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Civil Procedure (Amendment No. 2) Rules 2009

Volume 707: debated on Thursday 29 January 2009

Motion to Approve

Moved By Lord Bach

That the draft Rules laid before the House on 3 December 2008 be approved.

Relevant document: 1st report from the Joint Committee on Statutory Instruments.

My Lords, I hope that it is agreeable to the House that with this we debate the Rules of the Supreme Court (Northern Ireland) (Amendment No. 3) 2008. Both sets of rules were laid before Parliament on 3 December last.

The Counter-Terrorism Act 2008 provides for financial restrictions proceedings, which are proceedings on an application to set aside a financial restrictions decision or on any matter arising from such an application. The Civil Procedure (Amendment No. 2) Rules 2008 insert a new Part 79 into the Civil Procedure Rules 1998 and set out the procedure for such applications to the High Court of England and Wales and any appeal to the Court of Appeal. The Rules of the Supreme Court (Northern Ireland)(Amendment No.3) 2008 inserts new Order 116B into the Rules of the Supreme Court of Northern Ireland 1980 and makes corresponding provisions.

I shall say a word about the legislative context. Both sets of rules were made by the Lord Chancellor in exercise of powers under Section 72 of the Act on 2 December 2008, shortly after it received Royal Assent. The Lord Chief Justice of England and Wales and the Lord Chief Justice of Northern Ireland were consulted on the rules which will apply in their respective jurisdictions and were both content. The rules came into force on 4 December 2008, but will cease to continue to have effect unless they are approved by both Houses of Parliament.

For England and Wales, amendments to the Civil Procedure Rules 1998 are usually made by the Civil Procedure Rule Committee, which is the body with statutory responsibility for making the relevant rules of court. In Northern Ireland, amendments to the Rules of the Supreme Court (Northern Ireland) 1980 are usually made by the Supreme Court Rules Committee of Northern Ireland, which is the body with statutory responsibility for making the Northern Ireland rules.

In order that the rules can be made as soon as possible on Royal Assent of the Bill, Part 6 of the Counter-Terrorism Act 2008 authorises the Lord Chancellor to make rules of court in the first instance after the Act is passed, subject to consulting the appropriate Lord Chief Justice, which he has done. Any subsequent rules or amendments made by either the Civil Procedure Rule Committee or the Supreme Court Rules Committee of Northern Ireland will be subject to the normal rule-making requirements, including the parliamentary negative procedure.

Prior to these rules being made, there was no specific provision in either the Civil Procedure Rules 1998 or the Rules of the Supreme Court (Northern Ireland) 1980 to deal with financial restrictions proceedings. Rules are required, however, as it is expected that although financial restrictions decisions can be based on open or closed material, subsequent court proceedings will regularly involve the use of closed material and special advocates, and the Act sets out what the rules of court must or may provide. This includes making rules of court to govern the use of closed material and the use of special advocates.

Closed material has been used as evidence in asset-freezing decisions since 2006, when the Treasury announced its intention to do so where there are strong operational reasons to impose an asset freeze but there is insufficient open evidence. However, any reliance on that closed material in any subsequent court proceedings on such decisions has until now been dependent on the court being willing to exercise its inherent jurisdiction to order a closed hearing and to order the appointment of a special advocate. The question of whether and when the court should exercise its jurisdiction in this was one of the points at issue in the case of A, K, M, Q & G v HM Treasury, which was considered by the Court of Appeal last year.

The use of special advocates was developed as a means of mitigating disadvantage to a party who has been excluded from a hearing or from whom information relevant to his or her case is withheld on the ground that such disclosure would be contrary to the public interest. However, the need for a special advocate would arise only if the court could be persuaded that it should consider certain evidence at a closed hearing at which one of the parties and their legal representatives would not be present. The special advocate would represent that party’s interests.

However, since the Treasury’s decision in 2006 to rely on closed material in asset-freezing decisions, it became apparent that many if not most subsequent court proceedings on asset-freezing decisions would involve consideration of closed material, without which the Treasury could not defend its decisions fully. It was therefore felt that it was appropriate to provide for this by way of legislation, and by consequent rules of court, rather than relying on the court’s willingness to exercise its inherent jurisdiction in each case. It was felt that this would bring it into line with other areas where closed evidence is often central to proceedings.

