Clause 10 - Compensation

Anti-social Behaviour Bill – in a Public Bill Committee at 6:30 pm on 6 May 2003.

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

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

I have a couple of brief points and I think that my hon. Friend the Member for South-East Cambridgeshire may wish to speak as well. We were concerned about taxpayers' money being used, and subsection (4), which relates to compensation from central funds, concerned us, but I could not think of an easy and straightforward way of amending the clause. I simply wanted to raise the issue, which is why it is appropriate to say a few words about it in the stand part debate. There will be great concern if a person allows their premises to be misused, but the decision is taken not to implement a closure order owing to a bizarre verdict in the courts, and the person against whom the closure order has been sought then claims for damages and receives money from the

taxpayer. My constituents would not be happy if that were to happen. I therefore thought that it was important to put those concerns on the record, and to see what the Minister has in mind.

One recognises, of course, that an action may have been completely misconceived—the wrong premises may have been chosen, for example. I touched on the fact that to err is human; someone might make a bureaucratic error and write down the wrong address. In such circumstances, in which the people who own the premises have done nothing wrong, they will want some redress if their doors have been broken in. I am, however, worried that a situation might arise in which someone who is not, as lawyers say, coming to equity with clean hands, receives damages from the taxpayer under the provisions of the Bill. I therefore think it important to place that concern on the record at this stage, because the clause as drafted might attract quite a lot of attention when the Bill reaches another place.

The Minister and I are familiar with the sort of points that are picked up by the very senior lawyers—Law Lords and the like—who have experience of dealing with such matters over many years. I thought that if we did not have a brief stand part debate on the clause, their lordships might think that we had completely ignored the difficult issues that compensation from taxpayers' money raises. I hope that the Minister will be able to address some of those issues and that he will take them seriously. We are not trying to eliminate the opportunity for redress to be made to the innocent property owner who has been wronged, but we are concerned about the inappropriate use of taxpayers' money.

Photo of Mr Matthew Green Mr Matthew Green Liberal Democrat, Ludlow

I am glad that we have had the stand part debate, because while the hon. Gentleman was speaking, a further concern occurred to me. Subsection (4)(b) states that the court may order the payment of compensation

''if the person is the owner or occupier of the premises, that he took reasonable steps to prevent the use.''

What is a reasonable step? A reasonable step taken by a social landlord or someone who owns 50 or 100 properties might be entirely different from a reasonable step taken by a person who owns one property, decides that they want to travel around the world for six months, finds a tenant and signs a tenancy agreement, goes off round the world, and comes back to find that that tenant was running a crack house. The argument could be made that because that person went off round the world, they did not take any reasonable steps to prevent that happening. The definition of reasonable steps differs depending on who the person is.

I would like reassurance from the Minister that the Government will issue clarification—I see that he is nodding, so that is welcome. We need clarification of what constitutes the reasonable steps that a landlord—including one person renting out their house as well as a professional landlord—should take. It is difficult to know what steps one could take when renting out one's house to prevent someone selling drugs from it.

Photo of James Paice James Paice Shadow Spokesperson (Home Affairs)

My point follows that made by the hon. Member for Ludlow and relates to subsection (4)(a) and (b). I intended to expand on the point about ''reasonable steps''. However, I also want to raise an issue related to subsection (4)(a), which states

''that the person had no connection with the use of the premises as mentioned in section 1(1).''

Will the Minister tell me exactly what is meant by

''had no connection with the use of the premises''?

Can he confirm that it does not mean simply being the owner and the lessor of the property? It could be argued that if someone let a property, that person automatically has a connection with the use of the premises, particularly if they or their agent is acting as the letting manager of that property.

If someone has a contract with a letting agent who manages the lease of the contract, does that person have a connection with the use of the premises? It would be helpful if the Minister expanded on that. We have repeatedly discussed in Committee how a Minister's explanation of legislation can be used in future. It would help those who will have to implement the legislation and may be affected by it to know a little more about what the Government mean by subsection (4)(a) and (b).

