He asked a question about confiscation orders in relation to an earlier amendment, when I said that perhaps it was better to consider the matter when we were considering criminal charges. Confiscation is a key tool in depriving criminals of their access. The Government are committed to improving confiscation and taking steps to improve the confiscation regime in the Serious Crime Bill, as he may well be aware. That is the right place, we respectfully suggest, for a debate on these matters. There are, indeed, provisions in the Bill that strengthen the default system. We are planning, in due course, to allow confiscation orders to be made in the magistrates’ court for the first time. These matters are part of an overall serious and organised crime strategy.

The noble Lord, Lord Beecham, asked about Article 6 of the ECHR on access to the courts. We are satisfied that the criminal courts charge provisions are, in fact, compatible with the European Convention on Human Rights, Article 6 of which contains an implicit right of access to the courts. The charge would not interfere with that right in any way.

Preventing the use of the powers that these provisions contain would mean that offenders would have to face the consequences of defaulting on payment, which might include the use of bailiffs or a return to court to seek a variation, including additional costs for the court. We suggest that, notwithstanding the difficulties that are presented by those who do not have substantial means, as the noble Lords, Lord Kennedy, Lord Ponsonby and Lord Beecham, and my noble friend Lord Marks, mentioned, they are met by the various provisions that I have outlined to mitigate the harshness, and that the transparency and consistency of this provision is an advantage and should result in financial benefit accruing to the whole criminal justice system. I therefore ask the noble Lords not to press their amendments.

Lord Ponsonby of Shulbrede: I have a point that is slightly tangential to the group of amendments we have just been debating. When magistrates are fining somebody, for a huge proportion of the time they do

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not know the existing level of outstanding fines; so they are fining somebody when they do not know what debts to fines they already have. I understand that this is a practical problem and a difficult issue that the court service is reluctant to address. Surely, however, if one is serious about reducing the level of outstanding fines, one should try to address it so that when a court sets fines it knows the level of the outstanding fines when it puts in place the sentence.

Lord Faulks: It is certainly the case that the court should know, as far as possible, the level of outstanding fines. I understand the practical difficulties that can be encountered by courts but, with great respect to the noble Lord, we are concerned here with a definite, fixed cost in relation to the particular nature of the offence, which will not depend on fines outstanding. That is not a question—reasonable though it is—that arises on consideration of these amendments.

Lord Beecham: My Lords, I am struck by the direct relationship between the speed with which the Minister is racing through his brief and the embarrassment he no doubt feels at the material he is giving to the Committee. I cannot believe that the good and noble Lord is really convinced of the case he has been asked to put. That would not surprise me, because much of what we have heard is simply beyond credence. The noble Lord, Lord Marks, in a very powerful speech, made the essential point that—among other things—the court should have discretion on the amount. None of us is any the wiser about what kind of sums we are talking about. The Minister certainly has given no examples, except to say that it will be related somehow to the cost of the individual case. How is that to be calculated? On what basis will that be apportioned? Are we just talking about the cost of prosecution? That can be covered anyway, under the existing framework. Are we talking about a contribution to the cost of maintaining the court building or the cost of the judicial salaries in a higher court? There is no indication of how this cost is to be calculated and then passed on.

Equally, although the noble Lord rightly pointed out the provision in the Bill that the Lord Chancellor will prescribe the class of case to which the charge will apply, he has given no indication tonight—and I do not think that it was done in the other place either—of what kind of cases are envisaged. Why do we not know which cases are likely to be included? What will be the process, if any, for parliamentary approval of the classes as prescribed by the Lord Chancellor? Will Parliament be permitted any consideration in this, or will it simply be a matter of the Lord Chancellor’s fiat?

The Minister’s suggestion that it would be improper for the court to determine the amount because that would somehow reflect a vested interest on its part is simply risible. It is an absurd suggestion. The notion that magistrates or High Court judges will be influenced to make rather larger requirements of prisoners because that will somehow affect them, or the court system, is an insult to both the judiciary and the magistracy. It cannot be something that the noble Lord seriously believes. His scriptwriters need to go back to wherever they were taught their craft.

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In addition, and worryingly, the Minister suggested that there is no deterrent effect because the charge will be imposed only long after a plea was entered. That is absurd. The fact that the court is in a position to impose a charge is known to the defendant before he appears there; it certainly ought to be. Of course, it may influence a defendant as to the nature of a plea, particularly in the case of an appeal.

Lord Marks of Henley-on-Thames: Is not the noble Lord slightly mistaken? It is the fact that the court is bound to impose the charge that is known to every defendant before they go into court.

Lord Beecham: I am not known for being mistaken, but I am happy to concur with the noble Lord’s judgment of me. However, I am not happy to concur with the Minister’s judgment of the situation because it is simply fallacious, particularly in relation to an appeal, when the costs will necessarily be significantly more than they would be at first hearing. Of course, appeals are not just confined to going from the magistrates’ courts to the Crown Court. There is also the question of an appeal from the Crown Court to the Court of Appeal and, I suppose, ultimately to the Supreme Court, the costs of which would presumably be unimaginable to an ordinary defendant.

In my view the Minister’s case is in tatters, but let me put a further point. If we are talking about the cost of the case and the cost to the courts, where is the logic in not extending that to the costs—I am now looking at the noble Lord, Lord Paddick—of the police force or the probation service, which might also be involved with a particular client? Why are we confining this charge to the court process? There is no logic to this at all.

We still do not know how the £65 million figure is computed. No doubt the Minister, in fairness to him, does not know either. I cannot imagine he has been supplied with the information. Even if that figure were right, it is something like 3% of the total amount outstanding. The noble Lord gave figures for the uncollected sums for two quarters of 2012. I think my figures were slightly more up to date, if they were correct. However, he did not answer the point—I do not blame him, because presumably nobody has told him—as to why the Ministry of Justice does not know how much has been outstanding for longer than 18 months. Is there an implication that, if money is outstanding for more than 18 months, it would be written off? That would be curious, in the circumstances. There is also the point that the charge will apply to those who are sentenced to a period of imprisonment, presumably to be met after they come out, no doubt as part of their rehabilitation. Does this make any kind of sense, I ask rhetorically? The Minister may think it does; there will be few in this House or outside who would agree.

Of all the misconceived and less than half-baked ideas we have seen in the Bill, this proposal must surely rank in the front line. It is simply appalling and I hope the Minister will use his long experience of these matters, as both an advocate and as a recorder, to persuade his ministerial colleagues, in particular the

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Lord Chancellor, that he is bringing the whole system into a serious collision with reality, one that will do no good to the defendants, to the court system, or, frankly, to the reputation of those who are putting forward these proposals. However, as we are in Committee, I will not press the matter tonight. It is very probably one to which I and others will wish to return on Report. I hope the Minister will use his influence with the Lord Chancellor to see that some significant changes, at the very least, are made to these appalling, deeply flawed proposals. I beg leave to withdraw the amendment.

Amendment 63AA withdrawn.

9.15 pm

Amendments 63AB to 63EA not moved.

