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House of Lords Hansard
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Civil Procedure (Amendment) (EU Exit) Rules 2019
25 February 2019
Volume 796

Motion to Approve

Moved by

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That the Rules laid before the House on 31 January be approved.

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My Lords, I beg to move the two Motions standing in my name on the Order Paper.

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Object.

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It may assist the noble Lord if I explain that I am not taking the two instruments together. I am going to speak to them together but they will be moved separately.

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They should be debated separately; not only moved separately.

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Then let us start the debate.

My Lords, the Sanctions and Anti-Money Laundering Act 2018 passed through this House last year. For noble Lords not familiar with this legislation, the sanctions Act provides the legislative framework for the UK to continue to meet its international obligations, to implement UK autonomous sanctions and to update our anti-money laundering framework—although the latter is not part of our discussion today—after we leave the EU.

Before I explain the nature of these instruments, I would like to provide some background and to share the context of our approach to sanctions. The UK has strong expertise in this area and, following our departure from the EU, we want to continue working together with international partners to ensure we can develop and implement effective sanctions in the future. As an EU member state we currently implement more than 30 sanctions regimes, designating around 2,000 individuals and entities. These include country-specific sanctions regimes, as well as regimes targeting Daesh, al-Qaeda and other terrorist groups. Noble Lords will be aware that the Prime Minister has committed that the UK will look to carry over EU sanctions into UK law after the UK’s departure from the EU. Applying pressure through sanctions, together with international partners, is one means of enabling us to deliver our foreign policy objectives.

One important feature of the sanctions Act that noble Lords discussed in detail during its passage through this House is the right provided to designated persons to challenge their designation. Chapter 2 of the Act provides a route for the designated person to request that the Minister carry out an administrative review of their designation. The sanctions review procedure regulations came into force on 7 January and set out the process to be applied in relation to such reviews. A review can be requested for various reasons, including where a designated person believes that the reasons for their designation are incorrect or that particular information associated with the designation is not correct. If, following the review, the Minister’s decision is to uphold the designation, the designated person has the right under Section 38 of the Act to apply to the High Court in England and Wales and Northern Ireland or to the Court of Session in Scotland for the decision made against them to be set aside.

The two statutory instruments before us today set out the process applicable in relation to such court challenges, and are a technical step in the establishment of the new autonomous UK sanctions regime. They make technical amendments to the Civil Procedure Rules in England and Wales and the Rules of the Court of Judicature in Northern Ireland. They do not make any new substantive provisions. The instruments provide the procedure that will apply when challenges to sanctions decisions are brought before the courts of England and Wales, and Northern Ireland, under the sanctions Act. These instruments will allow the Government to apply to the courts to use the closed material procedure where appropriate in relation to such challenges. This will enable the Government to defend legal challenges against sanctions decisions which are underpinned by sensitive information. I should make it clear to noble Lords that the UK will use public unclassified material wherever possible when maintaining and pursuing sanctions listings. In a minority of cases, classified material may be necessary to support or sustain certain listings. These rules of court thus provide for closed sessions for those exceptional circumstances where the Government have used classified information to support a listing which is then challenged in court.

As I said earlier, the mechanism for considering such information is an extension of the existing tried and tested procedure, which allows full consideration of the facts and protects the rights of entities. Under Section 40 of the sanctions Act, we will apply Sections 66 to 68 of the Counter-Terrorism Act 2008 to any such challenges against sanctions decisions made under the sanctions Act. Rules of court already made under the Courter-Terrorism Act 2008 and amended in a similar way to these instruments by the Terrorist Asset-Freezing etc. Act 2010 allow the Treasury to ask for closed material procedures to apply to proceedings involving challenges to financial restriction orders made under that Act.

The instruments we are considering make technical amendments to Part 79 of the Civil Procedure Rules 1998 and to Order 116B of the Rules of the Court of Judicature (Northern Ireland) 1980 to extend existing procedures to challenges against decisions made under the sanctions Act. They state that challenges against sanctions decisions under the sanctions Act should be treated in the same way as challenges against financial restrictions decisions made under the Counter-Terrorism Act 2008.

