Clause 346 - Disclosure orders

Proceeds of Crime Bill – in a Public Bill Committee at 12:45 pm on 29 January 2002.

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Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 12:45, 29 January 2002

I beg to move amendment No. 556, in page 200, line 38, at end insert

'or a civil recovery investigation'.

Photo of Mr Bill O'Brien Mr Bill O'Brien Labour, Normanton

With this we may consider amendment No. 557, in page 200, line 42, leave out from 'investigation' to the end of line 3 on page 201.

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

We have discussed civil recovery proceedings, but I hope that the Committee will forgive me for raising them again.

The clause deals with disclosure orders, and as the Minister has rightly said, they are among the most intrusive investigative powers that the legislation will introduce.

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

Very well, ''more intrusive'' rather than ''most intrusive.''

The amendments would remove the power with regard to civil recovery proceedings. They would confine it to money laundering and confiscation.

When we discussed criminal recovery proceedings, it was explained that they were proceedings that could be brought by the state in a civil court to recover property. As we examined bit by bit the powers that the state would have in such proceedings, it became apparent that there would not be a level playing field between the state and the individual against whom the civil recovery proceedings were brought. The state would have a series of weapons in its armoury that, unlike in conventional litigation between citizens, the other person would not have. The other person could not serve disclosure orders on the director of the type that the director could use under the clause.

I am bound to raise with the Minister the public policy grounds on which it is thought that the director should not have to avail himself of the ordinary rules of court of, for instance, serving interrogatories and receiving the court's assent to that if he wishes someone to answer questions. I want him to explain the power that we are giving in civil recovery proceedings to run around compelling people in non-criminal investigations to answer questions. That is

why we tabled the amendment. I am not willing to let the clause be enacted without his justifying and explaining why he considers that such powers are required in proceedings that have nothing to do with criminal justice but relate to the civil recovery powers that the Bill will confer on the state.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The clause allows a judge to make a disclosure order, which would compel a person who is the subject of an investigation to answer questions, to provide information or to produce documents. Under subsection (1), only the director may apply to a judge for a disclosure order. As the provisions are drafted, disclosure orders may be made in respect of confiscation and a civil recovery investigation, but not money laundering. The key reason for restricting disclosure orders to confiscation and civil recovery is that the Government have decided to limit the use of disclosure orders in England, Wales and Northern Ireland to the director of the agency. The director is a specific post set up and operated exclusively under the Bill.

The director will not have a role in the investigation of money laundering offences or in any other criminal offence. It is a consequence that the disclosure order will not be available for the use of money laundering investigations. That restriction of access mirrors the restriction of the disclosure order under the Criminal Justice Act 1987, which is available only to the director of the Serious Fraud Office. The amendment would further restrict the granting of disclosure orders to confiscation investigations undertaken by the director. Those confiscation investigations carried out by the usual prosecutor will not have access to such powers.

We anticipate that the information obtained as a result of the making of a disclosure order by a judge may be of significant assistance to the director in determining whether a particular property may be recoverable and therefore whether to initiate civil recovery proceedings in a particular case. Whether it is appropriate to apply for a production order in a particular civil recovery investigation will clearly depend on the information that is already available to the director, including that passed to him by law enforcement agencies. It will also be a matter for him to judge whether a production order is the best way of obtaining information.

In our view, information obtained through a disclosure order may help the director to establish a good arguable case that he requires to obtain an interim receiving order. In some cases, it will be essential for him to do that. The order may also provide information that helps to establish that a stronger case is needed for the substantive recovery hearing. If the director did not have access to a disclosure order for civil recovery investigations, his investigatory powers would be considerably weakened.

Although disclosure orders will not be the director's first port of call, we envisage that there will be circumstances in which they will provide information that is absolutely vital to the building of a case for bringing civil recovery proceedings. To remove the

possibility of a disclosure order would therefore risk prejudicing the effectiveness of the entire civil recovery proceedings under the Bill.

The order is, of course, a potentially intrusive power. When we were speaking about production orders, the hon. Gentleman's explanation of disclosure orders was a little wider than mine. A disclosure order is a more intrusive power, and the Bill therefore contains a number of conditions to ensure that it will be used when appropriate and proportionate to the investigation. Surely that is the argument.

We will discuss these issues further under clause 347. However, one of the requirements for making an order is that there are reasonable grounds for believing that the resulting information is likely to be of substantial value to the investigation. We do not anticipate that disclosure orders will be sought unless other powers—such as production orders—have already been sought or would demonstrably not be appropriate or sufficient to obtain the required information. That would be one of the points that the judge would be expected to consider, in respect of proportionality, before approving a disclosure order.

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

Perhaps I misunderstood the Minister, but earlier he seemed to suggest that the disclosure order was aimed at the person against whom the proceedings were being brought. I am sure that he will agree that that is plainly not the case. The order is aimed at any person. That is particularly so in a civil recovery case, because the application for a disclosure order need state only the nature of the property specified as being subject to a civil recovery order. It is

almost implicit that such an order would be used as a device to require people who are not the owners or holders of the property to supply that information.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman is right. If the power is used in civil recovery proceedings, that may be the case, but it would have to be proportionate. The case would have to be made to the judge, who would consider the necessity for such intrusive powers before giving his approval. As I have said, if we removed that weapon from the director's armoury, we would be dealing a massive blow to the effectiveness of the civil recovery part of the Bill. In many cases, that power will be essential if we are to catch up with the proceeds of crime. Of course, it must be used appropriately, with judicial oversight, to ensure that it is being used proportionately. The judge will quiz the director about the necessity for the disclosure order, and about other routes that were available, before granting the power. The ability to grant the disclosure order will be central to the director's armoury.

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

I am grateful to the Minister for the opportunity to discuss that issue. I think that he has persuaded me of his argument, and I shall not press the amendment to a Division. However, it is important that we are aware of what we are doing, as we gaily send provisions on their way. The civil recovery mechanism causes me anxiety, and I have made that clear. The clause is another example of how powers will be conferred, notwithstanding that a layman's understanding would be that they are civil recovery proceedings being subjected to a civil test. If—

It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

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