Clause 13

Fraud Bill [Lords] – in a Public Bill Committee at 5:15 pm on 20th June 2006.

Alert me about debates like this


Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I beg to move amendment No. 15, in clause 13, page 6, line 3, at end add

‘that the Secretary of State may by order prescribe.'.

First, I thank the Solicitor-General for his letter in response to my point made to his ministerial colleague on second reading. The intention of the amendment is to add clarity to subsection 4(b), which defines “related offence” as “conspiracy to defraud” and

“any other offence involving any form of fraudulent conduct or purpose.”

That definition does not have any clear indication of what appendices are intending to be included, and I accept that there are a finite number. It would be of value, in terms of clarity, if the Secretary of State prescribed the offences that he considers to be caught by that definition. Everyone would then be clear about which offences are being referred to in applying section 13. It is a fine point. The Solicitor-General may be able to help me out by saying whether he will accept the amendment or what his definition is—that will have almost the same effect—if he cares to read it into the transcript.

Photo of Mike O'Brien Mike O'Brien Solicitor General, Law Officers' Department

I am not going to read a definition as such. As drafted, in our view, clause 13 makes clear that the offences under discussion are those involving any form of fraudulent purpose or conduct. That provides the right degree of specification for the context. We should bear in mind that the clause addresses the needs of civil justice and not to be deprived of evidence in property proceedings on the grounds that the answers and documents given may incriminate the person who gives them.

At the stage when someone is giving answers, the matter of whether an answer or a document discloses a fraud under the Bill, or some other type of fraud, may not be clear. It is likely that it will only be clear that his answers might show that some form of fraud has taken place. That might be a fraud that could be prosecuted under the Bill, or possibly under section 458 of the Companies Act, VAT legislation or tax law. We should  not tie the law to a specific list of offences which might leave gaps in which a person who does not want to answer questions, might say that it may or may not fit into a particular list.

We want any form of fraudulent purpose or conduct to be covered by that provision. For example, with a list of specific offences, a person might say that the clause does not apply. Therefore, he is not going to answer any questions because he might disclose an offence of benefit fraud, for example, that should be dealt with under the Social Security Acts. We would have to list everything in order to make sure that we do not give a loophole, that someone could use not to answer questions in a civil case.

We could put the Social Security Acts on the list and all the offences that could be characterised as fraud. However, it would be much simpler, more straightforward and understandable for individuals and for the court, to know that we have a generalised definition in the Bill. Ultimately, it will be a matter for the judge in the trial as to whether a party to civil proceedings can refuse to answer questions on grounds of self-incrimination. It is the judge who has to decide whether clause 13 should apply or not and clause 13 exemption applies. Judges are perfectly capable of applying clause 13. Our approach is better than the specific list of offences that the amendment suggests. A specific list would add to a great deal more confusion. It might also encourage persons who wish to refuse to answer questions to find a loophole. Something might not be on the list, which they might have cause to fear, and they might not want to incriminate themselves.

Photo of Geoffrey Cox Geoffrey Cox Conservative, Torridge and West Devon 5:30 pm, 20th June 2006

Let us suppose the party to the civil litigation was obliged under the clause to concede that part of the property that had been accumulated had been invested in a drugs enterprise. Would he be protected under the first line of subsection (2), as further defined in subsection (4)? I respectfully suggest that he might very well not be, which would be a grave lacuna in the protections under the Bill and likely to be incompatible with the European convention on human rights. If a party to civil litigation—let us say that he is a trustee—is obliged to answer that part of the property has been invested in a drugs enterprise, and if he answers honestly, as he must, he could, as I read the Bill, be prosecuted on the strength of his admission, because drugs enterprises would not necessarily include fraudulent conduct. Will the Solicitor-General give urgent and genuine consideration to the real risk that there is a lacuna in the clause and particularly to the compatibility of its provisions with article 6, among others, of the convention.

Photo of Mike O'Brien Mike O'Brien Solicitor General, Law Officers' Department

In the end, it will be up to a judge to decide how to apply the provisions. However, I shall examine the hon. Gentleman’s point and its implications, and I shall then write to him, if that is appropriate. I suspect that there is not a lacuna, but he raises an interesting and potentially difficult point, and I ought to give it more thought. If necessary, we can return to it on Report.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

This is an interesting point. I am not clear—perhaps I am being particularly obtuse—which  judge makes the judgment. Is it the judge in the civil proceedings who determines whether the person can be excused from answering the question on the grounds of self-incrimination?

