Proceeds of Crime Bill

HL Deb 11 July 2002 vol 637 cc839-71

4.31 p.m.

Read a third time.

Clause 19 [Provision of information by defendant]:

The Minister of State, Home Office (Lord Falconer of Thoroton)

moved Amendment No. 1: Page 12, line 13, at end insert— (4A) Subsection (4) does not affect any power of the court to deal with the defendant in respect of a failure to comply with an order under this section. The noble and learned Lord said: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 3 and 5. The amendments return us to an issue discussed briefly in Committee and on Report. I indicated on Report that we would table them.

As your Lordships will be aware, if the defendant fails to comply with the court's order to provide information, the court has the power under Clause 19(4) to draw adverse inferences from the failure. The effect of the amendments is straightforward. They make it clear that the power to draw inferences does not affect any other powers the court has to deal with the defendant in that situation; notably, the power to punish the defendant by way of contempt for failing to comply with its order.

The power to draw adverse inferences will provide sufficient inducement to the defendant to respond in many situations, but it will not be fully effective where the defendant is ordered to provide general information and says nothing. The amendments will help to ensure that the defendant always responds to the court's order. By making it clear that the order to provide information attracts contempt for noncompliance, we will enhance its effectiveness. I beg to move.

On Question, amendment agreed to.

Clause 76 [Exceptional legal aid]:

Lord Goodhart

moved Amendment No. 2: Page 49, line 35, at end insert— () For the purposes of this Part, a body corporate may have a criminal lifestyle. The noble Lord said: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 4 and 6. The amendments raise a short issue that should have been raised at an earlier stage. I regret that the question did not occur to me until Report stage, when I realised that there was a problem with the definition of what constitutes a criminal lifestyle.

The question is: can a company have a criminal lifestyle? I raised this matter briefly in debate, but the Attorney-General gave an off-the-cuff response and did not have time to give a considered response. I have therefore tabled the amendments to ensure we receive a proper expression of the Government's views.

The idea of a corporation having a lifestyle is odd. "Lifestyle" is defined in the Oxford English Dictionary as, a way or style of living". A corporation is a person in law, but it cannot be said in any real sense to live. Only a living person can have a lifestyle. In deciding for the purposes of Clause 76 whether a defendant has a criminal lifestyle, "defendant" must mean a living defendant. A company cannot have a lifestyle. If that is so, there is a big hole in the Bill.

Many offences under Schedule 2—quite apart from many that are not included but could be made the basis of a criminal lifestyle—can be committed by a body corporate. In such cases, the body corporate is usually the person who makes a profit and against whom a confiscation order needs to be made if it is to be effective.

It is clear that the Government intend the Bill to cover corporations that commit crimes and not just individuals. But it is far from clear that the Bill has that effect. On Report, the Attorney-General relied on the principle that the word "person" in a statute includes a body corporate under the Interpretation Act 1978. But that is subject to a context showing a contrary intention. The reference to "lifestyle" could be read by a court as showing such a contrary intention, particularly in view of the principle that a statute that imposes penalties must be read strictly in favour of the person against whom the penalties are claimed.

The definition of criminal lifestyle does not use the word "person". It refers to the defendant who has a criminal lifestyle, not the person who has a crirninal lifestyle. Therefore, in interpreting Clause 76 a court would have to proceed without relying on the definition of "person" in the Interpretation Act.

I am aware that this is a technical and legalistic argument. But unless the Government accept the amendments, a prosecution will face this argument sooner or later and could lose it. We have always made it clear that we wish to strengthen the Bill where it needs strengthening. We believe that in this case it needs clarification to strengthen it. I beg to move.

Lord Falconer of Thoroton

My Lords, we have considered carefully the issues put persuasively by the noble Lord, Lord Goodhart, but we believe there is nothing in the point. As the noble Lord knows, for the purposes of the Bill, "criminal lifestyle" is defined not in the Oxford English Dictionary but in the Bill itself, in particular in Clauses 76 and 226, which states: A defendant has a criminal lifestyle if (and only if) the following condition is satisfied", which is that it is an offence of a particular type, or a number of offences committed over a period of time. There is no difficulty in understanding that, and there would be no difficulty in a court interpreting the definition in that way.

The noble Lord rightly refers to Clause 6, which states that the court must decide whether the defendant has a criminal lifestyle. However, Clause 89(3) defines a defendant as, a person against whom proceedings for an offence have been started". Schedule 1 to the Interpretation Act 1978 states that, 'Person' includes a body of persons corporate or unincorporate". It follows, there being nothing in the context that suggests to the contrary, that references to the defendant in Clause 6 and elsewhere in the Bill already include bodies corporate.

I believe that the noble Lord and the Government are seeking the same end. We believe that the amendments would serve no useful purpose. Indeed, they would be damaging, because they would cast doubt on every instance in other legislation where a person is referred to. If we state explicitly that a person includes a corporation in the Bill, we will invite other statutes that use the term to be construed as referring only to a natural person.

I am afraid that for those reasons, while we share the aim, we are unable to support the amendments. I hope that having heard my explanation, the noble Lord will feel able to withdraw Amendment No. 2.

Lord Goodhart

My Lords, I do not believe for one moment that the amendment would cast any doubt on the general interpretation of the word "person". What is unusual here—and the reason the amendments were tabled—is the specific use of the word "lifestyle". That is where the difficulty arises.

However, I welcome the fact that the Government have made it clear that in their view there is no ambiguity. That statement may be relied on if, in a future case, it is argued before a court that there is an ambiguity. To that extent my purpose in bringing forward the amendments has been satisfied. In those circumstances, no useful purpose would be served by my taking the matter further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 105 [Provision of information by accused]:

Lord Falconer of Thoroton

moved Amendment No. 3: Page 66, line 8, at end insert— (3A) Subsection (3) does not affect any power of the court to deal with the accused in respect of a failure to comply with an order under this section. On Question, amendment agreed to.

Clause 144 [Criminal lifestyle]:

[Amendment No. 4 not moved.]

Clause 171 [Provision of information by defendant:]

Lord Falconer of Thoroton

moved Amendment No. 5: Page 106, line 26, at end insert— (4A) Subsection (4) does not affect any power of the court to deal with the defendant in respect of a failure to comply with an order under this section. On Question, amendment agreed to.

Clause 226 [Criminal lifestyle]:

[Amendment No. 6 not moved.]

Clause 246 [Proceedings for recovery orders in England and Wales or Northern Ireland]:

4.45 p.m.

Lord Lloyd of Berwick

moved Amendment No. 7: Page 150, line 32, at beginning insert "Subject to section 246A, The noble and learned Lord said: My Lords, the substantive amendment is Amendment No. 8, the next amendment on the Marshalled List.

The purpose of the amendment is to improve the Bill in two respects. First, it seeks to remove the risk of a serious injustice. It enables a man who has been accused of crime to defend himself in the normal way before a judge and jury. Secondly, it seeks to make Part 5 of the Bill less vulnerable to attack under the Human Rights Act. It is a waste of everyone's time to enact legislation which one can see will fall at the very first hurdle. It is surely wrong to wash one's hands of all responsibility for that result, as the Liberal Democrats, if I may respectfully say so, seemed inclined to do at Report stage by saying that it was better to leave the Government to stew in their own juice. That is not my phrase but that of the noble Lord, Lord Goodhart. Surely we can do better than that and seek to remove now the most obvious objections which will be raised under the Human Rights Act.

In returning to the first point, I shall not of course repeat the argument that I put forward on Report. That would be tedious and unnecessary. In a few moments I shall deal with the arguments put forward by the noble and learned Lord the Attorney-General by way of reply, but, first, it may be helpful to stand back a little from the Bill and take an overall view of what Part 5 seeks to achieve.

The Bill itself deals with the proceeds of crime—and I emphasise that word at the outset. It is true that Part 5 refers to "unlawful conduct"—a somewhat woolly expression—but, fortunately, unlawful conduct is defined in Clause 244 as conduct which would be unlawful under our criminal law. So we can safely forget about unlawful conduct and talk simply about crime.

Under Clause 246, proceedings can be brought against anyone who holds what is called "recoverable property". Recoverable property means property obtained by a person through crime, whether his own crime or someone else's crime. That is the combined effect of Clauses 245 and 308. So unless a crime has been committed, and unless that crime has been proved, the judge simply has no power to make a recovery order. So far, all is clear and must be common ground.

Next, it may be helpful to follow the likely course of these so-called civil proceedings. I shall assume that they are being brought against the kind of person that the Government seem to have most in mind—that is, the major criminals who are at the centre of a criminal network but who are said to be untouchable by the criminal law. We are told that there are 400 such people known to the police. That number was often referred to in earlier stages of the Bill, both in this House and in the other place.

Let us assume that these proceedings are being brought against such a person and a claim form is duly served. What happens next? The first thing the defendant will do is to ask this simple question: "Through whose crime do you say these proceeds were obtained—my crime or someone else's crime—and what is the nature of the crime which you allege?" Unless the defendant gets an answer to those questions the civil proceedings will simply be struck out. The defendant is entitled to a fair trial in civil proceedings, just as he is entitled to a fair trial in criminal proceedings. No High Court judge of whom I have knowledge would allow civil proceedings to continue unless the crimes alleged are particularised. Again, that must be common ground.

