HL Deb 22 April 2002 vol 634 cc96-116

8.32 p.m.

House again in Committee.

Clause 28 [Defendant convicted or committed]:

Baroness Buscombe

moved Amendment No. 53: Page 18, line 33, leave out "appropriate" and insert "just The noble Baroness said: In moving Amendment No. 53, I shall speak also to Amendments Nos. 54, 174 and 175. Under Clause 28, the prosecutor or the director of the assets recovery agency can still apply for a confiscation order after the defendant has been convicted if he absconds. The court can make such an order only if the prosecutor or the director applies to the Crown Court to proceed under the clause and the court believes it appropriate for it to do so. It is the word "appropriate" with which we take issue. It would be better for the court to proceed under the clause only if it were just rather than unjust to do so. A court will be more familiar with a test based on whether it is just or unjust to proceed under the clause rather than merely appropriate or inappropriate. I beg to move.

Lord Rooker

As the noble Baroness said, the effect of the amendments would be to make the power of the court to undertake confiscation proceedings against an absconder contingent on whether it were just to do so. We are satisfied that the word "appropriate" has the same meaning as the word "just" in the context in which it is used. It will always be appropriate for a court to exercise its discretion in a manner that is just. The effect sought by the amendments is therefore already achieved by the Bill, so the change is unnecessary. I hope that it meets the spirit of what the noble Baroness seeks to say that, for our purposes, the two words are interchangeable. I therefore hope that she will not press the amendment.

Baroness Buscombe

I fear that I must take issue with the Minister. We do not believe that "appropriate" and "just" mean the same, either in law or in fact. One is more discretionary than the other. I should like to consider what the Minister has said. We beg to differ hut, for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 agreed to.

Clause 29 [Defendant neither convicted nor acquitted]:

[Amendment No. 54 not moved.]

On Question, whether Clause 29 shall stand part of the Bill?

Lord Goodhart

I disagree that Clause 29 should stand part of the Bill, and shall also speak against Clause 184 standing part of the Bill. Clause 29 gives the court power to make a confiscation order where the defendant absconds after being charged with an offence but before he has been convicted. That is a dubious proposal. English law does not recognise trial in absentia. In special circumstances there is provision for, for example, removing a defendant from a trial at which he is being disruptive so that the trial continues in his absence, but as a principle, we do not recognise trial in absentia—whether or not that is caused by the defendant absconding.

Whatever may be the position with regard to a civil recovery order, it is plain that a confiscation order is a form of punishment—the Minister accurately described it as a penalty—following a criminal conviction. In Clause 29, the Government are imposing the penalty before the conviction. That is a case of "Sentence first—verdict afterwards"—literally, a Through the Looking-glass situation. It is also unnecessary. If there were no power to make a confiscation order where the defendant had absconded, the prosecution could do at least two things.

First, no doubt in such a case the prosecution would have obtained a restraint order. It could simply leave that restraint order outstanding. Assets are almost certain to be subject to a restraint order; if not, they will no doubt be long gone before the absconder can be brought back for trial. Secondly, the director or prosecutor could switch from seeking a confiscation order to seeking a civil recovery order under Part 5—where absence is not a bar to proceedings continuing.

Permitting the possibility of a confiscation order in a case in which there is no conviction contravenes a fundamental principle of English criminal law. The remedy provided by Clause 29 is therefore inappropriate and should be dropped, especially as alternative means of proceeding are available to achieve the same result.

Clause 184 applies the same provision to Northern Ireland. By some oversight, I failed to object to the corresponding clause for Scotland—Clause 115—but if we have to return to the matter, I shall certainly object to it as well.

Lord Rooker

The noble Lord, Lord Goodhart, has explained why he considers that the clause should not stand part of the Bill. At one point, I heard him say that it was a matter of fundamental principle. If it were, his argument would have some force. However, we are not inventing the wheel here. I shall explain why the clause should remain in the Bill.

The noble Lord's main argument is that Clause 29 deals with a situation in which a person has been neither convicted nor acquitted of an offence and that, even though the person has absconded, it ought not to be possible to make a confiscation order in his absence. The first point that I must make is that the provision was introduced in virtually the same form in the Criminal Justice Act 1993, although, at present, it applies in England and Wales only in drug trafficking cases. It was consolidated in Section 19 of the Drug Trafficking Act 1994. The key change made by the clause is to extend—not invent—the power to make a confiscation order in absentia against an absconding drug trafficker to cases involving those who have been charged with other crimes.

The justification for the power is the same as for Clause 28. We cannot think of any reason why a person who evades justice by absconding should be able to avoid having a confiscation order made against him. The fact that a person has escaped prior to his court case being heard must tell us something about that person. Nevertheless, there are, of course, numerous safeguards built into the procedures to ensure that they are fair. I would not be able to defend them were that not the case.

First, a confiscation order cannot be made until a period of two years has elapsed, starting on the date on which the court believes that the defendant absconded. That should knock out cases in which the defendant has absconded not because he is guilty., but for family or health reasons. Secondly—and exceptionally—any third parties who are affected by the confiscation order can make representations to the court. That recognises the fact that the defendant will not be present in court to provide information to the court about his realisable property. An absconder who returns to face proceedings will have an opportunity, if convicted, to challenge the size of the confiscation order under Clause 30. If he is acquitted, the order must, under Clause 31, be set aside. There is also the prospect of compensation under Clause 73—a wide provision—where an order is varied or negated.

