HL Deb 18 March 1980 vol 407 cc177-84

3.20 p.m.


My Lords, I beg to move that the Bill be read a second time. My noble friend Lord Cullen of Ashbourne ordinarily speaks, and speaks with distinction, in this House for the Department of Health and Social Security, but I hope that the decision that the one easily available Member of the Cabinet should move the Bill will meet with the approval of the House. Validation Bills do not come before us every day of the week, and I think that I owe it both to the House and to my colleagues to ensure that the Second Reading at least of the Bill is moved in this way.

In this process there is both an advantage and a disadvantage. The disadvantage is that I am not as well briefed on the affairs of the Department as is my noble friend, but my noble friend, Lord Sandys, is on the Government Front Bench, and I am sure will do what is necessary to repair the defect. On the other hand, in some ways there is something of an advantage, because this House is not a mirror image of the other place but has its own constitutional function to perform. Therefore, I hope that it will not follow the other place into debating some of the details which Members of another place felt it necessary to discuss. I refer to the course of events prior to those which made the Bill necessary, and the cognate problems of the divergent interests between say, Kent and Sussex, on the one hand, and Lewisham, South-wark and Lambeth and other London boroughs on the other—matters which occupied so much of the time of the other place. Nor, I think, can the Government properly indulge in hubris on the one hand, nor the Opposition in Schadenfreude on the other We have all had our problems in the past, and no doubt we shall all have them again. We face a concrete situation and must deal with it as practical men and women of affairs.

Fortunately, the Bill is mercifully short and requires little technical explanation. It arises from a decision by Mr. Justice Woolf in the Queen's Bench Division of the High Court on 25th February last. That decision was delivered on the application of the three London boroughs of Lambeth, Southwark and Lewisham, which together comprise an Area Health Authority (Teaching) under the structure of the National Health Service as it was reorganised by the National Health Service Reorganisation Act, 1973, now consolidated with other statutes in the National Health Service Act 1977. Any references I make in my remarks to the numbers of sections relate to the consolidated legislation.

The House will recall that under that structure there are, at the base of the pyramid, a series of area health authorities, supervised and administered by a smaller number of larger regional health authorities, and, at the apex of the pyramid, the Secretary of State for Health and Social Services. An area health authority (teaching) of which the applicant boroughs are an example is one which, in addition to the ordinary functions of an area health authority, contains one or more universities with substantial facilities for undergraduate or postgraduate clinical teaching. In this authority I believe that there are no fewer than three such teaching institutions.

According to the timetable I have, the legal proceedings in question were begun on 30th October by way of an application for judicial review under the new Order 53 of the Rules of the Supreme Court, leave to issue which had been granted ex parte by the Divisional Court on the previous day. This application for judicial review related to a direction of the Secretary of State dated as long ago as 1st August last which, as amended five days later on 6th August, purported to exercise his powers under Section 86 of the consolidated legislation by removing the functions of the area health authority, and then to give named commissioners, two of whom had been members of the authority, who have exercised the functions of the authority ever since; and, by agreement with the authority made after the judgment, will continue to exercise them until the end of their financial year which terminates on 31st of this month.

The effect of Mr. Justice Woolf's judgment, to which I will return in a moment, is that the original direction having been declared invalid, the regional authority from 1st to 6th August, and thereafter the five commissioners, have been performing statutory functions and, as agreed, will continue to perform them without statutory authority so to do. Since this has been going on since 1st August last, complete legal and practical chaos would ensue unless Parliament stepped in and substituted order and certainty for the resulting confusion.

The solution proposed by the Bill—which after some protracted debate in another place, was passed without amendment—is to provide that until 31st March next, when, at the beginning of their new financial year, the authority will resume its normal functions, the commissioners are to stay in office, and the invalid direction of 1st August last and its amendment will be treated as if from the first it had been a valid direction under Section 86 of the Act. This will have the effect of giving statutory authority for all that will have been done under its purported authority, but it will, of course—and this is important—preserve any right of action, whether in contract or in tort, which would have subsisted against the commissioners or the authority had the act or omission concerned been done with the full authority of the consolidating legislation behind it. In other words, the commissioners will remain liable for any act or omission which would have given rise to liability had they been properly appointed. They have no indemnity. My task is therefore to establish that this solution is the proper course of action to take, and, owing to the responsible attitude adopted by the respective parties to the litigation and thereafter by the Opposition Front Benches in both Houses, I trust that I shall succeed in performing it to your Lordships' satisfaction.

I begin on a somewhat philosophical note. Breaches of the law, and in particular any unauthorised use of power in authority, are never to be treated lightly, and must not be, nor must they be brushed aside as being of no importance, and I shall not attempt to brush them aside. It is a wise provision of our law embodied in a well known Latin tag, which forbids ignorance of the law or of its true effect, however excusable, to be used as an excuse for breach of any legal provisions. It was therefore right that my right honourable friend should offer an unqualified apology for his action, so soon as he had come to the conclusion that the judgment was not one from which it was desirable to appeal. I do not think he could have been expected to do so before that moment. The arguments involved were themselves numerous and complicated—so numerous and indeed so complicated, that at the end of his judgment, which ran into 27 foolscap pages of transcript, all of which I have read, the learned Judge himself seems to have envisaged that an appeal was more probable than not, and to have expressed the view, anticipating in one sense the present Bill—and here I quote his exact words: It should not be assumed that I am intending the Commissioners to cease to function during the interim. Speaking for myself, I think that it is in the public interest that they should continue, in the interim, to act ". That is what we are proposing should happen.