Let us suppose that the allegation is that the proceeds were obtained through the defendant's own unlawful conduct—for example, by his dealing in drugs. Let us suppose next that the defendant denies the allegation, as he surely would. He might say, "You have got the wrong man". I have no idea what his defence may be, but, surely, if he denies that serious offence, he must as a matter of elementary justice be entitled to have that question decided on a criminal standard of proof by a judge and jury.

The noble and learned Lord the Attorney-General said that that would be a most unfortunate state of affairs. It would mean that a lot of criminals would escape. "We know who they are", he said. "It is plain from our intelligence". I am paraphrasing from the speech that the noble and learned Lord made on 25th June, col. 1270 of Hansard: "It is plain from their lifestyle, their luxury homes, their yachts and fast motor cars, which do not appear to have been acquired by any lawful activity on their part". He continued at col. 1271, "It is true that there is not enough evidence to convict them of specific crimes, but it is as plain as a pikestaff that their money has been acquired as the proceeds of crime".

I find that a most remarkable statement to have fallen from the lips of the noble and learned Lord. Those 400 people may indeed be the subject of grave suspicion on the part of the police, but happily we do not live in a police state. We shall not know those people to be criminals until they have been charged and convicted of a crime. Anyone familiar with the criminal courts will be able to tell noble Lords from their own experience about cases that seem as plain as a pikestaff to the police but that fell apart when they came to court. Then there are those unhappy cases that should have fallen apart but did not and instead have resulted in grave miscarriages of justice.

That is why we rightly insist on the higher standard of proof where the liberty of the subject is concerned—proof beyond reasonable doubt. Once we allow the civil burden of proof to intrude we shall conduct a grave disservice to the cause of justice.

The noble and learned Lord then says that none of that really matters because the proceedings are not aimed at an individual but aimed at his property. That is col. 1271. He is not being accused of anything; the proceedings will not result in a conviction; and in any event he cannot be sent to gaol. But I protest. He is being accused of something. He is being accused of drug dealing. Unless it is found "as a fact"—not my phrase but that of the noble and learned Lord—by the judge that he is guilty of drug dealing, the judge has no power to make a recovery order. The noble and learned Lord says that there is a distinction between being found guilty by the judge and being convicted. I venture to suggest that that is a distinction that would not be readily apparent to the defendant. It is certainly a distinction that is lost on me and appears to be lost to the editors of the Oxford English Dictionary.

Lastly, it is said that this amendment, if accepted, would be unfair. The noble and learned Lord said that the "little man" would be subjected to the full force of Part 5, but that the big wheel, suspected of far worse crimes—crimes that cannot be proved—would go scot-free. If the crimes cannot be proved, is there anything so surprising about the defendant going scot-free?

I shall summarise the first point—the second point is much shorter. A person who is accused of very serious crimes as part of the so-called civil proceedings is surely entitled to have the matter of his guilt decided by a judge and jury on the criminal standard. If he is acquitted, that should surely be the end of it. That is the purpose of the first five paragraphs of my amendment.

The second point is quite brief and is a Human Rights Act point. No doubt, when the legislation is in force it will he attacked under the Human Rights Act on numerous grounds. One ground stands out a mile. In a case where the alleged offender is before the court and is found guilty by the judge of a crime committed, let us say, 12 years ago, Part 5 allows the state to recover the proceeds of that crime from that day to this in a way that was not possible when the crime was committed. That is retrospective legislation of the most obnoxious kind and it is directly prohibited by Article 7 of the Human Rights Act. Nor shall a heavier penalty be imposed than the one that was applicable at the time that the criminal offence was committed.

It is said by the noble and learned Lord that a recovery order is not a penalty imposed for an offence, but that it is compensation claimed by the state for loss suffered by the state as a consequence of that offence. That is the plainest nonsense. The state has suffered no loss as a consequence of the offence and is not entitled to compensation. It is the victim, if anyone, who has suffered a loss and not the state.

That horse will not run. As it happens the horse ran in the case of Welch v. United Kingdom. It ran and it fell. That was the very point that was decided against the United Kingdom in Welch. It is true, as the noble and learned Lord will point out, that that was after a conviction. I hope that by now I have persuaded your Lordships that there is no distinction to be drawn between a conviction and a finding of guilt. That is certainly not a distinction that would find any favour at Strasbourg.

The purpose of the last paragraph of the amendment is simply to confine the retrospective effect of Part 5 to those cases where it has at least a chance of being upheld; that is to say, where the offender has not been before the court because he is overseas or because he is dead or in some other way unavailable. By confining the retrospective effect of Part 5, I suggest that this House will make a significant improvement to the Bill. In that spirit, I put forward this amendment as a compromise. It falls far short of what I would have wanted, but I put it forward as a form of compromise which I hope may still be accepted, although I have no strong expectation. I beg to move.

Lord Renton

My Lords, I earnestly hope that the Government and your Lordships will support the amendment moved by the noble and learned Lord, Lord Lloyd of Berwick. We have to remember that he has moved it in the light of his great experience as a Law Lord. I shall be brief. There is not much need to repeat the arguments that the noble and learned Lord has used, but I want to emphasise one point. The trouble is that Clause 246 ignores the difference in the burden of proof in several criminal cases.

I remind your Lordships that in civil actions the burden of proof is based on the balance of probabilities, but in criminal cases there is a stronger burden of proof—a burden of proof beyond reasonable doubt. Although Clause 246 deals with civil cases and criminal cases, that difference is ignored. Amendment No. 7 would put the matter right.

Lord Thomas of Gresford

My Lords, on Report my noble friend Lord Goodhart indicated that the Government should stew in their own juice, as the noble and learned Lord, Lord Lloyd, pointed out. But he also gave strong support to these amendments. From these Benches, I do not propose to repeat the arguments so eloquently made by the noble and learned Lord, but the Government's response on Report was a familiar one: we all know what is going on. We know that such people are guilty; we have intelligence to that effect. It is the same kind of sentiment as was expressed recently by the Chief Constable in North Wales. He remarked that it was tragic that 63 per cent of people who appeared on trial before the Crown Court in North Wales were acquitted. We were not sure whether he was blaming the juries, the defence lawyers or his own force for failing to bring forward adequate evidence.

That is the point. Adequate and proper evidence needs to be brought forward before these draconian remedies are brought into effect. Ordinary standards of the criminal law ought not to be set aside. Suspicion of crime is not enough. We on these Benches will again strongly support the amendment.

5 p.m.

Viscount Bledisloe

The noble and learned Lord has made an extremely eloquent case. First, perhaps I may ask him a technical question. The "unlawful conduct" can, we see, be conduct committed outside the United Kingdom. How is an English criminal court to try an offence which was committed outside its jurisdiction—in a foreign jurisdiction—which it has no jurisdiction to try as a criminal offence? That is my technical question.

Perhaps I may now become bolder and suggest a possible fallacy in the noble and learned Lord's argument. He said that unlawful conduct is defined as the commission of a crime. He then used the word "crime" instead of "unlawful conduct". But surely there is a difference between being certain that a person has accumulated his wealth by criminal activity and being able to prove a specific crime by which he acquired it. You may not be able to prove that he smuggled in X quantity of drugs on a certain day and sold them on the street the next day. But you may be able to prove—and perhaps you ought to have to prove beyond reasonable doubt—that he could not possibly have accumulated the enormous wealth that he has without ever going to work, without ever going to a casino, and without ever going to the horse races—and how on earth did he get his wealth, especially if he absolutely declines to prove it and if you can prove that in the past two years he has flown 14 times to and from Colombia and cannot explain what those journeys were for?

Surely there will be many cases in which it could be proved, even beyond reasonable doubt, that a person's wealth had been accumulated by unlawful conduct, but you could not prove any specific time with the full particulars necessary to enable you to obtain a conviction.

Lord Lloyd of Berwick

My Lords, perhaps I may—

Lord McIntosh of Haringey

My Lords, as the noble and learned Lord has the right of reply and as we are at Third Reading, it may be better if he answers the question at that time.

Lord Kingsland

My Lords, the intellectual quality and persuasiveness of the speech by the noble and learned Lord, Lord Lloyd, ought by now to have convinced the Government to accept his amendment.

The Government's objective under Part 5 of the Bill is in principle a laudable one. It is to deprive drug traffickers and other criminals of their ill-gotten gains. The trouble is that, in doing so, they have succeeded in expropriating the right of the British citizen to trial by jury.

Our initial instinct on these Benches was to adopt the approach taken by the noble Lord, Lord Goodhart; that is to say that we disapproved of the approach taken by Part 5 but thought that it ought to be left to the courts to settle the matter. Our view changed, in the course of the Bill proceedings, for three reasons. First, the noble and learned Lord, Lord Lloyd of Berwick, as he rightly said, convinced us that this was a negative approach. We want, if possible, to make Part 5 work. That is precisely what the noble and learned Lord has done.

The second thing he did was to persuade us that, if someone is entitled to a right to trial by jury in circumstances where the evidence is strong enough to convict that person, he or she ought to be entitled to that same right in circumstances where the evidence is not strong enough to convict them. The right to trial by jury is a fundamental building block of our constitutional freedom. It is wholly undermined by Part 5 of the Bill. There is no real distinction between a confiscation order under Part 2 and a recovery order under Part 5; yet Part 2 provides the guarantee of trial by jury and Part 5 does not.

There is a final reason why I am convinced that your Lordships should accept the amendment. It is one that I gleaned, in the course of the past few days, from the Committee stage of the Nationality, Immigration and Asylum Bill. In Clause 4 of that Bill, the Government seek to deprive individuals, born in the United Kingdom, of their citizenship if their conduct seriously prejudices the vital interests of the United Kingdom. The Home Secretary determines the existence of that situation on his own subjective judgment.

