My Lords, Amendment 116A is essentially a probing amendment which raises an important issue; namely, to understand what the Government mean by reference to “or another person”—that presumably means an organisation—which may be “administering and enforcing” the code. For the notification process to work, it has to have the credibility that the administering and enforcing authorities will ensure full compliance by the ISPs and the rights holders; otherwise there is a further risk of losing public support.

The subsection seems to envisage that Ofcom would allocate its duties to another organisation. That raises my suspicions. We already have a situation where the code may be drawn up in the first place by the industry and only approved by Ofcom. Surely it is the responsibility of the statutory agency to ensure that the terms of the code are complied with not only by the ISPs—that is clear—but by the rights holders. If the rights holders behave as some of them or their representatives have done under present law in terms of threatening people for file-sharing then there will need to be some sanction against these rights holders, at least so that they do not pursue their case further under the code and these provisions.

I agree with the noble Lord, Lord Whitty; many of his comments are very sensible. It is surprising the extent to which these provisions allow for the establishment of a separate, semi-independent body to administer and enforce the code plus adjudicate in the matter of copyright disputes. All this is apparently separate from and in addition to the tribunal process. As I said earlier in these debates, we on these Benches are unconvinced about the benefits of such a body. We are certainly unconvinced that such a body should take on a quasi-judicial role. A separate body would appear to remove accountability from the process. If it remains with Ofcom, at least the Secretary of State will be ultimately responsible. A separate body would remove even that weak link. I am also extremely concerned at the idea that a body with no electoral or judicial accountability will be able to decide on administrative penalties of the scale mentioned in the Bill. What kind of powers does the Minister envisage this body having to resolve copyright disputes? Why would it be able to handle such disputes—or even the administration of the code—better than Ofcom? I also look forward to hearing the Minister’s response to the question of the noble Lord, Lord Whitty, about whether such a body would have the same disciplines upon it as Ofcom.

My Lords, what kind of resources will this body have? The Minister will remember that, in answer to the proposal of the noble Lord, Lord Gordon of Strathblane—that competition matters in this area should be given to Ofcom—it was said that Ofcom would need resources to deal with such matters, including lawyers, economists and so on. What about this body and its requirements?

My Lords, this hare is gaining more legs as it progresses round the Chamber.

The effect of the amendment would be to remove the ability of Ofcom to set up another body to administer and enforce compliance with the initial obligations code. It would require Ofcom—and no other body—to take on that role. I am sure that Ofcom appreciates the great faith that it inspires in noble Lords—although sometimes Her Majesty’s Opposition have rather less faith in quangos—and, indeed, Ofcom is an estimable organisation. However, our admiration should not lead us to restrict it in the way that is proposed. It is entirely reasonable for Ofcom to organise the administration and enforcement of the initial obligations code, for which it remains responsible, in the way that is most efficient and effective. For organisational, financial or other reasons it may prefer to set up a body which is, I stress, independent of internet service providers and copyright owners to carry out this function rather than be directly involved as Ofcom.

As Ofcom is the body that will continue to have the obligations, powers and duties of a regulator under the Bill, I do not see what is to be gained by insisting on its direct involvement and restricting its freedom of manoeuvre in the way proposed in the amendment. Certainly such a restriction is unlikely to be welcomed by Ofcom.

Two separate points were made. My noble friend Lord Whitty asked whether the organisation would act under the auspices of Ofcom—yes, it will; I can give that assurance—and the noble Lord, Lord Howard, referred to copyright disputes. The body will not be involved in copyright disputes, because this is an initial obligations code. It will not be involved in copyright disputes—perish the thought—but simply with the enforcement of the code. At least that is how I have been informed. The noble and learned Lord, Lord Mackay of Clashfern, asked about resources. The answer to that is that if we will the end, we will have to will the means.

This is not necessarily the route that Ofcom will take, but it might find it more effective and efficient, for financial or other reasons, to set up this body. We have not said that it absolutely will; we have just allowed it some flexibility. We have given an assurance that it will still operate under the auspices of Ofcom and be monitored in that way. With the assurances that I have given, I hope the noble Lord will feel able to withdraw the amendment.

Proposed new Section 124E(4)(a) refers to,

“including the function of resolving copyright infringement disputes”.

I am glad to hear the noble Lord making the odd joke, because I understand that there has been an edict to say that people at the DCMS are not allowed to look for jokes on the internet.

I said that this was a probing amendment, so I shall withdraw it, but I am not very satisfied with the answer. Although there are examples of regulators outsourcing administration, I do not know of a situation where a regulator has outsourced enforcement outside its own jurisdiction. I am gratified that the Minister assures me that enforcement will still be under the auspices of Ofcom, in which case the body will not be independent of everybody because it will effectively be an arm’s-length version of Ofcom. However, does that also mean that it will have all the statutory duties of Ofcom? If the Minister could point to an analogy in another area of economic regulation, I might be more reassured, but in an area where a new regime is being introduced, the main regulator ought to be dealing directly with enforcement.

I thank my noble friend for giving way. I am told that the body will have the same statutory duties, but we will clarify it in writing. While I have the opportunity, perhaps I may clarify one point about copyright disputes. Disputes between ISPs and copyright owners, for example, over whether a CIR is code-compliant are not copyright infringement disputes as defined in Clause 8(6). I hope that that is helpful. However, as I have said, I shall clarify my noble friend’s question about statutory obligations.

In light of that, I beg leave to withdraw the amendment.

My Lords, we have heard that the Committee is not particularly happy with this rather shadowy, possible body which seems to be lurking in the wings. We had rather a similar situation under Clause 7, which contained the right,

“to establish one or more bodies corporate”.

Just how many of these shadowy bodies are we going to be threatened with? Is this the revival of something which we thought had had a stake driven through its heart: the digital rights agency? Who knows? It would be useful to have more clarity from the Minister on just what is proposed.

Even more concern is felt about the rather weasel wording of subsection (4)(b) of proposed new Section 124E of the Communications Act 2003, which uses the expression “sufficiently independent”. If the Minister was frank and said that Ofcom will in all probable circumstances be responsible for the administration and enforcement of the code, we would be rather more satisfied, but if there is a possibility of this body being created, “sufficiently” seems to be rather important. Who decides what is “sufficiently independent”? Do we not need a rather more objective test? Is it independent or not? For what will it be “sufficiently” independent? Do we have to have to rely on the old test of the length of the Minister’s thumb to decide whether independence is sufficient? He may have a very short thumb, but his successor may have a long thumb, in which case independence will be defined in a different way. “Sufficiently” is a weasel word and it should not be in the Bill. I beg to move.

Our feelings on this possible extra body have already been made fairly clear, not least in the previous debate and that on Amendment 99, on which my noble friend Lady Buscombe intervened on Monday to such effect that the Minister said that he would take the matter away. Amendment 117A of the noble Lord, Lord Clement-Jones, goes right to the heart of our concerns. Ofcom, by its size, regulatory position and ultimate accountability to government, is, one would hope, immune to industry pressure. A small body, given the task of administering and adjudicating the code, will surely be at risk of being much more susceptible to all sorts of pressure. It also seems to us that it will be less able to assess the accuracy of the information as effectively as Ofcom, and will, furthermore, arguably be open to much more pressure from negative press briefing.

Of course, the Minister might respond that Ofcom will bear ultimate responsibility for the behaviour of the independent body. I am sure that that is technically the case—but, then, what advantage does the body add? Is the Minister implying that Ofcom might be seen as biased, giving rise to a need to establish a separate body in order to give the appearance of impartiality?

My Lords, the amendment would ensure that there was a clear separation between any body appointed to administer and enforce the code and the industry parties that will need to abide by the code, with the implication that “sufficient” independence is not, well, sufficient.

I understand the thought behind the amendment, since the independence of any body that is administering and enforcing the code must be clear; I endorse the concern of the noble Lord, Lord De Mauley, about it not being susceptible to undue pressure. However the amendment is not necessary to achieve that result. The noble Lord, Lord Clement-Jones, accused us of being shadowy and weaselly. I have to reject that; I am deeply hurt. In response to his anatomical analogy, we will not be operating by rule of thumb.

However, we need seriously to ensure that any such body is independent enough from the industry parties in order to perform its function properly and without risk of accusations of favour. Removing the word “sufficiently” would actually raise potential difficulties. The question could arise as to whether even Ofcom itself was independent, since it relies for its income on fees collected from industry and its operations within these provisions will be recouped from industry, and that would apply to any body it set up as well. I suggest that the answer to such questions would be that Ofcom, or a body set up by it to administer the code, is independent enough—or “sufficiently independent”. The amendment would really not be helpful in the way intended, and I invite the noble Lord to withdraw it.

My Lords, when the Minister talks about “sufficiently independent” and bodies set up by Ofcom, that is not what the Bill says. The Bill just refers to “another person”. If a body is set up by Ofcom, then we can take it that Ofcom has sufficient control over it, its method of operating and so on, and our respect for Ofcom—whatever that might be—can pass down to the body set up by it.

However, this just refers to a person chosen by Ofcom. “Sufficiently independent” is an odd concept. The idea that the courts should be “sufficiently independent” of the Government, say, would be an odd thing to put in to the structure of a constitution. Where you need independence—and here, you clearly do—should it not be there?

We will come to this again on one of my later amendments, in which I suggest that this body should be a properly constituted tribunal. Why do the Government think that limited independence is sufficient in this case?

My Lords, I have endeavoured to answer this. We do not see it as limited. We see it as being a body, not just an individual. Yes, we see it coming under the auspices of Ofcom, as we have already said. There is really no more that I can add to that. I hope that my explanation is sufficient for the noble Lord to withdraw his amendment.

My Lords, the Minister has used the word “sufficient” in rather a different context, but I am afraid that his reply was insufficient and very much hope that he will reflect on the wording. His response was very much special pleading on behalf of the Bill’s draftsmen. I know that the Government are always reluctant to tamper with the peerless drafting of parliamentary counsel. However, in this case, I think that the Minister will recognise on reflection that he is introducing the rule of thumb into this Bill—he used the expression himself. Either this body is independent, or it is not; “sufficiently independent” allows all sorts of coaches and horses to fly through the door. I feel distinctly nervous about this wording, which I have not seen before in a Bill describing the independence of a body. It would be very difficult for anybody to define “sufficiently” in these circumstances.

Would the noble Lord agree that it might be perfectly possible for a body to be set up, which in the interests of securing an agreement contained representatives of potentially interested parties, and that therefore the words “sufficiently independent” are exactly appropriate to the task?

My Lords, the point was made by the noble Lord, Lord Lucas, that it is a person that we are talking about here. We are not necessarily talking about a body—we are talking about a person who potentially will have certain functions of appeal, and so on. So it is a rather different concept.

I hope that the Minister will reflect on this. I do not see any nods or winks, but I always live in hope. In the mean time, I beg leave to withdraw the amendment.