May I say a word of praise for the responsible attitude adopted by the three boroughs in their hour of victory. No sooner had the judge uttered these words which I have quoted than counsel for the three boroughs, acting, of course, on the instructions of the three boroughs, expressed the suggestion—this again is embodied in the Bill and again I quote—that: the transfer of the functions of the five commissioners ought to continue to the end of the financial year, that is, the 31st March 1980 ". That again is what the Bill proposes. I have therefore the authority not merely of my right honourable friend but of the learned judge himself and of the successful litigants, as well as of the Opposition Benches in the House of Commons, for the pragmatic sanction which I am now proposing in the Bill.

I should add, if I may, a word of praise for the accommodating attitude adopted by the authority, since after a meeting with my right honourable friend he was able to tell Parliament on 11th March that: if restored the authority would abide by the cash limits established for the area —" [Official Report; Commons, cols. 1173–1174.] Thus, although it would be wrong on my part if I were to impute to them any enthusiasm for the policies involved by the imposition of the cash limits, due respect for their constitutional obligations is now clearly restored.

In the event, of course, as we now know, contrary to the expectation of the learned judge and of my right honourable friend's successful opponents, my right honourable friend decided not to appeal. In this, I think, he is also to be praised for his decision. Quite apart from the merits, to which I will return in a moment, he was able thereby to reduce the period of uncertainty inseparable from litigation from a matter of weeks, if not months, to a matter of days and probably thereby reduce the emotional tension and increase the chances of peaceful co-operation for the future.

No one, of course, can say what would have happened had an appeal gone forward and I will not attempt to speculate on the result of it. But I hope, since it is relevant to the present discussion, that the House will permit me one brief word of comment. The learned judge not merely acquitted my right honourable friend of the smallest degree of bad faith—that, of course, one would have expected —but also of acting unreasonably. He also ruled against a number of the legal arguments which had been advanced on behalf of the boroughs.

His judgment, in the result, seems to me to have been based on two separate grounds. On the first, he seems to have thought that my right honourable friend may have proceeded by the wrong route—that is to say, going by way of Section 86 rather than by way of Section 17, followed by Section 85. This issue depended on the view one takes of the facts. It was hotly contested at the hearing, and, since all the evidence was on affidavit and therefore not cross-examined to, it could of course easily have been appealed, although one must not speculate as to what might have happened had an appeal been heard.

But the second point was a pure point of law. Though from a procedural point of view it was even more easily susceptible on that ground as a matter of appeal, I do not think that I ought to refrain from saying that I think the learned judge was right in the view that he took and that my right honourable friend was wise to adopt his decision. This was that even on the assumption that Section 86 was the correct route to take, or at least one of two possible correct routes, the direction under it should have specified a definite period—say, until 31st March 1980—within which alone it should operate. If this be right—and, as I have said, I think it is—however praiseworthy my right honourable friend's action would have been if the direction had been properly expressed, it was invalid for an error of form visible on its face.

Attempts have been made in another place to cast scorn on the advisers of my right honourable friend for what must be seen in retrospect as a legal blunder, but I an bound to say—I do not know whether the noble and learned Lord who is to am bound to say—I do not know whether follow me would agree—as one who has practised in the law in one way or another for 50 years that it is easy to be wise in such matters after the event, and with hindsight, and that none of us lawyers can really say anything else in such a situation except"There, but for the grace of God, go I ".

Moreover, it is legitimate to say that whichever of the two points made by the learned judge had been upheld on appeal—and in the absence of appeal one should assume that both would have been upheld —neither casts any doubt on the correctness of the decision from the point of view of policy. However much one may sympathise with the authority for their reluctance, whether when confronted by Mr. Ennals or whether when confronted by his successor, to abide by cash limits at the expense of the important services which they provide, once it had been established, as it was established, that the cash limits had legal force, or would have legal force when buttressed by a direction, the authority was under a legal and constitutional obligation to accept them, and if it refused to do so would have been bound to have been replaced by commissioners, either under Section 85 or under Section 86; and these commissioners would in fact have done exactly as the present commissioners have done, whether they had been appointed by a Labour Minister or a Conservative Minister, and whether they had been appointed by way of Section 17 and Section 85 or by a valid direction under Section 86.

I submit to the House that this is really conclusive of the validity of the arguments for the Second Reading of this Bill, and I also submit that it is equally conclusive of the one remaining area of controversy which was raised in Committee on the Floor of another place and at least adumbrated in this House when the noble and learned Lord, Lord Elwyn-Jones, commented on my right honourable friend's original Statement which I then repeated here.

Once one has established, as I believe I have now done, that what was wrong about my right honourable friend's action was not the end he had set himself but either the route he had taken to reach it or the form in which he had chosen to express his decision, it is clear that the validation of his acts and the following acts of the commissioners is the only sensible course to take.

I have already said that this is not an indemnity Bill in the true sense. It is a validation Bill. It does not indemnify the commissioners against anything which they did or failed to do which would have been illegal had they been validly appointed. It only puts them in the same position as regards liability as they would have been if they had been validly appointed, as they could have been. That seems to me to be entirely right.

Other health authorities and at least one area health authority—teaching, were in the same position and under the same constraints as regards cash limits as were Southwark, Lambeth and Lewisham, but they chose to accept their obligation rather than to defy it. In doing so, neither they nor their Lambeth counterpart have incurred any liability of their own and so, equally, no inhabitant and no supplier or customer of the Lambeth, Southwark and Lewisham authority ought to gain a fortuitous advantage over their counterparts in, let us say, Hounslow or Hammersmith simply by reason of the fact that my right honourable friend chose to walk to his destination on the wrong side of the river or to express his decision in the wrong form or words. I think it follows from this that the Bill should command the support of the House, at least on Second Reading. I therefore beg to move.

Moved, That the Bill be now read 2a.—(The Lord Chancellor.)