I regard that as a step further down the undesirable road sign-posted by Part 5 of this Bill. I applaud the objectives of the Government under Part 5, just as I applaud the objectives of the Government under the Nationality, Immigration and Asylum Bill. But the Government are seeking to achieve the results that they want by wholly undermining the criminal law of this country built up over many centuries. Surely the right way to get the result under Part 5, as indeed under Clause 4, is to define the offences more clearly and more precisely in criminal law so that the proper criminal procedures in the criminal courts can be used.

The noble and learned Lord the AttorneyGeneral—who is looking at me with a bewildered expression—himself referred to 400 criminals in the country who could not be prosecuted by the prosecuting authorities. Surely in those circumstances it is up to the Government to define the offences more precisely, so that these criminals can be dealt with through the criminal courts.

For all those reasons, I support the amendment moved by the noble and learned Lord, Lord Lloyd of Berwick, and trust that the Government will accept it.

The Attorney-General (Lord Goldsmith)

My Lords, the noble and learned Lord, Lord Lloyd of Berwick, has throughout made plain his opposition to the new civil recovery scheme in Part 5 of the Bill. He is entirely consistent in continuing to oppose it. That is not something that can be said of the approach of the Front Bench opposite and—.I think, although I am not entirely clear—from the Liberal Democrat Benches.

I remind the House, and indeed the noble Lord, Lord Kingsland, of what was said at Second Reading, when the noble Baroness, Lady Buscombe, made it very clear that this: will signal a will and a wish to assist the Government in producing a workable and effective piece of legislation". She said specifically in relation to Part 5: …we do not want to obstruct the key objectives of the Bill, that is a real concern. We want to see those who have committed criminal offences deprived of their ill-gotten pins. [Official Report, 25/3/02; cols. 19–23.] I shall not mince my words. The amendment proposed by the noble and learned Lord, which we debated fully on Report although we did not divide, will not improve the Bill. It will not be workable in the way that he proposes. I give way to the noble Lord.

Lord Kingsland

My Lords, I am most grateful to the Minister, not only for giving way but also for promoting me in the Peerage. I believe he referred to me as "the noble Earl".

The noble and learned Lord may not have been listening to my opening remarks. I hope that he will accept that I said at the outset that our instinct was to leave the matter to the courts. It was as a result of the debate in your Lordships' House and the skilful ingenuity of the noble and learned Lord, Lord Lloyd of Berwick, that our position moved. However, our view remains as the Government said their position remained: that people should be deprived of their ill-gotten gains as a result of their criminal activities—so we may prosecute them for their criminal activities.

Lord Goldsmith

My Lords, if I attributed such peerage to the noble Lord, I am not sure whether to apologise to him or to those who have that dignity. But I do not apologise to him for saying what I have said and will continue to say on the amendment. It the amendment were passed, it would not improve the Bill. It would prevent Part 5 from being effective. With your Lordships' leave, I shall explain why.

Perhaps I may deal, first, with one point. Throughout there has been reference to the European Convention on Human Rights and whether or not the process involved would be held to be a civil or criminal process. That is a technical question. I shall not weary your Lordships with the arguments about it now. The simple approach taken by the Government is this. We are not seeking compensation for the state. The noble and learned Lord, Lord Lloyd of Berwick, suggested that I had said that we were seeking compensation for the state. I do not recall ever saying that. What I have said repeatedly is that this is about saying to people who are holding property which they have no right to hold because it is the proceeds of drug trafficking, bank robbery or other serious crime, "You have no right to this property and therefore this property is to be taken away".

By his amendment, the noble and learned Lord, Lord Lloyd of Berwick, accepts that in relation to all people except those who are said themselves to have committed the unlawful conduct.

5.15 p.m.

Lord Lloyd of Berwick

My Lords, I thank the noble and learned Lord for giving way. Yes, but surely in the case of the bank robbery the property belongs to the bank not to the state.

Lord Goldsmith

My Lords, as is clear from the Bill, if the bank can demonstrate that that it is its property it will be able to recover it.

One of the difficulties—with respect, the noble and learned Lord did not deal with this point, although the noble Viscount, Lord Bledisloe, made it well and clearly—is the fact that there are people in relation to whom it is not possible to say, "You committed this particular crime". But it may be possible to say that what they plainly possess in terms of property is the proceeds of crime. Precisely which crime—a bank robbery on this day, a drug trafficking offence on that day, proof of which is required by the criminal law cannot be demonstrated.

The noble and learned Lord rightly puts the High Court judge before us as an object of admiration and fairness. If a High Court judge is persuaded—otherwise no order is made—that property held by someone is the proceeds of unlawful conduct, the question is whether or not that property should be taken from that person who has no right to keep it.

What is the burden of proof in such circumstances? I have dealt with this matter at every stage—Second Reading, in Committee and on Report. No one has ever gainsaid what I said. It is this. Although the civil standard applies—that of the balance of probabilities—the decisions of the courts make very clear indeed that where the issue is serious misconduct, although that is still determined on the balance of probabilities, because of the inherent unlikelihood that serious criminal conduct has been committed the courts require more cogent proof.

Lord Goodhart

My Lords, is the noble and learned Lord the Attorney-General contending seriously that under the Bill as it now stands it would be possible for a court, without any evidence that any particular unlawful conduct has occurred, to come to the conclusion that the assets of the respondent must have been acquired by some unspecified unlawful conduct? That is not how I read the Bill.

Lord Goldsmith

My Lords, a High Court judge will have the duty to consider whether or not a particular property which is identified is the product of some unlawful conduct. What evidence the court will be persuaded by will be a matter for the court. I do not disagree with the example given by the noble Viscount, Lord Bledisloe, of someone who plainly has very substantial means, has never done a day's work in his life and cannot explain—that is a part of it—where any of it came from when questions are put. It is the easiest thing for someone to say, "You say that these are the proceeds of crime. I can tell you that I acquired this in this or that way". But he puts forward no credible explanation for that; and there is other evidence which suggests that he has been mixing in criminal circles: he has been taking aeroplane flights to Colombia, or whatever it may be. The judge will have to decide.

Lord Goodhart

My Lords, I am sorry to intervene again. Under Clause 244, the matter the court has to decide on the balance of probabilities is whether it is proved that any matters alleged to constitute unlawful conduct have occurred. That makes clear that a matter which constitutes unlawful conduct must have occurred.

Lord Goldsmith

My Lords, there will be certain cases where no doubt specific unlawful conduct is identified. The point I make is that there will be cases where, for example, it will be apparent that the property someone is holding may be the proceeds of a bank robbery or of drug trafficking. One cannot tell which it is but one can be satisfied—not the police; it is not a police state; not me; not the director—but the court is satisfied that those are the proceeds of unlawful conduct. In those circumstances, the court will be able to make the order.

I remind noble Lords of what I said about the standard of proof. It is important for two reasons. Because it is so important, I hope that noble Lords will bear with me while I read again these words that, When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation, the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence. Deliberate physical injury is usually less likely than accidental physical injury …built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation". The court would have to be satisfied—

Lord Renton

My Lords, I am grateful to the noble and learned Lord for giving way. Would he bear in mind that Clause 244(1) refers to, conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part"? As criminal law is brought into operation there, surely the principle of the burden of proof, which, as was said by the noble and learned Lord, has for centuries been beyond reasonable doubt, should apply.

Lord Goldsmith

My Lords, as I explained on Report—it has not been contradicted by the noble and learned Lord—time and again in the civil courts an allegation of a criminal act is made in the context of a civil proceeding. In those circumstances, what the court does is precisely what I have just read from the words of the noble and learned Lord, Lord Nicholls of Birkenhead. It decides that question on the civil standard, but applying the preponderance of that probability taking account of the need for more cogent evidence.

I have previously given examples. That happens in any libel actions and it happenedin re. H itself. The allegation underlying a care proceeding was that the father was guilty of raping the daughter. The whole question in the case was whether that allegation had to be determined on the criminal standard or in relation to something less. Obviously, the finding even in civil process would be very damaging to the father. Your Lordships' House in its judicial capacity held that on the balance of probabilities, but that more cogent evidence was required.

As it happens, the noble and learned Lord, Lloyd of Berwick, was on the panel. I have with me what he said. On that occasion, interestingly, he had no difficulty with the proposition that a civil court might find somebody guilty of a criminal offence in the sense that it found that he had committed that criminal offence. In fact, the noble and learned Lord was in a minority in suggesting that one should not have that heightened standard. His view was that the standard of proof should merely be a simple balance of probabilities. One understands why the noble and learned Lord said that. There is a critical difference between a criminal process and a civil process. In a criminal process, someone is convicted and goes to gaol or is at risk of going to gaol. That is not the case when someone is found in a civil process to have committed some disreputable act. At Report stage I gave the example of a case, which the noble and learned Lord tried when he was a puisne judge and I was a junior member of the Bar, involving forgery, deceit and lying. There was no suggestion at any stage that, despite the importance of those allegations, they could be dealt with only before a criminal court.

Lord Thomas of Gresford

My Lords, will the Minister confirm that it is not the case under the Bill that mere possession of property, which is thought to have been obtained dishonestly in some way or other, is sufficient for the provisions to come into effect? Clause 244 states: Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part". It continues: The court or sheriff must decide on a balance of probabilities whether it is proved …that any matters alleged to constitute unlawful conduct have occurred". It is not for the person to explain where his property came from; it is for those seeking to recover that property to demonstrate on a balance of probabilities that unlawful conduct—that is, unlawful conduct under the criminal law—has actually occurred. The response of the noble and learned Lord has given an entirely different impression.

