HL Deb 28 November 2001 vol 629 cc301-11

3.5 p.m.

The Minister of State, Home Office (Lord Rooker)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Rooker.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 1 [Forfeiture of terrorist cash]:

Lord Kingsland moved Amendment No. 1: Page 1, line 9, leave out "a magistrates' court" and insert "the High Court

The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendments Nos. 2 and 16. As regards Amendment No. 3, having read Amendment No. 4 tabled by the noble Lord, Lord Goodhart, I do not intend to move my own.

The Committee stage of the Bill has followed Second Reading more swiftly than is customary. There may be occasions on which amendments are moved which bear no relation whatever to speeches made from the Opposition Front Bench. I simply beg the pardon of Members of the Committee if that happens.

As regards Amendment No. 1, under the powers set out in Schedule 1, a police officer can apply to the magistrates' court for restraint of cash which is expected to be associated with, or furthers, terrorist activities. The order is for a maximum of three months, extendable for two years. When the investigations are complete, an application can be made to the magistrates' court for forfeiture. There is a right of appeal of the forfeiture order to the Crown Court by any aggrieved person within 30 days.

We accept that that is a valuable weapon in our armoury to defeat terrorism because it is self-evident that, without funding, terrorism cannot flourish. We therefore support the extension of that power. However, a magistrates' court will be faced with difficult questions of fact and law in determining whether or not cash should be forfeited. Before making the forfeiture order, the magistrates will have to be satisfied that the cash was intended to be used for the purposes of terrorism, or consisted of resources of a proscribed organisation, or was or represented property obtained through terrorism. These issues of fact could be very complex, difficult to prove and hard to understand. Moreover, the law that applies to the proceedings would be essentially civil in nature rather than criminal. In our submission, a magistrates' court is not the right place to determine these issues.

We believe that the right court to determine these issues is the High Court. The High Court is, of course, a civil court and has the necessary expertise to deal with the difficult issues which could arise in any application for an order that cash he forfeited. A forfeiture order is a matter which should be dealt with by senior judges with many years' experience of financial litigation.

Applications for restraint orders are currently heard in the High Court. The Proceeds of Crime Bill would change the jurisdiction for restraint orders to the Crown Court. Lay benches and district judges, however, will have no experience of restraint orders which are complex matters of civil proprietorial rights. We submit that these complex, sensitive matters must be dealt with in the High Court. I have dealt with Amendments Nos. 1 and 16. I have surrendered Amendment No. 3 to the noble Lord, Lord Goodhart. I beg to move.

Lord Thomas of Gresford

In rising to support the noble Lord, perhaps I may also speak to Amendment No. 2. Since Committee stage follows closely on Second Reading and yesterday I said all that I wanted to say in relation to the difficulties that a magistrates' court will face in dealing with these problems, I shall not repeat myself. It is probable that those who drafted this legislation had in mind confiscation orders in drugs legislation where applications are made to magistrates' courts for the recovery of assets. That matter was considered by the Runciman report in 1994 which followed an independent inquiry into the Misuse of Drugs Act 1971. Paragraph 53 of that report states: At present, except where a receiver is appointed by the High Court, the magistrates' courts are responsible for recovering the assets named in a confiscation order. They may find themselves called upon to enforce an order in an amount of several million pounds with a default term of up to 10 years. These are amounts and sentences wholly inconsistent with the maximum penalties that a magistrates' court can impose on conviction, and we doubt whether they are the appropriate jurisdiction for the task. We therefore recommend that the responsibility for enforcement should lie with the Crown Court not with the magistrates' courts". The report made the strong recommendation that in relation to drugs legislation the magistrates' court was not the suitable venue.

Under the Bill this is a civil procedure which involves difficult areas of law. I believe that to require the High Court to intervene is to put it a little high. I do not believe that these are issues which should take up the valuable time of the High Court judiciary; instead, they should occupy the valuable time of the circuit judge of the county court who has complete expertise in civil matters and should be able to resolve these questions. That is why I have tabled Amendment No. 2.

Lord Renton

I rise to support Amendment No. 1 and with it Amendment No. 16. I agree with the noble Lord, Lord Thomas of Gresford, that it would be better to give jurisdiction to the county court than the magistrates' court. But here we are breaking new ground in law in a very important and complex field. I would have thought that it was essentially a matter for the High Court. To allow the magistrates' court to decide the matter would be unusual. Magistrates' courts very rarely deal with civil matters. Although they deal with licences for intoxicating liquor, which can be described as civil proceedings, they are quite simple matters. To allow magistrates' courts to deal with civil proceedings in a new, complex and vital area of the kind referred to in the Bill, especially forfeiture of terrorist cash, would be unusual. I do not believe that it would have the confidence of the public. I am sure that my noble friends are right to suggest that the High Court should have jurisdiction.

