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Report (4th Day)
11.45 am
96: After Clause 143, insert the following new Clause-
(1) The Courts and Legal Services Act 1990 (c. 41) is amended as follows.
"58AA Damages-based agreements
(1) A damages-based agreement which satisfies the conditions in subsection (3) is not unenforceable by reason only of its being a damages-based agreement; but any other damages-based agreement is unenforceable.
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(2) For the purposes of this section, a "damages-based agreement" is an agreement between a person providing advocacy services, litigation services or claims management services and the recipient of those services which provides that-
(a) the recipient is to make a payment to the person providing the services if the recipient obtains a specified financial benefit in connection with the matter in relation to which the services are provided, and
(b) the amount of that payment is to be determined by reference to the amount of the financial benefit obtained.
(a) must relate to proceedings or a claim of a prescribed description;
(b) must not relate to proceedings in a relevant court;
(c) must not provide for a payment above a prescribed amount or for a payment above an amount calculated in a prescribed manner;
(d) must comply with such other requirements as to its terms and conditions as are prescribed;
(e) must be made only after the person providing services under the agreement has provided prescribed information; and
(f) must be in writing.
(4) A description of proceedings prescribed under subsection (3)(a) must not include proceedings that are-
(a) criminal proceedings; or
(b) family proceedings (within the meaning given by section 58A(2)).
(5) For the purposes of subsection (3)(b) an agreement is not to be treated as relating to proceedings in a relevant court if the services to be provided under the agreement are services that are to be provided only in contemplation of such proceedings before they are commenced.
(6) Regulations under subsection (3) are to be made by the Lord Chancellor and may make different provision in relation to different descriptions of damages-based agreements.
(7) Before making regulations under subsection (3) the Lord Chancellor must consult-
(a) the designated judges,
(b) the General Council of the Bar,
(c) the Law Society, and
(d) such other bodies as the Lord Chancellor considers appropriate.
"claim" and "claims management services" have the same meaning as in Part 2 of the Compensation Act 2006 (see section 4(2) of that Act);
"payment" includes a transfer of assets and any other transfer of money's worth (and the reference in subsection (3)(d) to a payment above a prescribed amount, or above an amount calculated in a prescribed manner, is to be construed accordingly);
"proceedings" includes any sort of proceedings for resolving disputes (and not just proceedings in a court), whether commenced or contemplated;
(a) a magistrates' court;
(b) a county court;
(c) the High Court;
(d) the Court of Appeal;
(e) the Supreme Court.
(9) In this section references to "advocacy services" or "litigation services" include a reference to services that it would be reasonable to expect a person who is acting (or contemplating acting) for another in relation to proceedings that do not take place in a court, to provide.
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(10) Nothing in this section applies to an agreement entered into before the coming into force of the first regulations made under subsection (3)."
(3) In section 120(4) (regulations and orders) after "58(4)," insert "58AA"."
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): My Lords, with the leave of the House, I have every intention of withdrawing the amendment at the end of the debate, which I hope may be short or even non-existent. I shall try to explain in a few words why I intend to take this course.
These amendments would establish a statutory framework for regulating damages-based agreements. They are not currently permitted in court proceedings and these amendments do not seek to change this. These agreements are, however, commonly used by solicitors and claims managers in some tribunal proceedings, primarily proceedings before the employment tribunal.
I am particularly grateful to the noble and learned Lord, Lord Woolf, for taking the time yesterday to discuss with my officials his and other noble Lords' concerns. As a consequence, I shall seek the leave of the House to withdraw the amendment in due course.
The primary intention of the amendments is to ensure consumer protection of claimants. We know from recent research that a significant number of claimants in employment cases who sign up to a damages-based agreement are not given proper information by their representatives. This lack of information covers alternative funding which may be available, such as through a trade union or a legal expenses insurance policy. Claimants are also not fully informed about the costs, such as experts' and counsels' fees, which they may nevertheless have to pay-notwithstanding that they have signed a no-win no-fee agreement. It is right to legislate to introduce regulation to protect consumers.