Lord Goldsmith

My Lords, I have been absolutely consistent throughout. Clause 308 is where one needs to start in this regard. It states: Property obtained through unlawful conduct is recoverable property". That is what the court is considering: whether the property is obtained through unlawful conduct. I stand by what I said. The court might be satisfied to that heightened standard that the property was the proceeds of unlawful conduct, but it could not be said whether it involved the proceeds of the bank robbery on 14th June 1963 or on 16th June 1980. It might: even be satisfied that the person had committed both. But which are the proceeds of crime? What has the person done with the proceeds in the mean time? On the question whether one can trace that back to the Midland Bank as opposed to Barclays Bank: no, the court would not have to do that.

On the European Convention, I respect the fact that the noble and learned Lord takes a different view from that of the Government. I have throughout said that we recognise that we are to some extent in uncharted territory. The Government's view— the better view—is that this matter will be held to be civil, not criminal. That is under the Strasbourg jurisprudence. I draw support from the fact that there are decisions from your Lordships' House, the Privy Council and Strasbourg supporting that result. The Government have said throughout that we accept that this is likely to be challenged. The sort of people who we are talking about, if we are right about them, will have pots of money, which they will not want to give up without a fight and they will challenge the decision. The Government should—this line was previously and rightly taken by the Opposition—be able to propose the legislation, have it tested in the courts and establish whether we are right, as we believe we are, not on a wing and a chance but because we have looked at the matter very carefully and concluded that we are right and will be held to be right. If there is something wrong with that, let us have the judgment of the court so that we can amend it in a way that makes sense and which reflects what the problem is; it should not be dealt with in some other way.

In order to emphasise what is so extraordinary about the amendment of the noble and learned Lord, I want to contrast two different people. The first is someone who is not said to be the person who has committed the unlawful conduct but who is holding the property, such as a wife or an associate. The amendment would accept that that person can be proceeded with under Part 5, with all the rigours of that part. One could go back 12 years and the case will be decided on the balance of probabilities, the standard of proof that I have identified. Part 5 will operate. If the person is said to be the culprit or is likely to be the culprit—not the person who is less culpable—under the amendment of the noble and learned Lord, that person cannot be proceeded against at all.

I shall explain why I say, "not at all". As I have made clear throughout the Bill's passage—it is very clear that this will be the position—there will be a hierarchy of proceedings. If it is possible to pursue criminal proceedings, they will be pursued. A decision will be made by the prosecutors about whether to proceed without regard to the fact that there is a civil process as well. Only if the prosecutors form the view that it is not possible to proceed will the civil process come in. After that, there are the taxation provisions.

What would happen under the amendment of the noble and learned Lord? The amendment says that if the person who is proceeded against is someone who is said to be guilty of unlawful conduct, that person is entitled to insist on going to the Crown Court. But for what would they go to the Crown Court? For a trial? But the prosecutor has already decided that it is inappropriate to proceed by way of trial. That cannot happen. But what if the prosecutor proceeds? What if the reason why it is not possible to proceed against the person is because he has sufficiently distanced himself from the actual criminal acts? The court may be absolutely convinced that he is holding the proceeds of a bank robbery but it may not know whether he is a bank robber, a conspirator or simply a fence—someone who is holding the property. He cannot be convicted on any of those grounds because one cannot convict him when one does not know which of those applies. He is entitled to keep all of that money although a court is satisfied that he was guilty.

What about the situation raised by the noble Viscount, Lord Bledisloe? What if the clearest possible evidence is that the person was guilty of committing a fraud outside the United Kingdom which we cannot prosecute? That is a very common problem these days because, as noble Lords well know, crime is global. If there is drug trafficking or human trafficking in a foreign country, we cannot bring the relevant person to the Kingston Crown Court or the Old Bailey. That person is entitled to say, "You cannot try me in the Crown Court, therefore I can keep all of this property". Those are considerable loopholes.

The extraordinarily absurd result is that one can proceed against the wife, someone who is not really culpable, but not against someone who is culpable. That is a manifest nonsense. Why is that said to be justified? On the basis that there is a right to trial by jury? There is a right to trial by jury for criminal offences, but this is not a criminal conviction. One does not go to gaol, the matter does not go on one's rehabilitation of offenders record and one has an appeal to the Court of Appeal. It is a civil process like any other civil process.

With respect to the noble Lord, Lord Kingsland, I say that it is impossible to describe this amendment as improving the Bill. If it is agreed to, it will mean that it will not be possible to proceed against a person who is holding the proceeds of crime even though a court can be satisfied of that by convincing evidence, unless one can convict that person of a specific crime.

The noble and learned Lord, Lord Lloyd of Berwick, considers that to be right because he does not believe that Part 5 should stand part of the Bill. As I said, I respect that. The Government happen to take a different view about it. But for the Opposition to say that the amendment would make the Bill more workable when they are driving a huge hole through it is simply false; it simply is not possible to maintain that point of view.

I turn to the final point—the Article 7 point—of the noble and learned Lord's amendment concerning retrospectivity. We debated this matter on Report at considerable length. Again, I invite noble Lords opposite to consider the consequence of this part of the amendment. It would mean that it would not be possible to proceed against a person who was currently holding the proceeds of a crime committed in the past. Therefore, if the amendment were agreed to, the provision would operate only in relation to crimes committed in the future. We are talking about a grossly denatured remedy because the provision would apply only far off in the future and the effect of the act would be gravely reduced.

The Government take the view that the provision is not contrary to Article 7 of the European convention. I explained on Report—I do not want to weary your Lordships now—why that is so. The noble and learned Lord referred to the case of Welch. As I said on that occasion, there are five distinguishing features. While one could argue about one or two of them, one could not do so in relation to the others. The most important of them is that in Welch there was a penalty because the individual had already been convicted of five counts of conspiracy to supply class A drugs. Welch was sentenced to 22 years in prison and, on top of that, the court said, "What's more, there will be a confiscation order". The Court in Strasbourg said, "That's a penalty". That is not the process that is taking place here.

Again, I recognise that there is a difference between us concerning what the Court in Strasbourg will say—if we get that far. But, having considered the matter extremely carefully, the Government's view, contrary to, and respecting fully, that of a former Law Lord, is that the Government will prevail in the courts. It is right that the Government should be allowed to proceed. I believe that many Members of your Lordships' House are of the view that it is important, as the noble Baroness, Lady Buscombe, said, that we should he able to deprive criminals of the proceeds of their crime; otherwise, as the noble Lord, Lord Kingsland, said at Second Reading, leaving criminals with the working capital of crime would have a corrosive effect on society. If noble Lords agree that depriving criminals of the proceeds of their crime is the objective that we seek to achieve, they will reject the amendment.

Lord Lloyd of Berwick

My Lords, I thank noble Lords on the Conservative and Liberal Democrat Front Benches for their support. As to the noble Viscount's first question concerning offences committed abroad, it seems to me that that illustrates very well the type of difficulties which will occur over and over again when Part 5 of the Bill is put into practice. As the noble and learned Lord the Attorney-General pointed out, that is one reason that I have been opposed to Part 5 from the start.

As to the second question, the noble Viscount meets me half way in urging the criminal standard of proof. I am very glad of that. But I still do not savour the concept of a person being accused of criminal activity in general, even a particular kind of criminal activity in general. In that respect, I must beg leave to differ from the noble Viscount.

As to the noble and learned Lord's response, I have now listened to him on three occasions. I am grateful for the trouble that he has taken each time. I have not been persuaded; indeed, if anything, and if it is not offensive to say so, I feel even less persuaded now than I was at the start. In those circumstances, I feel obliged to test the opinion of the House.

5.35 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 149; Not-Contents, 132.

Division No. 1
CONTENTS
Aberdare, L.	Campbell of Alloway, L.
Ackner, L.	Carlisle of Bucklow, L.
Addington, L.	Carnegy of Lour, B.
Alderdice, L.	Chadlington, L.
Ampthill, L.	Chalfont, L.
Anelay of St Johns, B.	Chilver, L.
Astor, V.	Chorley, L.
AstorofHever, L.	Clark of Kempston, L.
Attlee.E.	Clement-Jones, L.
Barker, B.	Colwyn, L.
Beaumont of Whitley, L.	Cope of Berkeley, L. [Teller]
Bhatia, L.	Cox, B.
Biffen, L.	Craig of Radley, L.
Blaker, L.	Crickhowell, L.
Blatch,B.	Cumberlege,B.
Boardman, L.	Denham, L.
Bowncss, L.	Dholakia,L.
Brooke of Sutton Mandeville, L.	Donaldson of Lymington, L
Brougham and Vaux, L.	Eames, L.
Burnham, L.	Elliott of Morpeth, L.
Buscombe, B.	Elton, L.
Byford, B.	Erroll, E.
Caithness, E.	Feldman, L.