The Earl of Mar and Kellie

The noble Lord, Lord Kingsland, said that he would not move Amendment No. 3, but I should like to speak to it since my name appears next to the amendment. This is one of a number of amendments proposed by the Law Society of Scotland which I believe will help to ensure that this emergency legislation is both Scots law-proof and devolution-proof. Amendment No. 3 is intended to probe why the code of practice needs to be modified when the Terrorism Act 2000, of which it is part, passed into law so recently.

Lord Elton

Like my noble friend Lord Kingsland, I struggle to keep up with developments. I apologise if I have misunderstood the position, but I should like to ask the noble Lord who is to reply for clarification. Is it not the case that the Proceeds of Crime Bill is a government measure and there proceedings equivalent to those with which we are now concerned—terrorist cash—will take place in the High Court? What is the reason for dealing with terrorist cash, which may be as large or even greater, in a very much lower court with normally far less discretion? Even if the reason is the need for expedition, I believe that the Committee will hesitate before giving to magistrates a complex procedure which may have very considerable financial impact and may finish up in the wrong place.

Baroness Carnegy of Lour

At Second Reading yesterday I asked the Government to give an assurance that they would be in constant touch with the Scottish Executive on the drafting of the Bill. This matter is an example of what I spoke about yesterday. If on examination, or by persuasion, the Government accepted that the High Court was the suitable venue, the question would arise whether in Scotland the right place was the sheriff court, as the Attorney-General readily appreciates.

In all these matters, when one is considering in this Bill which court is the right forum for decisions to be made, very careful attention should be paid to the drafting so there is no confusion in haste in reading across to the Scots system. If I spot it when the Committee comes to it I shall ask about the job which has been given to the Procurator-fiscal in Scotland. I do not quite understand the position. However, believe that what I have said arises in relation to Amendment No. 1. If I can have that assurance I shall not continually refer to it, which may be rather tiresome. However, it is an extremely important matter. All the reasons given by previous speakers as to whether jurisdiction should be in the High Court or Crown Court apply equally to whether the sheriff court is the right place.

Viscount Bledisloe

In considering this matter I have looked at some of the matters that the court may have to decide in Part 5 of Schedule 1 to the Bill: property earmarked as terrorist property; tracing property: mixing property and chasing profits. All of those appear to me to be matters of singular legal complexity. Tracing and mixing property are normally matters dealt with in the Chancery Division because mere common lawyers cannot understand them. I should like to ask the Minister whether there is any special definition of "magistrates' court" for this purpose. Does it mean only a particular stipendiary magistrates' court or any magistrates" court? If it means any ordinary magistrates' court, surely there is a second problem in that very seldom can magistrates sit for several consecutive days to try these kinds of matters. To try to solve the questions we have been looking at on a series of single days, with adjournments in between before the court can be reconstituted, is asking the impossible of eminent, worthy laymen used to deciding simple questions of fact.

I do not have any great thoughts as between the High Court and the county court, but, unless the Minister can come up with a convincing answer, one or other of these amendments has to be right.

Lord Rooker

In replying for the first time today, I wish to thank noble Lords and the authorities of the House for the speed with which they have managed to marshal the amendments for the convenience of our debate. I realise the pressure that everyone has been under.

I shall take advice in regard to the noble Viscount's final question. The issues he raised are probably more relevant to the debate on Schedule 1, starting with Amendment No. 5, and I shall deal with them at the appropriate time.

In moving the amendment, the noble Lord, Lord Kingsland, made a case, but, throughout the Bill, the onus is on the Government to give evidence as to why we want to make changes. The cash forfeiture scheme in respect of terrorism is, as the Committee will appreciate, built on a similar scheme in respect of cash related to drugs. That scheme has been in force for a decade and proceedings in relation to drugs-related cash have always been held in magistrates' courts. I have no evidence—and none has been adduced today—that there have been any problems in this respect. The procedure has been heavily used—there is no question of a one-off, isolated case—and noble Lords have not adduced any evidence of problems that I should take into account. The issues are fairly straightforward and, therefore, can be placed before a magistrates' court.