I should also say that, by virtue of subsection (5)(d), the assumptions cannot apply to a case that falls to be considered under Clause 29. It might be argued, of course, that the absence of the assumptions from the clause rewards the defendant for absconding. However, the stronger argument is that the principle underlying the assumptions is to require the defendant personally to account for his wealth and to give him an opportunity to rebut the assumptions. That will not be possible in absconder cases, and we believe that it is right that the assumptions should be disapplied in those circumstances. Furthermore, the effect of subsection (5)(e) is that a reconsideration of the defendant's benefit under Clause 22 is not possible while the defendant remains an absconder. The same principle would apply to Clauses 20 and 21, but it is not necessary to disapply those clauses. They apply only if the defendant has been convicted, which is not the case under Clause 29.

The noble Lord mentioned Part 5. There is the question of whether the clause is really necessary, given that civil recovery is possible under Part 5. However, the fact is that, under civil recovery, the authorities are required to prove the criminal derivation of the recovered property. In the case of criminal confiscation, the defendant's benefit is calculated. That is a different kind of exercise and a completely different procedure. A confiscation order may be enforced against any realisable property, legally or illegally obtained. There is a case for both schemes. Suitable provision has been made under Parts 2 and 5 to ensure that there is no double counting.

We consider that the clause serves a useful purpose and is a deterrent to those who may consider absconding before criminal proceedings are concluded. To forestall the obvious question from the noble Lord—"How many times has the power been used?"—I must say that, although it is on the statute book, it has never been used. However, the power must stay in the Bill because, if we were to remove it, there is an unacceptable risk that a major case might fail because their was no power to make a compensation order in cases in which the defendant had absconded.

I have stuck closely to a highly technical brief, and I hope that the noble Lord will take it on board that this is not a deviation from principle: it is an extension of an existing legal activity open to prosecuting authorities. It is already on the statute book.

8.45 p.m.

Lord Goodhart

It is obvious that it is a considerable extension of the existing law. I acknowledge that it is based on an existing statutory provision, but the Bill extends it from England and Wales to the rest of the United Kingdom. It also extends it from drug trafficking cases to a much larger swathe of offences.

The most important difference is that we now have the procedure for a civil recovery order under Part 5. In the case of somebody who flees abroad to avoid a charge and goes to a country where extradition is not available or where, for some reason, the extradition proceedings do not succeed, a civil recovery order will be applied for. Plainly, it is appropriate to treat someone who absconds abroad during criminal proceedings in the same way as someone who evades criminal proceedings by going abroad and going into hiding or successfully resisting extradition before the proceedings have formally started. The civil recovery order is more appropriate than a procedure that would, in fact, apply a penalty before there had been a conviction. As the existing powers have not been used, there has been no chance to challenge their validity in the courts.

I am still concerned. We will carefully examine what the Minister said and may bring the matter back on Report.

Clause 29 agreed to.

Clauses 30 and 31 agreed to.

Clause 32 [Appeal by prosecutor or Director]:

Lord Goodhart

moved Amendment No. 55: Page 21, line 15, after "order" insert ", the defendant may appeal to the Court of Appeal against the order and The noble Lord said: Clause 32 gives to the director or the prosecutor the power to appeal against a decision not to make a confiscation order or to appeal if an order is made but the director or prosecutor is unhappy with it—for instance, he might think that it does not go far enough or confiscate enough property. We do not object to that, but the Bill does not say that the defendant has a right of appeal against a confiscation order.

It would be completely wrong—and probably in breach of the Human Rights Act 1998—to deny the defendant a right of appeal against a confiscation order. Clause 32 does not say that the defendant has such a right. The Government may assume that the confiscation order is part of the sentence and could be covered by the ordinary right of appeal against it. However, the Government's general attitude is that a confiscation order is not part of the sentence, as is made clear, for example, in Clause 16 and Clause 7, which has now been removed from the Bill. There is a plain differentiation between the confiscation order and the sentence.

If that is right, if the confiscation order is not part of the sentence, are the Government satisfied that the defendant will have a right of appeal against the confiscation order on some other basis? If so, what? If not, what possible justification is there for refusing a right of appeal? If the Government really intend that there should be no right of appeal by the defendant, that is something which we would regard as completely unacceptable.

I await with some interest to hear the Minister's comments. I beg to move.

Lord Rooker

I am sure that I shall be able to satisfy the noble Lord, Lord Goodhart.

The amendments are based on a misunderstanding. The Bill already gives the defendant the right of appeal in question, as indeed the confiscation legislation always has done. I apologise for this incredibly large and complex Bill. But I draw the noble Lord's attention to Schedule 8, paragraphs 4 and 9, which amend the Criminal Appeal Act 1968 and the Criminal Appeal (Northern Ireland) Act 1980 respectively to make it clear that a confiscation order and a specified variation of a confiscation order fall to be treated as a sentence for appeal purposes. That has the effect of creating a right of appeal against a confiscation disposal, which is separate from the right of appeal against sentence.

I appreciate that there has been little time for the noble Lord to read the Bill right through. I have just read it for myself and I believe that what I have said is correct; that is, that the right of appeal already exists, as it should.

Lord Goodhart

I am grateful to the Minister. All I can say is that, given the limited time I had to look through the Bill, I do not believe I can be faulted for not noticing something in Schedule 8 which is introduced by Clause 448 and is way distant from Part 2, which is what we are dealing with.