I should emphasise that failure to have these instruments in place by the day we leave the EU would represent a significant risk. It would mean that there would be no closed material procedure set out for court reviews against designation decisions under the sanctions Act, including the availability of the closed material procedure. The Government would not be able to defend legal challenges to sanctions where sensitive information underpins a sanctions designation. This could result in the designation being revoked. Obviously revoking designations could have a significant impact on the delivery of key foreign policy objectives, reduce our ability to co-ordinate sanctions actions with close allies and potentially allow individuals involved in dangerous activities to travel to or invest in the UK.

Before making the rules of court, the Lord Chancellor consulted the Lord Chief Justice of England and Wales and the Lord Chief Justice of Northern Ireland in January 2019, and they raised no concerns. I welcome this opportunity to discuss the statutory instruments and to answer questions from noble Lords. I beg to move.

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My Lords, I hesitated to rise because I was sure that a number of other people would raise issues. A number of distinguished lawyers, people who understand the constitution better than I do and people who understand, even more than I do, the implications of what we are doing are present. We are dealing with something of monumental importance. Those of us who are astonished at the way that the Prime Minister is acting at the moment—as though she were a dictator in a banana republic—are amazed at the way that some Members of Parliament of both Houses seem to be sitting back and letting it happen.

The implications are astonishing. We have already looked at them in relation to visas. We are now told that if we come out of the European Union at the end of March we will have to have visas, and it will cost €60 to go to countries which we can now go to freely and as many times as we like. We will have lorry parks all over Kent because of the arrangements for customs clearance. There are questions over medicines and food supplies, which people are really worried about. The president of the CBI is warning us on behalf of all industries of the Armageddon that we face. On aviation, we have already discussed how we are still concerned that flights might not be guaranteed to all destinations after the end of March.

We now come to a life or death matter which is of great importance to everyone. We are talking about sanctions against Daesh or ISIS, action against Russian oligarchs and dealing with terrorists. These are major issues. All it needs is for some mistakes to creep into the statutory instrument that we are considering for something dreadful to happen and for us to fail to be able to deal with terrorists in the future or impose sanctions when we wish to. There are likely to be unintended consequences if we get this wrong.

Normally, if we were starting from scratch, we would go through primary legislation line by line. The noble and learned Lord, Lord Mackay, with his huge knowledge, would alert us to some of the imperfections contained in it and my good friend, the noble and learned Lord, Lord Hope—again, from his great experience—would point out some of the difficulties. We would go through it line by line and be able to consider and vote on amendments. However, because this is being dealt with through a statutory instrument it is, again, a take-it-or-leave-it situation.

It is absolutely unacceptable for a Parliament to be treated in this way. I find it astonishing that people whom I know to be manifestly concerned are willing to sit quietly and let this get through. This is not acting as a Parliament and scrutinising something in the way that we should; it is a meek acceptance of something being pushed through, having been started to patch up differences in the Conservative Party for party-political reasons by David Cameron, who has now fled the scene. He is no longer with us or taking any responsibility for the mess that he has got us into. Other people spread lies during the leave campaign about what was to happen and some of them, for a while, took the Queen’s shilling, but they are no longer with us or taking responsibility for what is happening. It is outrageous that this is being undertaken. I hope that at some point before the end of March, more and more people will get up and call the situation unacceptable, which it is. If we allow all these statutory instruments to go through again and again—day after day, without question or challenge—then we are not fulfilling our function as a legislative Chamber of the Houses of Parliament of the United Kingdom, and we should be ashamed.

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I am not outraged. I welcome the statutory instrument. I have merely a factual question to put to the Minister. Paragraph 3.4 on page 1 of the Explanatory Memorandum says:

“In the view of the Department, for the purposes of Standing Order … the subject matter of this entire instrument would be within the devolved legislative competence of the Scottish Parliament if equivalent provision in relation to Scotland were included in the Act of the Scottish Parliament”.

My understanding is that the current legislation is governed by the regulations adopted in Scotland in 2017. Can the Minister tell us how the department in question reached that conclusion, and what discussions were had with the relevant department and with the Scottish Parliament itself before bringing forward the statutory instrument today?

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My Lords, closed material procedures were introduced by the Labour Government around 2008—or possibly before then—when they were subject to considerable controversy and discussion. They were introduced for a number of named, specialist tribunals in the context of terrorism; the applicability of closed material procedures in cases that involved the safety of the public were obviously a matter of balance as to where public interest lay.