My Lords, in moving Amendment 118, I shall speak to Amendments 119, 189 and 190. I hope that the Minister will be instantly sympathetic to at least the first limb of these amendments, which fall into two parts and refer forward to another similar provision later on, in Clause 13. The first relates to the burden of proof, which is faced by a subscriber on the appeal mechanism. It is very important that when these matters come to appeal—and it will, I suppose, be about the evidence that is available—it is absolutely clear that the onus is on the copyright owner to demonstrate that there has been a breach of copyright and that, therefore, enforcement measures are appropriate. That will become increasingly important, particularly if, looking forward, Ofcom decides that the initial obligations code does not provide enough weaponry for the copyright owners and that technical measures will need to be adopted. The burden of proof will become even more important in future, because, after all, the initial obligations code is precisely that—it is the very first step towards enforcement of copyright. It does not seem to me to be at all unreasonable that the copyright owner should be expected to justify the allegations and produce the evidence. This goes right to the heart of the consumer confidence issue in this Bill; it is absolutely appropriate that it should be explicit in the Bill that the copyright owner in the first instance, in these appeals, has to demonstrate that they own the copyright, that there has been an infraction or infringement and that they have the evidence to prove it. All that will, I hope, be common ground between all noble Lords in this debate. I hope that the Minister will accept at least that first limb.

As for the subscriber appeals and their cost, under the draft order, which we discussed in the previous sitting, we talked about the costs of notification. In square brackets, the Government were saying that they thought it would be roughly 75 per cent for the copyright owners and 25 per cent for the ISPs. There is a strong view among the ISPs, which these amendments are designed to advocate, that that goes too far when talking about the cost of subscriber appeals. That split of 75 per cent and 25 per cent is fine with the set-up costs for notifications, and so on, but a case is being made by the mobile operators, which have rather different cost structures and software requirements, as well as more difficult circumstances with their hardware and software, that that is unduly generous to the copyright owners. The better regulation principles of the Cabinet Office require that the costs of regulation on business as a whole should be kept to a minimum, be proportionate to the desired outcome and, according to its six principles of pricing and recovery, embody both that of cost causation and distribution of benefits.

It is true that in these circumstances it is the copyright owners who stand to benefit from these mechanisms. It seems, certainly to those who wish to see this amendment go through, that the order does not currently make a sufficient distinction between the costs of notification, which are a qualifying cost, and the costs of appeals, which are another qualifying cost—they have all been lumped together and apportioned in the way that we have discussed.

The Bill should make it clear that ISPs can recover all their reasonably incurred costs in this respect from copyright owners, or indeed under the order. They have a strong case; they should not be making that extra contribution. I shall be interested to hear what the Minister has to say on the first limb of these amendments and on the second. I beg to move.

My Lords, the noble Lord raises some important questions about the appeal process, both the appeal against the initial obligations process and in the case where technical measures are established and imposed.

The burden of proof is a particularly interesting point. It is, after all, very hard to prove a negative. We have already heard that if the subscriber takes certain reasonable steps, it will be considered a defence against further allegations of infringement of copyright. Does that mean that on appeal it is up to the subscriber to prove that he did attempt to protect his subscription? Will the rights-holder have to produce any further evidence than that contained in the original copyright infringement report to uphold the claim against the subscriber?

As ever, we return to the matter of costs. Under the draft SI, the division between the copyright owners and the internet service providers is suggested to be 75 per cent to 25 per cent. How was that figure arrived at? The Explanatory Notes merely suggest that most of the costs should be borne by the copyright owner. The final figure appears to be very much the result of heavy lobbying from both sides. The copyright owners want a 50/50 split while the internet service providers want none of the costs. The Government seem to have made a final decision just to split the difference and have an easy life.

That, of course, is rather different from the suggestions in some of the supporting fact sheets. One suggested that the establishment of the appeal process should be 50/50 and the running costs should be apportioned according to who brought the appeal. Is that idea now discarded?

I have still not quite got my mind around why internet service providers should pay anything. They are providing the communication link but have no knowledge of what goes down that link; indeed, if they knew, that would raise privacy issues. Perhaps the Minister could explain this to the House.

My Lords, it is important that the subscriber does not have to get into the complicated process of deciding whether or not someone already owns the copyright. I had not realised until I was briefed the other day that copyright is an incredibly tortuous thing when you start to enforce it internationally and you take into account the Berne convention as well as the location of the servers or the people who might be uploading, as we used the word earlier, while the information is being downloaded elsewhere.

On top of that, some subscribers will not have the money to appeal and they will just have to pay up, which will open them up to bullying tactics if we do not accept Amendment 119. It is a strange notion if poor—I mean “poor” not in terms of being bullied but in terms of having no money—subscribers should have to pay the cost of appeals when they need their internet connections in order to connect to government services to receive benefits. We have to have a system in which the subscriber does not pay. It is a further complication and why it will be difficult to make the Bill work in the real world.

My Lords, I will first remark on Amendments 118 and 189, in answer to the noble Lord, Lord Clement-Jones. These amendments aim to make it completely clear that it is the copyright owner who should prove that the infringement of the copyright took place. I absolutely agree that that is where the burden of proof lies. The copyright holder must be able to substantiate that if the whole process is to have real credibility. There is no difference between us in that respect.

I appreciate the intent behind the amendments and certainly agree that it is important that the position of the subscriber is protected. However, we do not think that the amendment is necessary. The point to be remembered is that the copyright owner will have already provided the evidence that will form the basis of the copyright infringement report. It will be for the appeals body, and the First-tier Tribunal where appropriate, to assess that evidence, assuming that there is an appeal, against the counter arguments of the subscriber. It will then decide whether to uphold the appeal or not. That seems perfectly fair to me.

I reassure the noble Earl, Lord Erroll, that we have no intention of making the appeal scenario one in which people cannot afford to appeal. We said in a previous contribution that we intend this to be a modest cost merely to deter what we might describe as frivolous appeals. If the subscriber is successful, the money will be refunded anyway. Certainly, we agree with him that the regime should not deter perfectly innocent subscribers from receiving justice.

Similarly, Amendments 119 and 190 would ensure that the cost of any such appeal was borne solely by the copyright owner. I suggest that it is right to leave decisions on who bears the cost to the statutory instrument that will be issued as a result of Clause 15 of the Bill, which deals with the sharing of costs. A number of noble Lords have referred to this and I was asked to justify the figures. I make a plea to noble Lords not to get bogged down in the debate about 75:25 and whether it should be 60:40 or whatever. It is a working assumption. The proportion is not an exact science—we are not claiming that. We are clear that the costs should be shared and that the bulk of the costs should sit with the copyright owners, but there is merit in hearing the views of industry and others in the consultation.

The argument about why ISPs should bear any cost is threefold. It gives them an incentive to minimise the cost of sending notifications—here I am addressing the concern expressed by the noble Lord, Lord Clement-Jones—it provides incentives to take voluntary measures to reduce online copyright infringement and thereby reduce the number of notifications that an ISP might have to process and it provides incentives to participate in commercial offers under which a bilateral agreement could reduce the number of notifications that they receive.

We do not expect to be involved in costs in relation to mobile operators because we doubt that there will be enough infringements to breach the threshold and to fall inside the scope of this provision. That is our current assessment. The noble Lord shakes his head. If he has any more accurate information, we would be delighted to receive it and to respond accordingly.

The noble Lord, Lord Howard, asked about a subscriber who had taken defensive measures. In the easiest case, if they had taken defensive measures we assume that there would be no more allegations against them. A worst-case scenario might be where they had taken the measures that they had been advised would be sufficient to defend them, applying a range of software, and were able to demonstrate that they had done so, but somebody had still managed to infiltrate their network. We are clearly talking hypothetically, but we have ranged over what is a reasonable defence more than once in Committee and we have tried to give a reasonable assurance on this.

We do not think that the statutory instrument’s ability to apportion costs should be constrained where it is deemed fair and appropriate. The draft that we provided shows that we envisage that it might include a contribution from internet service providers. I have given the reasons why. There is a legitimate argument about whether the appeals process should be entirely free to the subscriber, or whether there might be a refundable fee to deter frivolous appeals. As I tried to reassure the noble Earl, Lord Erroll, it would certainly need to be accessible to all, which might well argue for the appeal to the appeals body being free to the subscriber. That is for consideration in light of discussion of Clause 15 and the accompanying draft statutory instrument. In light of those explanations and assurances, I invite the noble Lord to withdraw the amendment.

My Lords, my hearing is getting thin, as I thought that the noble Lord referred to prisoners’ appeals. I hope that we have not quite reached that point. He did, I am sure, say earlier that the copyright owner would already have provided evidence that they owned the copyright. I cannot see that anywhere in the Bill. It is an important part of this amendment. In other words, the copyright owner must establish that they are entitled to pursue the person under the Bill. Surely it has to be the copyright owner who establishes that. I cannot see it provided for at an earlier stage,

I think that we indicated that that would be part of the code. I am looking for inspiration from the Box. I said that I thought we had indicated that it would be part of the code; I am getting an affirmatory nod.

My Lords, I may have completely misunderstood but I am still a little confused by listening to these exchanges. If there is a slightly informal appeal process, and let us suppose that the evidence given points to rather more negligence in one direction than the other, will it be possible for whoever is presiding over this appeal process to decide that the cost of whatever is provided should be split rather more towards the person or organisation that had failed to do what was required of them?

My Lords, we have not described it as a slightly informal appeal process. In fact, we have said the opposite: it will be a formal appeal process. In answer to the question about where the burden of proof lies, maybe I am going too far in responding. Either there is or there is not an infringement. One would not expect someone to be slightly pregnant; they are or they are not. That is, I think, the situation that we would be in. We are not, as we have indicated, expecting the cost of the appeal to be significant. We want to keep it to a minimum. We do not want to deny people the opportunity to appeal. It will be a formal but not—again, I am checking with the Box—judicial process. That should keep costs down.

My Lords, I thank the Minister for his response and thank those who entered the lists during this debate. The noble Lord, Lord Howard, made a very interesting contribution, particularly when he said that he thought that the Government might be opting for an easy life. I thought that probably the Minister would not be taking the Digital Economy Bill through the House if he was really after an easy life, but I appreciate the comment.

This is a paradox. The Minister knows full well what the intent is, which is that there needs to be certainty in the way in which this procedure operates. He knows that there is a great danger here. As a lawyer, I know that there is a big difference between the onus of proof being on the copyright owner and having a rebuttable presumption of something in those circumstances. A rebuttable presumption means that, after you have had three notifications of CIRs, it is perfectly possible for the appeals person, or Ofcom, whoever it happens to be, to say, “It appears to us that you have had three of these letters, so show us now why we should not cut you off”—that is, if the technical measures code was in place—rather than saying, “You have had three of these, so let’s hear all the evidence again and make sure that I have got it absolutely right that the copyright owner owns the relevant material”. Then he goes through all the steps of uploading or downloading, or whatever the subscriber is claimed to have done. If subscribers are to be confident about these two codes—the Minister and the Government are fully aware of the controversy surrounding the Bill in terms of arguments about the freedom of the internet—adding these words about the onus of proof would make a massive difference to public appreciation of the way in which the Bill operates and would instantly demonstrate the fair way in which these two codes are intended to operate.

The Minister may say that this is not a judicial process, but in terms of the consequences it is a quasi-judicial process, because this person or Ofcom will be in a position to adjudicate. They will make a judgment about whether certain measures should be taken. I do not think that we can take refuge behind whether or not this is a judicial procedure; it is quasi-judicial and has all the relevant characteristics. Therefore, using language such as “burden of proof” seems to us to be absolutely fundamental. I do not know whether the Minister has received any notes from the Box, but if he has I would be more than happy to sit down to allow him to speak.