I understand that some noble Lords were concerned at the extent of the amendments as drafted. We are listening to those concerns, and propose to withdraw or not move these amendments at this stage, with a view to bringing back at Third Reading redrafted amendments, which will be narrower in scope and limited to the regulation of damages-based agreements in respect of employment claims which may go to the employment tribunal. I hope in this way that we can meet the concerns that have been raised by noble Lords, while ensuring from the outset the consumer protection of vulnerable claimants in employment cases. I beg to move.
Lord Thomas of Gresford: My Lords, I am most grateful to the Minister for the course that he has taken. We have shared the concerns to which he referred and consider that the proposals as currently drafted are wide and could capture areas which the Government would not wish to. The noble and learned Lord, Lord Woolf, has taken a leading part in dealing with this matter and I hope that when we see the redrawn clauses our concerns will be met. I am pleased to note, for example, that the Minister says that damages-based agreements will be restricted to the proceedings in
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Lord Hunt of Wirral: My Lords, I welcome the comments of the Minister. I, too, was concerned and had discussions with the noble and learned Lord, Lord Woolf. I agreed with the points that he made that the amendment would have an effect much wider than the one that the Minister outlined.
We are all aware of a timely review of costs conducted by Lord Justice Jackson, which has been welcomed on all sides of the House. Will the Minister consider not taking this matter further until the report has been received and carefully considered-as his ministerial colleagues have indicated that it will be? In the light of the concerns, and as the review is still under way-I understand that it will be completed shortly-we urge the Government to hold on until the report is published; and, if they are minded to bring the matter back, we will consider it in the light of the review and following wider consultation. These are important areas where we must proceed step by step to ensure the maximum level of consumer protection.
Lord Bach: My Lords, I thank both noble Lords who have spoken. I say straight away to the noble Lord, Lord Hunt, that we need to legislate urgently on this and will bring back amendments at Third Reading, which I hope to share with noble Lords in good time. We will see where we go from there. The suitable course now is for me to beg leave to withdraw the amendment.
Clause 144 : Exploitation proceeds orders
Lord Borrie: My Lords, together with other noble Lords whose names are appended to several amendments of the same kind, I tabled these amendments to remove Part 7 altogether from the Bill. We were not satisfied with the Government's response to similar amendments that were tabled in Committee. We continued to be concerned that the Government's proposals to enable court proceedings to be brought to recover royalties and fees earned by criminals from books, articles, films et cetera were not a proportionate response to a pressing social need.
Soon after we tabled the amendments on Report, the Government tabled amendments to modify their proposals in Part 7. First, they seek to reduce the scope of their proposals by confining them to indictable offences. Secondly, they seek to remove the test of offensiveness to the general public from considerations to be taken into account by the court when an exploitation proceeds order is sought. What remains for consideration by the court, if the Government's amendments are
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The amendments proposed by the Government are welcome, particularly because proceedings could not now be based on a media-led populist appeal to public outrage. All along, the Government have said that the new provisions would be exercised only sparingly. In the light of that assertion, and the amendments now proposed by the Government, noble Lords are entitled to ask: why seek the new powers at all? They ignore existing powers to deal with criminal memoirs and necessarily involve limitations on freedom of expression. Therefore, they are doubtfully compliant with the European Convention on Human Rights-a matter on which my colleague, the noble Lord, Lord Lester of Herne Hill, will speak. These proposals introduce a large discretionary power for the Attorney-General and, if a court action is brought, discretion for the judge. This must leave anyone acting as an adviser to a potential author, and indeed the author himself or herself, in a state of considerable uncertainty as to whether the law would apply.
