Most importantly, the imposition of these sanctions will be the subject of scrutiny by an impartial and independent tribunal, as we have discussed at length this evening, and that will offer an opportunity further to challenge the evidence collected by the regulator. Therefore, there will be no question of the regulator acting as prosecutor, judge and jury. The tribunal will also have the power to overturn or reduce the penalty imposed by the regulator or to take any other steps that the regulator could have taken in relation to the incidence of regulatory non-compliance. Therefore, it is not correct to say that the regulator will have absolute powers and that therefore business should be allowed an alternative route.

Lord Lyell of Markyate: My Lords, the noble Baroness has just said that it is not correct to say that the regulator is investigator, prosecutor, judge, jury and sentencer, but is she not wrong? Is not the whole structure here based on the fact that the regulator imposes the penalty? The penalty stands unless and until the defendant—the alleged wrongdoer—appeals but, as we shall discover a little later, the defendant has to pay up and also to prove his innocence before the appeal tribunal. Therefore, the position is the same as if the regulator imposes the penalty. I also ask the noble Lord, Lord Borrie, to reflect on this very carefully: the citizen or business is in the same position as someone who has been found guilty by the magistrates’ court or Crown Court and then has a right of appeal. That is a very serious position to be in.

Baroness Vadera: My Lords, I must disagree. The procedure is not as described by the noble and learned Lord, and I am very happy to go through it in detail when we meet. There are many steps in between which have been missed by the noble and learned Lord, including the notice of intent, the ability to make representations, the ability to appeal subsequently, and the fact that at the start the regulator needs a criminal standard of proof. I understand the superficial and compelling description of something for a good soundbite but, frankly, that does not reflect the reality. As the noble and learned Lord seems to have a somewhat ideological objection to the entire Bill, perhaps we could discuss this in the meeting that we agreed to have.

In the mean time, I can tell the noble Lord, Lord De Mauley, that there are sufficient safeguards for the purposes of his Amendment No. 69, and that allowing a business to choose which punishment method it is subject to is not appropriate. I hope that I have reassured the noble Lord that there are sufficient safeguards, at least for the purposes of Amendment No. 69, and that he will feel able not to press the amendment.

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Lord De Mauley: My Lords, I am most grateful to my noble and learned friend once again for his words of support. I am also grateful to the Minister, on whose words I shall reflect carefully.

On Question, amendment agreed to.

Baroness Vadera moved Amendment No. 68:

On Question, amendment agreed to.

[Amendment No. 69 not moved.]

Clause 50 [Combination of sanctions]:

Baroness Vadera moved Amendment No. 70:

(a) the regulator may not serve a notice of intent referred to in section 39(2)(a) on a person in relation to any act or omission where a discretionary requirement has been imposed on that person in relation to that act or omission, and(b) the regulator may not serve a notice of intent referred to in section 42(2)(a) on a person in relation to any act or omission where—(i) a fixed monetary penalty has been imposed on that person in relation to that act or omission, or (ii) the person has discharged liability to a fixed monetary penalty in relation to that act or omission pursuant to section 39(2)(b).(a) the regulator may not serve a notice of intent referred to in section 39(2)(a) on a person in relation to any act or omission where a stop notice has been served on that person in relation to that act or omission, and(b) the regulator may not serve a stop notice on a person in relation to any act or omission where—(i) a fixed monetary penalty has been imposed on that person in relation to that act or omission, or (ii) the person has discharged liability to a fixed monetary penalty in relation to that act or omission pursuant to section 39(2)(b).”

On Question, amendment agreed to.