On the second limb—the costs argument—the Minister is on rather more familiar ground. Many of us would not argue with a 25:75 split precisely because of the Minister’s arguments about incentives. We should give people the incentive not to have to issue too many notifications, but the boot is entirely on the other foot when we are talking about appeals procedures. We need an incentive for creative copyright owners to make jolly sure that they get their facts right when they start prosecuting subscribers. However, “prosecuting” is the wrong word; I meant to say when they start alleging that subscribers have breached their copyright. That is where the incentive should be and that is why I suggested that we should not follow the pattern set out in the rest of the order but break out that element about subscriber costs in terms of appeals and have a different allocation.

I am trying to be helpful. We have deliberately said that the 75:25 split is not set in stone. However, I shall take away the noble Lord’s point about the appeals procedure. I shall not re-enter the argument about burden of proof because I think that we have rehearsed it sufficiently. We have made it absolutely clear that there will need to be a real evidential base. That will be part of the code and people will have to provide a real evidential base to sustain the fact that there has been a copyright infringement. I referred on a previous occasion to an audit trail. I plead with the noble Lord not to dismiss that lightly. It was a serious attempt in a previous debate to reassure him.

I will not dismiss that assurance from the Minister. However, I will point out that, under the order, you would need different allocations for different costs. At the moment it is done in a blanket way for all qualifying costs. There has to be new language to allow differentials in different areas of qualifying costs. I hope that the Minister will reflect seriously before Report, because burden of proof will be one of the most important issues that we will come back to. In the mean time, I beg leave to withdraw the amendment.

My Lords, I shall speak also to Amendment 125. In the context of this part of the Bill, I have a good deal of sympathy with the Government’s idea that this should be a non-judicial process. After all, if a subscriber loses, they get tipped into a judicial process in the civil courts. It does not, in this part of the Bill, impose too great a burden on the subscriber to have this as a relatively informal process. However, in the same structure—if the noble Lord wishes, I will table additional amendments later in the Bill—we are looking at what happens if we get into technical measures. Then, the consequences of losing under the appeal arrangements are that you are likely to have your internet connection severed or greatly reduced, which can be an extreme penalty if you run a business from home, as many people do. The process begs to have a properly constituted appeal and indeed a route to pursue beyond that.

We will come back to technical measures. They are quite loosely defined and can have a big impact on a person. If we are talking about taking technical measures against someone who is providing a number of people with their internet connections and who has fallen foul of the process, there can be a knock-on effect. Under those circumstances, the decision should be properly taken, with a clear route of appeal.

I come back to my fondness for another Bill that the Government took through not so long ago, which became the Tribunals, Courts and Enforcement Act. It set up and regulated tribunals so that they became easier to understand and to deal with. Now they function well in many aspects of our society, and consider school appeals, appeals about special educational needs, tenancy disputes and appeals in many other areas. It is an established way of dealing with disputes where the consequence of losing the appeal is substantial. We should offer a potentially very large number of our citizens proper access to justice before we tip them into something like the technical measures that are envisaged in the Bill.

The Minister has persuaded me that the second part of Amendment 125 is inappropriate. There should be a cost to appeal, otherwise everyone will do it and the system will get clogged up. It should be flexibly designed to ensure that the level of appealing is rational. That the appeal mechanism should be just and properly set up is something that we should all aim for. I hope that, if I cannot persuade the Minister, I will be able to persuade my Front Bench of that and come back to it on Report.

I am not at all encouraged by the Minister’s reply to the earlier amendment of the noble Lord, Lord Clement-Jones, on the subject of the make-up of this body. If I am accused of doing something by a copyright owner and I find that the quasi-tribunal that I come up against has that copyright owner among its constitution, I am not going to be comforted by the idea that only two out of seven on the constituted tribunal come from that end. I am going to be comforted only if there is proper independence. As I said, this is something that we provide in the context of schools and in many other contexts. Those who are directly affected by the matter in hand are kept clear of the people who take the decision in the appeals process. I really do not think that we should step down from that level of justice just because we are dealing with our children rather than ourselves. I beg to move.

My Lords, I just inquire of the Minister whether it would be preferable for him to deal with Amendment 124 at the same time as he speaks to this group. If he has notes that combine the two, I shall be perfectly happy to speak to Amendment 124 at this stage. It seems to me that the proposals for setting up a body are quite similar, but if his notes relate purely to the amendment of the noble Lord, Lord Lucas, I shall wait until we reach the Amendment 124 grouping.

I agree with the noble Lord, Lord Clement-Jones, that the amendments are very similar. My noble friend’s amendments give us the opportunity to hear a little more about the tribunal. What will happen, for example, if a subscriber or rights holder does not find satisfaction with the appeals process? Will they have the right to a further appeal? Ofcom decisions are subject to judicial review. Would the tribunal’s decision be subject to the same process? If so, what about the cost? Judicial review is an expensive process and not within everyone’s means.

My Lords, with permission, I should like to take Amendments 120 and 125 together, as they form a logical whole with regard to the noble Lord’s intention. In response to the noble Lord, Lord Clement-Jones, I shall endeavour to do as he suggests. Perhaps I may point out that we have had debates that are very—

In case there is any misunderstanding, I think that the noble Lord, Lord Clement-Jones, meant Amendment 124, whereas the Minister referred to Amendment 125.

I thank the noble Lord. I meant to say Amendment 124.

My Lords, if the Minister is intending to make a speech that combines both groups, then I shall make my speech. However, if he is not planning that, then I shall not speak to my amendment at the moment.

I was simply going to say that I was.

I am sorry; I still do not understand what the Minister is trying to tell me. Will he be making a speech that does combine both? If so, I will make a speech.

Hear, hear.

I have never felt so popular, my Lords. I should like to speak to a rather different mechanism but one that is very much in sympathy with that of the noble Lord, Lord Lucas. My Amendment 124 would establish an independent adjudication scheme which subscribers could access at any stage of the process set out in Sections 124A to 124L of the Communications Act. The aim would be to enable subscribers to access an independent adjudication scheme for a judgment to be made on unlawful file-sharing cases.

Certainly, consumer organisations would like to see the Government establish such an independent adjudication system. It would be connected with Ofcom—at least, it probably would be—and it would have several advantages over the current situation and the Government’s proposals. For instance, it would be relatively inexpensive and would give the accused the opportunity to defend himself without incurring large costs. One would hope that if one set up a suitable system, the adjudicator would have an in-depth knowledge of the evidence and that those involved, having examined the evidence from both sides, would be able to question the claims of both sides. Sectoral and technological expertise could and should be integrated easily into the adjudication process.

Subscribers should be able to access this dispute resolution body at any stage after the receipt of a first official notification from ISPs, so it differs considerably from the current scheme. It would adjudicate on the merits of the accusation—or the allegation as we should call it. Those not happy with the outcome could appeal under Clause 8(4) and (6). This would be a preferable way of doing things. The consumer needs a way to have the allegation investigated, as the structure of the notification system seems to assume that the data are right. That returns to the point under an earlier amendment that the technical identification is accurate and by implication the IP account holder is liable. The innocent IP account holder deserves a system whereby he or she will know that once adjudicated the matter is fully resolved and no further action will be taken against him or her in respect of that allegation.

We are now taking three amendments together, which is very sensible. Having seen at first hand the arguments around Nominet’s domain dispute resolution service which had to be revamped about a year ago, it would behove the Minister well to take a look at what happened. There is a lot of suspicion about the genuine independence of some of the people involved in resolving disputes, which is a thorny issue. Perception by the public and trust in the system are everything in dispute resolutions. I prefer the pair of amendments tabled by the noble Lord, Lord Lucas—Amendments 120 and 125—as they would bring in something that is above suspicion and beyond reproach. The second half of Amendment 125 proposes no cost to the subscriber, which makes it accessible. Cost always worries me, otherwise the old blackmail can happen; someone will settle out of court for £2,000 because it will cost £3,000 to go to the tribunal.

Amendment 124 suggests that Ofcom might set it up, but I am worried that it could be set up in such a way that makes it less obvious and transparent that it is an independent body. I would therefore go for Amendments 120 and 125. Something along those lines should definitely be adopted.

I will take Amendments 120 and 125 together with Amendment 124. Let me make a plea. We have had a number of reiterative debates on issues, and time is precious. We have asked for groupings and sometimes they have been refused. I would hope that we would take lessons that it is not ideal to form groupings of amendments on the Floor of the Committee. I make that plea in the interests of using our time as wisely as possible.

The amendment would establish a first tier—

On the Minister’s remarks about groupings, although I have not been playing a part in this Bill, I had always thought that groupings were informal and that any amendment could be taken in any order that was necessary. I was rather surprised to hear what the Minister has just said.

Before the Minister answers, I was trying to be helpful by adding that amendment, so that he would not have to make two speeches and we would save time. I feel slightly hurt by his admonishment.

The noble Lord protests too much if he is slightly hurt by that. I merely pointed out that we have had many repetitive debates where grouping would have enabled us to debate issues. It was no more than that. There is a grouping procedure. I am grateful for the opportunity to do it now but I wish we had done it previously; no more than that. Please, let us not delay the debate further.

My Lords, that was a very good answer, and I undertake that when the noble Lord gives good answers, I will not raise the matter again, even should I find the opportunity. When he gives an insufficient answer, such as on the matter of “sufficiently independent”, he may find me coming back to it, but I beg leave to withdraw this amendment.

My Lords, when a subscriber is faced with an accusation which is technical in nature, he will often need some help to understand what it amounts to and how he can prove his innocence, or otherwise. Here, I envisage Ofcom offering a service whereby a subscriber can download a small program to his computer which will then inspect it and say, “Yes, you have taken the measures necessary and yes, there is no trace of unlicensed copyright material on this machine”, sign it off and thereby provide sufficient proof that he is innocent. That is an easier thing for Ofcom to do. Ofcom is a body which may be trusted to do that. That sort of intrusiveness on one’s computer hard disk is not something for which one wants to have to go to a commercial source, because it is all too easy for someone to add bits to that program that you do not want there. One way or another, the process has to provide subscribers with the ability to prove or disprove the allegation and to understand it. They will need some technical help to do that. It need not be expensive—or cost very much at all—but it needs to be there. I beg to move.

My Lords, my noble friend’s amendment identifies two key areas where evidence of an infringement at an appeal might need to be of a much higher quality than that which is presented to an internet service provider in an infringement report. Whether the simple process that my noble friend envisages is possible, I do not know. Whether an account has been hacked into despite reasonable measures having been taken, or whether a subscriber has apparently taken reasonable measures to prevent unlawful file-sharing but is in fact continuing, under the guise of being hacked, is a question that can be resolved only with a fair amount of technical expertise.

Similarly, the evidence that makes up the infringement report appears to be largely stand-alone. I am sure that the industry can show to its own complete satisfaction that an IP address was, at a certain time, unlawfully sharing a certain piece of copyright material, but will the evidence that satisfies a copyright owner be adequate to convince others who may take a less subjective view? Again, a certain level of technical expertise may be needed to show that the evidence that the rights holders claim is watertight is indeed watertight.

My Lords, this is more important than people may realise—particularly the last part about providing technical data. The reason is that we have seen cases in the past where large companies, in trying to protect positions where their electronic security provisions are supposed to be totally infallible, have not given complete information to the bodies that are trying to adjudicate on them. Some information given by banks to the financial services ombudsman springs to mind. There is a report from the Security Group at Cambridge covering the issue, if people want to look it up. It is very important that the technical data are correct and full and easily examined, because there will not be a lot of technical expertise on the tribunals. The problem is getting the stuff into a form that is really watertight. That has not always happened in the past.

