Clause 248 - Proceedings for recovery orders in England

Proceeds of Crime Bill – in a Public Bill Committee am 11:00 am ar 13 Rhagfyr 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 11:00, 13 Rhagfyr 2001

I beg to move amendment No. 382, in page 146, line 7, at end insert—

'(1A) All proceedings for a recovery order in the High Court shall take place in chambers.'.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

With this it will be convenient to take amendment No. 383, in clause 249, page 146, line 21, at end insert—

'(1A) All proceedings for a recovery order in the Court of Session shall take place in chambers.'.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

We now move on from general principles to the mechanisms of civil recovery. Those are set out briefly in clause 248 in relation to England and Wales, and in clause 249 for recovery orders in Scotland. Perhaps not surprisingly, not a huge amount is said about those proceedings. That raises immediately a point that I made on Second Reading about the potentially damaging nature of the proceedings for an individual's reputation. Amendments Nos. 382 and 383 state that all proceedings for a recovery order in the High Court and the Court of Session shall take place in chambers. The proceedings would therefore not take place in public.

I shall outline briefly the pros and cons of a public—as opposed to a private—hearing. A key essential of our legal system is that justice should not only be done, it should be seen to be done. Thus the general rule is that litigation, whether civil or criminal, should take place in public. The public should have access to it. They should have the opportunity of hearing what is going on and of forming their own views about the case. Secret cases may create anxieties about unfairness, and that would be a serious issue.

However, it is also a well-established principle of our law that some proceedings should not take place in public. The classic example is the family division, when children are affected. To ensure that the children are protected, such proceedings are held in chambers. For the same reason, and more significantly, in a divorce case ancillary relief proceedings in respect of family finances are held in private, in chambers. I have considered various administrative tribunals and my understanding is that in the usual course of events, an appeal to the Inland Revenue commissioners, for example, would take place in private. Clearly, however, the situation might be different if the case subsequently went to the Court of Appeal.

I have an anxiety about the nature of the proceedings for civil recovery. Civil recovery, as the Minister has explained, is likely to take place when a person has never been convicted of an offence that would bring him within the confiscation mechanism. Such a person may enjoy, perhaps wrongly, a high reputation in society. He may be a wealthy man; he may make donations to charity and have an established status. Whether he is such a person or someone with a lower public profile, it has always been a central principle that people's private finances should not be exposed to public gaze without good and sufficient reason. One such reason is that when an individual brings an action against another person, it is often inevitable that matters of a personal nature may be exposed in the course of proceedings. However, a judge usually has mechanisms to ensure that any highly confidential material is not exposed to public gaze when a person can demonstrate that—although he is prepared to make it available to the court and to the other side—he would be seriously damaged by its public revelation.

As matters stand, unless subsequent rules were made to govern the proceedings, they would be held in open court. I am sure the Minister will agree that it is likely, when the first recovery order is brought—possibly against a Mr. Big—that there will be the type of knee-jerk feeding frenzy with which we are familiar in high-profile litigation. That would be interesting to a fairly prurient public, in terms not only of the outcome, but of finding out about the assets of others. I have an anxiety about that.

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

Amendment No. 382 states:

''All proceedings for a recovery order in the High Court shall take place in chambers''.

Amendment no. 383 makes the same point with regard to the Court of Session. Does the hon. Gentleman agree that the drafting would have been better if the word ''shall'' had been replaced by the word ''may''?

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

That is a good point. I considered whether I should use that word—or whether I should insert some qualifying subsections, because this can be approached in a variety of ways. If the Committee expressed a wish that the word ''may'' rather than ''must'' or ''shall'' should be used, I would not complain. However, I felt that there was no harm in being emphatic, because that can stimulate debate, and because I am mindful of the fact that it is unusual for a Minister to stand up and say that he accepts an amendment in its present form. I have never known that to happen. Ministers usually have to check matters with their officials, and the amendment has to be redrafted to conform with the thrust of the legislation.

My emphatic drafting also helped me to develop my argument. The Minister has explained that in certain categories—although it will not be possible to be specific about them until the end of the proceedings—we will be dealing with entirely innocent people who have to hand over assets, and the court might also decide that certain individuals were right to contest a case, because they were entitled to establish why the assets that they believed to be innocently held were, in fact, illegitimately acquired by someone else—and that they were, therefore, the proceeds of unlawful conduct.

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

My hon. Friend has referred to the feeding frenzy of press coverage that prosecutions of high-profile Mr. Bigs might generate. Does he agree that that might be one of the Government's motivations, and that negative consequences might flow from it?

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

The Minister has made it clear that the Government intend the legislation to have a deterrent effect. The prospect of a Mr. Big being taken through such a civil procedure—with the attendant publicity, and the possible revelations about his lifestyle and other things—might act as a powerful form of deterrence, by highlighting the reach of the state, and its power to grab people and expose their lives to public gaze. In fairness to the Minister, I do not think that that was discussed when the Bill was drafted—I think that it was overlooked.

However, the Minister might agree that it is noteworthy that during our proceedings, the hon.—and, I think, learned—Member for Redcar has commented on the public nature of those proceedings. I think that she remarked on that last Tuesday—although I cannot be sure of the date, as I have not yet received the relevant copy of Hansard. Other hon. Members have also touched on the subject.

