing the job of the law enforcer by proxy.

It is not just this amendment that your Lordships have not had the opportunity to subject to the proper stages of debate, consideration and consultation. The previous Minister, the noble and learned Baroness, Lady Scotland, was very clear in stating that the Bill went to another place in a state of good health. Indeed, she was most relaxed about it when she said on Report:

these are hardly loose ends—

The other place has not had quite enough to do, because it could have looked at these amendments in good time.

We are very dismayed, as I hope I have made clear. I have asked the Minister some questions which I hope he will be able to answer. There are, however, enough virtues in the Bill not to vote today for the Liberal Democrats’ amendment, if they move it, which seeks to have these amendments to the Bill taken out. However, the Government need to take very seriously the point that they have breached the etiquette not only of this House but of the other place by tabling at the very last stages of the Bill a large group of amendments that need scrutiny and will not have it.

4.15 pm

Lord Marlesford: My Lords, I support the noble Lord, Lord Thomas of Gresford, and the remarks made by my noble friend. I am not going to discuss the merits of these two pages of fresh legislation—I am not qualified to do so, as I suspect many others here are not—but, my goodness, I recognise an abuse of the

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parliamentary system when I see it. It is outrageous that Ministers should have brought forward this detailed and important legislation at this stage of the Session. Will the Minister explain exactly how this happened? Who put it forward? When was it put forward? Did Ministers remonstrate? Were they strong enough to say, “No, this is not how you legislate”? Quite frankly if I were a member of this Government, I would be deeply ashamed of attempting to legislate in this manner. There should be a discussion between the usual channels about whether the Bill could be carried over, so that it is adequately discussed and we have a proper piece of legislation. There is already much too much Home Office legislation, and more is coming in the next Session. No doubt some of these matters could be attended to in that forthcoming legislation. Home Office legislation is much too important for there to be imposed on the community and the country the sort of costs and mistakes that inevitably will emerge from this new clause.

Lord Lloyd of Berwick: My Lords, as your Lordships may remember, I am deeply opposed to serious crime prevention orders anyway, but having listened to the three speeches that we have just heard, it seems that the Government really should take this clause away and think about it again rather than producing it at this stage. Following the suggestion of the Lord, Lord Marlesford, could it somehow be carried over? To introduce this new clause into the Bill at this stage does seem to be an abuse of process.

Lord Bassam of Brighton: My Lords, I take the House’s admonitions very seriously. I listened very carefully to what the noble Baroness, Lady Hanham, said, to the full fury of the noble Lord, Lord Marlesford, and to the reasoned plea by the noble and learned Lord, Lord Lloyd, as well as to the outright opposition on the part of the noble Lord, Lord Thomas of Gresford, to the whole notion of including the clause in the Bill. I recognise that it is unusual, although not completely so, for our Government and other Governments to seek at late stages in the progress of a piece of legislation to include new measures or measures that add a new twist to an existing policy that is set out in the terms of that legislation. It is therefore not completely unusual. I do, however, accept the fundamental point made by the noble Baroness that it is generally highly undesirable to put into a Bill at a late stage something that has not had the opportunity that we usually afford government Bills, not only in your Lordships’ House but in another place, to be given very detailed and line-by-line scrutiny.

I also heard the noble Baroness’s question about whether we would be willing to agree to some form of post-legislative scrutiny with the judiciary on this matter. In a sense, that was also the plea of the noble and learned Lord, Lord Lloyd, and part of the thinking behind the very sharp observations on the amendments made by the noble Lord, Lord Marlesford.

My simple answer to the question is yes, we are more than happy to have post-legislative scrutiny on this particular set of amendments. It makes absolute sense. In any event, we are seeking to work very closely with the judiciary on this to ensure that the

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cost provisions in particular are not used in any way that could constitute a punitive sanction on legitimate businesses. The forensic way in which this piece of the picture—this part of the Bill—will be used demands that we do exactly that.

I hear those admonitions. I recognise their seriousness and I am grateful to the noble Baroness in particular for committing the Opposition Benches to not supporting the Liberal Democrat amendment, which would remove our amendment from the Bill. I will happily ensure that we also invite noble Lords to make further post-legislative contributions to air and examine some of the detail that will be needed to thrash out how these amendments will operate in practice.

