HL Deb 29 July 2002 vol 638 cc738-45

7.6 p.m.

Lord Sainsbury of Turville

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

Moved, That the House do now again resolve itself into Committee.—(Lord Sainsbury of Turville.)

On Question, Motion agreed to.

House in Committee accordingly.

[THE DEPUTY CHAIRMAN OF COMMITTEES (Baroness Fookes) in the Chair.]

Clause 233 [Information]:

Lord Sainsbury of Turville moved Amendment No. 254: Page 166, line 15, leave out "subsection (4)" and insert "this section

The noble Lord said: This amendment makes a technical change to Clause 233 to ensure that both the order-making powers in the clause are subject to the negative resolution procedure. The clause contains two order-making powers for the Secretary of State. However, subsection (4), which determines the procedure under which the orders must be made, refers to only one power. The amendment ensures that both orders are subject to annulment in pursuance of a resolution of either House of Parliament. I beg to move.

On Question, amendment agreed to.

Clause 233, as amended, agreed to.

Schedule 14 agreed to.

Clauses 234 and 235 agreed to.

Clause 236 [Statutory functions]:

Lord Kingsland moved Amendment No. 255: Page 167, line 16, at end insert— save that where the information has been obtained by the OFT or the SFO using the powers contained in Part 6 of this Act, and no action is taken in relation to section 183, the information cannot be used for the purpose of any proceedings under the Competition Act 1998, unless that information could have been obtained by the OFT in any event using its existing powers.

The noble Lord said: I rise to move Amendment No. 255 and speak to a number of other amendments grouped with it. I apologise to noble Lords if I take a little time over this series of amendments.

So far as Amendment No. 255 is concerned, we are worried that the provisions in Clause 236 go wider than the disclosure provisions in Part 3 of the Anti-terrorism, Crime and Security Act 2001 in that they also allow information to be disclosed in relation to civil proceedings in connection with relevant measures set out in Schedule 15.

This would mean that information obtained by the OFT—by using the more extensive powers available to it under Part 6 in the investigation of a purported cartel offence which is not pursued to prosecution, or where there was no realistic expectation that a prosecution would ensue—could be used for civil proceedings if the information indicates some other breach of the Competition Act 1998. This information may not otherwise have been available had the OFT used its existing powers in relation to civil proceedings. There should be a provision preventing the misuse of information in this way.

The purpose of the amendment to Clause 237 is to ensure that there are adequate safeguards and, in particular, that disclosure is a proportionate response to the request for information. Clause 237 provides that a very wide range of public authorities would be entitled to disclose information obtained by them for the purposes of a criminal investigation into, or criminal proceedings for, any offence in the United Kingdom or elsewhere; or for the purpose of facilitating a determination of whether any such investigation or proceedings should be initiated or brought to an end.

The Joint Committee on Human Rights has considered the provisions of the current Bill in its 18th report, published on 21st June 2000. The Joint Committee referred to the submissions from Justice and considered that the disclosure provisions engaged the right to respect for private life under Article 8 of the European Convention on Human Rights—and that the safeguards in the Bill were unsatisfactory. We agree with this. The safeguards should be in primary legislation and go beyond those set out in Clause 240.

Further, in relation to disclosure overseas, safeguards should not be left to criteria published separately under Clause 239 by the Government in a form that is not open to parliamentary scrutiny. In particular, the Joint Committee stated in its report: we consider that the criteria for making disclosures are important elements in the safeguards for Article 8 rights which ensure that any interference with the rights will be in accordance with the law and proportionate to a pressing social need, as required if it is to be justifiable under ECHR Article 8(2). They should be accessible and should have full legal force. As such, they should be contained in the primary legislation which confers the disclosure powers, not left to be promulgated later in a relatively informal form".

The report continued: We consider that, to comply with the requirements of ECHR Article 8, the draft criteria should place a good deal more emphasis on the need to assess whether, in each case, the disclosure being contemplated would be proportionate to a pressing social need which the disclosure is intended to address. Decision-makers need to be made aware that this assessment is central to the legality of their disclosure decisions, and will be open to challenge in litigation in the United Kingdom under section 6 of the Human Rights Act 1998. The guidance on making the assessment should be informative and, as far as possible, unambiguous".

The report further continued: we wish to see the criteria for making disclosures, and particularly the treatment of proportionality issues under the criteria, emphasise the distinction between making disclosures for the purpose of an ongoing investigation where there is already evidence that an offence has been committed, and disclosures for the purpose of deciding whether to initiate an investigation. When a disclosure is sought for the latter purpose, the person deciding whether to make the disclosure will need to be satisfied that there are particularly strong grounds for conducting a speculative inquiry, which might sometimes be little more than a 'fishing expedition', if he or she is to avoid making a disclosure which is not proportionate to any demonstrated pressing social need, and thus unlawful by virtue of Section 6 of, and Article 8 of Schedule 1 to, the Human Rights Act 1998".