Clause 42 agreed.

Schedule 8: Further provision about criminal courts charge

Amendment 63F

Moved by Lord Faulks

63F: Schedule 8, page 106, line 18, at end insert—

“Proceeds of Crime Act 2002 (c. 29)

10A In section 13(3)(a) of the Proceeds of Crime Act 2002 (effect of order on court’s other powers), after “other than” insert “an order under section 21A of the Prosecution of Offences Act 1985 (criminal courts charge) or”.”

Amendment 63F agreed.

Schedule 8, as amended, agreed.

Clause 43: Duty to review criminal courts charge

Amendments 63FA and 63FB not moved.

Clause 43 agreed.

Clause 44: Variation of collection orders etc

Amendment 63FC not moved.

Clause 44 agreed.

Clause 45: Personal injury claims: cases of fundamental dishonesty

Amendment 63FD

Moved by Lord Hunt of Wirral

63FD: Clause 45, page 46, line 17, leave out “fundamentally”

Lord Hunt of Wirral (Con): My Lords, I declare my interest as a practising solicitor and partner in the international law firm DAC Beachcroft and as chairman of the British Insurance Brokers’ Association, and I have other interests recorded in the register.

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The “have a go” culture has infected our civil compensation system for far too long. Claimants—and it is always claimants—see that there is no real penalty for trying on either that they have been injured at all or a deliberate exaggeration of the symptoms that they have suffered. The advertising by claims farmers and solicitors has undoubtedly played a part in this. The adverts for personal injury and for financial mis-selling continue to give the impression of free money. The starkest example that I can immediately recall was a full-page advert last November showing simply a bundle of £50 notes done up in Christmas ribbon. We all recall those original adverts saying, “Where there’s blame, there’s a claim, and it won’t cost you a penny”.

That is why I welcome Clause 45 as part of the Government’s initiative to tackle this. I certainly support its introduction. Measures are, of course, already available to tackle the completely fabricated claim, but I fully support the idea that a claimant with a genuine claim who then dishonestly exaggerates it should put their whole case at risk. That, after all, is what would happen if one was unwise enough to put in a consciously exaggerated claim to one’s own insurance company. Why should it be any different if one proceeds with the same intent against another person’s insurance company?

I would like to hear more from the Minister on the choice of the phrase, “fundamentally dishonest”. I recognise that my noble friend has great experience of the English language, and I should declare an interest as having been for six years chairman of the English-Speaking Union, but, with due respect for his grasp of the English language, it seems to me that dishonesty is one of those absolute concepts: either you are dishonest or you are not, in the same way that you cannot refer to something as “very unique” or to someone as “slightly pregnant”. I know that a similar phrase was used in the Civil Procedure Rules following the seminal—perhaps I should now call it the “fundamentally seminal”—review by Lord Justice Jackson of civil legal costs, but I am not aware that it has been tested or scrutinised by the Appeal Courts as yet. I would welcome clarification from the Minister about the thinking behind the choice of this phrase.

I have received, no doubt like other noble Lords, material from those representing claimant personal injury lawyers who have expressed concern that this measure might go too far. I cannot agree with that. If a claim is brought which contains a dishonest element—and dishonest always means that there is proof of a deliberate intent to deceive—then that behaviour should rightly put the whole claim at risk. The effect of this clause is clearly a deterrent one which, as I have already explained, I strongly welcome.

It might be helpful to point out to noble Lords that Clause 45 is not unique—not even slightly unique—because an analogous provision can be found in Ireland, in Section 26 of its Civil Liability and Courts Act 2004. There, any plaintiff, as they are still called in Ireland, who knowingly gives false or misleading evidence will find their claim dismissed in total. The test is simply one of dishonesty rather than fundamental dishonesty. If there is a fear that the power in Clause 45 would be abused by overzealous defendants, the experience of more than 10 years in Ireland proves otherwise: the

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courts are alert to any attempts to abuse a provision that is expected to apply in only a small number of cases, and of course if the clause truly has a deterrent effect, it should mean fewer cases coming to court in the first place.

Let me finish by illustrating the concern over “fundamentally dishonest” with a stark example that was recently brought to my attention. It was a case tried in Stoke-on-Trent County Court earlier this year. Mr Steven Cotton is a 31 year-old heating engineer who now lives in Swadlincote, Derbyshire. In December 2008, he sustained an injury to his neck and shoulder while at work. It was frankly a modest injury and he was able to go back to work the following month, in January 2009, before a disciplinary matter at work intervened. At that point, he decided to bring a claim against his employers and to include in that claim an allegation of a lower-back injury. Matters progressed and, just a few months before trial, he put in a claim schedule for in excess of £1 million, despite his solicitors, Woolliscrofts in Stoke, being aware of video surveillance evidence showing Mr Cotton as being much less disabled than he was making out. I understand that the insurers facing this claim, AXA Insurance, were not impressed. They rightly defended the case to trial and the judge agreed that Mr Cotton had invented the lower-back injury as a deliberate exaggeration of his genuine neck and shoulder injury. The judge awarded Mr Cotton just over £18,000 for the genuine injury, which was less than 2% of the amount that he had falsely claimed, plus some of his solicitor’s costs. One might think that this degree of exaggeration would be enough to knock out the entire claim but, sadly, it was not so. On the one hand, Mr Cotton’s case is a classic example of why the clause is badly needed. On the other hand, it raises a question in my mind as to whether the addition of a second injury to an already genuine injury would be seen by the courts as fundamentally dishonest. The court in Stoke stopped short of declaring that Mr Cotton’s lower back injury was not a genuine medical condition, despite the surveillance evidence. I have a real fear that Mr Cotton might still be awarded damages after the new clause comes in when all right-thinking people would agree that someone whose claim had already been knocked out to the extent of 98% not being allowed should not receive a penny.

I turn to the second amendment in my name: Amendment 63FE. To me, the meaning of subsection (5) of Clause 45 is unclear. Subsections (2) and (4), for example, impose obligations on the court to follow a particular line of conduct by use of the word “must”. In contrast, subsection (5) is different in tone and appears to offer more leeway. I hate once again to split linguistic hairs with the Minister, but I would like some clarification on whether subsection (5) is really intended to be a discretionary “may”. I reassure noble Lords that there is some substance behind the point I seek to make. Subsection (5) appears to limit the legal costs consequences of a claim being dismissed in its entirety under the clause by restricting the costs award that could be made to the defendant to a sum net of the damages that would have been awarded to the claimant if he had pursued an honest claim. I wonder whether there is even a risk that subsection (5) simply undoes the good work of the rest of the clause. The

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dishonest claimant who is found out ends up paying his opponent’s cost but is able to offset the money he has forfeited by his dishonesty. To return to the example of Mr Cotton, he would still, in effect, get credit for the £18,000 awarded for his genuine injury. Does that not encourage the likes of Mr Cotton to have a go at the expense of insurers, which is where I was when I started? I beg to move.