Clause 53 [Appeals]:

Lord Lyell of Markyate moved Amendment No. 71:

The noble and learned Lord said: My Lords, I shall speak also to Amendments Nos. 72, 73 and 74. These amendments deal with Clause 53 on appeals. The noble Lord, Lord Borrie, is right that, in dealing with a Bill such as this, one has to put down clear markers about the broad construction. As he has been kind enough to pay a good deal of attention to my speeches, which may have been a burden to him, I hope he will have noticed that I have tried, at every stage, to find ways to achieve the same effect without what the Delegated Powers Committee and the Constitution Committee—not me—have described as
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unprecedented inroads into the normal rights of the citizen to be tried by judge and jury, as appropriate.

We have a system in which, as the noble Baroness said, some 15 different regulators have the power to issue administrative penalties. I have spoken of some of them, with approval—for example, the VAT tribunals—and of the Financial Services Authority with slight reservations. I have personal experience of seeing the Financial Services Authority break practically every rule in the book, do some very serious injustice and lose a case in the end after someone had lost his job three years earlier. It is not all up-side. I am looking for ways in which one can simplify the process; I have already said enough about that.

The point of Amendments Nos. 71 to 74 is that they continue to make the magistrates’ court and the Crown Court the courts to which one appeals in this case. Primarily, as the House knows, the courts should decide whether one is guilty and the level of penalty. We have seen the muddle that the Government are getting into in trying to create a one-size-fits-all or a 10-sizes-fits-all solution to the huge conundrum that they have set themselves.

Under Clause 53(1)(a) and (b) there is a double negative:

The noble Baroness told us a little earlier in answer to the noble and learned Baroness, Lady Butler-Sloss, and others that the Government think—I hope I am not mis-stating her—that there will probably be three people in such tribunals. I see the noble Lord, Lord Bach, shakes his head. In that case, I will ask the noble Lord how he thinks that these tribunals will be constructed.

I was alarmed when the noble and learned Baroness, Lady Butler-Sloss, pointed out that it would just be a single person, who might be another public official. I hope that the noble Lord, Lord Bach, will be able to reassure us that that is not the case. Perhaps he will also tell us what,

might be. This is an important part of the whole structure. I say with great respect to the noble Baroness, Lady Vadera, that when we sit down and look at her words on the previous amendment and she says, “Oh no, I am not doing these things because there is a notice of intent and the regulator must listen to what you say”, she is relying on some kind of mini-trial within the mind of the regulator. In a sense, that is what is intended. But that is not the same as being judged by an independent person, let alone an independent court.

We have in this country a well tried system of the magistrates’ court and the Crown Court. They are trusted. Yes, there will be some cases which are highly technical. I have 45 years of experience at the Bar, and in the early years I did a huge amount of work before the magistrates’ courts. As the noble Lord, Lord Borrie, knows, I did quite a lot of trade descriptions
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work and some Factories Act work. I was always deeply impressed by the care which the magistrates took over these cases. I am afraid that I am no way currently convinced, and the Government have come up with absolutely no chapter and verse to show that the courts have it wrong. In the only case they have given, the Oxford case, they do not seem able to find out who prosecuted. I cannot think why they cannot tell me who prosecuted that very important case and what the prosecutor told the court, even if it was only from the memory of the prosecutor. However, they put great weight on that kind of thing. It really does not stand up.

The other thing that is deeply worrying about the appeals system here is that it is not clear to me—I should like the noble Baroness to reiterate once again—on whom the burden of proof at the appeal will fall. Which will it be? The Delegated Powers Committee, which is greatly to be respected, as is its chairman, the noble Lord, Lord Goodhart, says in its report that the burden will be on the subject or the business. I was surprised to read that. I thought that the Government would have the matter tried afresh with the regulator proving the case and the appeal tribunal deciding it. What will be the powers of this appeal tribunal, whether it be a court or a tribunal? Will it be able to set the penalty afresh? Will it be able to reduce the penalty? Will it be able to give no penalty? Often the fair thing to do is to give a conditional or absolute discharge. I have had cases where prosecutors had thought that they had done the right thing and were pressing for major penalties, and the court, when it had heard all the facts, decided that there was an error but that a conditional or absolute discharge was the right response. I want to know that these tribunals can do that kind of thing and that they have full flexibility.