We would respectfully endorse the views of the Joint Committee in pressing for the need for appropriate safeguards to be included in these provisions.

This clause is less satisfactory than a similar disclosure provision in Section 17 of the Anti-terrorism, Crime and Security Act 2001 in that it does not even have the proportionality test that was inserted into Section 17 during the passage of the ACS Act through Parliament. This is the very minimum safeguard that should be included in the provisions.

Although it is useful to use Section 17 of the ACS Act as a guide to what minimum safeguards are required, it should not be regarded as the definitive model on which these provisions should be based, particularly as the Joint Committee similarly criticised the disclosure provisions in the anti-terrorism legislation. Its views were not heeded by the Government.

Our view of those provisions is that they are much wider than necessary and will lead to a severe invasion of privacy. We agree with the view expressed by Justice that the disclosure powers in the Enterprise Bill cannot be justified by the pressing public interest considerations cited in relation to the ACS Act.

The definition of "public authority" in Clause 233(3) is by reference to Section 6 of the Human Rights Act 1998, which is in very wide terms. It includes courts, tribunals and, any person certain of whose functions are of a public nature".

When the Joint Committee was considering the provisions in the Criminal Justice and Police Bill, the Joint Committee heard evidence from Mr Hartnett, who said, inter alia, we have described a 'public authority' as that which has the same meaning … as in section 6 of the Human Rights Act. So we feel that that not only deals with the specific point about disclosure, but the fact that we have anchored this … to Section 6 of the Human Rights Act means that any disclosure that a public authority makes must be compatible with Article 8 of the Convention … and thereby it has to meet the tests of reasonableness and proportionality which we understand the Committee was concerned about in January".

However, it cannot be assumed that the Enterprise Bill will be interpreted in such a way that disclosure will be compatible with Article 8 of the convention. By including a clause which makes express provision for the tests of reasonableness and proportionality, there can be no doubt that Article 8 should be complied with.

As to Amendment No. 258, Clause 240 sets out the considerations that a public authority must take into account before making a disclosure of information. While we are pleased to note that Clause 240 recognises that business undertakings have a legitimate interest in the safeguarding of commercial secrets from leakage into the public domain, this should also be reflected in Clause 238. The Secretary of State should take into account similar considerations when deciding whether to prohibit disclosure to an overseas authority. The suggested amendment will ensure that there are further safeguards against abuse in relation to the transfer of information to law enforcement authorities outside the UK.

The amendment replicates the considerations found in Clause 240, as well as providing that the Secretary of State should take into account whether the countries to which disclosure is made will have rules of confidentiality no less strict than those of the UK. This is particularly important given that the provisions in subsection (7) have no realistic means of enforcement.

The provisions as drafted could be open to abuse, particularly abroad where there can be no control over the use of the information provided, notwithstanding any agreement envisaged by subsection (7). If information were to be provided and neither criminal proceedings taken nor even an investigation commenced, what is to stop information being used to gain an unlawful economic or commercial advantage?

I apologise for taking so long to speak to the amendments but, as the Minister is aware, we take these points on disclosure extremely seriously. I beg to move.

Lord Sainsbury of Turville

I shall speak to Amendments Nos. 255, 256, 257, 258, 260 and government Amendment No. 259.

Amendment No. 255 seeks to prevent an investigator or prosecutor from using any information obtained under Part 6 of this Bill for the purpose of subsequent proceedings under the Competition Act 1998, unless that information could have been obtained by the OFT or the SFO in any event using their existing powers. All powers contained in Part 6 of the Bill are modelled on existing powers contained in Part 2 of the Criminal Justice Act 1987. Therefore, these powers are neither new nor novel, and are regularly applied during criminal investigations.

If during an investigation evidence is uncovered that points to a different offence having been committed, it is accepted and common practice by law enforcement agencies that that evidence can be used in a court of law. The decisive point is that evidence has to be obtained using proper powers and observing all existing safeguards. Information gathered under Part 6 powers will have been obtained to the highest standard and should, therefore, be admissible for the purpose of civil proceedings under the Competition Act 1998.

If we were to accept this amendment we would put in question any evidence currently obtained under the Criminal Justice Act 1987, which is subsequently used in civil litigation. I should also point out that the Joint Committee on Human Rights expressed itself content with Part 6 of the Bill. In its 19th report it said: In our view the rights of suspects, including the privilege against self-incrimination, are adequately protected". Amendment No. 256 seeks to introduce further safeguards with reference to the disclosure of information in relation to criminal proceedings. I have some sympathy with the sentiment behind this amendment. Ensuring that there are reasonable grounds for suspecting that the information is relevant to a criminal investigation or proceedings and that disclosure is proportionate to what is sought to be achieved by it appears, at first sight, to be fairly sensible.