Be that as it may, I am pleased to hear that my concerns are unfounded and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 56 not moved.]

On Question, Whether Clause 32 shall stand part of the Bill?

Lord Kingsland

There are essentially two reasons why we oppose Clause 32 standing part of the Bill. The first is that promoted by the noble Lord, Lord Goodhart. I, like the noble Lord, had not spotted the provisions in Schedule 8 which answered the question that the noble Lord asked.

The second reason why we question whether Clause 32 should stand part of the Bill is, essentially, about the knock-on effect in Clauses 33 and 34. Clause 33 refers to the Court of Appeal's powers on appeal; and Clause 34 concerns a further appeal to the House of Lords.

Normally, appeals to the Court of Appeal concern points of law. Fresh evidence can only be adduced by the parties at this stage in very special circumstances. Yet if Members of the Committee glance at Clause 33(2), it will be seen that, On an appeal under section 32(2) the Court of Appeal may confirm the decision, or if it believes the decision was wrong it may …itself proceed under section 6 …or direct the Crown Court to proceed afresh under section 6". That is an extensive power for the Court of Appeal to wield. It can essentially re-run the whole case, either under its own supervision or instruct the Crown Court to do the same.

Then over the page, in Clause 34, it will be seen again that an appeal lies from the Court of Appeal to the Judicial Committee of your Lordships' House; and the powers that that committee can wield in those circumstances are described under subsection (4) and are extensive. Clause 34(3) states: On an appeal from a decision of the Court of Appeal to confirm the decision of the Crown Court not to make a confiscation order or from a decision of the Court of Appeal to quash a confiscation order the House of Lords may …confirm the decision, or … direct the Crown Court to proceed afresh under section 6 if it believes the decision was wrong". Subsection (5) states: In proceeding afresh in pursuance of this section the Crown Court must comply with any directions the House of Lords may make". That means that the individual who is the subject of the confiscation order has to go through no less than three stages of first instance hearings with, as far as I can see, the prospect of having to face, at each level, fresh injections of evidence by the prosecution or by the director. I shall be interested to hear from the noble Lord the Minister the logic that lies behind those provisions and about the extent to which he thinks they conform with the European Convention on Human Rights. I beg to move.

Lord Rooker

It is with some surprise that we see the Opposition contesting this clause. I hope to be able to satisfy the noble Lord, Lord Kingsland, on this point.

It is true that Clause 32 does something quite new in the law of England and Wales and it will be of great benefit to the efficient operation of the legislation. For the first time it provides the authorities with a general right of appeal in confiscation proceedings.

The new right of appeal is available both where the Crown Court makes a confiscation order and where it does not do so, and it is wide enough to cover any decision of the court. The appeal is, of course, concerned with the decisions of the judge, not with the verdict of the jury or any matter underlying the conviction which preceded the confiscation hearing.

The purpose of this appeal is to deal with errors of law; for example, the sort of case where the court refuses to comply with a clear statutory requirement, not least the requirement to go through the confiscation procedures. Such instances are, regrettably, not unknown.

The appeal also covers factual mistakes such as adding up the benefit incorrectly or falling to take an item of property into account as realisable property which should be taken into account. The right of appeal is unlikely to be used frequently but we expect it to function as a valuable quality control mechanism in confiscation proceedings.

The change received widespread support in a consultation which we held in the spring of last year. Simply because the issue was raised by the noble Lord—I hope he does not come back on it but he is always free to do so—it is perhaps worth putting another couple of sentences on the record.

In a document, Criminal Justice:The Way Ahead,] published in February 2001, the Government proposed that the prosecution should have a right of appeal where, because of a judicial ruling, the trial has ended prematurely before the jury has been asked to consider its verdict. The Government also indicated that they would consider whether the prosecution should have an enhanced role in other proceedings, including appeals against sentence. In March last year, following a reference from the Home Office, the Law Commission made recommendations to enable the prosecution to appeal terminating judicial rulings, such as judge-directed acquittals. Sir Robin Auld endorsed those proposals in his review of the criminal courts, which was published in October. We are currently considering the responses to his recommendations and will publish our proposals in a White Paper later this year.

People may believe that there is already a right of appeal against blatant errors of law—for example, judicial review—but that is not the case. Apart from cases subject to a preparatory hearing—fraud and complex and lengthy non-fraud cases—when there is a right of appeal against rulings on admissibility of evidence and points of law before the trial begins, there is no power for the prosecutor to appeal a decision of the Crown Court in a criminal case. In the case of an acquittal my noble and learned friend the Attorney-General has powers to seek the opinion of the Court of Appeal on a point of law but the court's opinion does not affect the outcome of the case in question. In the case of sentences, where my noble and learned friend considers that the sentence is unduly lenient he may apply to the Court of Appeal for it to be reviewed. However, as Members of the Committee will appreciate, that is limited to a very small number of specified offences. I believe that it is worth putting that on the record to assist the Committee.

As regards the European Convention on Human Rights, we are satisfied that the Bill complies with the ECHR. It has been signed by the Home Secretary and myself on advice. However, if the noble Lord wishes to elucidate now or in the future which aspects concern him I shall have the matter considered and report back.

9 p.m.

Lord Kingsland

I am obliged to the Minister for his reply. I should need a lot of convincing that it was appropriate to allow an appeal, on behalf of the prosecutor, from a direction to acquit in the Crown Court. I await with interest to see whether the Government come forward with a concrete legislative proposal to that effect.