This amendment very properly seeks to ensure that the person responsible for hearing appeals about copyright infringement reports or actions related to the copyright infringement report should have available to him the technical expertise and the relevant information from the copyright owner and the internet service provider to be able to evaluate the evidence for the alleged infringement.

I agree with the noble Lord that this is an important issue. Clearly, it will be important that the appeals body set up by the code should be capable of determining whether a copyright infringement notice has been properly generated, so it will require some technical knowledge and expertise of, for example—I stress the importance of this—whether an infringement has occurred; whether the time and date stamp is accurate; whether the IP address was correctly captured and recorded; whether it has been properly handled by the ISP; and whether the subscriber has been properly identified from the IP address and the time and date stamp provided. As I have said on a number of occasions, that means an audit trail, a validated evidence base, not incomplete information. No system is infallible, but we are talking about serious evidence that can be technically validated and proved and that has to be chronologically correct.

The need for the appeals body to have the relevant expertise and the ability to require the relevant information goes without saying in the context of what we need to reflect in the Bill and, to reassure the noble Lord, Lord Clement-Jones, to create public confidence in the system and these procedures. The provisions relating to the code give Ofcom all the powers it needs to ensure that the code is clear on these points and that the appeals body is constituted in such a way as to ensure that they are delivered.

One point in the amendment is not so straightforward. The noble Lord, Lord Lucas, suggests that the expertise available to the appeals body should also be available, without cost, to subscribers. Without disagreeing specifically with what I think the noble Lord is seeking to achieve, I must say that I would not put it in those terms. The appeals body will need to apply its expertise to any appeal that comes before it and consider the strength of the evidence that copyright owners and ISPs have presented. I am not sure that there is any need to make that expertise available to the subscriber rather than to the appeals body.

On general information available to the public about security measures that can be taken, we have already talked about public education. Such information will be available so that people can understand the process and how the evidence has been obtained. We do not believe that making that available on a nil-cost basis is viable. While the aims of this amendment are not out of line with what we are proposing, it is not necessary to ensure the effect that the noble Lord seeks to achieve. I hope that the explanation I have given is sufficient to enable the noble Lord to withdraw the amendment.

I find it difficult to understand how if I am accused and think myself innocent, I set about demonstrating that to the tribunal. I am puzzled about the way I am supposed to present my evidence. If I say, “I have never done this”, what can I produce to substantiate that? If I say, “If it was on the system, it wasn’t me, and I have taken all the protective measures necessary”, how do I demonstrate that? Am I going to surrender my laptop for three months or, as has happened in other civil cases, more than a year in order for people to pore over it, or will Ofcom make that process simple in some way or another? When you are not technically minded—even when you are technically minded—sitting down at a computer to dig into its intestines to provide the necessary logs to prove that it does not contain any evidence of downloaded copyright material or that it was not online at a particular time or whatever else it might be, is a very technical issue. The only way to tackle this is to have a properly designed program. Ofcom ought to make something like that available. It will not cost them; once it is done, it is there, and it will run. It may audit someone’s computer and say that there is no evidence of infringement.

That depends on where we are. Let us say that a first letter has been sent and an allegation made that the individual concerned—certainly not the noble Lord, Lord Lucas, but some member of his family or mine—has infringed copyright. At that point, we are not proposing to take any action; we are inviting the subscriber concerned to consider whether they need to take action in case someone has piggybacked on their network, and are drawing to their attention actions that they can take. It seems to me that the examples that are being quoted are extreme. If we are talking about someone who is appealing against that first letter, for example, and is saying that it was not them, action would depend on what evidence they can produce in the circumstances. At this point, no one will be disconnected or have their bandwidth reduced, so I hope that we would take that into account before assuming that we need to go to the lengths that the noble Lord suggests.

My Lords, we will certainly return to this on Report, because the noble Lord has not answered my question at all. I meant that writing a letter, if he so wishes, might be the best way of responding to this. The question is simply: if I am presented with one of these letters—be it first stage, second stage or third stage—how do I defend myself against the allegation? In what way am I capable of defending myself, other than by saying, “I didn’t do it, guv”? What practical means do I have of producing evidence to the tribunal that it might even begin to believe? That is the question, but I will not press it further now. I will delight the noble Lord even more by saying that, having listened to his speeches today, I do not need to move the amendments in the next group. I beg leave to withdraw the amendment.

The amendment seeks to avoid excessive weight being placed on the civil courts. When someone admits their guilt, the process ought to be simple and structured; they should not be pitched into the uncertainties and high costs of the civil court system. There ought, at least at the first stage, to be a generally accepted level of penalties that can be applied. This would make life much easier for copyright owners in that they would not have the risks, difficulties and timescales of the civil court system. It would be much easier, too, for people who have admitted liability and just want to get it over and done with and to start behaving themselves. That, generally, would be a great weight off the court system. I offer that to the Minister as an idea for improving the Bill. I beg to move.

My Lords, the suggestion of my noble friend is excellent, although putting it into practice may be slightly more difficult. By virtue of the flexibility and the mass of material available as regards this issue, I do not know whether there could be a menu which is long enough. When the Minister thinks about it, there is also the risk that if a menu is set out people would know how much it would cost them to break the rules. Therefore, the amount may have to be set rather high in order to prevent that happening.

My Lords, this is an interesting idea. I certainly sympathise with the desire to ensure that the courts are not clogged up with many thousands or hundreds of thousands of cases, while simultaneously ensuring that those who continue to infringe, despite repeated notifications, suffer some penalty. The noble Lord, Lord Lucas, will not be surprised to hear that we do not think that this amendment works as it would prevent the copyright holder identifying the subscriber in order to reach any out-of-court settlement. Nor do we think that it would add very much to how this part of the process would work.

It might be helpful if I outline what we expect would happen. Once a copyright owner decides that they should take action against someone on the copyright infringement list, they would apply to the court for an order to get the ISP to release the identifying data. They would then write to the subscriber, setting out the allegation of infringement and seeking an out-of-court settlement. It is entirely right that this should happen, as it is important to keep cases out of court if an amicable settlement can be arrived at, and it may be that it can.

The proposition of the noble Lord, Lord Lucas, would provide a rate card of potential levels of damages that copyright owners could properly seek from the subscriber. This also raises problems since different infringements would cause different levels of damage. A pre-release film, for example, would cause a very different amount of damage from a number of relatively old music singles. In addition, the level of damage would depend on the individual loss to the copyright owner, which could be very different as between different copyright owners even for the same type of material—for example, a pre-release film which is expected to have a worldwide release as opposed to one likely to have very limited circulation. In the light of my explanation, I hope that the noble Lord will feel able to withdraw the amendment.

Yes, my Lords. However, I think that we are letting ourselves in for a situation a few years down the road in which a large number of our young people will face unpleasant levels of fines or court cases. To do that without retaining in some way a control on the level of punishment meted out to these people is unwise. Under the Bill, this is entirely in the control of the copyright owners. We have tens of thousands of these cases at the moment, so there is no reason why we should not have hundreds of thousands of cases under this Bill. If the amounts requested are on the scale that these same people have asked for in the United States, we are in for a very nasty time. The Government will have failed in their duty to their citizens if they do not keep to themselves a mechanism for making sure that at least the initial fine or punishment is within bounds. Ultimately, if this is what the Government want to do, I shall not oppose it further. I beg leave to withdraw the amendment.

My Lords, we have been here before, but I do not feel that I have had an adequate answer. The noble Lord talks in generalities, referring to programs out there which will do these things. But will they work? In the event of being hauled in front of a tribunal, will the fact that I have bought X, Y and Z program, installed it and used it, be adequate to protect me against an allegation that I have downloaded or someone has used my network to download?

We really ought to provide our citizens with certainty in this matter. They ought to know what they have to do to avoid infringing. I think that it ought to be a duty of Ofcom to provide citizens with that information. It is not really asking a great deal. Unless this certainty is provided, Ofcom will end up paying a great deal more in the costs of arguing this endlessly in the tribunal than it would if it had taken the trouble to audit a few bits of software upfront. I beg to move.

My noble friend raised the important issue of the subscriber taking reasonable precautions in the context of Amendment 43, which was moved by the noble Baroness, Lady Miller of Chilthorne Domer. I hope the Minister will excuse my revisiting the subject. We on these Benches fully support my noble friend’s amendment. The noble Lord, Lord Davies, pointed out that any subscriber taken to court would have all the normal defences under copyright legislation. This amendment sets out a clear line of defence; and because it is clearly set out and everyone knows what the rules are, it may well manage to avoid unnecessary court proceedings such as those which the Minister said are so undesirable.

My Lords, this amendment is only reasonable. All too often we pass laws that create absolute defences and against which there is no defence, and then suddenly we find that they are totally unfair. We are not trying to do that in this Bill. However, if someone takes all the reasonable precautions that they are told to take, that ought to be an absolute defence. What else are you supposed to do? I do not see how this line could be opposed by any reasonable Government.

As ever, the voice of reason. Following the debate during our second day in Committee on the subject of what constitutes a reasonable defence, I wrote to all noble Lords who had indicated an interest in this aspect of the online infringement of copyright provisions, recognising that this is of crucial concern. It is of fundamental importance that what we do here is fair, proportionate and transparent to subscribers who may become the target of the measures allowed either under the initial obligations code or, should it come to that, the technical obligations code. I hope that my letter clearly set out the Government’s position. If a subscriber takes all sensible measures and—should he be notified under these provisions—shows that he has done so, that should provide him with a good defence for the purposes of the Bill.

The noble Lord’s current amendment goes rather further than that, and I do not think that it would prove workable in practice. First, Ofcom will not be prescribing measures. The notification sent to subscribers will contain information that will help them to protect their privacy and prevent them inadvertently being the means of online copyright infringement in the future. However, I would not characterise this as Ofcom’s prescriptions. I would, in any case, hesitate to include anything that affords a complete defence when it is dependent on the individual interpretation of generic advice.

I would much prefer to leave this to the independent appeals body to take a considered and sensible view of what any appealing subscriber has done to prevent infringement. Of course the sort of measures set out in the notification, as well as other commonly available measures, are likely to be highly persuasive in this judgment. However, I would rather leave room for the appeals body to make the judgment. Indeed, we do not prescribe the decision.

In the light of my earlier letter setting out the Government’s view on defences and the impracticality of prescribing measures, I do not think that this amendment is necessary or practicable. I hope the noble Lord is reassured about the seriousness with which we take subscribers’ ability to mount a reasonable defence after taking reasonable measures and that he will agree to withdraw the amendment.

The noble Lord is describing a cumulative effect—all kinds of little ways in which Ofcom will not set out to help the consumer and all kinds of little ways in which someone accused under the Bill will find their life made difficult and tiresome, with a great deal of effort and uncertainty imposed on them in dealing with the allegation. Although each little piece of the argument has its own logic, as a whole it paints an uncomfortable picture, which is tilted too far towards the copyright owner rather than the citizen. I will listen to and read carefully what the noble Lord has said but, one way or another, we will come back to this on Report. I beg leave to withdraw the amendment.

My Lords, I shall speak also to Amendment 192. We move now to an interesting part of these provisions which has not yet been properly touched on. The Bill makes provisions for either Ofcom or the semi-independent body to impose a requirement on a body specified in the code to pay a penalty. The new body may also require damages from a copyright owner to indemnify an internet service provider for any loss resulting from the copyright holder’s failure to follow the obligations set out in the relevant code.