Forsyth of Drumlean, L.	Northesk, E.
Fowler, L.	Northover, B.
Fraser of Carmyllie, L.	Norton of Louth, L.
Freeman, L.	O'Cathain, B.
Gardner of Parkes, B.	Oakeshott of Seagrove Bay, L
Geddes, L.	Oppenheim-Barnes, B.
Glentoran, L.	Park of Monmouth, B.
Goodhart, L.	Phillips of Sudbury, L.
Goschen, V.	Prior, L.
Gray of Contin, L.	Pym,L.
Greaves, L.	Razzall, L.
Hambro, L.	Redesdale, L.
Hamwee, B.	Renfrew of Kaimsthorn, L.
Hanham, B.	Rennard, L.
Harris of Richmond, B.	Renton, L.
Hayhoe, L.	Roberts of Conwy, L.
Higgins, L.	Rodgers of Quarry Bank, L.
Hodgson of Astley Abbotts, L.	Roper, L.
Hooper, B.	Russell, E.
Howe, E.	Russell-Johnston, L.
Howell of Guildford,L.	Sanderson of Bowden, L
Hunt of Wirral, L.	Sandwich, E.
Hylton, L.	Scott of Needham Market, B.
James of Holland Park, B.	Seccombe, B.
Jenkin of Roding, L.	Selsdon, L
Kimball, L.	Sharp of Guildford.B.
King of Bridgwater, L.	Shutt of Greetland, L.
Kingsland, L.	Simon of Glaisdale, L.
Laingof Dunphail, L.	Skelmersdale, L.
Lane of Horsell, L.	Smith of Clifton, L.
Lester of Herne Hill, L.	Soulsby of Swaffham Prior, L.
Livsey of Talgarth, L.	Stewartby, L.
Lloyd of Berwick, L. [Teller]	Strathclyde, L.
Lucas, L.	Swinfen, L.
Luke, L.	Thatcher, B.
Lyell, L.	Thomas of Gresford. L.
MacGregorof Pulham Market,L.	Thomas of Gwydir, L.
	Thomas of Walliswood, B.
Mackie of Benshie, L.	Thomson of Monifieth, L.
Maddock, B.	Tope, L.
Mancroft, L.	Trefgarne, L.
Marlesford, L.	Vivian, L.
Masham of llton, B.	Waddington, L.
Mayhew of Twysden, L.	Wakeham. L.
Montrose, D.	Walker of Worcester. L.
Mowbray and Stourton, L.	Wallace of Saltaire, L.
Murton of Lindisfarne, L.	Walmsley, B.
Naseby, L.	Watson of Richmond, L.
Newby, L.	Wigoder, L.
Newton of Braintree, L.	Wilberforce, L.
Nicholson of Winterbourne, B.	Wilcox, B.
Noakes, B.	Williams of Crosby, B.
NOT-CONTENTS
Acton, L.	Bruce of Donington, L.
Ahmed, L.	Campbell-Savours, L.
Alli,L.	Carter, L.
Amos,B.	Chandos, V.
Andrews, B.	Christopher, L.
Archer of Sandwell, L.	Clarke of Hampstead, L.
Ashton of Upholland, B.	Clinton-Davis, L.
Bach, L.	Cohen of Pimlico, B.
Bassam of Brighton, L.	Corbett of Castle Vale, L.
Berkeley, L.	Crawley, B.
Bernstein of Craigweil, L.	Croham,L.
Blackstone, B.	Currie of Marylebone, L.
Blease,L.	Davies of Coity. L.
Bledisloe,V.	Davies of Oldham, L.
Borrie, L.	Desai,L.
Bragg, L.	Dixon, L.
Brennan, L.	Donoughue, L.
Brett, L.	Dormand of Easington, L.
Brooke of Alverthorpe, L.	Dubs, L.
Brookman, L.	Elder, L.
Brooks of Tremorfa, L.	Evans of Parkside, L.

Evans of Temple Guiting, L.	MacKenzie of Culkein, L.
Falconer of Thoroton, L.	Mallalieu, B.
Farrington of Ribbleton, B.	Massey of Darwen, B.
Faulkner of Worcester, L.	Merlyn-Rees, L.
Filkin, L.	Milner of Leeds, L.
Fyfe of Fairfield, L.	Mishcon, L.
Gale, B.	Morgan, L.
Gibson of Market Rasen, B.	Morgan of Huyton, B.
Gilbert, L.	Morris of Manchester, L.
Golding, B.	Nicol, B.
Goldsmith, L.	Pendry, L.
Gordon of Strathblane, L.	Pitkeathley, B.
Goudie, B.	Plant of Highfield,L.
Gould of Potternewton, B.	Ponsonby of Shulbrede, L.
Grenfell,L.	Prys-Davies, L.
Grocott, L. [Teller]	Puttnam, L.
Hardy of Wath.L.	Ramsay of Cartvale, B.
Harris of Haringey, L.	Randall of St. Budeaux, L.
Harrison, L.	Rea, L.
Haskel,L.	Richard, L.
Hayman, B.	Rogers of Riverside, L.
Howarth of Breckland, B.	Rooker, L.
Howells of St. Davids, B.	Sainsbury of Turville, L.
Howie of Troon, L.	Sawyer, L.
Hoyle, L.	Serota, B.
Hughes of Woodside, L.	Sheldon, L.
Hunt of Chesterton, L.	Simon, V.
	Smith of Gilmorehill, B.
Hunt of Kings Heath, L.	Stone of Blackheath, L.
Irvine of Lairg, L. (Lord Chancellor)	Strabolgi, L.
	Symons of Vernham Dean, B
Iswyn, L	Temple-Morris, L.
Janner of Braunstone, L.	Thornton B
Jay of Paddington, B.	Tumberg, L.
Jones, L.	Turner of Camden, B.
Jordan, L.	Uddin, B.
Kilclooney, L.	Walker of Doncaster, L.
King of West Bromwich, L.	Warner, L.
Kirkhill,L.	Warwick of Undercliffe, B.
Layard, L.	Weatherill,L.
LeaofCrondall, L.	Whitaker,B.
Lipsey, L.	Whitty, L.
Lofthouse of Pontefract, L.	Wilkins, B.
Macdonald of Tradeston, L.	Williams of Elvel,L.
McIntosh of Haringey, L. [Teller]	Williams of Mostyn, L. (Lord Privy Seat)
Mcintosh of Hudnall, B.	Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

5.46 p.m.

Lord Lloyd of Berwick

moved Amendment No. 8: After Clause 246, insert the following new clause—

"246A PROCEEDINGS BROUGHT UNDER SECTION 246: DEFENCE OF RESPONDENT

1. (1) Where proceedings are brought against a person under section 246, and that person (the respondent) is the person through whose unlawful conduct the property is said to have been obtained, the following provisions of this section shall apply.
2. (2) If the respondent denies that he is guilty of the alleged unlawful conduct, he shall be entitled to have the question whether he is so guilty determined in a separate trial by the Crown Court, and the proceedings in the High Court shall be adjourned.
3. (3) If he is acquitted by the Crown Court. the proceedings in the High Court shall be dismissed.
4. (4) If he is convicted by the Crown Court, the Court must proceed under Part 2 of this Act, and the proceedings in the High Court shall stand adjourned until the proceedings in the Crown Court have been conducted whereupon the proceedings in the High Court shall he dismissed.
858
5. (5) If the respondent elects not to exercise his rights under subsection (2), the question whether he is guilty of the alleged unlawful conduct shall be determined by the High Court on the criminal burden and standard of proof, and all other questions shall be determined on the civil standard of proof.
6. (6) If the respondent is found guilty of unlawful conduct under subsection (5), and the court is satisfied that he is in possession of recoverable property, the court shall make a recovery order in accordance with this Part of this Act, save that the recovery order shall not include property obtained by the respondent through unlawful conduct committed by him before the coming into force of this Part, and section 320(3) shall to that extent not apply."

On Question, amendment agreed to.

Clause 286 [Compensation]:

Lord Goldsmith

moved Amendment No. 9: Page 171, line 31, after "is" insert "withdrawn or The noble and learned Lord said: My Lords, on Report the Government brought forward an amendment to make clear that the three-month period during which an application for compensation must be made does not begin until any appeal proceedings are finally concluded. The noble Baroness, Lady Buscombe, argued that this did not take account of the case where an application for leave to appeal was withdrawn or where an appeal was abandoned. I said then that I would consider the matter. We have considered it and we have brought forward Amendment No. 9 to put the issue beyond any doubt that might arise in the case of a withdrawn application. We do not think that any further provision is necessary where an appeal is abandoned as the abandonment of the proceedings would mean that they would be finally concluded within the meaning of Clause 286(3).

The noble Baroness also argued that we should be referring to permission to appeal rather than leave to appeal. While we agree that "permission" is the more modern expression in relation to England and Wales, it is not correct usage in relation to the rest of the United Kingdom. As Part 5 applies throughout the United Kingdom we need to retain references to "leave" so that it can work in Scotland and Northern Ireland and, as there can be no possible doubt about what "leave" means, it is unnecessary to depart from the simple solution of using a single word.

Amendment No. 10 corrects a minor drafting error. It replaces the word "sum" with the word "currency" in Clause 303. I beg to move.

Baroness Buscombe

My Lords, I wish to thank the noble and learned Lord the Attorney-General for responding to our concerns expressed in Committee and on Report regarding Clause 286. I entirely accept his point with regard to use of the word "permission" versus "leave". It is rather refreshing to hear that for once the Government are refraining from the need to modernise. Thank you very much for that report.

On Question, amendment agreed to.

Clause 307 ["The minimum amount"):

Lord Goldsmith

moved Amendment No. 10: Page 183, line 31, leave out "sum" and insert "currency On Question, amendment agreed to.

