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I say nothing about the previous debates on procedures and whether this is or is not rushed. All I can say is that there is a mischief, which the amendment seeks to tackle.

Lord Hunt of Wirral: My Lords, I declare my interests recorded in the Register of Members' Interests; in particular, being a partner in the national commercial law firm Beachcroft LLP. The Minister has reintroduced this group of amendments. I suppose that he is hoping that this will be the third time lucky. He has had to withdraw his amendments at the last minute both in Committee and on Report after finding that they were not really in accordance with what he sought to do. I am not sure that to have the first proper debate on such an important amendment at Third Reading is the right way to legislate.

The Minister was at pains to stress in his speech that the Government had consulted over the summer. However, that was because they had tried to introduce amendments in Committee before the summer without bothering to consult anyone very much beforehand. Having spoken to a number of organisations that have been consulted, I believe that, in their view, these revised amendments will probably cause significant difficulties without properly addressing the problems that the Government have acknowledged exist, and which the noble Lord, Lord Lester, has just outlined.

Well, we have been here before. If we look back at what has happened to the conditional fee agreements, as we were reminded in the previous debate, that regime said that the agreements would continue to be unenforceable unless they complied with regulations. I presume that they were similar to the regulations now proposed for damages-based agreements, although we have not seen them. I am not sure whether the Minister has seen any draft regulations. It would be very helpful if he could acquaint us with their substance, if not yet their detail. With CFAs there has been an enormous amount of satellite litigation, which has certainly not been in the public interest. The cases demonstrated that there were certain fundamental flaws in CFAs. Is the Minister satisfied that those fundamental flaws will not exist as far as DBAs are concerned?

DBAs have been available for many years in non-contentious work. As the Minister explained, they are not permitted in court-based litigation here. We all know the problems that they have caused in the United States. They are, of course, available here for tribunal cases. The argument is that they are, in some ways, particularly suitable for employment and tax cases because it is very rare for the losing side to be liable for the other side's costs. Above all, I ask the Minister whether he is satisfied that this move on his part is in the public interest.

He has now tried to limit DBAs in the way that is expressed in Amendment 18. In many ways, this is all now based on some rather limited research to which

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he referred a few moments ago. That limited research, he feels, enables him to make regulations which ensure that DBAs are unenforceable unless they comply with regulations which are to be made, and might cover-I presume-such things as the percentage of damages that can be taken by the lawyer; exactly what costs are included in the percentage; the contractual terms; and the advice that must have been given before the agreement is entered into. I am guessing, because I have not seen the regulations. The Minister may well have seen some draft regulations.

The amendments propose to make agreements which do not comply with such regulations unenforceable. I suppose that would mean that consumers who wish to challenge will have to take legal action to establish whether their agreements comply with regulations. I am not sure that consumers will be aware of whether their agreement complies or not. I also do not think they will be queueing up to litigate further. If they do, there will a similar round of expensive satellite litigation. Surely that cannot be in the public interest.

It is anyway inappropriate for the Government to move in this direction, particularly when some of the people we are talking about are not regulated to the same level as solicitors. I immediately declare an interest: I was asked by my firm to give a report to the Law Society on the future regulation of solicitors. I pointed out that there are various areas where others have started to creep in-as we see extensively from TV adverts-to undertake work that is very similar to that of solicitors, but is not regulated in the same way. I hope that the Minister agrees that there should be a level playing field, and that the public interest demands that everyone is regulated to the same level. The Solicitors Regulation Authority has made clear that it has power to deal with concerns about solicitors, and it should be allowed to do so. If it is felt that the powers of regulators of those who are not solicitors are insufficient, the approach should apply only to them.

Finally, the Minister has referred to the much-respected review of costs by Lord Justice Jackson, which is now under way. The Minister knows that I expressed the strong view that we should await that report before we start going down this particular road. The Minister has made clear that he does not think he can wait. I hope that, when he responds, he will take into our account our dismay at the way in which the amendment has been produced and the way he is explaining why it is so necessary. We need a little more detail than we have so far had.

1.15 pm

Lord Thomas of Gresford: My Lords, having been a solicitor for some five years and a member of the Bar for too many years, I declare an interest to that effect. I have deep in my bowels a distaste for any litigation in which the lawyer has an interest. I have to weigh that distaste against access to justice and all the arguments that we had about that when the Access to Justice Act went through. As the noble Lord, Lord Hunt, said a moment ago, the blessing of the Government on conditional fee agreements has led to satellite litigation, which is a considerable burden that a litigant has to bear in addition to all the pressures and difficulties of the case itself.