Lord Marks of Henley-on-Thames: My Lords, I rise to speak to Amendments 63FDA to 63FFA. I do so with some diffidence because, in part, I disagree with my noble friend Lord Hunt. After the humorous and intelligent way in which he introduced his amendment, and given that I agree with a great deal of the sentiment he expresses, I am concerned about the extent to which I disagree with him.

I agree with my noble friend that there has been a culture of “going for it”. There has been an outbreak of “compensation-itis” that we no doubt acquired, in part, from the United States and which has bitten particularly deep into the culture of people who have had motoring accidents. I greatly agree that something needs to be done. The question is whether the clause does what needs to be done in the way it needs to be done.

As my noble friend explained, Clause 45 deals with claims for damages in personal injury cases where the claimant is guilty of fundamental dishonesty in the prosecution of his claim. Clause 45(2) provides that,

“The court must dismiss the primary claim”—

that is, the claim for damages—

“unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed”.

The question I seek to pose is how far subsection (2) would leave judges free to do justice.

In my view, the subsection works against the interests of justice, or certainly risks doing so, in two ways. The first is by imposing a presumption in favour of dismissal, subject to a modest saving provision that, frankly, is difficult to understand. I am not sure I agree with my noble friend Lord Hunt that the word “fundamentally” adds nothing, but I certainly am of the view that the saving subsection,

“unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed”,

is very difficult to understand. On one view of justice, and the view of justice which appears to be intended by the proponents of the clause, if there is dishonesty, it is not unjust for the whole claim to go. If that is the meaning, how does the saving provision come in at all? If, on the other hand, it means that the interests of justice seem broadly to require the claimant still to get some of his damages, does that amount to a duty to dismiss or is it merely a power to dismiss, which is what my amendments are directed to?

9.30 pm

The second area where I believe there is a risk that justice will not be done is that the clause as it stands allows for no middle course—no way of allowing a judge to reduce the damages rather than dismiss the claim, where a reduction in damages is really what is required to do justice between the parties.

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I am not sure whether my next point constitutes a declarable interest, but it is in the register. Over the years, I have conducted many personal injury claims on both sides—for claimants and for defendants. In more recent years, some of those have been very substantial indeed. Regrettably, many of those claims are marked by dishonesty. Such dishonesty can arise from relatively minor exaggeration, such as happens in any number of insurance claims in the experience of all of us. However, it can range to entirely fraudulent claims, where whole elements of the claim are simply made up or fabricated by the claimant.

I suspect that the word “fundamentally” is intended by the drafters of the clause to limit the provision to those cases where the dishonesty goes to the heart of the whole claim, or certainly to a very important element of it. I agree with my noble friend Lord Hunt that it is difficult to see exactly what it means, although it cannot refer to aspects of dishonesty that are on the margins and refer only to exaggeration. He is right technically to say that being dishonest is dishonesty; it is attempting to obtain money to which the claimant is not entitled. However, if that refers to making out a claim for five bus fares when one bus fare was, in fact, incurred, is that enough to tell the judge he should allow for not just no bus fares but no damages at all to a seriously injured claimant?

I have long believed that judges are presently far too limited in what they can do to reflect dishonesty in disallowing dishonest claims. It is right to consider what they can do. They can reflect the dishonesty, of course, by cutting out the dishonest part of the claim. They can also reflect the dishonesty in their award of costs by disallowing costs to the claimant on certain issues and allowing costs to the defendant—indeed, in a serious case, allowing all the costs to the defendant. Occasionally, a judge might send the papers to the Crown Prosecution Service or the Director of Public Prosecutions for him to consider prosecution for perjury, but in practice, as anyone who practises in this field well knows, prosecutions for perjury arising out of this sort of case are very unusual indeed.

I believe that judges should have the power to disallow claims, just as the clause proposes. However, I believe that should be a discretionary power of the courts and that there should be no presumption one way or another. The exercise of the power should be governed by the overriding objective of dealing with cases justly, which was introduced into the Civil Procedure Rules proposed by the noble and learned Lord, Lord Woolf. I submit that that is a proper and sensible way of approaching this. I also believe that the courts ought to have the power to reduce an award of damages not merely relative to the area where there has been dishonesty but, if necessary, relative to the whole case, so that they can disallow a dishonest claim and parts of the rest of the claim if they wish.

There may be many cases where dishonesty in presentation is so significant in relation to the whole claim as to make it just to dismiss the lot, but there should be no general rule to that effect. I put before the Committee the hypothetical example of a middle-aged middle manager who is severely injured in a road accident which renders him tetraplegic. He has 10 years

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left or thereabouts of his working life. He therefore has a claim for loss of earnings of about £500,000. However, he has a whole life claim for full-time residential care of, say, £4 million. He has a claim for medical help, for adjusted housing and for incidentals of about another £1 million. He has a claim for general damages for pain, suffering and loss of amenity of about £200,000 to £250,000. All in all, his claim is worth about £6 million. This claimant, in a way that is fundamentally dishonest, suppresses the fact that a week before the accident he had received notice that he was to be made redundant. He is unlikely, because of his age and limited skills, to get any further work. His loss of earnings claim, far from being worth £500,000, is worth a residual £20,000 to £30,000 at most. Is that fundamental dishonesty? Of course it is.

What would the outcome be under Clause 45? It may well be that somebody could say that that is so dishonest that it would not offend against justice for the claim to be dismissed. Furthermore, the saving provision requires the claimant to suffer “substantial injustice”. However, in the example that I have given, the National Health Service would be given the task of caring for the claimant, while social services would be meeting a lot of his social service needs, such as his adjusted housing and so forth and the care needs that he may have at home. The people who would be let off the claim if Clause 45 was applied would be the defendant’s insurers, and the public purse would bear the cost of that. It is not the claimant who suffers the substantial injustice in that case, so Clause 45 would be applied and the whole claim dismissed. However, I suggest that most judges and most lawyers would think that the right result would be that his general damages should be removed and that his loss of earnings claim should of course fall. The defendant’s insurers would nevertheless be left with the cost of his care claim and his medical claim—he is, after all, a tetraplegic.

I agree with my noble friend Lord Hunt on his other amendment, Amendment 63FE, that subsection (5) lacks sense. I would be tougher and suggest that the Committee invite the Government to be tougher than the proposers of the clause. As my noble friend Lord Hunt rightly pointed out, subsection (5) would give a dishonest claimant credit for the damages he had forfeited against the costs that he would otherwise have to pay the defendant. I simply do not agree that there is any reason for that. To take an example of a small claim, where he would have got £10,000 for an injury that has been exaggerated, under subsection (4) that sum of £10,000 would be recorded but his claim would be dismissed. The costs he ought to pay to the defendant come to, say, £30,000. Under subsection (5), he would only have to pay £20,000. Why, in a case where a dishonest claim is dismissed, he should get credit for the damages that he has forfeited, I cannot tell. The only answer I can think of is that the defendant would not have to pay the £10,000, but the claimant might not have brought that claim for £10,000 anyway so the defendant would not have to pay it.