If a landlord or property owner lets one or two houses by using the services of a letting agent, how can they take the reasonable steps to which the hon. Member for Ludlow refers? If that property is then used for something that makes it subject to the closure notice in clause 1(1), could their ownership and lease of it and the fact that the letting agent is in the vicinity be construed as their having any connection with the use of the premises, or does connection with the use mean that they are smoking or selling the drugs themselves? I suspect that that is what the Minister means and the Government intend, but like the Minister I am not a lawyer. I am not clear whether that is what the clause says, and it would be helpful to have an explanation, which could be used in future, of what the Minister is trying to achieve.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 6:45, 6 May 2003

The hon. Member for South-East Cambridgeshire points that neither he nor I is a lawyer. We want to the get the legislation right and do not want to pay compensation inappropriately. Equally, however, we do not want to introduce draconian measures that can be used in inappropriate circumstances without compensation being paid and so discourage people from getting into the business of letting their properties. We must encourage people to expand the rented sector where appropriate.

The hon. Member for South-East Cambridgeshire asked me to clarify what the clause means. I believe, and am advised, that it means precisely what it says, namely that

''On an application under this section the court may order the payment of compensation out of central funds if it is satisfied . . . that the person had no connection with the use of the premises as mentioned in section 1(1)''.

Of course,

''the use of the premises as mentioned in section 1(1)''

relates to clause 1(1)(a) and

''the unlawful use or supply of a Class A controlled drug'',

and to clause 1(1)(b) and

''the occurrence of disorder or serious nuisance to members of the public.''

The answer to the question whether we should, in any circumstances, compensate someone with a connection with the use that created the nuisance, is no. The answer should also be no if the person had any connection with the supply of class A drugs. Paragraph (a) is designed to prevent compensation in circumstances where the person has a connection with misuse, causing a nuisance or supplying drugs.

Photo of James Paice James Paice Shadow Spokesperson (Home Affairs)

I am grateful for what the Minister has just said. I was not advocating that someone who had been involved in the supply or use of drugs should be eligible for compensation. My concern is the other way round: that someone should be able to apply for compensation and should not be debarred because ownership and leasing of the property could be construed as connection with use. Is the Minister confirming that ownership of the property is irrelevant to its use? In other words, is he confirming that unless the owner has been complicit in the use, simple ownership cannot be construed as any form of responsibility for the use?

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

I know what the hon. Gentleman is reaching for and if I have not already made it clear, connection with the use is connection with the use; ownership is a separate matter. Compensation should not be considered if the person concerned is connected with the use—in effect, the misuse—of the property. Mere ownership of the property does not connect him with the misuse of it. Clause 1(1), as I read it, ensures that a person who is connected with that use or misuse cannot be considered for compensation. That does not debar the owner but anyone who has been connected with the activities taking place on the premises so that they are not inappropriately considered for compensation.

Clause 10 relates to compensation claims for those who incur financial loss, such as direct loss of income, in consequence of a closure notice or order. An owner may have taken all possible steps to control the behaviour but been unsuccessful, and for those cases we have given the courts discretion to award compensation for loss of rental income or damage caused during the closure period.

Hon. Members ask what constitutes reasonable steps and it is our intention to issue guidance. That guidance will be based on good housing management practice. Is someone clears off abroad without leaving an agent in control of the use of their premises, that will not be an excuse because it is not in line with the guidance and good management practice, so they will not be eligible for compensation. We need to clarify that in guidance.

Liberal Democrat Members and Conservative Members—I am not sure whether their emphasis is different—have properly alighted on the words

''that he took reasonable steps to prevent the use''

and the guidance should clarify that. I am as concerned as the hon. Member for Surrey Heath to ensure that we do not inappropriately pay out taxpayers' money. Whether the words should be ''reasonable steps'' or ''all reasonable steps'' will be considered in conjunction with the guidance to pin the matter down. I give a commitment to do that and to try to ensure that an avenue is open for people who have been treated inappropriately but that it is not open to people to claim compensation inappropriately from taxpayers.

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

I am grateful for the Minister's comments. Before he finishes, I hope that he will deal with the specific issue that I raised. We have all seen situations in which someone who is not in any sense law abiding benefits from a bizarre verdict of the court and then immediately tries to slap in a claim for compensation. The Minister's comments were reasonable, but I hope that he will address that specific issue.

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

If the hon. Gentleman believes that he raised anything in Committee today that I have not tried to explore elsewhere to ensure that compensation is paid only in appropriate circumstances, he is wrong. I can assure him that those concerns have been kicked around.

Subsection 4(d) states:

''having regard to all the circumstances it is appropriate to order payment for compensation in respect of loss''.

That should cover the circumstances to which the hon. Gentleman referred in which it is clear that people may have met the strict guidelines but, because a freakish situation arises, it is inappropriate to pay compensation. That should be covered by paragraph (d) and we must ensure that that is adequate.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.