I am most grateful to the Minister for his reply. I shall reflect on what he said. In my submission, it is an unprecedented set of powers for the Court of Appeal and the Judicial Committee of your Lordships' House to wield with respect to a single matter. I question the fairness of an individual being subject to essentially the same procedure on no fewer than three occasions.

I cannot point to any decision that the Court of Human Rights made with respect to such a situation because I cannot think of any other provision, either in United Kingdom law or the law of any continental country, which reflects what is in Clauses 32 to 34 of the Bill. I shall consider these exchanges and return to the matter on Report.

Clause 32 agreed to.

Clause 33 [Court's powers on appeal]: Lord Rooker moved Amendment No. 57: Page 22, line 7. leave out paragraph (b). On Question, amendment agreed to.

Clause 33, as amended, agreed to.

Clause 34 [Appeal to House of Lords]:

Lord Rooker

moved Amendment No. 58: Page 23, line 20, leave out paragraph (b). On Question, amendment agreed to.

Clause 34, as amended, agreed to.

Clauses 35 to 40 agreed to.

Clause 41 [Conditions for exercise of powers]: Baroness Buscombe moved Amendment No. 59: Page 27, line 12, leave out "Crown" and insert "High The noble Baroness said: The amendment seeks to ensure that unusually complex cases can still he heard in the High Court.

The removal of the High Court jurisdiction over restraint orders could, on one view, be seen as welcome. It would bring, as we believe that the Government intend, all confiscation and restraint matters into a single forum: that is, the criminal courts. It would end the anomaly of having to apply for civil legal aid in the context of criminal proceedings when one is faced with a restraint order for which criminal legal aid has been granted.

However, proprietary rights can be extremely complex, often involving several parties and a number of different jurisdictions. Previously restraint orders were considered sufficiently complex to require the expertise of the High Court jurisdiction and High Court judges more used to dealing with these matters.

We are of the view that the Crown Court may not be a suitable jurisdiction, particularly for some complex cases. Bringing the matter within the jurisdiction of the Crown Court should at the very least trigger a very high degree of training of Crown Court judges to deal with such matters. Alternatively, the Crown Court judge should be allowed to refer complex matters to the High Court or at least ensure—the amendment does not reflect this—that only High Court judges sitting in the Crown Court deal with restraint orders. This would be similar to the current provisions relating to the changing of the Crown Court trial venues which can be dealt with only in front of a High Court judge.

As the Bill is drafted, a complex matter could come before a newly qualified recorder who is required to deal with sophisticated financial orders which until now have been dealt with only by experienced High Court judges. I very much support what Mr Dominic Grieve, Member for Beaconsfield, said in another place when he sought reassurance from the Lord Chancellor's Department on the training programme envisaged and the resources available.

We are concerned that, as drafted, the proposal risks specialist work being spread too thinly. In that case there will be bad decisions by inexperienced judges leading to a plethora of appeals. We suggest, also, that there may be a reluctance by police prosecutors to expose themselves to legal areas with which they are unfamiliar. In addition, it could lead to inconsistency of decisions around the country, resulting from local areas following their own practice. The result stemming from that is adverse decisions preventing deployment of the jurisdiction in that area. The proposal is inconsistent with the "centre of excellence" theory proposed by the Bill in relation to training investigators to remove the restraint and receivership work to local areas and Crown Court judges.

A further consideration is that there are no practice rules for the Crown Courts for civil proceedings. Even if there were rules, redrafted and created, it is completely contrary to the practice and experience of the Crown Court to administer a highly complex civil jurisdiction, produce detailed orders, keep a court file in the same sense as a civil court and allow inspection by parties of the court file. There are no qualified lawyers assisting Crown Court judges. That could have an adverse impact on Crown Court time and on its carrying out what it is supposed to do, which is to try criminal cases. Specialist civil work is heavy on preparation time and on time to prepare reserved judgments. To be effective I respectfully suggest that the work must be done by specialists.

At present there is no evidence that the High Court administers the work badly or inefficiently. Nor is there evidence of it having too much work to cope with. We believe that the contrary is true. In short, we are concerned that this proposal is counterproductive. I look forward to the Minister's response. I beg to move.

Lord Bassam of Brighton

An identical amendment was tabled and debated in another place on 29th November last year. On that occasion, we made clear that this fundamental change to the legislation is needed to ensure that confiscation is converted from an incidental disposal into one that is routinely used in criminal cases. Transferring restraint proceedings to the Crown Court was a specific recommendation of the report of the Performance and Innovation Unit on which the Bill is substantially based.

We remain of the view that the transfer of restraint from the High Court to the Crown Court is fully justified. Our starting point is the number of restraint orders currently made. As the PIU report pointed out, there were only 252 orders made in 1997 and 247 in 1998. Throughout Part 2 of the Bill the Government's aim is to increase the use of confiscation as a tool against acquisitive crime. Effective and early restraint is a critical element of that process. The ease and speed with which cash and assets can be concealed and transferred to the safety of foreign jurisdictions requires that assets must be frozen to prevent that happening.

The Government consider the transfer of the restraint function to the Crown Court to be unavoidable given the anticipated rapid growth in asset recovery proceedings in general. In our view, the Administrative Court would simply not be able to cope with the heavier workload. I remind the Committee that the Crown Office of the High Court is the only forum currently authorised to hear such cases. It numbers just 20 judges, who sit mainly in London and deal with a huge range of work and not just restraint proceedings. It is vital that restraint orders are available routinely and at local level to support the greater number of confiscation cases that we envisage.