On first reading the Bill, I thought that the penalty could be levied on both the internet service provider and the copyright holder and was to be given by one to the other as compensation for breaching the obligations in the relevant code. Having read Clause 14 more carefully, and after looking at the brief Explanatory Notes, I think that the penalty might apply only to the internet service provider, as the defences laid out in proposed new Section 124K(3) relate only to the provider. That would leave the internet service providers liable only to the penalty and the copyright holders liable only for damages. I hope that the Minister will be able to clarify whether that is the case. If it is, I hope that he will either satisfy the Committee that such a division is fair and clear under the legislation or bring back amendments to make it clear.

Can the Minister confirm that, if an internet service provider has a penalty levied on it, the penalty is paid to the copyright owner? Is that the case, or does Ofcom pocket some or all of the penalty as it passes through? What was the thinking behind making the internet service provider liable for a penalty unrelated to damages? If the Government were concerned about the internet service provider becoming liable for disproportionately enormous sums of money, damages could have been capped. As it is, the penalty need have no relation to the damage caused by the failure to comply.

Similarly, why are copyright owners liable for financial penalty only if they cause damages? If a copyright owner sends in an infringement report and demands a notification letter in a non-compliant manner, but the internet service provider catches the copyright owner’s mistake before it sends out a letter or before any actual loss has resulted, why is the copyright owner not liable to any penalty? There appear to be two separate justifications for these two financial enforcement measures.

I have several more questions relating to this area of the Bill, but more amendments are to be brought forward and I shall save my points until then. I beg to move.

My Lords, Amendments 126 and 192 propose the same change in relation to both the initial obligations code and the technical obligations code. Proposed new Section 124E(5) in Clause 8 and proposed new Section 124J(4) in Clause 13 allow the code to make provision for financial penalties when an ISP or a copyright owner fails to comply with one of the obligations or the provisions under the codes that put those provisions into practice.

It might help if I explain the Government’s thinking. Failure on the part of either a copyright owner or an internet service provider to comply with the obligations or the code could have a damaging effect on a subscriber, a copyright owner or an ISP. In that situation it is appropriate that there should be some deterrent to ensure that the obligations and the code are complied with.

We have suggested two different types of deterrent, because the harm could occur in different ways, as the noble Lord, Lord Howard, identified. For example, if an ISP fails properly to process the copyright infringement notices, the notifications will not be issued and the resultant anticipated impact on the subscriber’s infringement will not materialise. This is a generic failure causing generic rather than specific harm and, because it is generic, is appropriately dealt with through a fine. However, if a copyright owner makes a mistake in transcribing the time and date of an alleged infringement, an ISP might issue a notification to the wrong subscriber. If technical measures are in place, an ISP might even impose a technical measure on the wrong subscriber. This could cause real financial or other harm to the subscriber, who might then choose to take action against the ISP in relation to any loss suffered. If the subscriber were to win damages from the ISP in these circumstances, it seems only reasonable that the copyright owner responsible for the error should indemnify the ISP for any loss or damage resulting from the error.

We have put these two different mechanisms into the Bill not as alternatives but as complementary tools, because different types of harm could be suffered dependent on where the error or omission occurred. That is not to say that both would be used in any individual case, but the code should be able to contain both and apply them as appropriate. I hope that that has clarified the matter for the noble Lord.

The noble Lord asked whether, where an ISP was charged with a penalty, the money would go to the copyright holder or to Ofcom. The penalty would be paid to Ofcom and subsequently to the Consolidated Fund. I am sure that that response gives the noble Lord great pleasure.

I thank the Minister for that reply. However, if damage and harm have been done, why should the penalty go to Ofcom and not to one of the people who has been harmed?

I said not to Ofcom but to the Consolidated Fund, but let me come back to the noble Lord on that issue.

I am grateful to the Minister for saying that he will come back on the matter and for the explanation that he gave. When he comes back on the point, which he has promised to do, he might care to have a re-look at the drafting to see whether it could be made slightly clearer. With that, I beg leave to withdraw the amendment.

My Lords, I shall speak also to Amendment 195. As the Bill is drafted, both the internet service provider and the rights holder can claim back some sort of financial recompense if either of them behaves improperly. It is noticeable that this is not true of the subscriber.

We have discussed data protection previously and have heard the Minister’s assurances that there is no intention for subscriber information to be shared unjustifiably. However, this does not take account of improper behaviour by either of the two bodies. An internet service provider or an employee of one might take the opportunity to sell such information illegally, or copyright owners might group to form a blacklist of their own, based on infringement lists, of subscribers whom they suspect but have not been able to sue.

Bad behaviour could lead to enormous damages for a subscriber separate from data protection issues, particularly via technical measures. A technical measure that limits or suspends access to the internet can impose a real cost on a subscriber. Not only is there the loss of benefit from ongoing subscription costs to the ISP, since an ISP is unlikely to stop charging the subscriber the monthly fee just because a technical measure has been imposed, but there is also the time and cost spent fighting a wrongful allegation through the appeals system. I know that the Minister said earlier that the subscriber would get their costs back, but it is rare for all costs to be recovered and the appeal has to be financed in the mean time. If there has been substantial damage to one’s business, one might find it difficult to be able to fund such an appeal.

Potentially most costly is the loss of revenue that many subscribers will experience from third parties if their subscription is limited. A large number of subscription services, from iTunes to online data sources such as Reuters or Bloomberg, use client site IP addresses to ensure that certain services are accessible only by those who have paid.

There are several much more sophisticated online services, especially in the financial world, where the sudden loss of an IP address would mean enormous loss of information, leading directly to loss of revenue. The Minister might argue that no one will get to the stage of technical measures without going through certain levels of checking and opportunities for correcting wrongful accusation. Can he therefore confirm that no technical measure will be imposed until the appeal process has been completed? I beg to move.

I have some sympathy with the purpose behind the amendment. Arguably, subscribers are in at least as much need of protection against negligence on the part of copyright owners and internet service providers as are internet service providers in their relationship with copyright holders. I certainly concur with the noble Lord, Lord Howard, on that.

However, this situation will not arise in practice. Subscribers will have a clear path to appeal at each stage of the process. The grounds of such appeals will certainly include the failure of the internet service supplier or the copyright owner to comply with the code or the copyright infringement provisions, or failure to observe the provisions of the Data Protection Act, which in any case contains its own penalties for failure to comply.

Furthermore, under the initial obligations, no loss or damage will be suffered by the subscriber unless they are identified via a court order and the copyright owner takes legal action against them. In those circumstances, any failure on the part of the copyright owner or internet service provider to comply with the rules will be taken into account by a court.

Moreover, under the technical obligations, there is a further recourse to the First-tier Tribunal for those subscribers who are not satisfied with the decision of the initial appeals body. Any failure on the part of the copyright owner or internet service provider to comply with the rules will be taken into account by the tribunal. The Government believe that it is right that the appeals process should be exhausted before any penalty is imposed, which answers the question raised by the noble Lord, Lord Howard. In other words, no subscriber will suffer any harm until they have had the opportunity of arguing their case in front of the First-tier Tribunal.

On balance, this provision is not needed. The Bill builds sufficient safeguards into the process for subscribers. I hope that in the light of my explanation the noble Lord will feel able to withdraw the amendment.

I thank the Minister for his confirmation that no technical measure will be imposed until the appeal process has been completed. That is the most significant part of the amendment. I therefore beg leave to withdraw it.

Although Amendments 128A and 128B are not in the same group, perhaps I may speak also to them to speed matters up, because they touch on related points. These are quite straightforward amendments, which reflect the argument that internet service providers are not involved in copyright infringement disputes. The current legal position is that internet service providers are bystanders or a conduit and are not directly involved in a copyright dispute that may arise between a copyright owner and an alleged infringer. They are a vehicle used by copyright owners and subscribers, rather in the way that the Post Office facilitates communications between various parties but is not a direct party to them. It is clear that the internet service provider has a role, reflected in the Bill, in providing information to the copyright owner, but it is not involved in any dispute between the copyright owner and the subscriber. Amendment 128 would require a copyright owner to indemnify an ISP for any loss or damage resulting from the owner wrongly accusing a subscriber of an infringement of copyright, were the ISP to be attacked by the owner in relation to it. Amendments 128A and 128B would make it clear that an internet service provider is not included in the definition of a copyright infringement dispute. I beg to move.

My Lords, the noble Lord, Lord Razzall, has identified another loss that might occur to an interested party that does not appear to be covered by the provisions. What would occur if the copyright owner followed the code meticulously but an error was still made? Who would bear the subsequent damages? The noble Lord also raised the important point that an internet service provider is a conduit—merely a provider of a means of communication between two people—and, as such, should not be involved.

My Lords, the Minister said in response to the previous amendment that all protections were built into the Bill. Actually, there are very few of them. We have heard lots of assurances from the Minister that the protections will be built into the code, but they are not in the Bill, which means that they do not have to go into the code and we must rely on ministerial assurances. Unfortunately, Governments change, Ministers come and go and the world changes. We cannot be certain about what will happen five years down the road. We should build more of these protections into the Bill and not rely on what Ofcom or other people might put in a code later on.

I thank the noble Lord, Lord Razzall, for this grouping, and I shall endeavour to deal with Amendments 128, 128A and 128B. I feel that we are still going over ground that to a certain extent we have covered in the previous debate—or, if not, that it is a variation on a theme.

The amendment would add to the current text covering the indemnification of internet service providers for failure to comply with the code or the copyright infringement provisions with further provision against wrongful accusation. While I understand the purpose behind the amendment, I do not believe that this addition is needed. The existing text protects internet service providers against the consequences of the failure of copyright owners to comply with the code or the requirements of copyright infringement reports, which includes the standard of evidence required, how the evidence is obtained and the way in which it is presented. We made it clear that the code allows for copyright owners to be made to indemnify internet service providers, in the event that they suffer loss as a result of a failure by the copyright owner. If there is such a failure, it is clear that we will have to indemnify the internet service provider. In producing the code, it will be an option for stakeholders to require other undertakings by copyright owners, if it was deemed appropriate. Clearly, ensuring that they make an accurate and valid copyright infringement report is vital to the success of this process.

Amendments 128A and 128B would affect that part of the clause that sets out what a copyright infringement dispute is. The text as it stands makes it clear that it addresses disputes between the industry parties as well as with subscribers, so removing the reference to internet service providers in this way would remove the possibility of a dispute between them and copyright owners being resolved quickly by the body set up to administer and enforce the code. We do not think that that helps. Instances where this might arise could, for example, be in the time taken to process copyright infringement reports, when the copyright owner may allege that the internet service provider is outside the time limit, while the internet service provider might claim that the way in which such reports were sent involved them in additional work. In those sorts of circumstances, it is envisaged that the body which has the function of administering and enforcing the code will be in a position to adjudicate, fairly and quickly, and resolve the dispute. That must surely be regarded as a sensible and useful provision, so I do not agree with the amendment that would essentially restrict this to a dispute between copyright owners and subscribers. As I have already said, there could be a different set of circumstances, in which there was failure on behalf of the internet service provider to carry out their obligations.

Subscribers will have a separate route to appeal against decisions, and were included in the copyright infringement dispute definition for completeness, because it is possible to envisage that they might be an active participant in such a dispute. Frankly, they are not the focus of it in policy terms; this is to enable differences between copyright owners and internet service providers to be resolved. Lines 26 and 27, which Amendment 128B would remove, set the scope and limits of the copyright infringement dispute, and attach it firmly to the initial obligations and the code, which must surely be right. Without it, the potential scope is unlimited. Again, I do not think that this consequence, which is perhaps unintended, is something that we should welcome.