Similar considerations apply in the case of decisions taken under Part 2 of the Anti-terrorism, Crime and Security Act 2001. The new powers introduced in Schedule 7 to the Counter-Terrorism Act 2008 may also involve decisions being taken that are based on closed material. For the Treasury to be able to defend such decisions fully, the court would need to consider closed material. Accordingly, it was felt that challenges to decisions taken under these powers should also be made subject to the new procedures.

Special advocates are appointed by the Attorney-General. The fundamental feature of all special advocate systems is that, once the special advocate has received closed material, all direct communication between the special advocate and the party whose interest that advocate is representing and their legal representatives must cease, unless the court has given its consent. In relation to other proceedings, the Government have established very similar statutory procedures involving closed material and the use of special advocates. These include proceedings before the Special Immigration Appeals Commission—SIAC—and control order proceedings in the High Court.

The new amendments to the Civil Procedure Rules and the Rules of the Supreme Court of Northern Ireland are based on the general principle that, subject to the new rules on financial restrictions proceedings, the other provisions of the Civil Procedure Rules and the Rules of the Supreme Court of Northern Ireland should apply to these proceedings and any subsequent appeals, subject to any necessary modifications. Such modifications and disapplication of parts of the Civil Procedure Rules and the Rules of the Supreme Court of Northern Ireland have been minimised as far as possible. The overriding objective in Part 1 of the Civil Procedure Rules and Order 1 of the Rules of the Supreme Court of Northern Ireland, which requires the court to deal with cases justly, is to be read as including a requirement that the court in financial restriction proceedings will ensure that information is not disclosed contrary to the public interest. A similar modification to the overriding objective already exists in relation to control order proceedings. Some general rules about evidence and disclosure are also disapplied in favour of the rules dealing with financial restrictions proceedings.

There is nothing in these rules that has not already been debated and approved by both Houses. I have outlined the substantive provisions of these statutory instruments and I beg to move.

My Lords, I thank the Minister for introducing the instrument, which, in effect, applies the financial restrictions proceedings provisions of Part 6 of the Counter-Terrorism Act 2008 to Northern Ireland. As a supporter of that Act, I welcome the logical extension of its remits. However, we are dealing with counterterrorist legislation. It is always a delicate matter, and it is necessary to tread a little carefully. In particular, we should acknowledge that we are in a sense creating a new form of jurisdiction here.

In the other place, the Minister conceded in the delegated legislation committee that there had perhaps been slightly less consultation on this matter in Northern Ireland than in England and Wales. In particular, I am not aware that the Northern Ireland Human Rights Commission was consulted. However, I am very relieved that, as the Minister has already stated, the Lord Chief Justice of Northern Ireland, who had a particular problem with the Government’s proposals, is now happy with what we have before us. That is important and reassuring.

There remain perhaps only two loose ends in rather a complicated piece of legislation. One relates to the special advocates, which the Minister has discussed carefully this evening. As is clear from his remarks, the special advocates will have access to sensitive intelligence material. An issue arises as to the quality of the vetting that special advocates will receive. That is why the Government have said that they will be subject to the same vetting as civil servants, with one or two procedural differences that are appropriate to their professions. Can the Minister say whether this is a genuinely high level of clearance? It follows logically from his earlier remarks that it must be, given the sensitive material to which special advocates are likely to have access.

Secondly and finally, it is well known that Northern Ireland terrorists of all shades employ corporate vehicles, small and medium-sized enterprise fronts, as cover for smuggling, protection and drug rackets. It has caused some surprise that these rules at this point do not seem explicitly to apply to SMEs or incorporated vehicles. Can the Minister offer clarification on that?

My Lords, I thank the Minister for giving that detailed explanation of what is in the two instruments. I listened to what he had to say with great care. I have also read what his colleague said in the Commons when these instruments went through last week. I looked at the questions that my honourable friend Mr Bellingham and others put to the Government on that occasion. Most of those queries have been answered, so I shall repeat only one question on behalf of my honourable friend. He asked,

“why the rules are so far-reaching that they allow proceedings to be carried on with and determined without a hearing taking place at all?”.—[Official Report, Commons, Eleventh Delegated Legislation Committee, 21/1/09; col. 6.]