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This proposal was introduced at a very late stage of the Bill, so there has been no opportunity for full discussion. I have had the benefit of a discussion with the noble and learned Lord, Lord Woolf, on the third edition of the clause that is now being put forward. I will not speak for him, but as a result of that discussion I do not propose to oppose this clause today. However, the Government must be very careful in drawing up any regulations that they propose to impose, and the matter should be monitored very closely to try to get away from the lay client-who is at the receiving end of it all-the threat of even more legal proceedings.

Lord Bach: My Lords, I thank the noble Lords who have spoken in this debate, all with a great degree of expertise, perhaps none more so than the noble Lord, Lord Hunt of Wirral, whose chairmanship I served under when we looked at the draft Legal Services Bill. I know that his recent report for the Law Society has been very widely welcomed, by both the society and others interested in that field. It is because I disagree with him so strongly that I have to praise him most strongly at the start of what I have to say.

The noble Lord asked whether it is in the public interest to legislate now. The answer is an emphatic yes from the Government. If I look for reasons, I rely to some extent on the speech of the noble Lord, Lord Lester, and the kind of cases that he has referred to today. In that sense, it cannot wait in this limited field of employment law, where there clearly has been abuse. Extremely unusually for the solicitors' profession, I am afraid that recent research concluded:

"Many solicitors failed in their professional obligation to inform and advise claimants of alternative methods of funding".

I am sure that the Law Society and its many thousands of members will want to put that right at the earliest opportunity.

On the question of public interest, we are adamant that we need to legislate, and legislate quickly. I take the point that this is the first time that this has been properly debated in this House. We withdrew in Committee because the Delegated Powers Committee made some powerful points to us, which we of course took on board in the normal way. On Report I had a Hobson's choice. There were concerns from the noble and learned Lord, Lord Woolf, and others about this matter. We thought it best to take it away and try to narrow the scope of these clauses to satisfy him. I had the opportunity of speaking to the noble and learned Lord only yesterday. That is what we have done. It is not entirely satisfactory; I agree with the noble Lord about that.

We will draw up regulations in the light of our consultation and take note of any points raised today. We will consult with all the key stakeholders over the details of our regulations. A consultation will begin shortly after the Bill gains Royal Assent. I remind the House that I have said it is envisaged that the first regulations could include, among other things, a requirement for representatives to provide claimants with clear and transparent information on all likely costs and expenses and on other sources of funding to which they may be entitled and which may allow them to keep all of their damages. However, I say to the noble Lord that I have not seen the draft regulations.



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By passing this legislation we are establishing a more level playing field in this area. CFAs are regulated statutorily; damages-based agreements are not. We think it is right that they should be on the same level. Why cannot this await the Jackson report? As the House will know, Sir Rupert published a preliminary report in May this year, which recognised that the unregulated use of damages-based agreements at employment tribunals, where they are most commonly used, is open to abuse. That is supported by the findings of research. Sir Rupert is considering the use of these agreements as a method of funding litigation before the courts and we await with interest any recommendations his report might include on this issue. In the mean time, we believe that the absence of specific statutory regulation of damages-based agreements in employment matters poses a real risk to vulnerable claimants. Therefore, there is a strong case for proceeding quickly to regulate this class of agreement in proceedings before employment tribunals. That is why we have brought forward these amendments today.

Amendment 18 agreed.

Clause 154 : Relevant offences

Amendment 19

Moved by Lord Lester of Herne Hill

19: Clause 154, page 101, line 17, at end insert-

"( ) it is a heinous offence, and"

Lord Lester of Herne Hill: My Lords, I am very grateful to the Minister and his advisers for having met me yesterday to discuss my amendment in the context of the amendments that the Government have tabled.

Noble Lords will recall that on Report on 29 October, the House decided, by 74 votes to 56, to reject the attempt of the noble Lord, Lord Borrie, to remove Part 7 from the Bill. In the course of the debate, the noble Lord, Lord Tunnicliffe, acknowledged that in its original form the scheme in Part 7 would apply to,

Nothing in the Explanatory Notes to the Bill explained how that could possibly be compatible with the rights and freedoms protected by the European Convention on Human Rights. No doubt because the Government came to realise that the scheme was grossly over-inclusive, the noble Lord, Lord Tunnicliffe, also explained:

"All we are saying is that if offenders profit from accounts of heinous crimes, an action which can cause great distress to surviving victims and bereaved families, the courts should have the power to order them to pay back the proceeds".-[Official Report, 29/10/09; col. 1293.]