Finally, the terminology used in the Bill may cause confusion, for which I apologise. However, if the noble Lord looks at the definition in subsection (6)(b), he will see that it applies only to,

“an act or omission in relation to an initial obligation or the initial obligations code”.

So this is not about copyright infringement as such, but about compliance with the code. My apologies for any unintended confusion, but I hope that that clarifies the situation. The noble Earl, Lord Erroll, doubts that there will be a code. Of course, there will be a code and it will have to be produced in a reasonable time. We do not think that it is practical or desirable to put everything in the Bill. In the light of the debates that we have had, I think that there has been some general recognition and acceptance of this. Of course, it is about getting the proportion and balance right.

I know that the Minister believes that he understands what he thinks that I said, but I am not sure that he realises that what he heard is not what I meant. I was not saying that there was unlikely to be a code—I am sure that there will be a code. I was trying to say that the code has to contain only the things in the Bill; it does not have to contain all the other things. The things that he is saying “no” to, about appeals and detailed matters and technical stuff, do not have to appear on the code if they do not appear in the Bill. That is why we feel that it is important to put some of these things in the Bill so that they appear in the code. I am sure that there will be a code; the question is whether it will be the code that Parliament wanted.

My Lords, it is conventional for the mover of an amendment in Committee to say that he wants to read what the Minister has said in Hansard. In the context of this amendment, that is even more apposite. First, I have to take on board the late intervention from the Box on the operation of the clause; secondly, I have to take on board the noble Earl’s saying that what he said was not what he really meant. I am not sure whether I can read what he did mean in the context of what he subsequently said, as it would test the wisdom of Solomon. First, I shall try to see whether we should have the point that I am making in the Bill.

The noble Lord, Lord Howard of Rising, and I agreed during our last sitting that there seems to be a slight disagreement between opposition parties and the Government on the extent to which things should be left to the code or put in the Bill. I shall look and see whether this is an area on which I want the noble Lord to join me at Report to decide whether this should be in the Bill. I really want to consider whether the Minister has convinced me about what the difference is between an ISP being in a dispute regarding the content of copyright by comparison with the Post Office being sued for the content of a letter. I am approaching it from the point of view that the ISP is in exactly the same role as the Post Office; it has all sorts of obligations with regard to the sender and recipient of the letter, but it does not have an obligation regarding the content of the letter. That is what this point is about. In the mean time, I beg leave to withdraw the amendment.

This amendment arose as another attempt to deal with the problem caused by ACS Law and others in their harassment of people with allegations that they have downloaded copyright material. This provision mirrors provisions that are already present in respect of patent law and trademark law; it is a pattern already well established in similar areas of law, but which is absent in copyright law.

My Lords, I support the amendment. Whether or not it stands up legally, it is a good peg on which to hang a short debate about the activities of this operation, ACS Law. Like many noble Lords, I have had an enormous postbag about the activities of this law firm. It is easy to say “of certain law firms”, but this is the only one that I have been written to about. That is the interesting aspect of this.

ACS seems to specialise in picking up bogus copyright claims and then harassing innocent householders and demanding £500, £650 or whatever—a round sum, in any event—in order to settle. Some people have been fighting off this firm’s claims for several years. One letter says that a close friend of the writer’s has been the target of regular bullying by ACS Law since September 2007 for alleged illegal file-sharing and currently has no means by which to prove his innocence, and so on; I could go through a whole series of letters on the subject. Someone has written eight letters to protest their innocence and answer the questions but the case has yet to be dropped. Someone has been asked how old their daughter is and what games console she has, when they have only a Nintendo DS.

This amount of intrusion is unacceptable. If someone has a claim, they need to issue a summons and go to court; but this bullying, which never results in a court action that can be tested, is the worst kind of harassment. This is only too common. Even though the Government may not favour this particular way of dealing with it, I hope that in some creative way, whether by direction, by ministerial statement or by some other mechanism, they can deter bodies such as ACS Law from engaging in this kind of activity.

I do not know quite how such firms get hold of these claims. We understand that they get hold of them by the Norwich pharmacal procedure, by which they get hold of information about these claims and then proceed to prosecute them. I admit, though, that I am somewhat hazy about how these cases are made against innocent people. People would not take the trouble to write these kinds of letters unless they felt really angry and that these cases were wholly unjustified.

I commend the noble Lord, Lord Lucas, who I know is cognisant of the activities of this particular firm, and I hope that the Minister will have something to say on the subject.

My Lords, as my noble friend has pointed out, the amendment relates back in part to the actions that are currently being undertaken by some copyright owners, which the noble Lord, Lord Clement-Jones, also referred to, in order to protect their material or receive compensation for its unlawful dissemination. In practice, I do not think this sort of bullying is exclusive to the digital world. Licence fee letters from the BBC are certainly unpleasant and bullying—I have rather a good collection of them, actually. There is no question that once the Bill has become law, there will be much less justification for a copyright owner to pursue alleged infringements with the sort of threats and demands that is now sometimes the case.

Will the Minister give us any more information about the investigation into the legal organisations that have been sending out these unpleasant letters? What action will be taken against them if they are found to have behaved improperly? Indeed, how disproportionate or threatening must their actions have been before improper behaviour is considered to have occurred? I believe that there are strict rules about the way that solicitors can behave; perhaps the Minister could direct certain people in that direction as well.

My Lords, I failed to mention one further element. The noble Lord, Lord Howard, is right about solicitors’ codes of conduct with regard to the Solicitors Regulatory Authority. It should be made clear to many of these individuals who have been bullied in this way that the SRA is available to them if they wish to make a complaint. It is difficult, though, even in those circumstances.

I remind the Minister, for the purposes of his response, that the reason why my noble friend Lord Razzall originally put down an amendment that said one should go first of all according to the codes rather than to court was entirely to try to eliminate this kind of issue. Obviously one cannot exclude the court completely, but one of the questions that the Minister might consider, certainly in drawing up the codes, is whether some kind of presumption should be stated in the code that most copyright owners will proceed according to the CIR notification process rather than through this kind of court action process. That is not a formal amendment, but it is something that I think the Minister should put into the pot in terms of his considerations.

This amendment illustrates why we should have started by looking at the whole issue of copyright in the digital age, rather than starting with an attack on people breaching copyright in the digital age. We have gone about things the wrong way round.

Copyright is a complicated thing. I did not realise until a week ago that apparently, with regard to what the noble Lord, Lord Lucas, has just said, it is illegal to accuse someone of trademark infringement or of patent infringement. You have to go about it in a much more oblique way. I cannot remember quite how it is done, but you cannot just come out with a bare-faced statement. That does not apply to copyright law because copyright law is much weaker in its protections. That is also why there is a much longer term in which to recover the value of your copyright. The term is now lifetime plus 70 years, whereas typically it is 30 years for a patent.

If people are behaving like this, we should be looking at what protections we give to copyright, and that should be done at a far more fundamental level than just including something in a Digital Economy Bill. However, as we need to put it somewhere, we should include a provision like this or we will get into trouble. The noble Lord, Lord Lucas, is quite right about that. The Government really have to think about protecting people or we will see an awful lot of abuse that will make some of the other scams that take place on the internet look like chicken feed.

My Lords, I am not sure how the proposed new clause would be of benefit to the people it aims to help. Copyright owners are currently threatening to take people to court, and it is precisely that threat that the clause seeks to address. However, it does so by offering the individual concerned the right to go to court—precisely what the individual is assumed to be trying to avoid. After all, if they are confident that the threat is unfounded, and that a court will uphold that view, they would be as well off by simply letting the copyright owner pursue them and then seeking costs when the court finds in their favour.

The noble Lord, Lord Clement-Jones, said that these actions are appalling and unacceptable, but nobody has referred them to any of the regulatory bodies. I find that strange. We are saying that we have had thousands of these cases yet nobody has said that this law firm is acting in a totally unacceptable way. I should have thought that the legal regulatory bodies would by now have been involved and I am puzzled why they have not been.

I am also concerned by the suggestion that notification of a copyright infringement report as set out in the Bill should constitute a threat in this context. The noble Lord should be aware that the notifications, at least in the first instance, will not be threatening, and at no stage will they seek money from the subscriber. A notification under the Bill cannot of itself result in court action against the subscriber. Indeed, even putting the subscriber on the copyright infringement list cannot itself result in any direct contact between the copyright owner and the subscriber, and certainly not a threat of legal action or a demand for money. The copyright owner would first have to go to court, as they do now, to get an order to make the ISP release the subscriber’s name and address. Therefore, although I have a good deal of sympathy with what the noble Lord is trying to achieve and while there may be scope to look at it again in the future, I do not think that the new clause is practicable.

A number of noble Lords asked what we were doing about this since we had sympathy with the amendment. We have undertaken to write to the Ministry of Justice. However, I hope that I have explained that we do not think the new clause is practicable and I therefore hope that the noble Lord will feel able to withdraw the amendment.

My Lords, I find the Minister’s logic strange because what is upsetting these people is the failure of ACS Law to take them to court. They want to go to court to demonstrate their innocence and the ridiculousness of the demands made of them. This is about the failure of ACS ever to get to court but to continue the stream of insinuating, embarrassing—because it often alleges that pornography has been downloaded—and damaging allegations. People want to bring that to an end with a proper court case where allegations can be thrown out and a suitable end brought to what is going on. But it never comes to that.

I accept that this route will not do, if that is what the Minister says, but we will clearly need to find some means of dealing with these people.

Does the noble Lord not agree that if subscribers are being harassed the Minister makes a fair point. There needs to be access to the regulators and we need to make sure that these individuals are made aware of their rights. Can we have an assurance from the Minister that he will encourage those individuals to do so rather than simply saying “I'm surprised they haven’t”? In many cases, I think they are unaware of their rights in this respect. They could go to the SRA and complain about the way in which ACS Law has behaved. Having looked at the way that it has behaved in some of these cases, it would be entirely justified. But I am not sure that we know that they have not complained.

I am not sure what our role is, particularly in encouraging people.

People hang on the Minister’s every word during the course of these debates.

I hope nobody does hang on any of my words. To treat this seriously, I repeat that I am surprised nobody has complained and that the noble Lord, Lord Clement-Jones, has not advised people to do that. As I said, we will see what else we can do when we write to the Ministry of Justice.

I want to take the opportunity to respond to a point made by the noble Lord, Lord Howard, because I did not do so earlier. He made a valid point that the existence of the new notification system as proposed by the Bill will make it much more difficult for copyright owners to behave as they have been doing recently. It is entirely possible that a court that now issues orders for the release of names and addresses on the detail of just one infringement might well start to expect copyright owners to have gone through the process of issuing notifications and seeking to take legal action only against the repeat infringers once this process exists, rather than to issue legal letters on a scattergun approach. It might also be that courts, before they start agreeing to instruct internet service providers, might again look at the examples of the process that we will have identified in the code and see whether that process has been gone through. That is a bit of an assumption, but it is a reasonable one in the circumstances.

That brings us back to Amendment 33, which I am sure the noble Lord, Lord Clement-Jones, remembers because it came from his Benches and was attacking the problem from exactly that point of view: that we should encourage the courts to think of this as the proper way of dealing with copyright infringement rather than, as is happening at the moment, the massive use of Norwich Pharmacal orders even where there is supposed evidence of single infringements.