Clause 312 [General exceptions]:

Lord Goodhart

moved Amendment No. 12: Page 199, line 24, at end insert "or an employee of his The noble Lord said: My Lords, Clause 313(3) of the Bill gives the Government a right to claw back from a plaintiff damages paid to him or her out of recoverable property which has been obtained when the damages have been paid under a judgment of the court.

We believe that that is grossly unfair because it is punishing the innocent plaintiff, not the person against whom the recovery order is made. It also creates plain anomalies. If the claim, for example, is a claim for damages for negligence, the plaintiff can keep the money awarded to him or her under the judgment if the damage is caused by a negligent act which is also a criminal offence, for example, careless driving. But the plaintiff cannot keep the money if the damage is caused by a non-criminal form of negligence. If damages are paid by an insurance company, the plaintiff can keep the money because it is not paid for out of recoverable property. At least, that is the view of the Government. I am not certain that that is the case if the insurance premium was paid out of recoverable property. If, on the other hand, the damages are paid personally by an uninsured defendant, there may be a right to claw them back.

There will be plain inconsistencies between situations which have nothing to do with the plaintiff. When a similar amendment to this was moved by us on Report, the Government raised what seemed to me a fair point; that is, that a payment made out of recoverable property to, for example, a former spouse in the course of matrimonial proceedings, should remain recoverable. We have therefore tabled a revised amendment which prevents a claw back only in the case of claims for payment of a debt or for damages, and would not prevent the claw-back in the case of an order for payment of a settlement of matrimonial property.

That seems to me to be an amendment which is plainly just and fair. It will prevent what could be a serious injustice to a successful plaintiff. I also find it extraordinary, and, indeed, unprecedented, to be able to recover damages which have been not only ordered but paid under an order of the court in cases other than ones where there has been fraud or some other serious default on the part of the plaintiff. To that extent, it establishes thoroughly bad precedent. Therefore, I hope, though I fear I do not expect, that the Government will see the justice of the case and will accept the amendment. I beg to move.

Lord Goldsmith

My Lords, I shall explain the context in which the amendment arises. Clause 309 enables the proceeds of unlawful conduct to be traced. That principle is not assailed. Giving away dispositions, for example, or other dispositions, does not prevent the property from continuing to be recoverable and therefore recovered. But there must be exceptions.

Perhaps the most important exception is in Clause 31 2(1). Where someone acquires the property in good faith for value and without notice, lie can keep it. That concept is well known to lawyers. It is often called "equity's darling". There are three elements to that. If a person has acquired in good faith, for value and without notice, the property is tainted in that way.

However, another exception which the Government thought important is contained at present in Clause 312(3). That is in circumstances where the very nature of the proceedings is on the basis of the respondent's unlawful conduct. In those circumstances, it is likely that the claimant 'will realise that the property is recoverable because he is saying either, "The property has been taken from me by fraud", or if not that very property. "That is the sort of person who takes property dishonestly from other people". That is why the exception, as presently drafted, is necessary. Therefore, if I am defrauded. I sue for fraud and I receive back my money. The fact that I knew that the property which is coming to me was the proceeds of crime does not and should not prevent the recovery order from operating.

It would be wrong in those circumstances that the director should recover; the victim would take priority. However, the noble Lord, Lord Goodhart, wants to extend that to the proceeds of any judgment for debt or damages, subject only to the proviso that it is made in good faith, and therefore would not apply the two other elements in Clause 312 without notice that it is recoverable property or that it is for value. That would put the judgment creditor in a favourable position. Indeed, subject to other parts of the Bill, the person who had obtained a judgment for a debt would be in a better position than the person who had simply had the debt paid on this analysis without the need to go to court.

I emphasise that that does not undermine the judgment. The judgment will remain. If someone has a judgment, there is nothing wrong with him saying, "The respondent has chosen to meet that judgment by using my money or other property to which he is not entitled". The true owner—in this case the state, because that is the philosophy behind Part 5—is entitled to say, "That is property which should he mine. This judgment has to be settled with some other property". There is nothing absurd or wrong about the principle.

My fundamental proposition is that Clause 312(1) adequately meets the cases which should be met. I understand that the noble Lord accepts that if a judgment is met there is a disposal, so that part is satisfied. He presumably sees no difficulty in the concept of good faith because that is the concept he wants to apply. Presumably, he has no difficulty with the concept that it was without notice that it is recoverable property. He continues to question whether or not a person who has obtained a judgment may be giving value. That is where he and I differ.

I invite the noble Lord first to consider a case in which a person has supplied goods, has a claim for a debt and that debt is paid before court proceedings. There can be no doubt that value has been given because value was given at the time that the money was lent, the goods were sold or whatever gives rise to the debt. There is no less value given when the money is paid following a judgment. Equally, if there is a claim for damages, the person who has that claim as a result of an injury sustained possesses something which is a chose in action in legal terms. It is a right of action which is given up at the time that the judgment is satisfied. One cannot obviously keep both the right of action and the proceeds of the judgment.

Therefore, I do not have difficulty in seeing that in the right case the concept of Clause 312 can apply to proceeds after a judgment. It will be for the court to be satisfied that value has been given. That would always be the case. Researches have identified the Chancery Division case of Taylor v. Blakelock. That was a breach of trust. When the property was then passed from another trust to the person who had the claim in relation to the trust, it was held to be a disposition for value. One is not surprised by that because the real distinction is between a volunteer and someone who has given value. Someone who has a claim for damages, which is satisfied by the court, is not an innocent volunteer. That would be for the court to decide, but I suggest that there is not the problem that the noble Lord suggests.

The amendment is not necessary in order to meet the category of case with which he is concerned. However, there is a further problem, which goes beyond the considerations set out under Clause 312; that is, equitable considerations. That does not include the requirement of absence of notice or the requirement of value in some other sense. If the noble Lord accepts my argument, we have dealt with that point. It does not deal with the "without notice" issue. If someone has a judgment—even if a bona fide judgment—and knows that it is being satisfied from the proceeds of a robbery, why should he be able to keep the property? He will say, "No, you must pay me out of money which is clean".

I refer to a second problem. In Part 5 we have been attempting to have a civil process, which follows the same kind of rules as a civil process. A concept such as bona fide purchaser for value without notice and in good faith is entirely what one would expect in a civil process. The courts would be used to dealing with that. To introduce a novel concept which simply depends upon good faith would be to introduce an unusual approach. That could give rise to serious difficulties as to how this is supposed to apply.

I hope that the noble Lord feels that that explanation—although we have covered some of this ground before—is of some reassurance. I invite him to withdraw the amendment.

6 P.m.

Lord Goodhart

My Lords, I am inclined to accept the argument of the noble and learned Lord the Attorney-General so far as it applies to actions in debt. To that extent, I agree that the wording of my amendment, which refers to debt, is probably superfluous. However, there remain serious problems as regards actions for damages.

Let us assume that there is an action for damages for personal injury. A plaintiff who is injured by the negligence of the respondent is not interested in the question of whether or not any claim for damages is likely to be satisfied out of recoverable property.

It is not like a contract where one knows that one is dealing with a particular person. One may or may not know that that person is involved in crime. If one does, it is reasonable that the property acquired from him should be treated as being recoverable. I turn back to the case of someone injured by the negligence of the respondent. Let us assume that at the time of the injury the injured person does not know anything about the respondent whatsoever, except that his conduct has injured him. The noble and learned Lord tried to argue that one could get around that issue by saying that when the plaintiff is injured he acquires a chose in action—a right in action. When he gets the payment of damages he disposes of his right of action for value and in good faith. I regard that as an extremely narrow and technical argument.

On Report the noble and learned Lord raised against me the argument that the cause of action is extinguished by the judgment. On this occasion I would raise that against him because by the time one gets one's damages judgment has already been given, obviously. So one no longer has a cause of action—when one gets the damages one has nothing of which one can dispose. I do not wish to rely on that exceedingly technical argument.

If the noble and learned Lord is right—when one gets judgment in an action for damages, and when that judgment is satisfied one provides value to the person who paid the damages—the whole of subsection (3) would be unnecessary. If the claimant's claim is based on the defendant's unlawful conduct, there must be a right of action for the unlawful conduct which is being given up, in exactly the same way as would be the case if it is simply an action for damages for negligence.

Lord Goldsmith

My Lords, I thank the noble Lord for giving way to me. In that circumstance the claimant will have noticed that it is recoverable property. That is why Clause 312(1) would not work in that situation. That is why the existing clause is necessary.

Lord Goodhart

My Lords, the point about the notice is a bad one. I return to the case of someone injured by negligence. At the time of the injury, he has no idea that the respondent is involved in crime. By the time the judgment is satisfied he has found out quite a good deal more about the respondent. If that is the case, on the noble and learned Lord's interpretation of Clause 312(1), the conditions cannot be satisfied because by the time the judgment is satisfied the plaintiff has notice that the property might be recoverable. Surely, it should make no difference whatever if an entirely innocent plaintiff, with a good cause of action in damages against a respondent is defeated simply because at some stage before the judgment is satisfied he comes across the otherwise irrelevant information that the respondent, is a no-good type against whom a recovery order might be made. It is unjustified to say that that is a deciding factor in whether or not the plaintiff is entitled to keep the damages which he has been paid. This is a wholly unjustifiable objection.