The reverse of what I said before is also true. To argue against my amendment, I admit that an individual might demand a public hearing, because he wanted to shame the director by exposing the folly of his course of action to public gaze.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

If the main purpose of the amendments were accepted by the Government, they could table further amendments. For instance, an exception could be introduced, to enable someone who wished to expose the director to the full glare of the public gaze to make an special application for a public hearing.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

That is right. When the hon. Member for Orkney and Shetland asked how I might have redrafted the provision, the amendment that sprang to mind was

''unless the person involved requested a public hearing''.

The danger of the discretion allowed by the word ''may'' is that it could lead to lengthy disputes about whether a case should be held in chambers. I need to be persuaded of the merits of public hearings. No doubt we shall hear from the Minister about that, but that is my starting point.

If my understanding of the Government's policy is correct, it is probable that civil recovery will be used against individuals with substantial assets and substantial business interests. I would imagine that such a person would fit neatly into the category, especially as the Mr. Bigs—those who have escaped prosecution—are often wealthy individuals who may have a range of legitimate and illegitimate business interests. One hears about such people anecdotally. Every now and again one has the pleasure of hearing that one or two of them may be in the process of being brought to book, and it is reassuring when that happens.

It is likely, given the nature of human affairs, that the proceedings may turn out to have been wrongly aimed, however good and fair the director may be. I worry that such proceedings could have catastrophic consequences for an individual's reputation or business—and, in some circumstances, on his physical safety. I had experience as a lawyer of a case that involved allegations of a fraudulent nature. One of the interesting aspects was that one of the key witnesses, who, having tried to avoid coming to court, finally had to be brought to court, was a business man with business interests both in this country and in another country whose democratic credentials were not well established. It became clear in the course of my cross-examination that his financial transactions, although they involved Lichtensteiner Anstalt and other devices, might be said to have related not so much to criminality in this country as to avoiding the arbitrary and capricious laws of the country from which he originated, and in which he continued to have business interests.

The Minister will appreciate that in some circumstances the full revelation of such facts in proceedings involving someone who is justifiably trying to defend an action against him might not only damage his business reputation in this country but place him at risk elsewhere. How might we tackle that? It is a difficult issue but, as the hon. Member for Orkney and Shetland said, at least allowing for the possibility of hearings in chambers would be appropriate.

Even under my amendment, according to which proceedings would have to take place in chambers, I would be perfectly content if it were suggested that in the event of success, a full judgment should subsequently be made available to the public. I have no anxiety about that. However, I worry that the cases involved are likely to have a high profile. The Inland Revenue commissioners maintain confidentiality, but in this case that will not apply. As the Minister accepts, the people involved may have no criminal convictions. The Committee must deal with that. I should be interested to hear Committee members' views on how the matter should properly be tackled.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath 11:15, 13 Rhagfyr 2001

My hon. Friend the Member for Beaconsfield has already thoroughly set out the reasons why he and I, and perhaps other members of the Committee, think that we need to have the proceedings in chambers, and he gave us examples from his own practice. I can helpfully alert the Committee with examples from my professional practice over the years before I came to the House.

Like my hon. Friend, I was involved in various cases, both prosecuting and defending, in which there were allegations of such crimes as fraud. I am sure that Government Members have similar experiences. One encounters cases in which people operate on the fringes of legality. Even if they have legitimate businesses, they may deal with criminals. Such people are often in fear of their lives because although they may not act criminally, they have unwisely got into an area of business—especially international finance—in which they deal with very unpleasant people.

One of my jobs in my previous practice involved me with legitimate financial institutions that had to decide whether to give authority to the—later infamous—Bank of Credit and Commerce International to issue credit instruments under internationally recognised logos and arrangements. I am glad to tell the Committee that I recommended that no authority should be given to BCCI to legitimise their operations. Even though the investigations occurred some years before BCCI became notorious, they made us aware that there were question marks—to say no more—over some of its operations.

That reminded me that those who operate on the fringes of the law often find that they are intimidated by criminals who are involved in organised racketeering, and pressure can be brought to bear on people who hold legitimate jobs in legitimate financial institutions. There was worry about BCCI at an early stage because suggestions were floating around the financial sector in the City of London that such intimidation may have occurred in the middle east and the subcontinent.

If one prosecutes in the criminal courts and talks to special branch officers who say that there are times when organised criminals will actively try to threaten people involved in legitimate business life or legitimate public life, one is bound to worry about the consequences for a person who is innocent and who would not themselves be properly proceeded against by the director. In order to protect people who may be innocent, such matters should be dealt with in chambers.

I was reminded of this in my parliamentary work last year. In my then role as shadow spokesman on the Lord Chancellor's Department, I visited my regional headquarters of the Crown Prosecution Service. I know that the Minister's predecessors in the Home Office and the Lord Chancellor's Department were keen for all hon. Members to have closer links with their local Crown Prosecution Service. I talked to a senior official in my regional headquarters, and I was taken aback to learn that the reason why he moved there was because during his previous job in government service, he and his family were targeted by organised crime. It would not be right or sensible to go into greater detail, but if senior people in government service have been put under such pressure in the past 12 months, Government Back Benchers and others can understand the importance of reinforcing the need for proceedings to be held in chambers.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

In the light of observations made at the start of the sitting on a point of order, hon. Members may wish to know that during this morning's sitting, I have received a most courteous letter from the Deputy Editor of the Official Report apologising for the fact that the proceedings of Tuesday afternoon's sitting were not available at the start of this morning's sitting. That was due to an error at the Stationery Office, and the Deputy Editor assures me that the Official Report will be available as soon as possible.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.