Finally, Amendment 63FG, which is the amendment in the names of the noble Lords, Lord Beecham and Lord Kennedy of Southwark, effectively reverses the

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point so that if a defendant is dishonest, the defence will be struck out and judgment will be entered. There is a difficulty about that. It is superficially attractive because it proceeds on the basis that what is sauce for the goose is sauce for the gander. However, unless the amendment goes only to the defence on liability, it is bound to be wrong because the judgment that should follow is a judgment only for damages to be assessed. It cannot be right that the defendant cannot put forward a counterschedule of damages, and that the claimant will get a windfall in damages of an amount to which he cannot possibly be entitled, because of the fact that the defendant is precluded from defending the claim. While I see the attraction of the way that the noble Lords have put it, I would not support that amendment.

Lord Beecham (Lab): My Lords, I find myself not for the first time playing Spencer to the noble Lord, Lord Marks. We are almost ad idem on most of this evening’s discussions.

Clause 45 contains yet another mandatory instruction to the courts. On this occasion, as we have heard, it relates to findings of “fundamental dishonesty”. The noble Lord, Lord Hunt, raised some semantic issues about the terminology. I am personally rather anti-semantic but there is a possible interpretation of the phrase so that it is the effect of the dishonesty being fundamental to the claim, I think, rather than the nature of the dishonesty. As the noble Lord pointed out, the phrase is used in the Civil Procedure Rules. However, we need not worry particularly about the precise terminology. The problem is that if,

“on the balance of probabilities”,

such a finding is made, the court has to strike out the claim unless, as we have heard,

“the claimant would suffer substantial injustice”,

whatever that purports to mean.

Amendment 63FG seeks, as the noble Lord, Lord Marks, pointed out, to even up the balance by putting the defendants in the same position as a dishonest claimant, such that the defence would be struck out. It would certainly be legitimate to apply that to the issue of liability. Frankly, if the Government were to insist upon the full operation of their proposals in terms of the quantum issues, it would not be unjust to apply the same principle to the defendants. That is perhaps a debatable point.

However, I want to explore generally the issues a bit more widely as they have been discussed before this evening by the noble Lords, Lord Hunt and Lord Marks. Certainly there are in my mind a number of questions about Clause 45, which is clearly another example of the Government’s Pavlovian reaction to pressure from their friends in the insurance industry, this time including the noble Lord, Lord Hunt. I am not criticising the noble Lord, who perfectly properly declares an interest, but I am saying that the Government—particularly the Conservative Party—do rather seem to be beholden to the interests of the insurance industry, which is one of their more prominent supporters. I am not suggesting for a moment that the noble Lord is in any way to be criticised personally for that. However, it is a matter of fact that—

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9.45 pm

Lord Faulks: Is the noble Lord suggesting that in order to bring in a provision saying that one cannot recover damages if one is fundamentally dishonest, that is simply serving the interests of the insurance industry?

Lord Beecham: Of course it is not simply serving the interests of the insurance industry, but it is serving its interests and there is no reason why the insurance industry should not lobby to that effect. But let us not be unrealistic. I repeat that it is perfectly proper for the noble Lord to make his case, and I have no criticism of him whatever. My criticism is of the Government. In any event, there are a number of questions about the situation, as created by the Bill.

First, why single out personal injury claims? There are many damages claims to which such a provision might apply. There are claims, for example, of breach of contract over the supply of goods or services, damages to property or professional negligence. Indeed, paradoxically or ironically, the driver of a car might be caught by this provision in respect of a personal injury claim arising out of an accident but not if he claims only for damages to the vehicle. Where is the logic in that? In fairness to the noble Lord, he quoted an example of a potential for a claim other than a personal injury claim. But that is not what the Bill says; it concentrates purely on the aspect of personal injuries.

The second question is why, particularly given the drastic consequences, should the balance of probabilities test apply only to something that after all amounts to fraud, and is capable, as pointed out by the noble Lord, Lord Marks, of being prosecuted? In that event, it should be prosecuted if it is committed, but a different standard of proof would apply to the treatment of the conduct, deplorable as it is, in a civil claim as opposed to a criminal claim. As we have also heard, claimants, in addition to the possibility of prosecution, which would be amply justified, could face contempt of court proceedings in which again the applicant for the contempt case must prove fraud beyond reasonable doubt. I do not think that different standards of proof should apply to the same conduct in this context.

The third question is on why the entire claim should be struck out instead of judicial discretion being exercised to reduce damages or penalise the claimant in costs. The noble Lord, Lord Marks, has dealt very effectively with an example in which that situation might occur. The fourth question is whether the Government have considered the impact on third parties, notably the National Health Service, which in personal injury claims can recover treatment costs from the person causing the injury. Again, the noble Lord, Lord Marks, was ahead of me, not for the first time, and was quite right to say that if the defendant escapes scot-free because of some misconduct on the part of the claimant in relation to part of his claim, it is the health service—and the taxpayer generally—that will suffer.

The fifth question is: what is meant by fundamental dishonesty? The CPR, as the noble Lord, Lord Hunt, pointed out, coined the phrase in relation to qualified one-way cost shifting when a party loses the protection of QOCS if he has been found to have behaved in this

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way. However, as far as I am aware, there has been only one unreported case. It may be the case to which the noble Lord referred; it rings a bell. I think it was the case of Cotton. That is the only one that has so far come to light since the provision came in. I assume that the Minister will confirm that the Bill’s provisions have the same meaning, as far as that is ascertainable, as the Civil Procedure Rules.

The sixth question is: yet again, why are the Government seeking to fetter judicial discretion? This is one of the most fundamental points. In Fairclough Homes Ltd v Summers in 2012, the noble and learned Lord, Lord Clarke, said:

“It is for the court, not parliament to protect the court’s process. The power to strike out is not a power to punish but to protect the court’s process”

The Supreme Court said that its already existing power to strike out,

“should be exercised where it is just and proportionate to do so which is likely to be only in very exceptional circumstances”.

The court referred to other ways of punishing fraudulent claimants in costs, criminal or contempt proceedings.

Let me be clear: the Opposition are not in favour of tolerating, let alone encouraging, fraudulent claims whether or not the fundamental dishonesty applies to the whole claim or any part of it. To that extent, all of us who have spoken tonight—the noble Lords, Lord Hunt and Lord Marks, myself and no doubt the Minister are absolutely agreed. But the Opposition are content to allow the courts to deal with any abuse, both in determining the issues of damages and costs and in pursuing criminal proceedings when they are appropriate, and would regard that as applicable to all kinds of claims, not just personal injury claims. That would be illogical, in my submission. The Minister may wish to take that back as a matter to consider. I do not see why personal injury claims should be singled out for this particular treatment.

There is certainly a need to deal with people who abuse the system, but in my submission what is proposed here goes too far and leaves too little discretion to the courts, which are really capable of dealing with it. I beg to move.

Lord Faulks: My Lords, I am grateful for the contributions of all noble Lords to this useful discussion of Clause 45. Until the conclusion of the remarks of the noble Lord, Lord Beecham, I was beginning to wonder whether he thought that there should be any problem with people grossly exaggerating or being fundamentally dishonest in pursuing their personal injury claims. However, by the end I realised that the party opposite is not in favour of that, although he asked why we singled out personal injury claims.