I am unhappy with the Government's response. Nevertheless, I have the feeling that we are arguing in terms of some fairly narrow technicalities. I should be reluctant in the circumstances—although I remain convinced that my point is good—to press the matter to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 334 [Failure to disclose: regulated sector]:

Lord Goodhart

moved Amendment No. 12: Page 199, line 24, at end insert "or an employee of his The noble Lord said: My Lords, in moving Amendment No. 12,I shall speak also to Amendments Nos. 13, 14, 15 and 16. The amendments are based on the belief that the most effective way to ensure that the regulated sector observes high standards in relation to money-laundering is to make its employers liable to prosecution for misconduct or negligence of their employees, whether or not the directors of an employer company have been guilty of it.

If employers face a hefty fine for a breach of money-laundering by their staff, that ensures that their staff are not only properly trained but are selected as people who have the capacity to do the job, are properly monitored and are not grossly overworked.

Amendment No. 12 substantially strengthens the Bill. In addition, it eliminates the need to make employees personally liable for a negligent failure to spot a suspicious transaction. It is unfair to make a junior employee liable for failure to spot a suspicious transaction if he did not realise that it was suspicious.

There is a specific defence provided in the Bill for employees who have not had proper training, but it is not a defence if they fail to notice that a transaction is suspicious because they are exhausted by overwork or because they are simply not up to the job. That potential unfairness to employees who may find themselves with a criminal conviction for negligent conduct was a matter of great concern to members of all parties in Committee in another place. An offence of careless driving is a criminal offence of negligence, but does not normally attract the kind of stigma that would be attracted by a conviction for money laundering, which may be a crime of serious dishonesty.

The amendments would strengthen the Bill by giving employers a real incentive to ensure the maintenance of high standards in watching for money laundering and would remove a potential injustice to their staff. I beg to move.

Lord Kingsland

My Lords, I rise to support the amendments. As the noble and learned Lord, Lord Falconer, will recall, in Committee we tabled amendments of a slightly different nature to the clause. Our approach was to reduce the penalty for the negligence offence to one below the custodial threshold. That did not find favour with the noble and learned Lord. The noble Lord, Lord Goodhart, took the message and has come up with a different approach.

The Government's approach is both ethically wrong and operationally futile. It is ethically wrong for the reasons explained by the noble Lord. A criminal penalty of that nature should not be the consequence of negligent conduct in which an officer in an institution does not do what he ought to do, according to the required standard. Equally, the existence of the penalty will make no difference to the conduct of those who are, to use the modern expression that I do not much like myself, but which seems the most evocative, at the workstation.

I hope that the Minister will reflect on the matter. I do not say that our solution is necessarily the best; nor that that of the noble Lord, Lord Goodhart, is the best; but the Government should think again about the issue. So something needs to be done. The Government have got the balance wrong and they should take the opportunity, while the Bill is still alive, to come up with a better solution.

Lord Falconer of Thoroton

My Lords, we share a considerable number of goals with noble Lords on both Front Benches on the matter, but I earnestly ask both of them to consider what they are proposing under the amendment.

For example, let us suppose that a one-man solicitors firm has trained all of its staff and has systems in place, as required under the money laundering directive that is to be introduced. That one-man firm will be caught by the directive and by the clause. He has trained; he has the system; he is careful. As the result of the negligence of one of his employees, there is a breach of the provision. Under the amendment, the employee will get off but the solicitor, who is completely blameless in that respect and has done everything required of him, will end up being liable for a criminal offence that carries a maximum penalty of five years in prison.

Having put the ethical case, I cannot believe that noble Lords intended that, but that is the amendment's consequence once the second money laundering directive is introduced and solicitors are caught by it.

Lord Kingsland

My Lords, I am most grateful to the noble and learned Lord for giving way, and I shall be telegraphic. I agree with much of what he said, but the Government are equally at fault in their position. That is why I asked them to come up with a different approach. The Government have criticised both of our approaches, but they have not done anything to improve their draft.

Lord Falconer of Thoroton

My Lords, that draft involves blameworthy conduct in the sense of negligence before a crime is committed, whereas the draft proposed by the noble Lord, Lord Goodhart, which the noble Lord supports, involves conviction for an offence without any blameworthy conduct.

We all agree that our goal is high standards for reporting coupled with appropriate penalties for wrong-doing. We cannot possibly support what would in effect be strict liability for professionals who were completely blameless. From what the noble Lord, Lord Kingsland, said, I detect that he does not support that conclusion either. We think that we have the best solution.

The Money Laundering Regulations 1993 require all businesses within the regulated sector to have systems in place to provide for the training of employees, the identification of customers and the keeping of records for five years. The penalty on conviction for failing to comply with the regulations is a period of imprisonment of up to two years or an unlimited fine. Most companies are diligent in that respect and comply fully with the regulations' requirements, but a company director can already be brought to book for failing to take the regulations seriously. That is important because of the high standards that we seek.

In effect, the amendments would mean that even if an employer has done everything in his power to ensure that his employees have been correctly trained to be alert to money laundering, where an employee fails to make a disclosure because he did not know or suspect that money laundering was going on, the employer would have to take full responsibility for the negligent behaviour of his employees. It does not end there. In the circumstances that I have described, by virtue of Clause 338, the employer could find himself subject to a period of imprisonment of up to five years.

For the reasons that I have given, that cannot be right. The employer will have done nothing wrong at all; on the contrary, he will have done all that he can to protect his company from money laundering activity and yet, through wilfulness or sheer laziness on the part of his employee, he may still face a longish term of imprisonment.

Separately from the ethical point, how would the amendment work in practice? Where the employee knew or suspected money laundering, the prosecutor would seem to have a choice whether to prosecute the employer or the employee. It is not right to have the option of prosecuting the employer in cases where the employee deliberately fails to report money laundering. In cases in which there was no knowledge or suspicion, the employee would have a defence to the offence, so the prosecutor could pursue only the employer.

However, in practice it may not be clear at the outset whether there was actual knowledge or suspicion or simply reasonable grounds for it. In order to secure a conviction, the prosecution would need to put both the employee and the employer in the dock and see whether the employee successfully made the defence. That could lead to the employer being prosecuted in the most inappropriate cases.

The simple fact is that, under the amendments, the prosecutor would be reluctant to bring a prosecution against a company except in the most blatant cases of a company's disregard of proper procedures. In most such cases, the company would be liable to prosecution under the money laundering regulations in any event. We should be no further forward in trying to bring about a higher degree of diligence within the regulated sector.

So we would end up with unfairness and would not produce the high standards that we seek. In those circumstances, I firmly ask the noble Lord to reconsider and to withdraw the amendment.

Lord Goodhart

My Lords, I found the noble and learned Lord's response far from convincing. He raised the argument of the one-person solicitors firm and said that the threat of a five-year term imprisonment for the breach of the money laundering rules by an employee of the solicitor would be inappropriate. Of course that is so but there would be no chance in those circumstances of any term of imprisonment being imposed. A five-year term would be almost equally inappropriate for a new young employee who, despite being properly trained, failed to notice something that an experienced employee would have noticed and became liable for negligence.

Equally, where the employees of a large firm or an incorporated business commit a series of breaches, plainly there is something wrong with the way that the employer runs the business and a fine—possibly substantial—would be entirely appropriate. Strict liability is a way of ensuring high standards in the commercial sector, so there are several fields in which employers are subject to strict criminal liability for breaches of law by their employees.

I would have been minded to press the amendment to a Division except that it would impose a considerable potential liability on any organisation that falls within the regulated sector now or may do in future. It would be inappropriate to press the amendment to a vote without more thorough consultation with the business sector potentially affected than we have been able to undertake. In those circumstance, while I remain convinced that the amendment is a much better way of proceeding, it is not appropriate to press it now. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 13 to 16 not moved.]

Clause 380 [Evidence overseas]:

Lord Falconer of Thoroton

moved Amendment No. 17: Page 226, line 1, at end insert— (11) Rules of court may make provision as to the practice and procedure to be followed in connection with proceedings relating to the issue of letters of request by a judge under this section. The noble and learned Lord said: My Lords, before I refer to Amendment No. 17, I want to add something that I should have said in response to Amendment No. 12. The Government believe that strong anti-money laundering measures, including the new negligence test, are fully justified against the background of several money laundering cases in the City that were not reported to law enforcement. For the City's financial reputation and standing, here and overseas, it is of utmost importance that the United Kingdom should be seen to demand the highest standards of diligence. I was recently able to reassure representatives of the Law Society concerning the operation of the provisions in Part 7. One of their concerns was that a problem might arise if NCIS is unable to consent to a transaction quickly and a client brings an action for negligence—for example, where there is urgency in completing a conveyancing transaction.

Although it would ultimately be for the court to decide, in our view it is highly unlikely that a company that is in dialogue with NCIS would be found negligent in those circumstances. Where a report is sent to NCIS and the matter is urgent, I am looking into establishing a follow-up hotline within NCIS to operate during daylight hours, so that the discloser is not left in the difficult position of neither being able to effect a transaction nor inform the client that a report has been made to NCIS. The Bill's time limits will be helpful but there will inevitably be cases where consent to a transaction needs to be given before seven calendar days, as provided in the Bill.

Lord Goodhart

My Lords, I am most grateful to the noble and learned Lord for making that point. The original Law Society proposal for a two-day time limit presented obvious difficulties and might have led to NCIS refusing permission without the opportunity to consider the matter properly because the two-day limit was approaching. The formula devised by the noble and learned Lord and the Law Society is the right way to proceed.

Lord Falconer of Thoroton

My Lords, I am obliged.