The adjective "heinous" is not a technical term of art. It is a word whose ordinary meaning is given in the Oxford English Dictionary as,

Like many other adjectives, such as "reasonable", or "proportionate", it involves questions of fact and degree involving the exercise of judgment.



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The noble Lord further explained:

"To provide additional reassurance to the House and after extensive consultations, we intend to bring forward amendments at Third Reading to further limit the ambit of the scheme to indictable-only offences. Limiting the scheme to those who exploit material about offences that are triable only on indictment will be a major move on our part".-[Official Report, 29/10/09; col. 1295.]

He added that the scheme would then cover,

Offences at the grave end of the spectrum are what might conveniently be described-in the noble Lord's words-as heinous offences; not just serious, but grave.

Unfortunately, the Government's new amendment does not achieve the Minister's stated aim of confining the scheme to profiting from "accounts of heinous crimes". Offences triable only on indictment in the Crown Court are serious, which is why they cannot be tried in magistrates' courts, but not all indictable offences triable only in Crown Courts can properly be described as "heinous" offences, or as being at the most grave end of the spectrum. They are all serious but are not all heinous or grave. For example, the various types of homicide involving murder and manslaughter are undoubtedly serious offences triable on indictment in the Crown Court, but they range widely in their character depending on the circumstances of the particular offence. The offence of murder, which can be tried only on indictment and carries a mandatory life sentence, covers a broad range of situations from mercy killings, or the killing of an abusive partner by a victim of domestic violence, to terrorist atrocities and mass murders.

In other words, the scheme, as it would stand with the government amendments moved today, remains overinclusive in that those at risk of having the proceeds of their works forfeited to the state, and the chilling effect on freedom of expression, would remain. A former criminal who wishes to write a book, collaborate in the making of a play or film, or discuss his or her crime with a journalist or publisher to receive a fee, will not know from the language written into Part 7 whether he or she may be liable to pay the penalty of confiscation merely by knowing that discussion of indictable-only offences creates a risk. That is why, to achieve the Government's stated aim, and no more, it is necessary to limit the scheme's application to those who exploit material about heinous indictable offences.

Some might argue that the test of heinousness is too vague to be applied by the courts. There are several answers to this objection. In the first place, the Government consider that the courts will be capable of interpreting and applying the vague criteria already contained in the Bill. The test of whether an offence is heinous is just as capable of being applied by the court having regard to the particular circumstances of the offence as is that of deciding the social value of a work. What is heinous and at the grave end of the spectrum involves a judgment about matters of fact and degree, which the courts are perfectly capable of making.

Secondly, senior courts in the common law world, notably in India and the United States, already use the test of whether a crime is heinous for the purpose of

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deciding whether it merits the death penalty. It has been used by the Supreme Court of India in deciding which categories of murder could attract the death penalty. In the case of Bachan Singh, the Supreme Court noted:

"While considering the question of sentence to be imposed for the offence of murder under Section 302, Penal Code, the court must have regard to every relevant circumstance relating to the crime as well as the criminal. If the court finds, but not otherwise, that the offence is of an exceptionally depraved and heinous character and constitutes, on account of its design and the manner of its execution, a source of grave danger to the society at large, the court may impose the death sentence".

Similarly, the Supreme Court of the United States, when interpreting the Eighth Amendment's prohibition against cruel and unusual punishment, has repeatedly decided that, under the precept of justice, punishment is to be graduated and proportioned to the crime, and that capital punishment must be limited to those offenders who commit,

and whose extreme culpability makes them,

The case of Roper v Symonds, cited by Justice Kennedy in Kennedy v Louisiana in 2008, illustrates that. The American federal courts do that in accordance with the well-known principle of proportionality. That shows that the criterion is capable of being interpreted and applied in context by our judiciary.

1.30 pm

Similarly, the European Court of Human Rights and our own courts and tribunals have to carry out a similar process when deciding whether a given example of ill-treatment is sufficiently severe to amount to inhuman or degrading treatment in terms of Article 3 of the European convention. The confiscation of proceeds under this scheme undoubtedly involves the infliction of a penalty or fine for exercising the right to free expression. The proceeds are not to be paid to victims or their families. They are to be confiscated and paid to the state, like any other fine or penalty.