The answer to the noble Lord’s question was provided very elegantly by my noble friend Lord Hunt. There has been—and the Government seek to address this by this clause—an epidemic of people claiming in circumstances that most right-thinking people would find deeply unattractive. The Supreme Court recently in the case of Fairclough had to deal with this particular issue, which the Government seek to address in Clause 45. So it is a particular problem that is troubling most people in society generally, with the so-called compensation culture, but also with a specific problem that has come

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before the courts. We suggest that it is entirely appropriate for the Government to endeavour to address this difficult problem; indeed, the Supreme Court found it difficult to find a satisfactory answer.

I am grateful for some of the constructive suggestions that have been made about how the clause ought best to have been drafted. At the moment, it requires the court to dismiss in its entirety any personal injury claim when it is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest, unless it would cause substantial injustice to the claimant to do so. That is of particular relevance when the claimant has grossly exaggerated his claim, and in cases where the claimant has colluded with another person in a fraudulent claim relating to the same incident—also, sadly, a far too common feature of the whole claims industry at the moment.

This is part of a series of measures taken by the Government to discourage fraudulent and exaggerated claims, which arise often in motor accident cases and so-called “trips and slips” claims. Such claims cause substantial harm to society as a whole, not least in increasing the insurance premiums that motorists have to pay. I notice that the noble Lord criticised the Government; I think that the inference was that they were in some way in league with the insurance industry. We are talking here about insurance premiums paid by members of the public. These cases also eat up valuable resources of local and public authorities and employers, which could otherwise be used for the benefit of business and in providing services to the public.

Under the current law, the courts have discretion to dismiss a claim in cases of dishonesty, but will do so only in very exceptional circumstances, and will generally still award the claimant compensation in relation to the “genuine” element of the claim. The Government simply do not believe that people who behave in a fundamentally dishonest way—and I will come to address the adverb in a moment—by grossly exaggerating their own claim or colluding should be allowed to benefit by getting compensation in spite of their deceit. Clause 45 seeks to strengthen the law so that dismissal of the entire claim should become the norm in such cases. However, at the same time, it recognises that the dismissal of the claim will not always be appropriate and gives the court the discretion not to do so where it would cause substantial injustice to the claimant. To that extent, some of the remarks of my noble friend Lord Marks were entirely apposite. The clause gives the court some flexibility to ensure that the provision is applied fairly and proportionately.

The amendments tabled by my noble friend Lord Marks and others would considerably weaken the effect of the clause by simply giving the court a wide discretion were it satisfied that the claimant had been fundamentally dishonest, which would enable it to either dismiss the claim, reduce the amount of damages or to do neither. That would make it much less likely that those provisions would be used, even in cases where the claimant has clearly been fundamentally dishonest. I do not believe that that would be appropriate. We do not believe that people who behave in a fundamentally dishonest way should be able to benefit by getting compensation regardless.

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I assure the Committee that the way that the clause is drafted should not result in the courts using the measures lightly. Civil courts do not make findings of dishonesty lightly in any event; clear evidence is required. The sanction imposed by the clause—the denial of compensation to which the claimant would otherwise be entitled—is a serious one and will be imposed only where the dishonesty is fundamental; that is, where it goes to the heart of the claim. That was very much what my noble friend said about what it was aimed at.

Of course, “fundamental” has an echo in the Civil Procedure Rules and the qualified, one-way costs shifting. An adverb to qualify a concept such as dishonesty is not linguistically attractive, but if we ask a jury to decide a question such as dishonesty, or ask a judge to decide whether someone has been fundamentally dishonest, it is well within the capacity of any judge. They will know exactly what the clause is aimed at—not the minor inaccuracy about bus fares or the like, but something that goes to the heart. I do not suggest that it wins many prizes for elegance, but it sends the right message to the judge.

The amendments tabled by my noble friend Lord Hunt, who has enormous experience in this area, reflect the fact that in his view, any degree of dishonesty, unless the court is satisfied that dismissal would cause substantial injustice to the claimant, would be sufficient. It is a difficult balancing act, but we do not believe that that would be proportionate or practical. The sanction imposed by the clause is a serious one—denial of compensation to which prima facie somebody is entitled—and we believe that it should be imposed only where it goes to the heart of a claim. It would be disproportionate to require a claim to be dismissed in its entirety. It would also not be practical as it would be likely to lead to a large number of disputes between the parties over whether the claimant had or had not dishonestly exaggerated the claim. There is potential for it to impede settlements, leading to an increase in contested litigation.

My noble friend is quite right; the Government hope it will act significantly to deter people from bringing claims or exaggerating in any way at all. The fact that there may not be many reported cases about fundamental dishonesty and the QOCS scenario may be an indication that the concept does not engender great difficulties for judges applying it in practice, and therefore, there is no need for reported cases.

It should not be forgotten that the courts still have powers available—for example, the awards of costs to penalise claimants whose behaviour falls short of financial dishonesty—if it considers the sanction is merited. We consider that the courts will be able to apply the test. In addition, supplementary provisions are included to ensure that the sanctions imposed on the claimant are proportionate. Subsections (6) and (7) ensure that in the event of subsequent proceedings against the claimant for contempt or criminal prosecution, the court has a full picture of the consequences of the dishonest conduct for the claimant when deciding what punishment to impose.

Subsection (5) ensures that when a court dismisses a claim under this clause, it can award costs against the claimant only to the extent that these exceed the

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damages that would otherwise have been awarded. I thought that I understood what that meant, but I hear what my noble friend says about it, and what my noble friend Lord Marks says about it, and if it is not as clear as it might be I will take that back to consider the drafting before Report. The intention is to limit the extent. We think that that is what it says, but I will definitely take that back and consider it.

10 pm

As to Amendment 63FE, this would delete it. We do not for the moment think that that is appropriate, subject to amendment.

Amendment 63FG, tabled by the noble Lords, Lord Beecham and Lord Kennedy, seeks to apply a similar provision to defendants who are fundamentally dishonest. Unfortunately, we believe that this amendment is fundamentally misconceived. The clause focuses on the denial of damages to claimants who behave in a fundamentally dishonest way. Where a defendant brings a counterclaim for damages, the clause will apply to that counterclaim. However, damages are not otherwise awarded to defendants. They are not in an equivalent position. A defence which has no merit can be struck out, and there are a number of ways in which a defendant who behaves dishonestly can be penalised—for example, through an adverse costs order or through action for contempt or fraud. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, who has had considerable historic exposure to personal injury claims, indicated at Second Reading that there is,

“no possible logic in suggesting that this provision should … be mirrored in regard to the defendant’s conduct of their defence”.—[

Official Report

, 30/6/14; col. 1589.]

Therefore I am afraid that we are unable to accept the amendment.