Perhaps the Minister could give an explanation in advance of his honourable friend writing to my honourable friend. That would be useful. Other than that, I can confirm that we believe that these are non-controversial.

My Lords, President Obama, in his inauguration speech two weeks ago, said:

“As for our common defense, we reject as false the choice between our safety and our ideals. Our founding fathers, faced with perils that we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience’s sake”.

The rule of law and the rights of man, to which President Obama referred, are expressed in our concept of justice, which is central to procedural fairness. Under the Civil Procedure Rules 1998, paragraph (1) of Rule 1.1 states that the overriding objective of the rules is to enable,

“the court to deal with cases justly”.

That is defined in paragraph (2)(a) as,

“ensuring that the parties are on an equal footing”.

Therefore, it is not surprising that when these rules are brought before the House we see that the objective has to be modified. Rule 79.2 of the new rules states that,

“the overriding objective in Part 1, and so far as relevant any other rule, must be read and given effect in a way which is compatible with the duty set out in paragraph (2)”.

That duty is:

“The court will ensure that information is not disclosed contrary to the public interest”.

In other words, the rules recognise that there will be inequality between the person against whom the order is made and Her Majesty’s Treasury, which makes it. It is not a technicality. It demonstrates how far this Government have moved away from those ideals, which President Obama declared that he would not give up for the sake of expedience.

It is a matter of regret that the special advocate procedure has now been extended to this area. It is an area where a person may be paralysed by having his assets frozen. I just ask your Lordships to consider what it would be like if your bank account was frozen, if you could get no cash out of the cash machine downstairs and if your credit cards were worthless. How would you get home tonight? A person can be paralysed by an order made by the Treasury without any recourse to the courts. It will be observed that nothing in these new rules requires the Treasury to go to court to obtain an order to freeze assets; it can do it of its own volition. This is concerned with an application to set aside a financial restrictions decision that is made by the Treasury, which can be, in an utterly arbitrary way, based on information that it refused to disclose when making the order and will resist in disclosing when an application is made to set aside that order.

We on these Benches have opposed the whole concept of special advocates from the moment they were introduced about eight years ago. What are special advocates? Lord Justice Sedley, in a decision on 12 September 2008 in Murungaru v the Secretary of State for the Home Department, says:

“A special advocate system is thus not a substitute for the common law principle that everyone facing an accusation made by the state is entitled to a fair chance to know the evidence in support of it and to test and answer it in a public hearing”.

He continues:

“The help of the special advocate is to be sought if, but only if, the interests of justice require it: it is a last resort if all other means of doing justice fail”.

He then refers to the judgment of the noble and learned Lord, Lord Bingham, in the case of H in the Judicial Committee of this House, and to that of the noble and learned Lord, Lord Woolf, in the case of Roberts v the Parole Board. He states:

“The availability of a special advocate can never be a reason for reducing the procedural protections which the law otherwise guarantees”.

The Minister referred in his opening remarks to the subsequent Court of Appeal decision, A, K, M, Q and G v HM Treasury, where Lord Justice Sedley repeated those observations and was supported by the Master of the Rolls in so doing.

As I say, we have opposed the principle of special advocates throughout. In 2003, my noble friend Lord Goodhart said:

“First, both my noble friend Lord Carlile of Berriew and the Joint Committee”—

the Joint Committee on Human Rights—

“have pointed out the profoundly unsatisfactory nature of the special advocate procedure. It is most unsatisfactory, for example, that an advocate cannot question the person on whose behalf he or she is acting. We recognise that there may be exceptional cases where that is justified because of the importance of protection of sources and not disclosing too much about what we know. However, the closed procedure, as it is called, should only be adopted where it is absolutely necessary and evidence should wherever possible be open”.—[Official Report, 11/3/03; col. 1296.]

He repeated those views in 2005, when he said:

“It is a very unsatisfactory procedure. It has been considered by a report of the Constitutional Affairs Committee of the House of Commons that was published just before the Recess. That stated that the special advocate system should be operated only under the most exceptional circumstances. I wholeheartedly agree. One of the most objectionable features of the special advocate procedure is the ban on contact between the controlled person and the special advocate following the disclosure of closed material to the special advocate”.—[Official Report, 7/4/05; col. 790.]