In fact, the order involves the infliction of a double penalty: first, the penalty of a custodial sentence; and then the penalty, as a convicted criminal or previous criminal, of having the proceeds not of the crime but of exercising the right to freedom of expression confiscated by the state. The defendant has already been sentenced and punished for the offence. He or she is to be further punished for writing about it in an article or book, or making a film or a play, deemed by the court to have insufficient value to be in the public interest.

The JCHR report in which I was involved expressed concern about the lack of certainty in the scheme. Unfortunately, in my view, and that of others, it did not take sufficient care on this occasion. I remain concerned about the lack of certainty in drawing a distinction between offences triable only on indictment and other offences. I have tried my best but I have been unable to discover any comprehensive list of offences which are triable only on indictment-indeed, I have asked the Minister's department about that. I am sure that the Minister will provide a list in his reply, although I am not sure that such a list exists. I cannot tell, therefore, which offences are covered. However, my

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greater concern is with the fact that the Government's use of this category is overinclusive by not being restricted, as the Minister wished, to heinous or grave offences.

The Government accept, as they must, that to deprive a criminal or former criminal of profiting from an account of his crime interferes with the right to free expression and the right to property. The Government also accept, as they must, that the interference must be no more than is necessary to conform to proportionality. My amendment seeks to give effect to that principle by ensuring that the forfeiture scheme will apply only to heinous offences at the most grave end of the spectrum of indictable offences.

Like the Mikado, I hope the Government and the House, will appreciate that, "my object all sublime", is to,

If my amendment is agreed to, it will be much more likely that Part 7 will pass muster if its compatibility with the convention rights is challenged in British courts or before the European Court of Human Rights. I beg to move.

Lord Borrie: My Lords, I shall not hide the fact that I would prefer that the Government had withdrawn the whole of Part 7, because it is neither worth while nor will be of much value. It will have a number of serious disadvantages. However, we debated those a week ago. On behalf of noble Lords from various parts of the House who supported withdrawing Part 7 altogether, I say that we had the voices but the Government had the votes. All those who spoke, apart from an uncertain voice from the main opposition party, were against Part 7. However, we move on.

The noble Lord, Lord Lester of Herne Hill, is more constructive than me. He has sought, alongside the Government's move to reduce further the scope of Part 7-to use "heinous" to separate those more serious crimes, where perhaps there is justification for Part 7, from the rest. He has given a number of reasons why "heinous" could be included, despite its apparent vagueness. It features in the Oxford English Dictionary, but I have looked at the law dictionaries and they do not mention it-probably because it does not appear in our statutes. None the less, it has a reasonably clear meaning, as the noble Lord indicated. It is a more worthwhile attempt, and it goes further than that of the Government. The Government have already made two moves to reduce the scope of Part 7, and maybe they will explain further why those moves were sufficient.

The main objection to "heinous" in this context is its vagueness. However, I am much impressed, not only by what the noble Lord, Lord Lester, said about the Supreme Court of India and the Supreme Court of the United States in the use of "heinous" to separate, for example, crimes justifying the death penalty from other crimes; I am also impressed by the noble Lord's indication that, in so far as there is an uncertainty about the word, by Jove, there are plenty of uncertainties in this part of the Bill. If you study the list of things that the court is to take into account in determining whether an order should be made under Part 7 proceedings, you will see phrases such as the "social

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value" of the literature or taking into account the "extent to which" the victim or his family will be offended. There are so many vague, uncertain and subjective items for the court to consider. If it is to consider the difference between a heinous crime and a less than heinous crime, that is a relatively straightforward matter which a judge would find a good deal easier to determine than the social, cultural or literary value of a book written by an offender.

I appreciate that vagueness remains, but I also appreciate the value and constructiveness of the attempt of the noble Lord, Lord Lester, to address this point when the Government have, thus far, singularly failed to do so in their attempt to define and distinguish between indictable and non-indictable offences and so on, thereby reducing the scope of the Bill.

Lord Henley: My Lords, as the noble Lord, Lord Borrie, made clear, the House debated this matter a week ago and came to a firm conclusion. For that reason, Part 7 will remain in the Bill, but the Government are making their attempt to tighten it up a little, as is the noble Lord, Lord Lester of Herne Hill.


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