I alerted your Lordships to the need for Amendment No. 17 on Report. Its effect is to provide a power to make rules of court for proceedings under Clause 380, which makes provision for the Director of ARA to apply to a judge for a letter requesting evidence from overseas relating to confiscation investigations. The person under investigation will also be able to request such evidence for use in their defence. The amendment is required because applications under this clause will be made to a judge, not to a court, and therefore specific rule-making provision within the Bill to make rules of court will be required.

Amendment No. 18 is a purely drafting amendment. Part 5 of the Bill refers to "interim receiving orders" for England and Wales and to "interim administration orders" for Scotland—reflecting the different terminology in the two jurisdictions. The same terminology is used in Part 8. Amendment 18 simply adds a reference to "interim administration orders" to the interpretation provision for Part 8. I beg to move.

On Question, amendment agreed to.

Clause 420 [Other interpretative provisions]:

Lord Falconer of Thoroton

moved Amendment No. 18: Page 246, line 10, leave out "and "interim receiving order"" and insert ", "interim receiving order" and "interim administration order" On Question, amendment agreed to.

Clause 423 [Tainted gifts]:

Lord Falconer of Thoroton

moved Amendment No. 19: Page 247, line 42, after "339" insert ", 340 The noble and learned Lord said: My Lords, the two sets of minor amendments that follow are technical. They are largely a matter of integration, in that they extend to the whole of the United Kingdom provisions that the Bill already applies to one or more of the three jurisdictions. The amendments to Clauses 429 and 433 are mainly designed to simplify for Northern Ireland the interrelationship between tainted gifts under the confiscation legislation and under-value transactions under the insolvency legislation. The amendments simply replicate for Northern Ireland amendments that your Lordships approved for England and Wales and Scotland on Report, when I mentioned that we would bringing them forward.

The second set of amendments affects Clause 423 and, to a lesser extent, Clauses 429, 431 and 433 and is concerned with preferences—a term used in insolvency legislation. I beg to move.

On Question, amendment agreed to.

Lord Falconer of Thoroton

moved Amendments Nos. 20 to 22: Page 248, line 1, after "339" insert ", 340 Page 248, line 10, after "339" insert 340 Page 248, line 10, after "27" insert ", 44 On Question, amendments agreed to.

Clause 429 [Tainted gifts]:

Lord Falconer of Thoroton

moved Amendments Nos. 23 to 29: Page 251, line 31, after "312" insert ", 313 Page 251, leave out lines 33 to 36. Page 251, line 38, at end insert ", or (ca) there is in force in respect of such property an order under section 51, 53, 130(3), 201 or 203. Page 251, line 39, after "312" insert ", 313 Page 251, line 39, leave out from "after" to "must" in line 40 and insert "an order mentioned in subsection (2)(c) or (ea) is discharged Page 251, line 43, leave out subsection (4). Page 252, line 3, leave out subsections (6) and (7). On Question, amendments agreed to.

Clause 431 [Tainted gifts]:

Lord Falconer of Thoroton

moved Amendments Nos. 30 to 36: Page 254, line 4, after "238" insert ", 239 Page 254, line 5, after "242" insert "or 243 Page 254, line 6, after "alienations" insert 'land unfair preferences Page 254, line 12, after "238" insert ",239 Page 254, line 13, after "242" insert "or 243 Page 254, line 21, after "substitution" insert "— (a) for references to section 239 of the 1986 Act of references to section 615 of the Companies Act 1985; (b) Page 254, line 22, at end insert "; (c) for references to section 243 of the 1986 Act of references to section 615B of the Companies Act 1985. On Question, amendments agreed to.

Clause 433 [Tainted gifts]:

Lord Falconer of Thoroton

moved Amendments Nos. 37 to 43: Page 255, line 38, after "202" insert ", 203 Page 255, leave out lines 40 to 43. Page 255, line 45, at end insert ", or (ca) there is in force in respect of such property an order under section 51, 53, 130(3), 201 or 203. Page 256, line 1, after "202" insert ", 203 Page 256, line 1, leave out from "after" to "must" in line 2 and insert "an order mentioned in subsection (3)(c) or (ca) is discharged Page 256, line 5, leave out subsection (5). Page 256, line 11, leave out subsection (7). On Question, amendments agreed to.

Clause 463 [Orders and regulations]:

Lord Goodhart

moved Amendment No. 44: Page 271, line 15, at end insert— () an order under paragraph 5 of Schedule 9 to amend Part 1 of that Schedule; The noble Lord said: My Lords, at the very last gasp we plead for the third time for the Government to adopt the simple proposal to subject the extension of criminal offences to new groups of people to full parliamentary scrutiny by the mechanism of the affirmatory procedure—which was the recommendation of the Delegated Powers and Regulatory Reform Committee.

Clause 463 imposes a considerable burden on businesses that are designated in Part 1 of Schedule 9 as the regulated sector. Criminal responsibility is placed upon any person involved in that sector who has information that may be apposite to money laundering. The Government's response on Report was twofold. First, they said that it was necessary to implement the second European money laundering directive—which would extend the scope of the schedule to accountants, auditors, tax advisers, lawyers, estate agents, casinos and dealers in high-value goods. One only has to consider that last group to wonder what sort of businesses are included in dealers and high-value goods. How are they to be defined? The extensions should be fully debated and accepted affirmatively.

Secondly, the Government said that minor technical changes to the money-laundering regulations have already been made from time to time and that technical changes do not require the expenditure of a considerable amount of parliamentary time. If that is so, we are not concerned with minor technical changes but with the extension to new groups of people of a whole raft of new criminal offences. That matter should be fully considered by the House and another place. I beg to move.

Baroness Buscombe

My Lords, I support the amendment.

6.30 p.m.

Lord Falconer of Thoroton

My Lords, we are still not minded to accept the noble Lord's amendment or the recommendations of the Select Committee on Delegated Powers and Regulatory Reform in this respect.

As the noble Lord said, we intend to implement the Second European Money Laundering Directive by a revision of the Money Laundering Regulations 1993, which will include an extension of the regulations to cover the areas of business specified in the directive. Changes to the regulations will be subject to a full three-month period of consultation. On Report, I said that the regulations—and hence the criminal law—would be amended simply in order to fulfil our international obligations, as set out in the directive, which has, of course, been considered and cleared by scrutiny Committees in both Houses.

At that stage, the noble Lord stated that he was not satisfied with that argument, because the directive did not lay down a requirement as to the length of sentence for failing to report suspected money laundering. I must point out that the European directives and other international documents represent a minimum standard. In order to maintain the strong reputation of our financial sector, the UK must be seen as a leader in the field, with strong, effective anti-money laundering provisions in place.

As set out in paragraphs 84 and 85 of the Home Office's memorandum, the Treasury can, at present, change the definition of business in the regulated sector set out in the Money Laundering Regulations 1993 by order subject to the negative resolution procedure under the European Communities Act 1972. That covers issues such as the requirement to establish systems for suspicious transaction reports, keeping records, undertaking training and appointing designated money laundering reporting officers.

The noble Lord, Lord Thomas of Gresford, made the point that the European Communities Act could not be used to create offences for which the penalties were more than two years and that we should, therefore, not argue that the Schedule 9 power should have the same procedure as the Money Laundering Regulations, which are made under the European Communities Act and contain only penalties of two years. I still disagree with that line of argument. It is clear that we are not trying to say that the provisions in the Bill are the same as the Money Laundering Regulations. Neither are we creating offences by way of secondary legislation. We would be making changes to what constitutes the regulated sector for the purpose of the Act and changes to the list of supervisory authorities. It has already been accepted that the regulated sector will be extended to additional types of business, such as accountants and tax advisers, and that they will, consequently, be subject to the failure to disclose offence and the penalties that that offence attracts.

The important point is that we must ensure that the two definitions of the regulated sector are kept the same for practical purposes. It would not be sensible to have one definition of the regulated sector for the purpose of the Money Laundering Regulations but another definition for the requirement in the Proceeds of Crime Bill to make suspicious transaction reports when there were reasonable grounds to suspect involvement in money laundering.

Lord Goodhart

My Lords, that must be the weakest argument ever. After all, the House is used to making identical sets of regulations for, say, England and Wales, on the one hand, and Scotland, on the other. The regulations may be identical, but they will be in different instruments. It is perfectly possible to do exactly the same here.

Lord Falconer of Thoroton

My Lords, it would be perfectly possible to do it, but it is equally possible that it would not be done. It is for the House to judge the strength of the argument. If we make one order subject to affirmative resolution, there would be the potential for the definitions to get out of step, while we wait for the affirmative order to be approved. The amendments would also create the rather odd and undesirable position in which amendments to Part 1 of Schedule 9—the definition of the regulated sector— would be subject to the affirmative resolution procedure, while amendments to Part 2 of the schedule—the list of supervisory authorities—would be subject to the negative procedure.

I hope that what I have said will reassure the noble Lord and that the amendment will be withdrawn.

Lord Thomas of Gresford

My Lords, I must take up that final point. I emphasised that the thrust of the amendment was that we should deal with the extension of criminal offences to new groups of people. The Minister says that that does not create new criminal offences, but there are dealers in high value goods who today do not commit an offence by failing to report matters that come to their attention but who tomorrow, when the regulations are passed, will commit: a criminal offence if they fail to disclose information. That is creating new criminal offences.

We are wholly unsatisfied with the explanation given. However, for the moment—indeed, for the end of the Bill in this House—we will not press the amendment to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdraw.

[Amendment No. 45 not moved.]

On Question, Bill passed, and returned to the Commons with amendments.