I have another important question and I hope that I have the noble Baroness’s attention. What will happen to the penalty in the mean time? Although we have not focused much time on it—we could not, it is a complex Bill—what you experience if you are a motorist and you do not pay your congestion charge will apply here. If you have not paid after a month, there are provisions for powers to increase the fine, just as there are provisions for powers to tempt you to accept it because if you pay quickly it is less. Then there are powers for if you do not pay and you have to go to the county court or something like that. It can go up and you can pay interest. There is a structure like that. I can see the thing mushrooming. The noble Baroness shakes her head to say that there are not provisions for such powers. I will be very comforted to hear it, but I have obviously misread the Bill because I think there are. The most important question that one needs to know is whether the requirement to pay the penalty stands unless and until—I am sorry; I keep talking about the noble Baroness and it is the noble Lord, Lord Bach—the citizen, who may be a fairly basic individual, has realised that he has to make an application to the tribunal that it be suspended pending a hearing. It may put him out of business. Are the bailiffs going to be sent in pending the hearing of the appeal or is the Minister relying on the fact that the Government would never do anything so
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unkind? I wish it were so, and I do not speak of any particular Government or particular time. There are serious problems here. I look forward to the noble Lord’s answers. I beg to move.

9.45 pm

Lord Borrie: My Lords, I shall speak briefly because we all want to hear what the Minister will say. I find it difficult to follow the noble and learned Lord on this point, as on earlier points, where he seems to have an—I shall use a word that the Minister used a while back—ideological objection to tribunals, which, at least for the past 40 years since the passing of the Tribunals and Inquiries Act 1958, have been part of the judicial system. They may be called administrative tribunals for convenience, although that is hardly an appropriate description for many of them that decide disputes between one individual and another, as employment tribunals do, generally, it is thought to the satisfaction of employers and employees. Nobody suggests that they are somehow inferior to something that is called a court. I suggest that the noble and learned Lord is indicating a kind of hangover from the days of that not very good Lord Chief Justice Lord Hewart who in 1930 wrote a book called The New Despotism because he regarded anything other than the courts deciding disputes as despotic, unjust and unworthy of our consideration. However, that has not been so for the past 40 years, and with the membership and the attention paid to training there is no reason why tribunals should not do the job that the Government give them in this Bill.

Lord Lyell of Markyate: My Lords, I am grateful to the noble Lord for giving way because otherwise I have no means of answering him within the rules of the House.

Lord Bach: My Lords, the noble and learned Lord can answer him adequately when the debate is completed because he is the mover of this amendment and has the last word.

Lord Razzall: My Lords, I have not attempted to intervene very often in this debate, largely because, like the Minister, I assumed that we would get through by 10 o’clock, but I am afraid that there is clearly no possibility of that. Whether we will get through by any 10 o’clock remains in the hands of others. From these Benches, I endorse the remarks of the noble Lord, Lord Borrie. What we have sat through in Committee in the Moses Room and on Report is significant ideological opposition to the Macrory principles coming from the noble and learned Lord, Lord Lyell. He is perfectly entitled to his view and it is a pity that he did not express his view at Second Reading, which would have been the appropriate point, because he fundamentally disagrees with this Bill. His problem is that he keeps trying to amend it to make it better. I know that he is going to meet the Minister, but I predict that his meetings with whichever Minister or Ministers will not result in any resolution of his ideological objection to the Bill.

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Fundamentally, what the noble and learned Lord wants, as the noble Lord, Lord Borrie, suggested, is that all these matters be referred to the lawyers and the courts. The Bill cannot deal with that. Either the Bill is defeated at Third Reading or it must be accepted, because we cannot keep trying to amend it as the noble and learned Lord suggests.