In short, as a recently:retired High Court judge put it in response to the consultation exercise on the published draft clauses for the Bill earlier this year, transferring the jurisdiction from the High Court to the Crown Court is likely to be beneficial". It is true that restraint cases sometimes raise issues of the utmost complexity, but it is difficult to imagine an area of the law where that might not occasionally be the case. In our view, the large majority of restraint cases are likely to be routine. Contrary to what one may hear from some sources, restraint is not rocket science and we are confident that the Crown Court will be able to cope with it.

I remind the Committee that the Crown Court has been dealing with complex property issues for many years by virtue of its existing involvement in post-trial confiscation proceedings. Those proceedings can be extremely complex, but we have never heard it suggested that the Crown Court is unable to cope with them. In addition, as the PIU report pointed out, the increasing throughput of restraint cases will help to build up the Crown Court's expertise in that area. For those reasons I strongly oppose the amendment and invite the noble Baroness to withdraw it.

Baroness Buscombe

I thank the Minister for his response. I make no apology for the amendment being identical to one tabled in another place. We were not happy with the response in another place so we tabled it again in your Lordships' House.

We believe that this proposal is not practical and we do not believe that it will work for all the reasons that I suggested. It would be otiose of me to repeat them, but we shall consider carefully whether to return to the matter at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rooker

moved Amendment No. 60: Page 27, line 36, leave out from first "the" to end of line 37 and insert "relevant amount (as defined in that section) On Question, amendment agreed to. Lord Rooker moved Amendment No. 61: Page 27, line 44, leave out from first "the" to end of line 45 and insert "relevant amount (as defined in that section) On Question, amendment agreed to.

Baroness Buscombe

moved Amendment No. 62: Page 28, line 14, at end insert— ( ) any period of investigation exceeding 12 months will be presumed to constitute undue delay unless otherwise shown. A restraint order can be made for a maximum of 6 months and must be reviewed unless extended by written consent The noble Baroness said: The purpose of this amendment is to prevent property and funds of a suspect and third parties being frozen pre-charge for unnecessarily long periods. Allowing restraint orders at the investigative stage will have an enormous impact on fraud trials, prior to which an investigation stage may have lasted for up to three or four years.

In that case is it being suggested that property may be restrained for the whole of that period? Clause 41(2) states that a restraint order may be made if, a criminal investigation has been started in England and Wales with regard to an offence, and there is reasonable cause to believe that the alleged offender has benefited from his criminal conduct". One hopes that a court will be rigorous in requiring a high standard of information from the investigating agency, not the prosecuting body, since no charges will have been brought before making an order. However, experience suggests that this will not be the case and that a court will impose a restraint order, albeit on flimsy information impacting on someone's personal life; for example, an innocent third party trader whose stock is frozen during an investigation leading to him becoming bankrupt to an enormous extent and for many years, when theoretically no charges may be brought at all. Indeed, there may be Article 8 considerations in this regard.

It should also be noted that Clauses 48 to 53 deal with receivers. Again, the Bill distinguishes between management receivers appointed in relation to restraint orders and enforcement receivers who are appointed once a confiscation order has been made. These are appointed in the Crown Court and this highlights the necessity for a high degree of training for Crown Court judges. Many judges will have had no experience at all of these areas and `the potential for miscarriages of justice is alarming. I beg to move.

9.15 p.m.

Lord Goodhart

This group of amendments includes three amendments in our name. The first is Amendment No. 64. It is intended to achieve the same purpose as the amendment of the noble Baroness. We are agreed that we are concerned about this issue. We propose a slightly different solution, which is that when a restraint order is made it should be made for a period not exceeding 12 months. There would be power to make a further restraint order before the end of the 12 months. The purpose is to ensure that any restraint order is reviewed at yearly intervals.

It is quite clear that it would be wholly wrong for a restraint order to be imposed and then left while the prosecution dillies and dallies over the investigation or indeed the trial itself. That has been recognised by the Government in Clause 43(7), where it is stated that if, an investigation was started or an application was to be made, the court must discharge the order if within a reasonable time proceedings for the offence are not started or the application is not made". We believe that the most effective way of ensuring that that result is achieved is by requiring any order to be reviewed by the court at intervals of not more than a year. That will clearly encourage the prosecution to keep moving and to make sure that it is not at risk of having the restraint order thrown out. That measure is highly desirable and would not basically interfere with the process if work is carried on as it should be.

Lord Rooker

The noble Baroness referred to orders based on flimsy information and the noble Lord referred to the prosecution dillying and dallying. I put the case on behalf of Joe Public and not the criminal. I am not saying that they are supporting criminals because that is clearly not the case.

For some criminals, at the first sniff of an investigation the assets are out of the gate and up the road quicker than the investigator can take his notebook out of his pocket. That is why we need to be in at the beginning of the investigation. We are dealing here with serious criminals in the sense that they are people who can shift assets very, very quickly and with the speed of lightning sometimes. There will not be any dillying and dallying, but we need to restrain some criminals at the beginning of the investigation and not when charges are made. That is the nub of the issue.

It is always open to the defendant if he believes that the restraint order had continued for too long to return to court to have it lifted. That possibility is always open. The courts exercise discretion in any event in making restraint orders. They already refuse to extend them if they consider that there has been unreasonable delay.