If we moved the proceedings to the High Court, in particular, it would undermine the proposed scheme. It would increase expenditure enormously and might cause problems in meeting the important 48-hour deadline. There are some changes in the process of this scheme compared to other schemes, in terms of legal services and so on, but, if the amendment were agreed to, the 48-hour deadline for the first detention hearing would be seriously undermined.

The noble Lord, Lord Renton, said that we were breaking new ground. We are not. The procedure under the Drug Trafficking Act is well used in magistrates' courts. The Terrorism Act 2000 contains cash forfeiture procedures, which also take place in magistrates' courts. So far as concerns the Proceeds of Crime Bill, that is currently passing through another place. At the moment, it contains some 450 clauses, so I am not going to pre-judge what it may be like when it reaches your Lordships' House. That is not a reason for not answering the question, but the issue is covered in another Bill in another place and it will be several months before that Bill arrives here. Unless noble Lords can make out a case, based on evidence, that the present system has not worked in magistrates' courts, I ask the Committee to reject the amendment.

The noble Earl, Lord Mar and Kellie, referred to Amendment No. 3 and to the issue of the modified code of practice under Clause 1(5). The Home Secretary has made drafts of the modified code available and it has been placed in the Libraries of both Houses today. Members will therefore have an opportunity to see the draft code and to comment upon it. The amendment was brought forward because of a concern that the code would not be available before enactment. Quite clearly, that amendment is now unnecessary given the fact that the code is now available in the Libraries of both Houses.

Lord Renton

The Minister mentioned that the Terrorism Act 2000 provides a precedent for the jurisdiction of magistrates' courts. But this Bill has been introduced in quite different and much more serious circumstances than those which arose before the introduction of the Terrorism Act 2000—and, incidentally, from the point of view applying the law, much more complex circumstances than those which arose before that Act. In view of what has happened since 11th September, surely we should look at this matter with fresh minds.

Lord Rooker

We are looking at this matter with fresh minds. Obviously there are substantial changes. For example, cash can be collected from anywhere in the country; we are not as confined as we are under the terrorism legislation. In some ways, that adds weight to the fact that the quicker we can get a case to court the better. Therefore, meeting the 48-hour deadline is important. Values have also changed.

However, I do not want to go into the overall aspects of Clause 1 stand part. We are seeking to build on existing procedures; we are not seeking to invent the wheel. We have a well-tried and tested system, which has been operating in magistrates' courts since 1991, and there is no evidence of any problems in that respect. We know that there will be problems following September 11th, hence the Bill.

On the narrow issue of which court should deal with these issues, we have no problems with the system we are using at the moment. It is a well tried and tested system and I ask the Committee to put its faith in the lay magistrates of this country.

Lord Thomas of Gresford

I thought I had brought evidence with me by quoting directly from the recommendations of the Runciman report. But now that we know where we are, I shall go back to the report and find out on what those recommendations were based. I am sure that the Runciman committee, which inquired into the working of the Act, went into the matter with a great deal of thoroughness. It came to the conclusion that the magistrates' court was not a satisfactory venue for drug confiscation orders.

As the noble Viscount said, the machinery and the issues involved in the first schedule to the Bill—the tracing and earmarking of property and so on—are complicated. Magistrates, particularly lay magistrates, are in no way suited to deciding legal issues of that kind. Presumably they would have to do it on the advice of the clerk to the magistrates' court, and that is not on. I hope that the Minister will look again at this particular problem.

Lord Elton

The Minister told the Committee that we have no examples of what has gone wrong under the Terrorism Act 2000. We should wait until the next stage to hear the evidence of what has gone right under that Act. It has not been running very long and it would not be fair to ask the Minister how many cases involving substantial amounts of money have been heard.

In his reply, the Minister said that there would be a need for expedition—I presume it was his reply to me—because of the need to confirm or otherwise the first detention order within 48 hours. I may have misheard or I may misunderstand the law, but I thought detention orders referred to people rather than to cash. Perhaps he can explain the context of his reply.

Lord Rooker

It is a question of what happens to the money after the civil proceedings. At the moment, there seems to be an obsession with the word "detention", but I am dealing with what happens to the money after it is forfeited. After 48 hours the money has to go into an interest-bearing account—procedures will be set in train after that period, after the money has been collected—which is obviously right and proper. The money may be collected wrongly and therefore there must be set procedures. That is why there is a need for speed.

There has been one case so far under the Terrorism Act. However, I do not rest my case on the Act. I rest my case on the fact that the procedure has been working for many years under the drug trafficking legislation.

3.30 p.m.