We will take what the Minister said seriously and, if we come back to this on Report, it will be on the basis of understanding exactly what happens when you take complaints to the solicitors’ regulatory bodies. There are certainly other ways of doing this. The orders are being sought on the basis of allegations that information has been downloaded. As the Minister said at an earlier stage, there is no known way of doing that legally. Perhaps we can just say that a Norwich Pharmacal order may not be granted in respect of an allegation of downloading material. Since there is no known method of doing that legally that would seem to be a reasonable way of shutting off this particular attitude. Certainly, in terms of dealing with the perceived wrong, we shall be keen to return on Report if we can find a sensible way of doing that. For now, I beg leave to withdraw the amendment.

My Lords, we turn now to the question of how well the provisions set out in Clauses 4 to 9 will work. I am glad to see that the Government have drafted an extensive section on assessing the impact that the notification letters might make and the list in new Section 124F(4) is a good starting point for setting out the sort of information that the Government, Parliament and the public should know. However, there are a few omissions in that list, the absence of which are possibly a matter for concern. This amendment seeks to balance the focus on unlawful peer-to-peer file-sharing with an assessment of how much use has been made of legal access to copyright material. Often in these debates, the Minister has equated all file-sharing with unlawful dissemination of copyright material. That is an inaccurate view because much of what is downloaded is legal. I hope this amendment will enable a more balanced picture to be produced.

I would hope that the measures the Bill provides for copyright owners to address unlawful file-sharing will not remove the incentive for copyright owners to continue to innovate. Internet access is here to stay, and looking to remove every person who has breached copyright from the internet is not practicable.

I am slightly confused. The noble Lord is, in one sense, talking about downloading, but the amendment refers to access. They are not necessarily the same; you can access an internet service without downloading it to your computer.

I thank the noble Lord for his instructive point.

This amendment would ensure that Ofcom monitors whether legal access to material continues to grow, and how the balance between legal and illegal activity changes. It would also provide valuable information about the sort of behaviour that the Government seek to address in drafting Clause 17. As Amendments 130 and 131, in the name of the noble Lord, Lord Whitty, established a while ago, this clause could be used to report on all sorts of copyright infringement, not just file-sharing. It becomes doubly important then to have a fair view of how internet access benefits copyright owners, as well as opening them up to unlawful exploitation. I beg to move.

My Lords, I support my noble friend’s amendment. I understand that this would allow, particularly in relation to Clause 17, the possibility of understanding what is happening in the marketplace and with changes in technology. We need to have, in a sense, the good news story as well as the bad news story to be able to respond to changes in the marketplace and technology. You cannot do that unless you have an understanding of legal access and the growth in that, as well illegal access.

My Lords, I entirely support my noble friend’s amendment. To understand what is happening in the market needs a better set of data than we have now. At an earlier stage, much was made of the experience in Sweden, where rules similar to these were introduced and internet use apparently halved. That is a disastrous answer for the copyright owners. It means that instead of people going out and legally buying their copyright material, they choose to have none of it. That means that it does not have even its advertising and promotional effect. There is no point in this legislation if it does not increase the consumption of legal copyright material. All we are doing then is punishing people; we are not benefiting anybody. We must know both sides of the equation. We must know what is happening in terms of illegal file-sharing, but we must also know what is happening on the other side. Without that information, we do not know whether further action is justified. Further action merely to punish people for something that does no damage—because ceasing it brings no benefit to the copyright owners—cannot, in my view, be justified.

The noble Lord, Lord Lucas, is 100 per cent right. If you do not have a benchmark or starting point, you do not know where you are going. The Swedish situation is interesting. When I mentioned it to someone the other day, they said that, yes, internet use had dropped, but no one knows why it was by 50 per cent immediately, in a day. It is highly unlikely to have been just because of that. There must have been some other reasons. Apart from that, they said that traffic is back up again and that it had dropped by 18 per cent soon after. The traffic is back up again, but much of it is encrypted now, so no one knows what is going across it. If that happens here it will completely mess up the Home Office. The Government will make themselves very unpopular with the Home Office.

My Lords, the noble Earl, Lord Erroll, and the noble Lord, Lord Lucas, have pointed out the problems of using the Swedish example as justification for the way the Government are going on this. I meant to make this point at a much earlier stage. The Swedish data show that although there was a drastic fall, immediately after the case, traffic went up. There is the problem that some of it is clearly encrypted and designed to avoid the kind of protection and sanctions that follow.

My main point on this amendment is that the whole point of the Government’s strategy—as I understood it, and certainly as I would like to see it—is to move to a situation where the majority of people gain their copyright material by legal means. In other words, we should have time and incentives to develop the legal forms of downloading, particularly of music. If we do not know what level of take-up of those legal services exists at the beginning, we cannot judge how far we will need to use the sanctions that are provided in the next few clauses. It is important to get this benchmark, as the noble Lord, Lord Lucas, refers to it.

It is also important to get the strategy right. It is not sensible to use sanctions simply to reduce the traffic. The aim must be that the majority of the market uses legal means of downloading, uploading and file-sharing. Then we can deal with the residual problems that exist in the illegal sphere. I was going to make this point later and I will probably make it again, my noble friend will be happy to learn. It is very important that something like this amendment gives us a starting point in assessing how far we are successful in that objective.

My Lords, of course the Government do not disagree with the sentiments expressed so eloquently by my noble friend Lord Whitty, and preceded by all other noble Lords who have contributed to this short debate. We are, of course, committed to the fact that we need to promote the use of internet access services to access copyright material offered by copyright owners via legitimate channels. We have always made that clear. I am not sure that constant repetition throughout the Bill does a great deal of good in these terms.

We have always made it clear that there will be a three-pronged attack. The enforcement actions in the Bill back up—rather than exclude—moves to develop the commercial markets. We all see the advantages that can derive from exploitation of the new technology available to us. In addition, we will educate consumers about the value of copyright so that there is a wider appreciation in society of that situation. However, saying that we are all in agreement on that—and the Government agree with every sentiment that has been expressed positively in this debate—does not mean that it is appropriately expressed in this amendment. Would this amendment be useful in this context? Indeed, would it be reasonable?

Let us be absolutely clear. The noble Lord, Lord Howard of Rising, tabled the amendment; he is not, I hope, underestimating the fact that there are considerable additional costs in the preparation of Ofcom’s annual report. We are, therefore, engaged in a cost-benefit analysis of whether the benefits which the noble Lord suggested with regard to the amendment would be advanced by the amendment and would justify the inevitable costs involved. What are we dealing with in this part of the Bill? We are tackling the online infringement of copyright. Therefore, it seems somewhat inappropriate that we should be involved in such a discussion on this proposal. Of course, the level of legitimate traffic is interesting—I do not deny that—but is it crucial to the objective that the Government are seeking with the Bill? Under subsection (4)(b) of new Section 124F of the Communications Act, Ofcom already has an obligation to report to the Secretary of State on the steps,

“taken by copyright owners to enable subscribers to obtain lawful access to copyright works”.

Therefore, we have the constructive dimension with regard to copyright. Requiring Ofcom to go even further and assess the current levels of such legitimate activity would scarcely bring additional benefits in comparison with the obvious costs involved in making this significant imposition on Ofcom in the preparation of its annual report.

I assure the Committee that the Government are, of course, concerned that we should promote exactly the issues which the noble Lord, Lord Howard, first raised and the benefits from ensuring that we increase the activity and the legitimate traffic in every way that we can, and particularly that we ensure that our fellow citizens do not fall foul of the law when they do not intend to. However, I ask the noble Lord, is the cost worth it?

I am very grateful to the noble Lord for allowing me to intervene. That is a very good question. To some degree the measure has to be practicable. However, we are looking at the need to be proportionate. It is very difficult to be proportionate, particularly in relation to Clause 17, which concerns power to amend copyright provisions. Unless we have a clear idea of the degree to which illegal downloading is outstripping legal file-sharing, we are in a difficult place in terms of appreciating the degree to which there is therefore sensible pressure, or whether it is practical or reasonable to expect there to be amendment to the copyright provisions.

I hear what the noble Baroness says. I have accepted part of the argument, that we are all seeking to achieve the same objectives. However, this is a specific obligation on Ofcom to extend its annual report at very considerable cost. It would be engaged in an exercise which truly, in the context of this clause and where we are with the Bill, is not justified. As the noble Baroness knows, we will debate Clause 17, not at length—we never debate at length—but with considerable intensity. I look forward to that with the greatest delight.

It surely cannot be suggested that there are sufficient benefits attendant upon this extension of Ofcom’s annual report to justify accepting this amendment. I hope that the noble Lord will see that we have thought very seriously about the amendment and that he can safely withdraw it.

My Lords, I am puzzled—to put it politely—about the noble Lord’s reference to large costs. Under subsection (4)(b) of the new section, Ofcom is, presumably, already writing to the major copyright interests—there are not that many of them—to discover what they are doing so that it can fulfil its duty under the clause. If it adds a little line at the bottom, “How much have you sold online this year?”, that would answer my noble friend’s question. The data will just come as a result of an answer to one or two simple questions appended to communications that are already going out under this Bill. That would not even cost an extra stamp. It would be a matter of a few pounds. Given all the ingenuity of the Civil Service, how does the noble Lord manage to translate that into vast costs? What does he imagine Ofcom will spend money doing beyond what I have described?

The noble Lord will appreciate the extent to which this Bill puts very significant obligations on Ofcom. There is a whole series of proposals with regard to the annual report. I do not think that this request should be included in the annual report. It would not bring benefits, bearing in mind the significant amount of work that it would involve and the responsibility that Ofcom would bear for it. That is why I ask the noble Lord to withdraw the amendment.

My Lords, the noble Lord has not answered my question. What work? He need not answer me now, but will he please write to me saying what work would have to be done beyond adding a line or two to a letter which will have to be written anyway to obtain these data? What work will be necessary beyond that for which my noble friend has asked in adding up a few figures and comparing them with those of previous years to provide the result? In what way does he not understand that we have to do that in order to comprehend the significance of the level of illegal downloading and the consequences of this measure in reducing it or otherwise? That is the only way in which we can judge it.

Reducing the level of illegal downloading is not in itself an absolute good. If we reduce the level of illegal downloading, all we will do is to reduce a lot of people’s enjoyment of music and films. If we do not at the same time increase the level of revenue to the copyright owners, we will do nothing for them. We will produce a widespread bad, but no good. Just depriving people of something is not a good thing to do. It is good only if we can get more revenue for the copyright holders. That is how the effectiveness of this measure ought to be judged. It is an absolutely vital part of judging the performance of this Bill to know what its effect is on the revenue of copyright owners. That will cost mere pence compared with the cost of assessing the level of illegal downloads, which will require extensive research.

I hear what the noble Lord says and I will bear in mind the phrase that he used—a few pence. I will write to him about this issue but the context in which we are arguing this case is that the Bill is directed at tackling what we all appreciate are offences with regard to illegal activity. As I have indicated, there is no difference between noble Lords in any part of the House about the importance of promoting legitimate operations on the internet and extending legitimate copyright. The Government have made that clear in every aspect of defending this measure.