I am sure that the orders will not be based on flimsy information. I can assure noble Lords that there will be no dillying and dallying. This power is necessary simply because of the way in which organised criminals, those to whom the Bill's provisions are directed, operate.

By definition, some of cases are extremely complicated. I am not saying that there is an excuse for the investigation to continue for years. If it did, the defendant would be likely to apply to the court and the judge would lift the restraint order. The provision is there as a stop on behalf of the defendant. We should be reluctant to change the present position. Noble Lords may wish to think about it, but I hope that they will withdraw their amendments.

Baroness Buscombe

I thank the Minister for his response and for his reassurance that what we suggest will not take place. We shall consider his remarks. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 agreed to.

Clause 42 [Restraint orders]:

[Amendments Nos. 63 and 64 not moved.]

Baroness Buscombe

moved Amendment No. 65: Page 28, line 31, leave out subsection (4). The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 66A.

With regard to Amendment No. 65, the provisions of Clauses 41 and 42 combine to have the following effect. First, any person under investigation or against whom proceedings have been started with regard to an offence, where there are reasonable grounds to believe that he has benefited from his criminal conduct, is liable to have a restraining order made in relation to all his realisable property regardless of the amount of potential benefit.

Secondly, a person who is under investigation but against whom proceedings have not been started may be permitted, by way of exception to the restraint order, to expend funds on reasonable legal expenses in relation to the offence or offences under investigation.

Thirdly, a person against whom proceedings have been started can in no circumstances apply for an exception to the restraint order as regards reasonable legal expenses in relation to those proceedings.

There is now available public funding for legal representation before proceedings have been started, which was no doubt the reason for permitting that exception to a restraint order in the Bill.

The Government have now acted to reduce publicly funded representation in criminal proceedings, in high cost cases by approximately 40 per cent from that which was regarded as reasonable by officials under the taxation system. The Bar Council's argument that the cuts have been too severe to ensure that representation in these cases will continue at an appropriate level have been rejected on the basis that the market will decide. The legal representatives under new, very high cost cases contract arrangements are accordingly not obliged to undertake the work unless a satisfactory agreement can be reached as to the work that will be paid for and the rate for it in advance of the work being done.

By preventing anyone charged from applying for access to restrained realisable property in relation to reasonable legal expenses in connection with the offence charge, the following practical consequences are likely to occur. First, a person under investigation who is then charged will often be forced into a change of representation as a result of the instructed representative not being prepared to undertake the work at the publicly funded work rates on offer. Thus, his choice and continuity of representative will be substantially removed.

Secondly, a person who is charged will have access only to those legal representatives who are prepared to carry out the work at publicly funded levels. This will restrict the choice and quality of representation substantially.

Thirdly, these restrictions apply regardless of how small the benefit may be in relation to the total realisable assets. Fourthly, the restrictions will create an entirely false market in legal representation in these cases whereby the Government dictate the only rate for the work, having introduced a new contracting system which depends on the representative's right to refuse the work for the contract "negotiation" to have any meaning.

If the real purpose behind the provisions is not total control by Government of all legal representation in these important cases, the answer surely lies in permitting reasonable—not unreasonable—legal expenses to be met in all situations, as determined by the court. An amendment to delete Clause 42(4) would permit reasonable legal expenses in all circumstances, and thereby provide a reasonable choice of representative to the accused person.

The purpose of Amendment No. 66A is to ensure that any person affected by the making of a restraint order not only has the right but the means to apply for a variation. Currently public funding in the criminal courts is available only to the defendant when charges are brought. It is important to note that a large amount of publicity has surrounded the asset confiscation aspects of this legislation but the power of Crown Court judges to impose restraint orders at the beginning of an investigation on what may be only minor evidence has enormous significance. It may have far-reaching consequences for defendants and should be opposed on principle.

An order may also be made against third parties who would have no recourse to legal aid as the proceedings would be of a criminal nature. A third party would not be under investigation. It would clearly be unjust and unwarranted interference unless further consideration is given to the rights of third parties in that regard. No compensation would be due unless the investigator had been negligent, which is a high threshold test to meet.

It is also important to note that under Clause 43 an accredited financial investigator employed by the director of the assets recovery agency may apply for a restraint order. It is crucial that those officers are well trained and do not simply replicate the often shoddy methods by which investigators currently apply for search warrants, for example, on small amounts of information. I am not sure that I dare use the word "flimsy" again. Crown Court judges must be rigorous in testing the information given to them by either employees of the director of the assets recovery agency or by employees of other investigative agencies. I beg to move.

Lord Goodhart

We have tabled three amendments in the group. Of those, Amendment No. 66 would have exactly the same effect as Amendment No. 65, except that we want to remove subsection (5) as well. Subsection (5) would cease to have any meaning if subsection (4) were removed as it is consequential. We have also tabled Amendment No. 130 to remove the same provision in relation to Scotland and Amendment No. 184 in relation to Northern Ireland. We are therefore entirely at one with the noble Baroness.

I shall not repeat what she said but we agree with her entirely. There is no justification for removing the right of a defendant to use what at that stage is his own money. He will be deprived of it just as effectively if he uses it to pay for an expensive QC as if it were confiscated and went to the Government. There is the possibility that bogus expenses could be incurred. There are unfortunately some crooked solicitors who might arrange to overcharge their client and then hand back the money by some devious route. That could be controlled by ensuring that the expenses allowed are reasonable, as is provided by Clause 42(3). We believe that to be inappropriate. The restriction should be removed so that the funds that are subject to a restraint order can be used to pay the reasonable legal expenses of the defendant, not only in relation to other matters but also in relation to the primary proceedings.