The Government's answer is that sometimes real pain is caused to the victim or the victim's family from the offender being able to profit by exploiting his offence for personal gain. But these proposals are bound to have what I call a chilling effect on any attempt by an offender to express himself, including publications or artistic work that may of course be very helpful in assisting his rehabilitation. It is not as though our present law on criminal memoirs is non-existent. There is the Proceeds of Crime Act 2002, the full implications of which have not yet been pursued sufficiently to see its advantage in extreme cases. The prison rules, enabling confiscation of memoirs by anyone serving a prison sentence, were upheld by the Court of Appeal in the case of Dennis Nilsen as being in conformity with the European Convention on Human Rights. Because Dennis Nilsen is serving a life tariff-he has already served 26 years in prison-there will never be a time when the Government's proposals could apply in his case. He will never be a free man able freely to engage in publishing memoirs. The same point could be made about Ian Brady, the Moors murderer, who is also serving a full life tariff.
Then there are cases at the other end of the spectrum where there are no obvious victims whose outrage could form the basis for an exploitation proceeds order. In the recent case, which your Lordships may have read about during the Summer Recess, John Darwin the canoeist faked his own death so that he and his wife could live in Panama on insurance payouts. He profited from newspaper articles and was given a jail sentence of eight years for fraud. It seems that the proposed legislation can hardly apply to what is sometimes called a victimless crime. When you take all these things into account, surely the Government have a real question to answer. What is the value, use and worth of Part 7 of the Bill, with its 15 pages of proposed legislation? Part 7 can achieve very little for the victims of crime in whose name it is promoted, but it could have a number of damaging consequences, and it is doubtfully compliant with the European Convention on Human Rights. I beg to move.
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Lord Soley: My Lords, I understand fully where the Government are coming from on this, and I am sympathetic to anything that tries to stop the distress caused by some of these publications to victims of crime and their close friends and families. As the Minister has already discovered, the problem is in the detail of how to do it without slipping into undesirable censorship. I make the point in passing that if we had a similar rule for newspapers publicising these sorts of crimes, most of the articles would not be published. After looking at yesterday's reporting of the poor 17 year-old girl who was killed as a result of an internet connection, one could well argue, as I suspect some of her friends and family may, that the detail and description given in the articles was undesirable and unacceptable. Of course, newspapers profit from that, so there is a delicate line here.
Noon
I leave that to one side because the important question relates to how we draft legislation in such a way that does not stop the release of good books and films. The Minister will know that this goes back to the publication of a book by Gitta Sereny about the Mary Bell case. I think that it was a good and important book because it explained a lot about why children kill. However, the media storm around it developed into a suggestion for legislation of this type. There is a case for it because there are examples of acute distress being caused to victims by people exploiting the horror of what they have done.
At this stage, I would ask the Minister to look at the degree of flexibility available. I know why he moved to the indictable offence factor as a way of trying to judge the seriousness of the issue, but I am troubled by the fact that that also catches other people. In other circumstances, I mentioned to him the book by John Healey, a recovered alcoholic. It is the only book I know that was written by someone who was a vagrant alcoholic for some 15 years, who came off the drink and published a book that won an autobiographical prize and became a Channel 4 film that also won awards. Like most vagrant alcoholics, he has many convictions, most of which were petty-being drunk and disorderly and so on-but among them were several indictable offences.
That book would not have been written if ultimately some payment had not been involved because it helped his development and it helped the development of the film that won the award. As I have indicated, it was also an important book in describing the process by which a person becomes a vagrant alcoholic and the processes by which they can abandon that position. It therefore has an important element. We have talked about the well known cases of Mary Bell, Dennis Nilsen and so on. But, thinking about it, the book by Jean Genet, the French author, would probably never have been published.
We therefore have to think carefully about this aspect, and I have a solution for the Minister. I understand the dilemma of getting this right. I wonder whether we could do more on the rights of the victim. The Government have introduced legislation in other areas where the victim has a greater say in what happens in sentencing. Without overriding the court, their views
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I repeat for the benefit of the media that they need to think very hard about how they approach these things. If we introduce such a law for the media, most of the stories about violent crimes will not be reported. Although I do not like the way that they report crime, I have to say that that would be a serious mistake. The same applies to books and films. I ask the Minister to look again at the way in which we trigger this process. That is important. If we have a blanket provision of indictable offences, for example, I am almost sure that John Healey's book, The Grass Arena, and the Channel 4 film based on it, as well as books by people such as Jean Genet would not be published.