Taking one point made by the noble Lord, Lord Borrie, forget 40 years of operation of tribunals, which of course there has been, the pass has been massively sold in the creation of the FSA, which has been given huge powers. No one from any part of your Lordships' House suggests that the powers given to the FSA should be curtailed—that in some way judges or magistrates should be brought into the operation of the FSA. So the cat is long out of the bag on trying to roll back to only judges or only magistrates’ courts being able to deal with such matters.

I have a lot of sympathy what the noble and learned Lord, Lord Lyell, is saying—I do not agree with him, but I have sympathy with his view—but he will not achieve what he wants by trying to emasculate the Bill with his amendments. The appropriate thing would be to get to Third Reading and test the opinion of the House on whether we agree with him and his views.

Baroness Wilcox: I speak to Amendments No. 71 and 74 tabled by my noble and learned friend Lord Lyell of Markyate. As he has expressed them, his amendments would remove the appeal to a tribunal and return the situation to the status quo, which is the jurisdiction of the magistrates' courts and the county courts.

We seek clarification from the Government as to exactly how and to whom an appeal will be made and whether there will be further level of appeal; for example, to a second-tier tribunal or to the Court of Appeal. I expect the Government to explain that in some detail.

We also must know on whom rests the burden of proof before the tribunal. Can the tribunal substitute no penalty or any level of penalty it considers just, or can it increase the penalty? Those are questions that must be answered before we can even start to consider the Government’s proposals for this part. The Government may be content to give a fairly lofty view, but we all know that the rudimentary mechanics are often the very things that determine how a scheme works or does not.

Lord Bach: My Lords, I thank the noble and learned Lord for coming back to this issue. I have to tell him that the amendments go to the very heart of the Macrory review, as the noble Lord, Lord Razzall, successfully argued.

We believe that tribunals are the most appropriate venue for hearing appeals against the new sanctions. As was said in Committee, the Macrory recommendation was supported by a range of important bodies, including the Council of Her Majesty Circuit Judges. It was also supported by the Council on Tribunals, now the Administrative Justice and Tribunals Council. I am sorry that the chairman of that body, the noble Lord, Lord Newton of Braintree, is not in his place.

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If I may, I shall cite the council's response to the consultation on the draft Bill. It stated:

There are a number of advantages in routing appeals against the new sanctions to a specialist and expert tribunal rather than to the courts. First, that will allow the criminal courts to concentrate on those cases that warrant a prosecution, rather than adjudicating on civil appeals. Secondly, tribunals can comprise members with both legal and specialist expertise in the subject matter before the tribunal, thereby providing it with a fuller understanding of the regulatory issues. Regulatory cases could be concentrated through one tribunal, enabling expertise to be built up over time. By contrast, cases of regulatory non-compliance make up less than 1 per cent of all cases heard in magistrates’ courts, making it difficult to provide specific training to magistrates and legal advisers.

The noble and learned Lord said on an earlier occasion that people will have to spend a lot of time and money going to a tribunal. Of course, they will need to go to a tribunal only if they wish to challenge the imposition of a sanction, unlike criminal prosecution where every case must go through the court. I reiterate that tribunals are considered to be more accessible than the courts, so businesses and individuals will be able to present their own cases, should they wish to do so, without the need for legal advice or representation.

The crucial point, which I do not think has been fully grasped, is that tribunals will be independent from regulators and will be able to ensure that the procedural and other rights of businesses and individuals are protected. This is what tribunals do now, as my noble friend Lord Borrie said, and have done for many, many years, including the period when the noble and learned Lord served the high office of Attorney-General with great distinction. We have ensured that the Bill allows for further provision to be made on such matters, if necessary, through Clause 53.

I understand the noble and learned Lord’s concerns about what he sees as the ousting of the jurisdiction of the criminal courts, but let me stress again that the new civil sanctions are an alternative to criminal prosecution. The courts can and will have a role to play in regulatory offences. Professor Macrory made a number of other recommendations on the criminal court, which we also accept in full and are taking forward.