9.30 p.m.

Lord Bassam of Brighton

These matters were given a good thrashing around in another place. But our position remains unchanged: we are unable to accept the amendments, largely because they would make the Bill much less effective than is the case at present. We can see no good reason for doing so.

Essentially, the amendments would allow the courts to release restrained assets to pay for any legal expenses, including those of the defendant. They would, therefore, reverse one of the major changes that the Government have made to the restraint provisions in the Bill. As was explained in another place, the report of the Performance and Innovation Unit found that substantial sums that should be available for confiscation were being dissipated on unnecessary legal expenses. I suppose one could argue that the Government are moving to ensure and keep clean the money that might otherwise be paid to lawyers, protecting them from benefiting from potentially ill-gotten gains. That would be a laudable exercise on the part of the Government.

There is no suggestion that the Bill's removal of some of the powers of the court to release moneys for legal expenses will deprive defendants and other litigants of the right to be represented. Criminal and civil legal aid will be available to cover all proceedings under the Bill on the usual terms.

The only people who would benefit from the amendments would be defendants who wanted to reduce the amount available for confiscation—a point made by the noble Lord, Lord Goodhart—and the less scrupulous element of the legal profession, which, of course, is very small in number. I do not believe that the public would necessarily see the benefit. It is perhaps worth adding that Amendment No. 66A is entirely unnecessary. Schedule 8 to the Bill, which has been widely read by noble Lords, already amends the Access to Justice Act 1999 to make it crystal clear that civil public funding will be available, on the usual terms, to cover the situation. Having outlined those very good reasons, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Buscombe

I thank the Minister for his response. However, I do not believe that he made specific reference to a point that I believe I made quite clearly. Given the proposed clause, a person under investigation who is then charged will often be forced into a change of representation. This is an important issue, and something that the Government should carefully consider. A person who is charged will have access only to those legal representatives who are publicly funded—

Lord Bassam of Brighton

I am not quite sure what difference that would make. Perhaps the noble Baroness could assist me in that respect.

Baroness Buscombe

The difference is that such a person will have access only to those legal representatives who are prepared to carry out the work at publicly-funded levels. In that case, the person's choice of representation is diminished. The question is whether or not that is correct in principle. Indeed, is that just?

We believe that our proposal is sensible. As the noble Lord, Lord Goodhart, observed, we are talking about removing the right of the defendant to use his own money, which is something that would seem to be rather more sensible than turning to publicly-funded alternatives. It is a practical suggestion. We are disappointed that the Government have not changed their view since the debate took place in the other place. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 66 not moved.]

Clause 42 agreed to.

Clause 43 [Application, discharge and variation]:

[Amendment No. 66A not moved.]

Clause 43 agreed to.

Clause 44 [Appeal to Court of Appeal]:

Baroness Buscombe

moved Amendment No. 67: Page 29, line 38, leave out subsection I and insert— (1) The following can appeal against the court's decision on an application for a restraint order—

  1. (a) the applicant, or
  2. (b) any person affected by the decision,
and public funding will be available for any person appealing against a decision under (b). The noble Baroness said: The purpose of this amendment is to allow a right of appeal both by the investigator against a refusal to make a restraint order and also to the suspect and any third party to appeal against the making of an order, with the public funding that would enable them to do so.

Currently, the wording allows the investigator making the application a right of appeal only against the refusal to make an order. Clauses 44 and 45 deal with appeals from the Crown Court to the Court of Appeal and to the House of Lords. There is no general right of appeal under the Supreme Court Act 1981 from the Crown Court to the High Court. This legislation could create such a right.

However, it would not create a right to appeal against the making of a restraint order, merely against the refusal of a Crown Court to vary or discharge an order. There are clearly resource implications for Crown Courts in dealing with restraint orders. Indeed, there are also training implications which will cost time and money. There are scheduling implications and, one might suggest, there are cultural implications in the sense that Crown Courts are wholly unused to dealing with property matters of the type which are in issue in restraint proceedings.

Although Crown Courts are used to dealing with confiscation, restraint is a wholly different matter, in particular in the light of the ability to apply for orders prior to the institution of proceedings. Up until now, Crown Courts have never been involved in criminal proceedings or property proceedings prior to a person being charged. We believe that it is therefore imperative that a suspect and third party rights are safeguarded. I beg to move.

Lord Goodhart

I strongly support this amendment and it is only through an oversight that I did not add my name to it. Frankly, it is ridiculous to have a situation where the person against whom an order is made cannot appeal directly against the restraint order. He can do so only by applying to discharge the order and then appealing against a refusal to discharge it. That achieves exactly the same result, but it does so by involving a wholly unnecessary intermediate process. It would be very much simpler if the person against whom the order is made had the right of a direct appeal against the making of the restraint order.

Lord Rooker

We do not think that these amendments are either necessary or desirable. As noble Lords have said, they would give persons other than the investigator or, for that matter, the prosecutor, a right of appeal against the court's refusal to make a restraint order.

The Bill has been drafted precisely to prevent that outcome. There is no error or failure here. We fail to see why a person other than the one who applied for a restraint order should have any need for a right of appeal against the refusal to make it.