Lord Lester of Herne Hill: My Lords, my name is attached to the amendments, and I have tabled a couple of my own, Amendments 106A and 107A. I shall concentrate on why I consider that the Bill is not fit for purpose because Part 7 does not comply with the European Convention on Human Rights. Before I do that, perhaps I may say how much I agree with what the noble Lord, Lord Soley, has just said. The concerns that he expressed are very important and place this House in something of a dilemma, because we are faced today with the problem that Part 7 was not properly debated in the other place-which is a matter of great regret. We are the scrutineers and the revising Chamber, and that, plainly, Part 7 as it stands is not satisfactory. Somehow we need to try to stimulate the Government to reflect on what the noble Lord, Lord Soley, and others have said.
First, I thank the Minister and his advisers for having met the noble Lord, Lord Borrie, and me to discuss the possibilities of Amendments 106A and 107A, which I tabled in the hope-foolish optimist that I am-that there might be some way of making Part 7 convention-compliant. I am grateful for that.
One of the points that Her Majesty's Official Opposition make in their scepticism about aspects of the Human Rights Act is that it does not allow Parliament to do its job sufficiently and leaves too much to the courts to repair legislation enacted by us. I have some sympathy with that, even though I think that I am one of the architects of the Human Rights Act. It has come to be seen as an easy get-out for Governments, who can simply say, "The courts have an obligation to read and give effect to legislation if they possibly can to make it convention-compliant, so it does not really matter if the legislation enacted does not really get it right on its face". One of the attractive points made by the Opposition is that it is really important for Parliament to do the best it can to pass legislation that is fit for purpose in being convention-compliant.
Yesterday evening, in a short debate on Section 5 of the Public Order Act, the noble Lord, Lord Bach, perfectly correctly referred to the fact that the European Court of Human Rights has held that Article 10(1) of the convention, the free speech guarantee, applies,
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- "not only to ideas that are favourably received, or regarded as inoffensive or as a matter of indifference, but also to those that offend, shock or disturb".-[Official Report, 28/10/09; col. 1190.]
That is the starting point for Article 10. There is a right to freedom of expression which can be interfered with only where there is legal certainty and necessity-proportionality. I am sure that that is common ground and that Ministers would not dissent from that basic position. There is also the right to property, the right to the peaceful enjoyment of one's possessions in Article 1 of protocol 1.
The Explanatory Notes to the Bill, although they do not explain why the Government think that the provisions are convention-compliant, repeat the fact that they think that they are convention-compliant. I do not understand how a Minister could have been advised to come to that view. In the first place, the criteria in the Bill, which the court will be expected to exercise, are not only incommensurable-you cannot weigh one properly against the other for the reasons explained in our previous debate-but they are so vague, even without the "offence to the public" provision, which will now happily be removed if Part 7 stands, as to have the chilling effect to which the noble Lords, Lord Soley and Lord Borrie, have referred. Therefore, the first vice in these provisions is that they are vague and lack legal certainty. That would be quite enough to cause the European Court of Human Rights to say that they are in breach of Article 10.
Secondly, they also sweep too broadly; they are disproportionate. The Minister will no doubt say in his reply that all that may be, but it is for the judge to make sure under the Human Rights Act that the provisions of Part 7 can be read and given effect in a way that cures the vices of legal uncertainty and overbreadth. The courts cannot cure the vice of lack of legal certainty. That vice can be corrected only by Parliament. As the Joint Committee on Human Rights, on which I serve, has repeatedly pointed out, it is quite wrong to use the Human Rights Act, which I strongly favour, as a substitute for proper legislation. The safeguards have to be in the Bill.
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