The system has developed in such a way that a special advocate who has been appointed is then allowed to see what is being withheld, but he may not take instructions on it. He cannot go back to the person concerned and say, “They are saying this about you. What is your response?”. That is bad enough in the sort of procedures for which special advocates have been employed. In this case, the Treasury has itself made a decision and imposed a freezing order but has refused to say why and has refused to disclose anything to the person concerned, who may have a full explanation of why he is in possession of certain assets. This area creates even greater injustice than was the case before.

It is interesting to look at the views that have been expressed by special advocates in the past. Mr Ian Macdonald QC resigned as a special advocate on 1 November 2004, saying that he had taken the job because he thought that he might be able to make a difference and so that he could see how everything worked from the inside. But he concluded:

“I now feel that whatever difference I might make as a special advocate on the inside is outweighed by the operation of a law fundamentally flawed and contrary to our deepest notions of justice. My role has been altered to provide a false legitimacy to indefinite detention”—

he was talking, of course, about indefinite detention at that time—

“without knowledge of the accusations being made and without any kind of criminal charge or trial. For me this is untenable. No other country in Europe has felt it necessary to follow this course … Such a law is an odious blot on our legal landscape”.

That is a special advocate speaking from his own experience.

In its report of 2006-07, the Joint Committee on Human Rights, having interviewed special advocates and listened to their evidence, said:

“After listening to the evidence of the Special Advocates, we found it hard not to reach for well worn descriptions of it as ‘Kafkaesque’ or like the Star Chamber. The Special Advocates agreed when it was put to them that, in the light of the concerns they had raised, ‘the public should be left in absolutely no doubt that what is happening … has absolutely nothing to do with the traditions of adversarial justice as we have come to understand them in the British legal system’”.

It went on:

“Indeed, we were left with the very strong feeling that this is a process which is not just offensive to the basic principles of adversarial justice in which lawyers are steeped, but it is very much against basic notions of fair play as the lay public would understand them”.

It has returned to this issue on a number of occasions and, in particular, commented on the decision in MB v the Secretary of State for the Home Department.

Your Lordships have had the views of the Joint Committee, the views of the special advocate and the views of my noble friend Lord Goodhart, but what has the judicial arm of this House said? The noble and learned Lord, Lord Bingham, said in the case of MB v the Secretary of State:

“In any ordinary case, a client instructs his advocate what his defence is to the charges made against him, briefs the advocate on the weaknesses and vulnerability of the adverse witnesses, and indicates whatever evidence is available by way of rebuttal. This is a process which it may be impossible to adopt if the controlled person does not know the allegations made against him and cannot therefore give meaningful instructions, and the special advocate, once he knows what the allegations are, cannot tell the controlled person or seek instructions without permission, which in practice (as I understand) is not given. ‘Grave disadvantage’ is not, I think, an exaggerated description of the controlled person’s position”.

I made some comments at that time but I shall not weary your Lordships with what I said on a previous occasion. Indeed, the Joint Committee on Human Rights commented on it later.

These rules are an extension of the special advocate system and, according to what the Minister said, they will be extended in most of these cases. These financial restriction orders freezing assets are to be made by the Treasury on undisclosed material. The special advocate will not be able to take instructions except, under the terms of the rules, by making an application to the court, to which the Treasury may object. The rules set out in detail what the special advocate has to do if he wishes to communicate any of the allegations on which the orders are made to his client. He has to go to court. But, as the noble and learned Lord, Lord Bingham, said in the judgment in MB, the court rarely gives permission. It is moved by the submissions that are made and by the fact that all is very secret and must not be disclosed and so on.

The system is wholly unsatisfactory. Instead of resolving it in the way that has been recommended by the Joint Committee on Human Rights, by the Constitutional Affairs Committee, by submissions that are made and judgments that are given, the Government have done nothing about it and in these rules are simply continuing an unacceptable and unjust system. I come back to where I started, with President Obama’s words: we should ourselves reject as false the choice between our safety and our ideals.