Subject to the possible improvement of the drafting in relation to subsection (5), we believe that this clause adopts a fair, measured and proportionate approach to a difficult problem. We believe that it will send a strong message to deter dishonest behaviour and give a greater incentive to defendants and insurers to investigate and challenge dubious claims. One of the problems is that defendants are often not incentivised to investigate claims properly and pay them out far too easily. I therefore hope that the noble Lords will be prepared not to press their amendments, and I beg to move that Clause 45 stand part of the Bill.

Lord Hunt of Wirral: My Lords, I thank my noble friend the Minister, in particular for his generous tribute to the way in which I introduced the amendment. However, I am gravely disappointed by the reaction of the noble Lord, Lord Beecham, whom I have always felt to be my noble friend, in seeking to categorise me in some way. Perhaps I should have declared an interest as a solicitor for many years for the Transport and General Workers’ Union, acting in many claims. Perhaps I should have declared an interest as acting for the child most seriously damaged by the thalidomide drug, in a lengthy court action against Distillers. Perhaps it is all my fault that he should have categorised me in the way that he did—but I regret it.

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As to my noble friend Lord Marks, I think that we are more or less in agreement, and I thank him for what he said. All I would say is that I do not think that we should have just a discretionary power because, as my noble friend the Minister just said, we all surely want to combine to send a strong message from this House that dishonesty must never pay. That is the purpose behind this.

I say to the noble Lord, Lord Beecham, whom I still regard as my noble friend, that he ought to have a word with Mr Jack Straw, who has been fighting hard on behalf of genuine claimants and seeking to eradicate this tendency to exaggerate claims and to make us the whiplash capital of Europe.

I think that the Government are taking a step in the right direction. I am very grateful to the Minister for agreeing to look at certain aspects again. In the light of that, I beg leave to withdraw the amendment.

Lord Beecham: My Lords, I have clearly upset the noble Lord. It certainly was not my intention to do so. We have a very long association, going back to the time when we were involved in the inner city partnership in Newcastle. We have always got on very well. I intended no imputation whatever upon the noble Lord. I do think that the insurance industry, as an industry, has been overpersuasive with the present Administration, in particular with the Conservative Party.

However, that is no reflection on the noble Lord. I made it clear that he has behaved with complete propriety, as he always has. I am sorry if I have upset him; I can say no more than that. I apologise if that has been the effect—it was certainly not intended. I look forward to engaging in civilised conflict with him from time to time over this and other measures in the spirit that we have enjoyed hitherto. I certainly would not like him to leave the Chamber tonight feeling that I have cast any slur or imputation upon him. He is widely recognised as extremely able and a man who has devoted a great part of his life to public service. I would not wish in any way to detract from his record or his sincerity.

Lord Faulks: I want to ask the noble Lord about that comment. He redirected his fire at the Government and said they had been improperly influenced by the insurance industry. Perhaps he can assist the Committee as to the basis of that allegation and how it is relevant to the amendment that the Committee has before it tonight.

Lord Beecham: I was trying to say that the Government have frequently changed the law in relation to claims, not just with regard to tonight’s amendment but on a range of issues in a way that adversely affects claimants and generally favours insurers. Whenever the Labour Party makes a proposition that affects working people and trade unions, it is accused of being in the pockets of trade union leaders, dancing to Len McCluskey’s tune. If that is a legitimate comment for the Conservative Party to make about the Labour Party, it is quite legitimate for us to point to some of those industries—not just the insurance industry; there are others—that

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seem to be willing to fund the Conservative Party, whether or not that involve tennis matches with the Prime Minister.

Amendment A63FD withdrawn.

Amendments 63FDA to 63FG not moved.

Clause 45 agreed.

Amendment 64

Moved by Lord Faulks

64: After Clause 45, insert the following new Clause—

“Rules against inducements to make personal injury claims

(1) A regulated person is in breach of this section if—

(a) the regulated person offers another person a benefit,

(b) the offer of the benefit is an inducement to make a claim in civil proceedings for—

(i) damages for personal injury or death, or

(ii) damages arising out of circumstances involving personal injury or death, and

(c) the benefit is not related to the provision of legal services in connection with the claim.

(2) An offer of a benefit by a regulated person to another person is an inducement to make a claim if the offer of the benefit—

(a) is intended to encourage the person to make a claim or to seek advice from a regulated person with a view to making a claim, or

(b) is likely to have the effect of encouraging the person to do so.

(3) A benefit offered by a regulated person may be an inducement to make a claim regardless of—

(a) when or by what means the offer is made,

(b) whether the receipt of the benefit pursuant to the offer is subject to conditions,

(c) when the benefit may be received pursuant to the offer, or

(d) whether the benefit may be received by the person to whom the offer is made or by a third party.

(4) The Lord Chancellor may by regulations make provision as to the circumstances in which a benefit offered by a regulated person is related to the provision of legal services in connection with a claim, including provision about benefits relating to—

(a) fees to be charged in respect of the legal services,

(b) expenses which are or would be necessarily incurred in connection with the claim, or

(c) insurance to cover legal costs and expenses in connection with the claim.”

Lord Faulks: My Lords, this measure complements significant reforms that the Government have already introduced to control the costs of civil litigation. In particular, it is part of our focus on discouraging fraudulent and grossly exaggerated personal injury claims, as is Clause 45 on fundamentally dishonest claims. In all this work, our intention has been to allow appropriate personal injury claims to proceed at proportionate cost. However, we are determined to root out the disproportionately high costs and frankly unacceptable behaviour that has tainted the personal injury world in recent years.

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These clauses address the practice of offering inducements to bring personal injury claims. There are many examples of lawyers offering potential clients money or items such as tablet computers for pursuing a personal injury claim. One recent advertisement read:

“If you bring a successful claim”—

to X Solicitors—

“you will be eligible for a free iPad. We believe in thanking those who entrust us with their claim, and as well as providing clients with a professional legal service, we hope a complimentary iPad can make things easier for you after your accident”.

Another stated:

“On acceptance of your case we will pay you £250 as an upfront ‘welcome’ payment. This payment is on top of your eventual compensation payment”.

Such incentives contribute to the so-called compensation culture by offering rewards for bringing a claim, regardless of its merits. Expenditure on these inducements might also have a detrimental effect on the quality of service provided to the client. Furthermore, in a significant number of cases, the client is then denied the money or benefit initially offered because of terms and conditions. This practice has no doubt developed because of the excessive legal costs in personal injury cases which have already been addressed by our reforms in Part 2 of the LASPO Act 2012, but it is a practice that we need to stop to protect consumers and, indeed, the reputation of the legal profession more widely. We are grateful for the cross-industry support for introducing a ban on the offer of such inducements; reputable lawyers recognise the harm that this does to their profession. The House of Commons Transport Committee has also recently endorsed a ban.

Consequently, these clauses prohibit legal services providers from offering monetary and non-monetary benefits to potential clients as an incentive to make a personal injury claim. They define what is considered to be an inducement and require regulators to monitor and enforce the ban, as breaches of the ban will not be considered as a criminal offence.

Amendment 87 amends the extent provisions in the Bill to make clear that those provisions apply only to England and Wales.

