Privileged information etc.

Enterprise Bill – in a Public Bill Committee am 6:00 pm ar 23 Ebrill 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster 6:00, 23 Ebrill 2002

I beg to move amendment No. 107, in page 134, leave out line 43.

I should like to say a few words on the clause and proposed amendment. Several hon. Members have a legal background and take legal professional privilege for granted. Outsiders are often cynical about the whole idea of professional privilege. I am looking with an eagle eye at the hon. Member for Wolverhampton, North-East, who is chuntering away at the prospects that legal professional privilege brings with it.

However, we should remember that professional privilege is not primarily about protecting the lawyer or relevant professional—in subsection (2), the banker—but the interests of the client. Subsection (2) states:

''A person may not under section 184 or 185 be required to disclose any information or produce any document in respect of which he owes a an obligation of confidence by virtue of carrying on any banking business unless'',

under paragraph (a)

''the person to whom the obligation of confidence is owed consents to the disclosure or production'';

in other words, unless privileged information protection is waived by the person in whose interests the privilege exists. Or, under paragraph (b)—to which we object, so we want the second tenet deleted—

''the OFT has authorised the making of the requirement.''

In respect of fairness and due process, it is unjust that the OFT has this power of override. An item of information is privileged and the person whose privilege is protected may be keen for it to remain in confidence, but without the amendment the OFT has full discretion to override it. Will the Under-Secretary explain why, given the draconian powers in other clauses, an OFT override is necessary?

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change) 6:15, 23 Ebrill 2002

I share some the concerns of the hon. Member for Cities of London and Westminster. I am pleased that the Bill deals with privilege and it is sensible to extend its compass to include bankers. It is rendered somewhat meaningless, however, by granting the power in the first place and then allowing it to be waived by the person conducting the investigation. Sometimes it might be appropriate to waive banking privilege, but why cannot that be done after some level of prior and conditional scrutiny, perhaps through an application to a judge in chambers explaining why the information should be put into the hands of the investigating authorities? Did the Under-Secretary reflect on that in her preparation for the Bill? Is that not a more suitable avenue to explore?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

Can I go back to the origins of banking professional privilege, which lie in the Criminal Justice Act 1987? We used that as a model for the investigatory powers in cartel offences. Section 2 of the 1987 Act confers powers of investigation on the SFO with respect to serious fraud investigations. Since the OFT and SFO will work closely together on cartel investigations, the Government want to ensure that the investigatory powers of the two bodies are

aligned as closely as possible. Section 2(10) provides for banking professional privilege and section 2(10)(b) provides a director of the SFO with the power to override that privilege. The provision here exactly parallels the 1987 Act.

Clause 187(2) seeks to replicate the arrangement. The amendment would deny an equivalent power to the OFT, which could seriously hamper investigations. No one would deny that the ability to follow money trails is an important power for a cartel investigator. Corrupt payments can be made to seal cartel deals, and individuals involved in bid-rigging and market-sharing can receive sweeteners and pay-offs. The banking trail is important in all those respects. Evidence of such activity is often crucial to securing a conviction, so the OFT needs access to bank records if they are relevant to an investigation.

The Government considered leaving out the banking privilege and the override. In contrast with legal professional privilege, there is no legal requirement to respect banking privilege, but we decided that the OFT board should consider in each case whether banking privilege should be respected. That will provide an additional procedural check before bank records can be accessed, and precisely mirrors the tried and tested process followed by the SFO.

I hope that, in the light of my explanations, the hon. Gentleman will withdraw the amendment. If he does not, I shall ask the Committee to oppose it.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

On balance, I will withdraw the amendment, but a concern has been highlighted. I am reassured in part that a lot of consideration has gone into the provision and that it was not just added as an override. Clearly, there are distinctions between the 1987 Act and this Bill, not least in relation to the potential powers of the OFT, as we discussed at length earlier. One concern that arose was that the OFT had powers over and above those of an investigator and was much more similar to a prosecutor, which of course relates to the SFO's powers under the 1987 Act and the power to override.

I am not entirely comfortable with the explanation that we have heard. However, on balance, we probably want to move on at this juncture, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

I beg to move amendment No. 108, in page 134, line 43, at end

insert

'( ) For the purposes of this Part, 'privileged communication' shall have the same meaning as in section 30 of the Competition Act 1998.'.

The amendment is about good housekeeping as much as anything. Indeed, in the light of the explanation that we heard under the previous group of amendments, I hope that the Under-Secretary will be happy to take this amendment on board on the basis that good housekeeping means that the 1987 Act and this legislation should have parallels. There is also a view that the issue of privileged communication should at least be married up with the Competition

Act 1998. It has more in common with the Bill than even the 1987 Act, which introduced the concept of banking privilege.

Our proposal is fairly straightforward. The concept of privileged communication should have the same meaning in the clause and the Bill as it does in section 30 of the 1998 Act. That change would avoid inconsistency, and I hope that it is not objectionable to the Under-Secretary.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I should like first to clarify what I think the amendment means. It is designed to align the meaning of the phrase ''privileged communication'' in part 6 of the Bill with the definition of ''privileged communication'' in section 30 of the Competition Act 1998. In fact, the term ''privileged communication'' does not appear in part 6, but I believe that the hon. Gentleman is attempting to align the definitions of information that is subject to legal professional privilege in the Bill and the 1998 Act.

The investigatory powers and the safeguards for their application are based on the powers conferred on the SFO by the Criminal Justice Act 1987. The provisions relating to the protection of legal professional privilege use different words from those in the 1998 Act but, in principle, the legal effect is the same.

OFT and SFO officers will work together on cartel investigations. The Government simply want to ensure that they operate under powers that are as similar as possible, so we want to retain the wording based on the 1987 Act. That is our rationale. In the light of that explanation, which is akin to the one that I gave on an earlier amendment, I hope that the hon. Gentleman will withdraw his amendment.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

We will be happy to do so, as we have made our point about the need for consistency. It would be perverse to have two, albeit slightly disparate, tests, given the strong connection between the 1998 Act and the Bill. However, we spent 15 years trying to align banking privilege to the 1987 Act. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

I am delighted that legal professional privilege is in the clause, and that the Government accept that it is important. Will the Under-Secretary explain ''in the High Court'' in subsection (1)? Does it mean that privilege is allowed only in proceedings in the High Court, and not in summary proceedings, which in Scotland would be held in the Sheriff Court? If it does, I was not aware of it.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I am grateful for the hon. Gentleman's question, which I cannot answer at this point. [Interruption.] I may now be able to answer it. The answer is no. Subsection (3)(a) states that the High Court is also the High Court of Justiciary, so in that sense the privilege applies only to the High Court. I hope that that clarifies matters.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

They are as clear as mud. Does ''in the High Court'' mean that legal professional privilege

attaches to proceedings taken in the High Court of Justiciary, or is it suggested that privilege is somehow different in the High Court of Justiciary? If it is, I was not aware of it.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I will answer the hon. Gentleman's question in writing.

Question put and agreed to.

Clause 187 ordered to stand part of the Bill.

Clause 188 ordered to stand part of the Bill.