I thank all noble Lords who have spoken in this debate. I shall deal first with the question asked by the noble Lord, Lord Bew. I am grateful for having had some advance notice of what he was going to say. He asked about the vetting of special advocates and about small and medium-sized enterprises, known as SMEs. The vetting procedure for special advocates is, as I think he indicated, substantially the same as the developed vetting procedure that civil servants go through before being cleared to work in areas involving access to sensitive material. This involves credit checks, interviews and criminal checks. It can be described as a high level of vetting.

The noble Lord asked, completely appropriately, about small businesses. This point was dealt with in a letter that my honourable friend Bridget Prentice, who spoke on behalf of the Government when these rules were being debated last week in the other place, placed in the Library. She said:

“A question was asked whether or not these rules apply to small businesses. I believe that this question has arisen as a result of a statement in paragraph 11 of the Explanatory Memorandum to these rules which states that this legislation does not apply to small businesses”.

She went on to say:

“This legislation does apply to small businesses. What the Explanatory Memorandum should have indicated was that the legislation does not impact on the regulation affecting small businesses”.

I am grateful to have the chance to repeat in this House what my honourable friend said in her letter.

I thank the noble Lord, Lord Henley, for his comments and for their brevity. He referred, quite rightly, to a question that his honourable friend Mr Bellingham asked in the other place about whether it was possible to do this without a hearing. In her letter, Mrs Prentice said:

“I would like to reassure the Committee”—

I hope that I am also reassuring the House tonight—

“that in no way do the rules of court seek to prevent parties or their legal representative from being present for the determination of proceedings at a hearing. Rule 79.17(1) of the Civil Procedure Rules 1998 and Rule 22.1 in Order 116B of the Rules of the Supreme Court of Northern Ireland 1980 make it clear that all proceedings must be determined at a hearing and although there are exceptions, these would apply where the proceedings are no longer contested, are withdrawn, or where all the parties agree to determination without a hearing”.

I thank the noble Lord, Lord Thomas of Gresford, for his contribution. I admire and respect his consistency on this topic. But it compares peculiarly with what his honourable friend Mr Brake said on behalf of the Liberal Democrat Front Bench at the hearing last week. He said that he was looking forward to having the questions answered, which was fair enough, and then he said:

“However, on the basis that I have been advised that these measures are not controversial, I will certainly not seek to delay their progress”.—[Official Report, Commons, Eleventh Delegated Legislation Committee, 21/1/09; col. 7]

I would hate to see any proposals that were controversial. Powerful arguments were put forward by the noble Lord, Lord Thomas of Gresford. I cannot accept them on behalf of the Government. The House will be relieved to hear that I shall not go into the issue in detail now, but I hope that he accepts, as I am sure he does, that where terrorists are planning to commit offences against innocent people, they need funding. It is vital that Her Majesty’s Treasury acts at once to freeze that funding as soon as its existence is known. The statutory instruments set out how an applicant who complains about those assets being frozen can apply to the court to oppose the action of the Treasury. That is the background to the instruments, which are parallel—one for England and Wales, and one for Northern Ireland.

As to whether fundamental liberties have been put at stake by the existence of special advocates and closed material, the Government have consistently made clear their view that the measures in the Prevention of Terrorism Act 2005, including the special advocates procedures, are fair and fully compliant with the European Convention on Human Rights. That view has been upheld in the Court of Appeal. For the same reasons, we consider that the measures in the Counter-Terrorism Act are fully compliant.

To try to relieve the noble Lord, Lord Thomas of Gresford, of one of his concerns, I emphasise that, wherever possible, material will be dealt with in open court, where the designated person is represented by legal representatives of their choosing. Where there is closed material, a special advocate will be appointed to represent that designated person. The individuals will be aware of the open case against them. Nothing in the CT Act or these rules of court made under it requires the court to act in a manner incompatible with the right of the applicant to a fair hearing. A very similar special advocate scheme was recently held by the House of Lords to be human rights compliant.

I know that I shall not persuade the noble Lord that it is right that the Government have sometimes to use these procedures, but it is our view that, to prevent terrorism and to make sure that it is unsuccessful, these measures sometimes have to be taken. They will not be taken unless it is necessary to do so.

Motion agreed.