As to Amendment 64A, I thank my noble friend Lord Hunt of Wirral for bringing this issue to my attention. I know that he has a long-standing constructive interest in making sure that the Government get the drafting right on this kind of issue. I am extremely grateful for that. I will ask officials to consider the matter carefully during the Recess with a view to returning to it at a later stage.

Subject to that point, we believe that the new government clauses are a proportionate response to what has been a thoroughly bad practice. I beg to move.

Amendment 64A (to Amendment 64)

Tabled by Lord Hunt of Wirral

64A: After Clause 45, line 24, after “party” insert “, or

(e) whether the benefit is offered by the regulated person or by a third party”

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Lord Hunt of Wirral: In view of my noble friend’s comments, I do not wish to speak to this amendment but will return to the matter on Report.

Amendment 64A (to Amendment 64) not moved.

Lord Beecham: My Lords, I am perfectly satisfied that the Minister makes a very good case. We support it and would also support the amendment of the noble Lord, Lord Hunt. He and I between us have nearly 100 years—God help us—as practising solicitors and we have seen our profession change from a profession to a more conventional, perhaps even less than conventional, business. Professional standards seem to me—and, I dare say, to the noble Lord—to have suffered considerably from the commercialisation of the profession in a way that I find distasteful. I dare say he does as well. So we welcome this.

The problem does not stop with the inducements offered by solicitors or other people. All of us, I suspect, are constantly beset by unsolicited telephone calls raising the possibility of claims where there is no foundation to them, and all kinds of other calls selling services and the like. Quite apart from this legislation, the Government generally need to look at what can be done to make it much more difficult for this cold-calling industry across a range of issues—and certainly in the areas of promoting claims for PIP or accidents that have never occurred and so on. They should consider whether there cannot be a framework that makes it much more difficult.

Many of us have signed up to a system that is supposed to screen such calls but it simply does not work. Although it is impossible, I suppose, to stop e-mails, telephone calls which constantly occur—whether they are about this specific issue or more generally—are a nuisance. They are expensive and they are extremely irritating. It is not a matter for the Bill but perhaps the noble Lord could take back to his colleagues in BIS, and possibly other departments, that this issue generally needs addressing in addition to the specifics referred to in the government amendments and the noble Lord’s amendment, which we support.

Amendment 64 agreed.

Amendments 65 to 67

Moved by Lord Faulks

65: After Clause 45, insert the following new Clause—

“Effect of rules against inducements

(1) The relevant regulator must ensure that it has appropriate arrangements for monitoring and enforcing the restriction imposed on regulated persons by section (Rules against inducements to make personal injury claims).

(2) A regulator may make rules for the purposes of subsection (1).

(3) The rules may in particular provide that, in relation to anything done in breach of that section, the relevant regulator may exercise any powers that the regulator would have in relation to anything done by the regulated person in breach of another restriction (subject to subsection (4)).

(4) A breach of section (Rules against inducements to make personal injury claims)—

(a) does not make a person guilty of an offence, and

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(b) does not give rise to a right of action for breach of statutory duty.

(5) Subsection (6) applies in a case where—

(a) a regulated person has offered a benefit to a person, and

(b) it appears to the regulator that the offer of the benefit is an inducement to make a claim as mentioned in section (Rules against inducements to make personal injury claims)(1)(b).

(6) Rules under subsection (2) may provide for the offer of the benefit to the person to be treated as an inducement to make a claim as mentioned in section (Rules against inducements to make personal injury claims)(1)(b) unless the regulated person shows—

(a) that the benefit was offered for a reason other than encouraging the person to make a claim or to seek advice from a regulated person with a view to making a claim, or

(b) that the benefit is related to the provision of legal services in connection with the claim (see regulations under section (Rules against inducements to make personal injury claims)(4)).”

66: After Clause 45, insert the following new Clause—

“Inducements: interpretation

(1) In relation to an offer of a benefit which is an inducement to make a claim in civil proceedings for damages for personal injury or death or arising out of circumstances involving personal injury or death—

(a) a regulator is any person listed in column 1 below;

(b) a regulated person is any person listed in column 2;

(c) a regulator in column 1 is the relevant regulator in relation to the corresponding person in column 2.

RegulatorRegulated person

The General Council of the Bar

A person authorised by the Council to carry on a reserved legal activity within the meaning of the Legal Services Act 2007

The Institute of Legal Executives

A person authorised by the Institute to carry on a reserved legal activity within the meaning of the Legal Services Act 2007

The Law Society

A person authorised by the Society to carry on a reserved legal activity within the meaning of the Legal Services Act 2007

A licensing authority for the purposes of Part 5 of the Legal Services Act 2007 (alternative business structures)

A person who is licensed by the authority to carry on a reserved legal activity

A regulatory body specified for the purposes of this section in regulations made by the Lord Chancellor

A person of a description specified for the purposes of this section in regulations made by the Lord Chancellor in relation to the body specified under column 1

(2) For the purposes of this section and sections (Rules against inducements to make personal injury claims) and (Effect of rules against inducements)—

“benefit” means—

(a) any benefit, whether or not in money or other property and whether temporary or permanent, and

(b) any opportunity to obtain a benefit;

“claim” includes a counter-claim;

“legal services” means services provided by a person which consist of or include legal activities (within the meaning of the Legal Services Act 2007) carried on by or on behalf of that person;

“personal injury” includes any disease and any other impairment of a person’s physical or mental condition.

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(3) For the purposes of this section and section (Effect of rules against inducements) whether an offer of a benefit is an inducement to make a claim is to be determined in accordance with section (Rules against inducements to make personal injury claims).”

67: After Clause 45, insert the following new Clause—

“Inducements: regulations

(1) This section applies to any regulations under section (Rules against inducements to make personal injury claims) or (Inducements: interpretation).

(2) The regulations are to be made by statutory instrument.

(3) The regulations may include consequential, supplementary, incidental, transitional, transitory or saving provision.

(4) Regulations under section (Rules against inducements to make personal injury claims) may not be made unless a draft of the instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.

(5) A statutory instrument containing regulations under section (Inducements: interpretation) is subject to annulment in pursuance of a resolution of either House of Parliament.”

Amendments 65 to 67 agreed.

10.15 pm

Clause 46: Appeals from the High Court to the Supreme Court

Amendments 67A to 67E not moved.

Clause 46 agreed.

Clause 47: Appeals from the Upper Tribunal to the Supreme Court

Amendment 67F not moved.

Clause 47 agreed.

Clause 48: Appeals from the Employment Appeal Tribunal to the Supreme Court

Amendment 67G not moved.

Clause 48 agreed.

Clause 49 agreed.

Amendment 68

Moved by Lord Hope of Craighead

68: After Clause 49, insert the following new Clause—

“President of the Supreme Court

(1) Section 5 of the Constitutional Reform Act 2005 (representations by senior judges) is amended as follows.

(2) After subsection (5) insert—

“(6) The President of the Supreme Court may lay before Parliament written representations on matters that appear to him to be matters of importance relating to the Supreme Court or the jurisdiction it exercises.””