Lord Campbell-Savours

Perhaps I may ask my noble friend a question, without wishing to press him too hard. I understand that under subsection (7) the appeal procedure is to the Crown Court. I am not a lawyer. but is there any evidence to suggest that there would be a higher incidence of appeal to the Crown Court in the event that the first stage were to a magistrates' court—in so far as people might feel that the judgment made in the first instance was not correct?

Lord Rooker

I am dealing with an amendment to Clause 1. I cannot see a subsection (7) in Clause 1. I shall have to take advice in order to respond to my noble friend at some other time.

Lord Swinfen

The noble Lord's reference is fine. It is to Paragraph 7 of Schedule 1, which is affected by this clause.

Lord Rooker

I accept that. But the reason the amendments are grouped is so that we can have an ordered debate. We shall have a fairly extensive debate on Schedule I when we come to the third group of amendments, which includes Amendments 5 to 15 and 17 to 22. I shall be happy to deal with my noble friend's point at that time.

Lord Kingsland

The Minister said that the burden of proof was on the non-government Benches in your Lordships' House to establish a better case for the High Court or the Crown Court than had been established by mere speeches in Committee. But the truth of the matter is that in many cases it is the Government, not the Opposition, the Liberal Democrat Party or the Cross-Benchers, who are in a better position to identify this evidence.

The key to our case is paragraph (c) of Clause 1(1): is, or represents, property obtained through terrorism". The noble Viscount, Lord Bledisloe, has spent much of his life dealing with the law of financial services. He is in an extremely good position to explain to the Government just how complex legal concepts like "subrogation" and "tracing" are. With the greatest possible respect to the Minister, I simply do not think that the average magistrates' court is capable of dealing with such issues. They are uniquely, now, matters which fall to the expertise of the Chancery Division. With the greatest respect, I suggest that it is for the noble Lord to disprove that proposition.

I should also like to say to the noble Lord that, frankly, I think it much more likely that he will find a High Court judge available within the 48 hours to deal with these complex matters than a magistrate. This matter can now stand over to the Report stage. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 and 3 not moved.]

Lord Goodhart moved Amendment No. 4: Page 2, line 2, at end insert— (6) An order under subsection (5)—

  1. (a) must be laid before Parliament after being made, and
  2. (b) ceases to have effect at the end of the period of 40 days from the day on which it was made unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order).
(7) In calculating the period of 40 days in subsection (6)(b) no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.

The noble Lord said: I begin by repeating a declaration of interest that I made late last night at Second Reading. I am vice-chairman of the council of Justice, an organisation which has submitted a briefing paper to a number of Members of the House in relation to the Bill. Having made that declaration twice, I hope that I shall be excused if I do not repeat it during future proceedings on the Bill.

The Minister has dealt with Amendments 1 and 16, which deal with an entirely different subject matter from that in Amendment No. 4. He replied briefly to Amendment No. 3, which raises a similar matter, when it was mentioned by my noble friend Lord Mar and Kellie. But because that reply was not wholly satisfactory, and because the Committee should know what Amendment No. 4 is about, I shall deal with it briefly.

Schedule 14 to the Terrorism Act 2000 deals with the exercise of certain powers under that Act by officers of the police, the Customs and the Immigration Service. Those powers include in particular the seizure of cash. Under Schedule 14, the Home Secretary issues a code of practice about the exercise of functions by those officers. The Home Secretary has to lay a draft of the code or revised code before Parliament, and brings it into operation by order. Under Section 123(4) of the Terrorism Act, the order must be approved by affirmative procedure.

Under the Bill, the seizure of terrorist capital provisions in the Terrorist Act are replaced by the provisions in Schedule 1 to the Bill. Schedule 14 to the Terrorism Act is not replaced. It simply applies to the new provisions rather than to the repealed ones.

Clause 1(5) of the Bill provides that the commencement order bringing Schedule 1 into force may make modifications to any code of practice under Schedule 14 to the Terrorism Act that is then in force. These modifications need not just be consequential.

Commencement orders are not normally subject to any form of parliamentary procedure. So we have a curious situation. Amendments to the Schedule 14 code normally require affirmative resolution. When the commencement order is made, the Home Secretary can modify the code without any form of parliamentary control; thereafter, changes revert to the affirmative resolution procedure.

This seems completely illogical. I accept that there must not be a hiatus when there is no code in force. The Delegated Powers and Regulatory Reform Committee, of which I am a member, picked up this problem and recommended the negative procedure for the order made under Clause 1(5). This amendment goes somewhat beyond the committee's proposal. It proposes to use the delayed affirmative procedure—that is, the order comes into force immediately, but lapses unless it is approved by both Houses within 40 days. That would be as close as one could get to the affirmative resolution procedure under the order.