However, I look less favourably on forcing the public authority to be satisfied that the subject of the information has committed an offence before making a disclosure. This could create a catch-22 situation, whereby the information is needed to establish that the subject has committed an offence, yet the information cannot be given unless that has been established. However, we agree to consider the issues raised by paragraphs (a) and (c) of the amendment.

Amendment No. 257 seeks to impose a stronger duty on the Secretary of State to ensure that directions made by her to block the disclosure of information requested by an overseas authority are brought to the attention of those parties likely to be affected. The suggested change would have little practical effect on the operation of the clause. The Bill already gives the Secretary of State a duty to take such steps as she considers appropriate to bring her decision to block the disclosure of information to an overseas authority to the attention of parties likely to be affected by the decision. In the vast majority of cases, the actions that she takes to fulfil that duty will be those that are necessary to bring the relevant direction to the attention of the relevant parties.

The use of the word "necessary" would impose a duty on the Secretary of State to ensure that all relevant parties are informed. However, there may be rare occasions when, despite taking all reasonable steps, it is not practically possible to bring the direction to the attention of all the affected parties.

I turn to Amendment No. 260, which seeks to introduce a requirement for parties likely to be affected by a decision to disclose information to an overseas public authority to be given 28 days' notice before the disclosure occurs. Information requested will be for the purpose of criminal investigations, and civil investigations of consumer or competition breaches. It could be damaging to any such investigation if the disclosure of potentially critical evidence has to be brought to the attention of any person or company under investigation. Some complex fraud or cartel investigations rely on the investigating authority being able to collect evidence without alerting potential suspects to the nature of an investigation at an early stage to prevent evidence from being destroyed.

The requirement that the disclosing authority should notify, any person likely to be affected", by the disclosure of its intentions, would introduce an element of uncertainty. It would require the disclosing authority to devote time, effort, and resources to identifying all the parties with an interest in the matter to which the disclosure relates, followed by an assessment of the likely effect on each of them as a result of disclosure.

Government Amendment No. 259 proposes to add to Clause 238 a set of considerations to which an authority must have regard before disclosing information to overseas authorities. As the noble Lord, Lord Kingsland, said, the Joint Committee on Human Rights made some important recommendations to ensure that the overseas disclosure provisions were subject to even tighter safeguards. The committee recommended that the considerations that will be used by UK public authorities when making decisions on disclosure to overseas authorities should not be left to be drafted by the OFT, as currently required, but should be placed on the face of the Bill.

The committee also recommended that the criteria should include a consideration on whether the disclosure being contemplated would be proportionate to a pressing social need that the disclosure would address, and whether the matter for which disclosure is sought is sufficiently serious to justify disclosure. The Law Society and the CBI have put forward similar recommendations. The Government have listened carefully to those recommendations and agree to them.

Amendment No. 259 addresses the recommendations made by the Joint Committee on Human Rights, the CBI, and the Law Society. The 19th report of the committee accepts that this amendment meets its concerns. The considerations as set out in the amendment will ensure that information is disclosed only when public authorities are satisfied that the matter for which the information is requested is sufficiently serious rather then speculative and little more than a "fishing expedition".

I return to Amendment No. 258. We hope that Amendment No. 259, tabled in my name, will meet many of the concerns raised by the noble Lord. We believe that it is right to rely on public authorities rather than the Secretary of State to take responsibility for decisions to disclose. However, our amendment recognises, as does the noble Lord's amendment, the need for careful consideration of a variety of important issues before disclosure is made—including whether the relevant country provides appropriate data protection laws, and whether the matter is sufficiently serious to justify disclosure of the information.

As regards paragraphs (b), (c), and (d) of Amendment No. 258, I should stress that Clause 240 already ensures that the disclosing authority must have regard to whether disclosure would be, contrary to the public interest", or whether it would include information that could "significantly harm" the interests of business individuals. Therefore, I invite the noble Lord to withdraw Amendment No. 255, and not to press Amendments Nos. 257, 258 and 260.

I should like to take away and consider the matter introduced by Amendment No. 256, and reflect further on the issues introduced by paragraphs (a) and (c) thereof. On this basis, I also ask the noble Lord not to press this amendment. Finally, I commend Amendment No. 259 to the Committee.

Lord Kingsland

I am most grateful to the Minister for that very full and extremely helpful response. In those circumstances, I shall be delighted to comply with the noble Lord's request about not pressing the amendments. I look forward on Report to seeing the consequences of some creative thinking about Amendment No. 256 on the face of the Bill. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 236 agreed to.

Lord Davies of Oldham

I beg to move that the House do now resume. In moving the Motion, perhaps I may suggest that the Committee stage on the Bill begin again not before twenty-nine minutes past eight o'clock.

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

House resumed.