My Lords, I thank my noble friends Lady Buscombe and Lord Lucas for their support and for making my point rather better than I did. I am also grateful to the noble Lord, Lord Whitty, for making a very valid point about the importance of being able to measure what is happening. If you cannot measure what is happening, you do not know what is happening and you do not know whether what you have set out to achieve has been achieved. In that context, I cannot really see how the cost to Ofcom would be so great as to be relevant, as my noble friend Lord Lucas pointed out. If copyright owners are able to tell what is happening in the private sector by subscribing to various services, how is it that Ofcom cannot also see what is happening? I should have thought that any organisation that can afford to have its own bottled water would not find that cost too significant. If the Government cannot know what the starting point is and what will happen later on, they will have no method of knowing whether the Act is successful or unsuccessful. I do not know whether the Minister cares to comment on that.

My Lords, we will know whether the Act is successful in terms of the extent to which we make progress in reducing illegitimate traffic and finding ways in which fuller advantage of the opportunities which the technology provides can be enjoyed by all sections of society, particularly as regards those who produce material which requires copyright defence. The noble Lord obviously endorsed what the noble Lord, Lord Lucas, said. The implication was that this is merely a tick-box exercise that Ofcom would be involved in. It would not be that at all. The box may be ticked, but analysing the significance of the information received will take resources. Noble Lords opposite are dismissive of additional costs for a particular public institution, but spend a great deal of time saying how they will deal with this in general.

That is what I care about—that all the money that Ofcom spends on establishing the level of illegal downloading should have a purpose. Without knowing the level of illegal downloading, it has very little.

My Lords, the point is that, if traffic doubles, how do you know whether it is because of a vast increase in legal or illegal activity? Without measuring it, you cannot know. Obviously we are not going to get much further on this tonight. I beg leave to withdraw the amendment.

My Lords, this is a straightforward amendment. New Section 124F(4)(c) refers to,

“a description of the steps taken by copyright owners to inform, and change the attitude of, members of the public in relation to the infringement of copyright”.

It is an essential part of the equation that Ofcom and the UK Intellectual Property Office also take part in the education process. It should not be up to copyright owners alone to engage in education of the general public. UK IPO has an honourable record of trying to change attitudes and inform the public about the value of copyright, and about its contribution to the UK creative economy. There is a gap here. It is important that Ofcom, in its progress report, describes its own efforts, those of UK IPO and those of the copyright owners. That will give a more comprehensive picture of what is happening.

We have agreed in these debates that education is as important as enforcement. That theme has run through our proceedings. It was picked up in the Digital Britain report. There is no difference between us on the importance of education. However, it is important that we identify where that education will come from. I beg to move.

My Lords, Amendment 133, tabled by the noble Lord, Lord Clement-Jones, is interesting. I take the point that useful information could be provided by bodies other than copyright owners. Indeed, information is more likely to be accepted as reliable and impartial if it comes from bodies other than copyright owners, especially those able to take an objective view. However, we have concerns about the idea of Ofcom and the United Kingdom Intellectual Property Office getting involved in changing the public's attitudes. I hope that the noble Lord, Lord Clement-Jones, will forgive me for suggesting that that sounds as if we are asking impartial bodies with no stake in either camp to undertake a public relations campaign on behalf of copyright owners. Such a campaign would not only be unlikely to be effective, but might also cast doubt on the impartiality of the body responsible for administering the obligations code and adjudicating in disputes.

My Lords, the amendment would require the full report to the Secretary of State to cover any educational or awareness-raising activities undertaken by the IPO and Ofcom, in addition to those being undertaken by copyright owners. This is to misunderstand the nature of what we are trying to do. It is important to remember that this is a three-pronged approach to the online infringement of copyright. Inevitably, the Bill is most concerned with enforcement; but just as important are the efforts of copyright owners to develop new, attractive market offerings—that issue has been raised on a number of occasions—and the education of the general public on why copyright is important and worth protecting. It is primarily the responsibility of copyright owners to deliver on the commercial offerings, and also on the educational parts of the approach; and of course it is in their interests to do so.

The IPO produces some very well received educational material. I say that in response to the comment of the noble Lord, Lord De Mauley. By and large I agreed with his assessment of Ofcom. As I said, the IPO produces well received educational material explaining the function of intellectual property, and no doubt will continue to do so. However, it is the willingness of copyright owners to play their full part in tackling online infringement that we are asking Ofcom to report on here. That should not be joined or confused with initiatives in the public sector. On that basis, I ask the noble Lord to withdraw the amendment.

I thank the Minister for that reply. I also thank the noble Lord, Lord De Mauley, for his contribution, which was slightly half-hearted. The Minister is correct that the UK IPO produces valuable material. The fact that we are talking about copyright does not mean that we have to be advocates for creative rights owners. This is about educating people about the value of copyright, about why the right is important to our UK economy and about the consequences if people do not observe it. There should not be an issue between us on the value of education by public bodies such as Ofcom and UK IPO.

With all due respect to the Minister, I do not think that I misunderstand the nature of the progress report. In my view, it should deal with the way in which our culture and our attitudes towards copyright infringement are changing. One may want to involve the Advertising Association and various other associations that, strictly speaking, do not hold copyright. The amendment argues for a broader view than simply expecting copyright owners to do all the heavy lifting. We all have a duty to try to get to a position where people understand the need to observe copyright, the reason for it, and the importance of copyright to our future as an economy. I hope that the Minister will consider that further. In the mean time, I beg leave to withdraw the amendment.

My Lords, I apologise to the Minister for the amendment. It belongs several clauses earlier in the Bill, with the general dealings of Ofcom. It is entirely my mistake that it appears here. The Minister can choose whether to reply to it now or wait until Report, when I will put it in the right place in the Bill. It merely addresses the problem that arises where individual companies gain a large slice of the internet communications market and then start to restrict the services that are available. I do not propose any particular remedy, but this is something that Ofcom should keep an eye on. I will give the Minister an example. Although we provided that there should be no favouritism when it came to access to directory inquiry services over fixed lines, where a company offers voice over internet protocol it can restrict access to one such supplier. That is merely an example for the Minister. I beg to move.

My Lords, these sorts of things are very important. The Americans are greatly concerned about networks and neutrality because they have been having problems with people trying to grab control of a bit of the market. Also, ISPs are currently doing something called traffic-shaping, in which they decide what bits of traffic you are and are not allowed to have in an attempt to optimise the traffic over their networks, particularly at busy times. However, it could also have the inadvertent effect of favouring one form of traffic over another. The indirect effect could well be that beneficial things that come over peer-to-peer networks are acted against because there is pressure due to unlawful downloading. One could go on for hours trying to invent reasons for this, but I think that this is a more important amendment than people realise.

My Lords, as always, my noble friend makes his point very well. Despite his apology to the Minister, he has reinforced my view that what his Amendment 134 proposes is, as the noble Earl, Lord Erroll, said, important, whether or not this is the right place to do it.

My Lords, in the light of those comments, I shall give an abbreviated response, which in no way indicates that I wish to appear dismissive.

New subsection (4) in Clause 9 sets out what a full progress report from Ofcom must include. The amendment would, in addition, require Ofcom to carry out a review of the measures needed to encourage competition in electronic communications services.

I am not sure whether it is intentional but, as drafted, the amendment would require the report to cover phone, broadband and broadcasting services, together with other data services such as the provision of smart metering information, as well as content-based services such as access to film, music and other copyright-protected content online. It certainly cannot be right that in this part of the Bill Ofcom should be asked to carry out a report drawn so widely. In the light of that explanation, I hope that the noble Lord will feel able to withdraw the amendment.

Before the noble Lord sits down, I should like to express the degree of importance that I attach to this amendment. I very much hope that this whole subject will be discussed properly at some point during the passage of the Bill. It sounds to me as though the amendment goes to the heart of Ofcom’s core responsibilities—to ensure that there is a proper regard for competition. I hope that the Minister is comfortable and confident that this area will absolutely be a core part of Ofcom’s responsibilities in relation to the Bill.

My Lords, I entirely understand the noble Lord’s attitude. This amendment will reappear in its proper place in relation to the Bill on Report. For now, I beg leave to withdraw the amendment.

My Lords, I shall speak also to Amendment 137, which works together with Amendment 135. I think that by and large the noble Lord answered this question in his responses on previous amendments, so for now I shall move my amendment, listen to the noble Lord, Lord Clement-Jones, and, if the Minister says anything that I think needs amplification, question him after that. I beg to move.

My Lords, despite my noble friend’s brevity, I should like to say that these amendments go right to the heart of the progress report. Indeed, it is somewhat surprising that something similar has not already been included in the Bill. The question of whether loss of revenue to the copyright owners has been stemmed is not the best measure of success of the provisions. If the cost of the provisions proves to be greater than the amount of revenue received as a result of the provisions, the provisions surely cannot be counted a success. The Minister’s thoughts on this will be extremely interesting.

My Lords, I feel that I barely need to speak to my amendment, such has been the brevity of the previous contributors. I think that Amendment 136 is self-explanatory. The wording,

“an assessment of the extent to which any such proceedings against subscribers have been successful”,

seems to be an important addition. The amendment goes on to mention,

“an assessment of the extent to which the process for copyright clearance in the United Kingdom has improved … an assessment of the extent to which the legislation has had an impact on the adoption by subscribers of broadband services in the United Kingdom”.

Again, that seems to be a sensible addition to the kind of report that Ofcom is required to give and I hope that the Minister will consider it favourably.

My Lords, on the previous amendment the noble Lord, Lord Lucas, rightly mentioned that there is no point in this legislation cutting off people’s internet access and discouraging them from doing this, that and the other if there is no benefit to the rights owners. If it does that, it has no purpose. It will simply be acting like the traditional puritan who has a haunting fear that someone, somewhere, might be enjoying himself. There is absolutely no point in wasting public and other money on that.

My Lords, tonight I have been accused of puritanism, as well as of having an easy life—and so it goes on.

It is important that we do not require Ofcom to produce a report of such extent and detail that simply gathering the data for it and putting it together becomes a disproportionate burden in terms of both time and money. We should bear in mind the fact that consumers will ultimately pay the cost of this, whether in the price that they pay for content or the price that they pay for broadband connections.

New subsection (4) in Clause 9 already identifies the issues that we have good reason to believe are key in enabling the growth of the market in legal content: the availability of legal offerings, public understanding and awareness, and enforcement. In addition, it allows the Secretary of State to request Ofcom to consider any other matter.

However, I bring your Lordships some good news. I think that some of the issues raised here might be relevant, although some might not. In the interests of making progress, I suggest that we work on the basis that the Secretary of State will carefully consider all the issues raised by your Lordships and consider whether to ask Ofcom to include them in its progress reports. On that basis, I invite the noble Lord to withdraw the amendment.

My Lords, I am not quite sure what the Minister is saying. Is he saying that this is what the Secretary of State might include in a direction to Ofcom or that, when the Minister comes back to this on Report, there will be scope to introduce something that will be reflected in the Bill? I hope that it is the latter. I hope that this is a chink in the armour and that the Minister has noticed that even the fertile brains of the DCMS have realised that some aspects of the progress report can be improved. I well understand that the Minister does not want that report to become a great compendium, but some of these elements are extremely relevant. I hope that what is sauce for the goose is sauce for the gander. If we have discovered elements that should properly be included in the progress report, I hope that the Minister will come back with a suitably crafted amendment on Report to reflect that.

My Lords, I am greatly comforted by what the noble Lord said about the Secretary of State. I am sure that he will think of nothing else between now and 6 May. The crucial element of my amendment is the one that was raised in the earlier amendment tabled by my noble friend Lord Howard of Rising and it is certainly something that we will come back to on Report. Therefore, I beg leave to withdraw the amendment.