If the Government were to indicate their willingness to apply the negative resolution procedure, as recommended by the Delegated Powers and Regulatory Reform Committee, I should be happy. But if the code is thought important enough to require the affirmative procedure, it is wrong to allow an occasion when it can be modified with no parliamentary procedure at all.

I accept that, as the Minister has said, he has placed a copy of the draft code in the Library. But some explanation should be given as to why it was not thought appropriate even to go as far as the negative procedure, as was recommended by the Delegated Powers and Regulatory Reform Committee. I beg to move.

Lord Rooker

I take the noble Lord's point. In the absence of being able to see the code, there is weight to his remarks. But the code is purely a modified version of the existing code. It is a consequential change, simply because the cash that will be collected under this clause will be collected in-country, as opposed to being collected at ports. The consequences of that change require modification of the code. That is the substance of the change.

When Members of the Committee have had an opportunity to examine the draft code, if they believe that it goes beyond that, I shall be more than happy to consider using the negative procedure. I am not against the idea. The codes of practice are important. We want them to carry some force as codes of practice rather than legislation. Sometimes it is better if they carry the force of Parliament, although that is not always the case.

The modifications of the code are merely consequential amendments relating to that one change. There are a couple of drafting improvements, but they are minimal. If Members of the Committee believe that I have over-egged the pudding, I shall certainly be willing to consider the negative procedure when we debate this matter on Report. I believe, however, that when noble Lords see the changes in the draft, they will see that the changes are essential and that they are purely consequential on the expansion of the cash seizure scheme; namely, that cash is seized in-country, not merely at the ports.

Lord Campbell of Alloway

I have not seen the code. I should be conversant with the trigger clause but am not. Can the Minister say whether it is a code of practice or whether it has legal efficacy? If it has legal efficacy, surely it must have affirmative or negative resolution—from my point of view that is probably immaterial. But I should like to know the status of the code.

Lord Rooker

I shall cite the sentence that I have here because that will get it on the record. The code of practice in question is a code of practice for authorised officers who are officers empowered under the Terrorism Act 2000 to make cash seizures. It is simply as a consequence of the expansion that the code needs to be modified. It clearly has not received the negative procedure in the past. That is the implication of the note that I have.

Lord Campbell of Alloway

It has no legal efficacy. It is merely a code of practice.

Lord Rooker

But that is not unusual for government officers. On a variety of issues we discuss with industry a code of practice. The Government make inquiries of industry. We set down a voluntary arrangement. We do not want to be heavy handed. If we can operate non-legalistic codes of practice which are effective and do the job it is better than having to ram codes of practice through the legal system.

Lord Elton

I think that I am right in saying that the code of practice in question was printed as a draft called the Code of Practice for Authorised Officers under the Terrorism Act 2000. It was made statutory by the publication of a statutory instrument. The Minister is now saying that under the present legislation further amendments are needed and that they should be made under this legislation and not, for some reason, under the Terrorism Act 2000. I understand that such a code has force within a court of law and can be appealed to in a case. Therefore, in the sense to which my noble friend Lord Campbell of Alloway refers, it is a legal document with force.

Perhaps I may express a concern. The Minister said that this is needed only to make a couple of necessary and quite minor changes without which the provision will not work. We all accept that. But the power remains for ever. The power remains with the Secretary of State to make far more sweeping changes with no restraint from Parliament.

Lord Goodhart

Perhaps I may intervene. When making the commencement order, this is a once-and-for-all power to vary without parliamentary control. Thereafter subsequent changes go back to the procedure under the Terrorism Act which requires affirmative resolution.

Lord Elton

I stand corrected. Clearly the Minister's undertaking has more force than it would otherwise.

Lord Rooker

The noble Lord is right. It is a one-off. The code is introduced under the 2000 Act. If a revised code of practice were brought into force under that Act it would be by the affirmative procedure. I hope that I have not misled the noble Lord. The effect of the amendment would be to make a commencement order, in so far as it revised the code, subject to the emergency affirmative resolution procedure. It would cease to have effect unless it was debated and approved by both Houses within a period of 40 days. The modifications of the code are set out in the commencement order. This would have the effect of initiating debate on the code itself. That is why we do not think that the amendment is necessary. It is a small consequential adjustment.

Lord Goodhart

I am grateful to the Minister. I shall look at what the revised code states. Unless it appears to go beyond what is consequential, I would not wish to bring back the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Lord Grocott

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.