Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I beg to move amendment No. 25, in page 33, line 2, at end add—

'( ) After that section there is inserted—

''34A Compensation for preparation time

Appeal Tribunal procedure rules shall include provision for authorising an Appeal Tribunal to order a party to proceedings before it to make a payment to any other party in respect of the time spent by that other party in preparing his case and shall make provision for taxing or otherwise settling the amount of payment to be made or for fixed sums to be payable by reference to criteria set out in the rules''.'.

In Committee, the first clause of the Bill or a part of the Bill tends to be the subject of a rather lengthy debate, which I suspect is partly due to the ranging-shot principle. In debates on clause 22, we covered an awful lot of general ground that also applies to the whole of part 2. For that reason, I hope that we can make rapid progress through the remainder of this part.

The amendment is simple. I propose to add to the arrangements for employment appeal tribunals a provision on compensation for preparation time, mirroring, mutatis mutandis, the provisions in new section 13A in clause 22, which we have discussed. The Minister made the point that it is almost unheard of for people not to be legally represented at employment appeal tribunals, and I do not dispute that. However, he also said that the fact that a person was legally represented would not necessarily prevent them from recovering in-house preparation time costs. We had a debate earlier about the economics of using in-house support to reduce external legal bills. That would be to the ultimate good of the entire system, with the notable exception of lawyers.

I hope that the Minister will accept amendment No. 25 as a logical extension of the Government's framework, although I recognise that there will be fewer employment appeal tribunal cases than employment tribunal cases in which it would be appropriate.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

The hon. Gentleman gets to the nub of the problem early on. Most applicants and respondents are not legally represented at employment tribunals, whereas practically everyone is at an employment appeal tribunal.

The Government do not agree with the proposal, although we have given it a great deal of thought. When we considered the changes to clause 22, we examined whether we should introduce the measures in clause 23 as well. The reason for the different treatment is our view that provisions for costs and preparation time awards should be appropriate to the nature of the tribunal. Proceedings before the employment appeal tribunal deal largely with points of law. As such, they require less gathering and preparing of factual evidence by the parties. The situation that we described in clause 22, in which workers sit around the kitchen table and put lots of effort into preparing their case, does not apply. Most are legally represented.

Another major difference is that litigants in person to an employment appeal tribunal can recover their costs, as in the civil courts. We dealt with that inconsistency in clause 22. A cost regime is already in place for the employment appeal tribunals; adding compensation for preparation to that regime is unnecessary.

The first part of the amendment, in which ''shall'' creeps in instead of ''may'', obliges the Lord Chancellor, who is responsible for the employment appeal tribunal rules, to include the provision in the rules. The amendment does not deal with the Secretary of State but the judiciary. In the same way that we saw no reason to bind the judgment of the Secretary of State, the Government see no reason to bind the judgment of the Lord Chancellor in the matter of employment appeal tribunal rules. We take the view that such matters can be safely left to discretion. For those reasons, I hope that the hon. Gentleman will withdraw the amendment.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I have listened carefully to what the Minister said. I am pleased to hear that he has considered the argument for symmetry. The least persuasive part of his argument was that fettering the discretion of the Lord Chancellor was unthinkable. Some of us might regard even an illustrious person such as the Lord Chancellor as a mere politician rather than a haughty judicial personage. However, if the Minister has given the issue genuine consideration and reached the conclusion that it would not be appropriate, I am prepared to withdraw my amendment. Our noble friends tend to scrutinise and ponder such issues more deeply than we do, and I am sure that it will be discussed in the other place if others believe that we need to go around the loop again. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I have just a couple of questions for the Minister; we have already dealt with many of the substantive issues. Clause 23 amends section 34 of the Employment Tribunals Act 1996, which allows the award of costs or expenses if:

''(a) the proceedings were unnecessary, improper or vexatious, or

(b) there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings.''

The replacement wording in clause 23 says merely:

''Appeal Tribunal procedure rules may include provision for the award of costs or expenses.''

On the face of it, the primary legislation removes the constraint on the circumstances in which costs or expenses can be awarded. What is the practical effect of that? Does the Minister intend to reimpose the limitation by secondary legislation? It is an extremely poor general principle to amend primary legislation to make it more universal and then to reimpose precisely the same restriction by secondary legislation, which can be amended by further secondary legislation. It is a retrograde step. If it is not simply that and the Minister intends that the power will operate in a different way as a result of the change to the wording in the primary legislation, can he explain precisely how it will work?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I hope that the Committee will agree clause 23. It is important. It introduces the same ability for employment appeal tribunals to make costs awards against representatives and to prevent that award being clawed back from the client.

Let us be clear, we are not changing the basis for costs awards at the EAT. The wording is slightly different and the hon. Gentleman quoted it. It is

''the proceedings were unnecessary, improper or vexatious, or

b) there has been unreasonable delay''.

Unreasonable delay would obviously apply more to the employment appeal tribunal than to the employment tribunal. We are talking about someone taking a long time to decide to go to an appeal. We see no reason to change that. These circumstances, which closely mirror the employment tribunals, are set out in primary legislation. There is no need to repeat that in the clause. We now want to make provision for wasted cost. That is the purpose of the clause.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

It is not clear to me where that is set out in primary legislation because the wording in section 34 of the 1996 Act is being replaced by wording that does not contain the phrase ''unnecessary, improper or vexatious''. Can the Minister tell me where in the primary legislation that limitation is placed on the power?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I wish that I could. The circumstances in which costs can be awarded in employment tribunals and in employment appeal tribunals are already similar in practice. As we are introducing new powers for both the employment tribunals and employment appeal tribunals it makes sense to set them out in legislation in a consistent way.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

That is good paraphrasing. The Minister seems to be saying in a nutshell that he is taking the limitation out of the primary legislation and putting it back in secondary legislation. It is a retrograde step to depend increasingly on secondary legislation.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

We seem to have a point here that I will look into. If we need to change that on Report or at some other stage, we will. I will examine the point and give the hon. Gentleman a reasoned response.

Question put and agreed to.

Clause 23 ordered to stand part of the Bill.