I will now move on to some of the other questions and issues that are important in the context of these amendments. There is a generalised allegation, which is quite understandable, that paying for the costs of monitoring could put quite legitimate and serious businesses out of business. That is exactly what we want to avoid. We know that companies and other bodies can be used by serious criminals in a complex and considerable variety of ways. Some of these will mean that the business is little more than a front and some will simply be using the resources of a larger company.

There are two imperatives here that we are trying very carefully to take into account: first, that we should be seeking to stop these businesses being used to further serious criminal ends, and, secondly, that, where possible, if a company is maintaining any legitimate business elements, these should be protected and maintained. In doing that, I could fairly argue that we are adopting McCrory principles, because the potential for authorised monitors balances these two imperatives very well. It means that we can put in place what is effectively a targeted higher form of regulation, where appropriate, which will help to ensure that future involvement in serious crime is prevented.

Almost as importantly, the court will ensure that the impact of the costs of the monitor on the business is fully taken into account in deciding whether it is an appropriate term for an order. They will look at the means of the body corporate, partnership or unincorporated association concerned, as I explained earlier. They will look at the expected size of the costs and look very carefully at the effects of the terms on the ability of any body corporate, partnership or unincorporated association that is carrying on the business to continue to do so. It is also the case that these monitors will be useful where there is a great deal of complexity in the business concerned—where there are a very high number or particularly complex business transactions being conducted, for example.

Businesses with such complex structures are almost certainly more likely to be able to bear the cost of the monitor than a smaller, less complex organisation. We should be confident that the costs are very unlikely to be so high as to put an organisation out of business.

The noble Lord, Lord Thomas of Gresford, pointed out that businesses would be paying for criminal activity that has never been proved against them. But our argument is that that is not the case. What we are doing here is requiring an organisation

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that has been proven to be involved in serious crime to pay the cost of what is effectively akin to raising the regulatory burden on it. It is only right that we recognise that organisations can be used very effectively to provide a means for serious criminals to achieve things that would not otherwise be within their scope. For example, money laundering as a private individual is virtually impossible without some form of organisation, such as a suspect bureau de change, providing some form of facilitation.

We can also argue that there is nothing new in asking businesses to prove that they are acting within acceptable norms in the way that they are carrying out their activities. Sometimes, that proof comes with a cost to the business, such as the cost of employing auditors for their accounts. Here, we are simply providing a means of targeting that approach against those organisations where the court has reasonable grounds to believe that future involvement in serious crime may be prevented, certainly restricted and most certainly disrupted.

I should deal with one or two other questions. The noble Baroness, Lady Hanham, asked who the monitor will be, who will choose and what checks and balances there will be. A monitor will have to be an expert in the information that they receive. A good example would be an accountant or perhaps a logistics expert. It will be for law enforcement officers to advise who is best to undertake that work—some of it will need to be extremely forensic in its nature. What checks and balances will there be? That is an entirely proper question. The answer, very simply, is that, from time to time, there will have to be a return to the court for variation, validation and discharge. So the court will operate as a check and a balance in those cases. The noble Lord, Lord Thomas, asked a similar question and I think that my response probably covers his point about who will specify who the monitors are.

I have covered the issue of costs and the allegation that they may be punitive. I do not believe that they will; they will be proportionate. The fact of the court acting as a check and a balance in the way that it will should ensure that the system operates fairly.

I am very grateful to noble Lords for their contributions. I recognise the sincerity of the concerns raised and criticisms made. I commit the Government to some form of post-legislative scrutiny on the government amendments. I accept that this is a less than perfect way to approach the matter. It would be inappropriate to withdraw our amendments at this stage, because this is the most appropriate piece of legislation for them to be a part of. They certainly fit within the serious crime prevention order remit and work well with the general fact of the legislation. It would be wrong for us not to provide those useful and necessary tools to law enforcement at a time when we are stepping up our efforts to disrupt high value crime and adopting this approach to disrupt serious criminals.

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