Since then, these procedures have crept in scope—the noble and learned Lord, Lord Hope, used that expression in one of the cases that have been decided in relation to them. There was great controversy as to whether a court of appeal should hold proceedings with closed material procedures in place. The Supreme Court has now come round to them but was very reluctant to do so. The creep of the scope has now extended to the challenges to sanctions decisions. As the Explanatory Memorandum makes clear, this will be the first instance of the use of the powers in Sections 66 to 68 of the Counter-Terrorism Act 2008 in the context of sanctions.

It is unfortunate that a Minister who is challenged on a decision that he has made with material in front of him, can go to the court and say, “We must have in place these closed material procedures so that the person who is challenging my decision never sees the full basis upon which that decision was made”. A special advocate is then brought in to represent his interests—but I think it is regarded by all as a very unsatisfactory way of doing justice and carrying out the duties of the court.

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I am grateful to the noble Lord for giving way. Can he explain to the House how this is a change? I thought the whole purpose of this regulation was that nothing would change, but he is telling us that this will be the first introduction of closed material procedures in respect of sanctions proceedings. Can he explain to the House how that can be? It sounds like a significant change—not “no change”.

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The reason these regulations have come forward is the passing of the Sanctions and Anti-Money Laundering Act 2018, which was the very first piece of Brexit legislation to be brought before Parliament. Section 40 gives the Minister the right to make rules of court in order to carry out the procedures set out in that section, which are based upon the Counter-Terrorism Act. So it is a change of rules that these regulations are dealing with. The actual discussion about whether they should apply to sanctions was appropriate when the Bill was going through this House last year.

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Did the House agree that the closed material procedures could be used in these cases?

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The House agreed at that point. All I am doing is moaning slightly about the further extension of the procedures. There is nothing that I can do about that because they already passed into law in the 2018 Bill last year. I sat in on some of the proceedings but did not actually take part, although I know that others who are present did so. As I say, I am kicking against the further extension of these closed material procedures in the field of sanctions.

I have a second point, which is perhaps a bit more specific. Part 3 of this SI is extremely confusing. I do not understand why the statutory instrument should not simply have replaced Part 79 instead of making minor alterations to 20 of the 29 paragraphs. I would be glad to know why that has happened, why it was not replaced with a new Part 79 and whether this is the proposed procedure for future regulations brought forward to deal with Brexit legislation.

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My Lords, I want to add to what my noble friend Lord Thomas of Gresford has said and to comment on what the noble Lord, Lord Adonis, said. The noble Lord may remember that that first piece of Brexit legislation was very controversial and full of extra powers given to Ministers, and the noble and learned Lord, Lord Judge, who is in his place, was an extraordinary help to the House in highlighting those. On Report and thereafter, the focus was on several of the most egregious uses of those powers, but they were littered throughout the Bill. The noble Lord, Lord Adonis, is right to highlight this as one of the changes.

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My Lords, I would like to follow the observations of the noble Lord, Lord Thomas, mainly because I have been involved in one or two cases in the Supreme Court where this type of procedure has been used. It causes real problems for appellate judges because one of the features of the closed procedure is that you cannot give reasons for your decision that can be made public so you are taking a decision in private, the reasons for which are kept private as well. That is the situation that we are faced with.

With regard to the content of this measure, however, I cannot see it as extending the procedure any further than it exists at present. In response to the noble Lord, Lord Foulkes, I did not get up earlier because I could not see anything to comment on in the substance of the instrument. I cannot speak for other noble and learned Lords but I think there is some virtue in remaining silent if you have nothing to say.

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My Lords, I have never suffered from that difficulty. What the noble and learned Lord has said is very reassuring. It seems to a non-lawyer reading the Explanatory Memorandum as if the issues at stake are significant, not minor. From what he is saying, I think it is fair to say that while no one doubts the significance of closed-material procedures, let alone the sanctions regimes to which they apply, this does not involve any changes. Some of my good friends on the Lib Dem Benches are very wary of closed material procedures, as am I. Indeed, I find the noble and learned Lord’s brief description of them—judgments in which no reasons are given in public at all—to be a matter of extreme concern, and they should take place only in the most extreme circumstances. I am amazed that the noble and learned Lord, Lord Judge, allowed measures like that to pass the House at all, given his views on the growing extent of executive powers.