A further effect of the amendment would be to require an appeal to the Court of Appeal to be lodged immediately. As we explained in the other place, the Bill expects individuals to apply to the Crown Court for a variation of the order first, and only then to appeal to the Court of Appeal. The report in Hansard of 29th November makes that clear. In fact, this is currently what happens in practice. As most restraint orders are made ex parte, the defendant and third parties will not have had a chance to be heard, so it makes sense that they should first apply to the Crown Court and then appeal against the decision of the Crown Court under Clause 44(2).

If the amendment were carried, the Court of Appeal's time would be wasted quite unnecessarily and there would be massive resource implications. I should also stress that public funding on the usual terms is already available for these applications, whether through criminal public funding in the case of the defendant or civil public funding as set out for other persons in the amendments to the Access to Justice Act 1999, which is affected by Schedule 8 to the Bill.

Having made those comments, I invite the noble Baroness to withdraw her amendment.

Baroness Buscombe

I thank the Minister for his full response which I shall consider carefully in Hansard. I shall also take this opportunity to read through Schedule 8 to the Bill.

However, on the face of it, my immediate response is that I cannot agree with the Minister, and I am grateful to the noble Lord, Lord Goodhart, for his support and clarity of approach to the rather nonsensical problem before us. I shall think about it further, but we may well return to the matter on Report. For now, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 44 agreed to.

Clauses 45 and 46 agreed to.

Lord Bassam of Brighton

moved Amendment No. 68: After Clause 46, insert the following new clause— "HEARSAY EVIDENCE (1) Evidence must not be excluded in restraint proceedings on the ground that it is hearsay (of whatever degree). (2) Sections 2 to 4 of the Civil Evidence Act 1995 (c. 38) apply in relation to restraint proceedings as those sections apply in relation to civil proceedings. (3) Restraint proceedings are proceedings—

  1. (a) for a restraint order;
  2. (b) for the discharge or variation of a restraint order;
  3. (c) on an appeal under section 44 or 45.
(4) Hearsay is a statement which is made otherwise than by a person while giving oral evidence in the proceedings and which is tendered as evidence of the matters stated. (5) Nothing in this section affects the admissibility of evidence which is admissible apart from this section. The noble Lord said: The amendment flows from the transfer of the restraint jurisdiction from the High Court to the Crown Court. Hearsay evidence is nowadays routinely admitted in civil proceedings. Restraint proceedings currently take place in the High Court and they, likewise, rely on hearsay evidence. This is important where the authorities need to get a restraint order at short notice. The prosecutor will ordinarily put in a witness statement referring to the sources which make him believe that the case is appropriate for restraint.

The procedures of the Crown Court, as a mainly criminal court by contrast, have far more stringent evidential rules. Now that restraint is to be based in the Crown Court, more stringent evidential rules could mean that hearsay evidence is not admissible. That would have a very serious effect on the conduct of the proceedings. The amendment puts it beyond doubt that the Crown Court, in dealing with any restraint matter, can accept hearsay evidence in the same way as the High Court.

I draw the Committee's attention to the safeguards in subsections (2), (3) and (4) of the clause. These apply Sections 2 to 4 of the Civil Evidence Act 1995 to the Crown Court in a restraint proceeding. Sections 2 to 4 of the 1995 Act apply three main safeguards to hearsay evidence. They provide for notice to be given of its proposed introduction; they provide that a person who has given hearsay evidence may be examined on it; and they give the court guidance as to the weight it should put on the evidence.

The amendment is technical but it amounts to a new clause. It is important because it bites on the practical operation of all future restraint cases. I beg to move.

Lord Goodhart

I have considered this matter very carefully. It is obvious that any introduction of hearsay evidence into criminal proceedings—and these are plainly criminal proceedings—where it was not available before is a matter that needs to be looked at very carefully. Nevertheless, having looked at the matter, I recognise that the introduction of hearsay evidence is solely in relation to restraint orders. It does not apply to the evidence on which the relevant conviction is based, nor does it apply to the evidence on the basis of which the confiscation order is obtained. In those circumstances I do not see any reason to object to the amendment.

On Question, amendment agreed to.

Clauses 47 to 67 agreed to.

Clause 68 [Applications and appeals]:

Lord Bassam of Brighton

moved Amendment No. 69: Page 43, line 15, leave out "is authorised to do so by" and insert "falls within subsection (2A). (2A) An accredited financial investigator falls within this subsection if he is one of the following or is authorised for the purposes of this section by one of the following— The noble Lord said: These are fine-tuning amendments. They tidy up Clauses 68 and 222, which set out the conditions under which an accredited financial investigator may apply for a restraint order.

The clauses as currently drafted have a rather odd effect—that is, that a senior accredited financial investigator may authorise another accredited financial investigator to apply for a restraint order but may not apply for one himself or herself. The amendments remove that anomaly. We do not like anomalies in your Lordships' House. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton

moved Amendments Nos. 70 to 72: Page 43, line 18, leave out "or Page 43, line 25, leave out "is authorised as mentioned in subsection (2)" and insert "falls within subsection (2A) Page 43, line 33, leave out "is authorised as mentioned in subsection (2)" and insert "falls within subsection (2A) On Question, amendments agreed to.

Clause 68, as amended, agreed to.

Clause 69 agreed to.

Clause 70 [Committal by magistrates' court]:

[Amendments Nos. 73 to 75 not moved.]

Clause 70 agreed to.

Clause 71 agreed to.

Lord Grocott

I beg to move that the House do now resume.

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

House resumed.