Lord Hope of Craighead (CB): My Lords, I am very conscious of the lateness of the hour and I shall be as brief as I possibly can.

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This amendment, together with Amendment 69 which follows it, seeks to deal with matters which may have been overlooked when the Constitutional Reform Act 2005 was passing through Parliament. They both relate to the Supreme Court, provision for which was made in Part 3 of the Act. I tabled both amendments at the request of the President of the Supreme Court, the noble and learned Lord, Lord Neuberger.

Amendment 68 would extend to the President of the Supreme Court the same opportunity to lay representations to Parliament on matters that appear to him to be of importance that Section 5 gives to the heads of the judiciary in each of the three separate jurisdictions within the UK: England and Wales, Scotland and Northern Ireland.

So far as I can recall, no thought was given to the position of the President of the Supreme Court when the Bill that became the 2005 Act was passing through Parliament. There may be various reasons for that. I do not recall the matter being discussed at all. I do not think that there was any policy decision on the matter either one way or the other. There may have been a drafting explanation, because Part 2, which contains Section 5, appears in the Act before Part 3, which created the Supreme Court. The separation of those two parts may have led to the matter being overlooked. Whatever the matter, the fact was that the point was concealed from us by the events that were going on at the time. If we had been thinking of the matter now, we would certainly have asked for the president to be included.

I should say that there are no issues of current concern to the president. However, unless the statute is amended, he would be unable to make representations should something of concern arise. He has been looking for quite some time for a suitable vehicle to introduce an amendment to that effect and it seemed to him that this Bill contains that kind of vehicle, which is why this has been brought forward now.

I will say just a brief word about the wording of the provision that is being proposed. The heads of the judiciary in each of the three jurisdictions have no objection in principle to what is being proposed. However, some thought has been given—especially by the noble and learned Lord, Lord Neuberger, and myself—to the precise wording. The words,

“that appear to him to be matters of importance relating to the Supreme Court”,

which is the first part of the formula, are simply a translation of the first part of the formula in Section 5(1) to accommodate the new court. It has been a little more difficult to find a formula that is appropriate to the situation of the new court in place of the words,

“or otherwise to the administration of justice”,

in Section 5(1). The wording in my amendment uses the phrase “or the jurisdiction it exercises”—that is, the jurisdiction of the Supreme Court. The intention of that formula is quite simple: to ensure that the responsibilities of the heads of the judiciary in their respective jurisdictions are respected by the president, which of course he would seek to do.

Finally, I will address two very short points on this amendment. The first is that it would be highly desirable for this formula—or at least one that the Minister can be assured has the agreement of all concerned—to be

23 July 2014 : Column 1277

adhered to in any revised version of this amendment. The second is that between now and when we come back on Report the president and the heads of the three jurisdictions will be seeking to agree a mutually acceptable form of words that will ensure that their respective areas of jurisdiction are respected. They may come up with the same form but, if there is any difference, we will of course let the Minister know.

The second amendment is quite short. It relates to the composition of the supplementary panel, provided for in Section 39 of the Constitutional Reform Act, from which the president may invite someone to sit as an acting judge of the court under Section 38, as is necessary from time to time when places need to be filled. The section contains a number of different sources from which that supplementary panel may be drawn, but time has marched on and subsections (2) and (3), which extended membership of the panel to Members of the House of Lords under conditions which are set out, are no longer relevant as there is now no one who can possibly satisfy those conditions. That is a feature of time marching on. Subsection (6) is of no help for the present either, for the same reason.

Therefore, the only subsection that can now be relied on is subsection (4), which is very tightly drawn, but it requires a decision to be made as to membership of the panel before the individual retires. The president, the noble and learned Lord, Lord Neuberger, has found that embarrassing in at least one case. He wanted to appoint somebody who was eminently suitable and who had retired very recently, but it was too late to catch him to put him on to the panel. The amendment seeks to retain the principle of tightness to avoid individuals becoming too, perhaps, stale after retirement but nevertheless to make it a little easier to draw in people who are suitable for appointment to the panel. That is the purpose behind the amendment. I do not think there is any dispute between any of the heads of jurisdictions about this amendment; it is just a simple matter of facilitating the sensible provision in the Act. I beg to move.

Lord Beecham: My Lords, I am very happy to support the noble and learned Lord’s amendment and I take it that the Government will accede to it. It is a very sensible change.

Lord Faulks: My Lords, Amendment 68 would have the effect of allowing the President of the United Kingdom Supreme Court to make written representations to Parliament about the Supreme Court and its jurisdiction in the same way as the Lord Chief Justice of any part of the United Kingdom is able to do under Section 5 of the Constitutional Reform Act 2005. The Lord Chief Justice of England and Wales has used the provision under Section 5 of the 2005 Act to lay before Parliament his annual report, which highlights his accountability for oversight of the judiciary in England and Wales.

Amendment 69 would have the effect of allowing the United Kingdom Supreme Court the flexibility to appoint judges to the supplementary panel within two years of their retirement, providing they are under the age of 75.

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First, I should very much like to thank the noble and learned Lord, Lord Hope, for all his work on these issues and for being so patient in waiting for this amendment to be reached at such a late stage. Given his background, he is of course well placed to speak with authority on these matters. I know that he has been working closely with the judiciary on these amendments and he has also recently written to me regarding them.

The Government understand the rationale behind the amendments. However, before we can agree to make such changes, we will need to consider the matter and the impacts of the proposed changes further and discuss them in more detail with the President of the Supreme Court, the Lord Chief Justice, the Lord President of the Court of Session and the Lord Chief Justice for Northern Ireland. I will also be happy to have further discussions with the noble and learned Lord about the amendments and will respond fully to his letter shortly. On that basis, I hope that he will feel able to withdraw the amendment.

Lord Hope of Craighead: My Lords, I am grateful to the Minister for his very helpful reply. It is indeed the reply that I expected. It is sensible to take time to consider the matter a little more fully. In view of the undertakings that he has given, I am happy to beg leave to withdraw the amendment.

Amendment 68 withdrawn.

Amendment 69

Moved by Lord Hope of Craighead

69: After Clause 49, insert the following new Clause—

“Supplementary panel

(1) The Constitutional Reform Act 2005 is amended as follows.

(2) In section 39(4) (supplementary panel)—

(a) after “but only if,” insert “either”,

(b) after “while he holds such office” insert “or within two years of ceasing to hold such office”.”

Lord Hope of Craighead: My Lords, perhaps I may be quite clear about where the Minister stands on Amendment 69. I do not think that he indicated where he stood on it. It is a very simple matter. Perhaps he could come back to it on Report, but I should be grateful if he would say where he stands. I beg to move.

Lord Faulks: It is also a matter where we would like to consider the full implications of the changes. The reply that I gave was supposed to embrace both amendments.

Lord Hope of Craighead: I am most grateful. In view of that indication, I am happy to beg leave to withdraw the amendment.

Amendment 69 withdrawn.

House resumed.

House adjourned at 10.25 pm.