However, on the basis that there is in fact no actual change in powers that have already been granted by Parliament, clearly we would be doing the right thing just to allow this order to go through.

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My Lords, I will speak very briefly. Of course, we had extensive debates when the first Brexit Bill on sanctions went through and we have certainly spent a lot of time trying to restrict executive powers. However, one thing that was absolutely clear when we took that Bill through was that we needed sanctions regimes. We needed them to ensure that our progressive foreign policy—under whichever Government—could be maintained. Therefore, the Opposition supported the Bill and it is now an Act. I certainly cannot see any reason to not support the straightforward extension in this SI.

I have a couple of questions. One is on consultation; I expected my noble friend Lord Adonis to mention that it seemed rather limited. Is that the norm in these circumstances? Could it have gone a bit further? Also, on the timing, why has it taken so long to bring this rather simple SI forward? Should it not have come forward earlier, bearing in mind that it is linked to other SIs?

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My Lords, I am very grateful to those who have contributed. Let me address the important questions raised. The noble Lord, Lord Foulkes, raised a wide range of issues. His pertinent question was “Where are the lawyers?”; he asked why they were not standing up. The noble and learned Lord, Lord Hope, answered that question neatly, to use a judicial phrase, by stating that he had nothing to say. That is perhaps characteristic of him sometimes—although fortunately, for the benefit of this House, not always. I think it is a very helpful commentary on what are technically fairly mechanical provisions, if I might describe them as such.

On the important point about scrutiny, I say to the noble Lord, Lord Foulkes, that these instruments are made under an Act of primary legislation—Section 40 of the Sanctions and Anti-Money Laundering Act 2018—which this House went through line by line. The details of these SIs raised no new issues. The noble Lord, Lord Thomas of Gresford, had a similar concern about that.

My noble friend Lady McIntosh of Pickering raised the question of Scotland and Section 38 of the sanctions Act, which makes provisions to the effect that these rules of court need be made by Westminster in relation only to England, Wales and Northern Ireland. Scotland is to make its own rules, as per the primary legislation. As she will be aware, rules of court in Scotland are different and it is entirely appropriate that the devolved Parliament is placed in charge of these matters.

The noble Lord, Lord Thomas of Gresford, also raised what he described as the creep of closed material procedures. I understand his concern, but let me try to allay it. The Government believe that these procedures are right for cases which involve national security material. Previously, these cases were unable to proceed, which meant that questions posed by claimants remained unanswered. That seems unsatisfactory. The defendant—the Government—could not fully present their case, which is also unsatisfactory. In that event, designations might have had to be revoked. The purpose of the sanctions Act, augmented by these regulations, is to ensure that the hiatus, or dilemma, for both Government and applicants is resolved.

The noble Lord, Lord Thomas of Gresford, also raised an interesting question about the drafting format, asking why we were amending Part 79 rather than creating a new one. Amending the existing rules of court was felt to be the most appropriate and proportionate way to draft these instruments, because it ensures that the effect of closed material proceedings is unchanged in the context of sanctions decisions; in other words, there is a consistency about the provisions.

The noble Lord, Lord Collins, asked about delay. As he is aware, a very considerable volume of statutory instruments has been reaching the other place and this House. I acknowledge that a large body of work has had to be resolved and processed by this House. That has gone through the committee and sifting procedures. I accept that this instrument has been fairly late coming to this House but I hope that your Lordships accept, given the very technical nature of these provisions, which do not create any new policy matters, that it has been addressed adequately by the Government and that your Lordships have been given the opportunity to scrutinise them.

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I find the noble Baroness’s reply very reassuring. I am most grateful to her.

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I never cease to be amazed and surprised by the noble Lord, Lord Foulkes. I never quite know what will be aimed at me from that section of the Benches opposite, but I am very grateful to him for his observation.

I thank noble Lords for their helpful contributions. As I outlined in my opening speech, these instruments are crucial for setting out appropriate procedure for court reviews against sanctions decisions made under the sanctions Act.

Motion agreed.