The Solicitor-Generalindicated assent.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

The Solicitor-General is nodding, so that is the point at which the person is excused or otherwise. In that case, what happens in cases where criminal proceedings take place subsequently and the prosecution wishes to use evidence that was given on the basis of a decision by the civil court judge? What if that person was not covered by the clause, and the civil proceedings judge had wrongly directed that the person was obliged to answer the questions, because the offence was not an offence or a related offence under the clause? The judge in the criminal proceedings would inevitably say that the evidence was admissible, and nothing could be done to turn back the clock. The defendant’s convention rights would be breached by virtue of those two decisions, both of which could be entirely proper. Obviously, one of the decisions must be mistaken, but they can both be made in good faith by two judges in quite different proceedings.

A degree of clarity in the definition, rather than it allowing an infinitely expandable group of related offences, would therefore be advantageous. It would be perfectly in order in statute terms to say that all offences are covered by the provision. That would very debatable in terms of convention rights, but it is a perfectly arguable position to say that all offences could be covered. The Minister would then have a provision to say that, on any offence, that the information would not be admissible.

The Minister is in some difficulties, having two points at which an offence is included or not: first, when the judgment is made in civil proceedings, and then when it is made in subsequent criminal proceedings. The judgments can be different on quite proper grounds. So, I invite the Solicitor-General to give that further consideration before Report, as I fear that we may unintentionally be producing a new difficulty through that lack of precision.

Photo of Dominic Grieve Dominic Grieve Shadow Attorney General

I am sorry to have been out of the room briefly when the hon. Gentleman first raised the question. It seems to me that it cannot have been the Government’s intention to remove the privilege against self-incrimination in criminal proceedings—if that is indeed what clause 13 does, as highlighted by my hon. Friend the Member for Torridge and West Devon, outside the scope of fraud and related offences—and that in those circumstances, the provision must be wrong. If the Solicitor-General can reassure us on Report or in writing that we have misunderstood the position, so be it. Otherwise, the Government will be constrained to do something about it, because it is clearly incompatible with every principle of law in this country, quite apart from the Human Rights Act 1998.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I think the waters are rather murkier than might have been presumed, so a little further consideration is required, but if the Solicitor-General does not accept that and thinks that the provision perfectly self-evident,  I have obviously failed to understand the situation—which is entirely likely, as I do not have the expertise in these matters of the hon. Members for Torridge and West Devon and for Beaconsfield. If I have misunderstood, I would be delighted if the Solicitor-General explained what I have misunderstood.

Photo of Mike O'Brien Mike O'Brien Solicitor General, Law Officers' Department

Briefly, the intention of clause 13 is to remove the right relating to self-incrimination in property cases. However, if the person answers in civil proceedings, the evidence cannot subsequently be used in a criminal trial—in a drugs case of the sort to which the hon. Member for Torridge and West Devon referred and which I said I would examine in greater depth. If the person refused to answer questions in civil proceedings, the privilege against self-incrimination is not removed, if his answer relates to a drugs offence.

If a person refused to answer but the civil judge ruled that subsection (1) applied, and ordered him to do so, the use of the evidence is prohibited by subsection (2). We do not consider that a criminal judge, who has to comply with human rights legislation, would take a different view from a civil judge. Even if neither applied the Human Rights Act 1998, the evidence would be excluded under section 78 of the Police and Criminal Evidence Act 1984. I think that we are covered, but I hear what the hon. Gentlemen have said, so I shall look again at this complicated area of law. On the face of it, the provision seems reasons, but, as I have indicated, I will look at it again.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I am grateful to the Solicitor-General and look forward to hearing his further consideration at a later stage.

Photo of Geoffrey Cox Geoffrey Cox Conservative, Torridge and West Devon

I wonder if I might make a supplementary point on the clause. I am necessarily thinking as I go along, but I ask the Solicitor-General to consider one further point. Under subsection (1), and leaving aside the question of “complying with any order” for now, the person would not be excused from

“answering any question put to him in proceedings relating to property...on the ground that doing so may incriminate him”— leaving aside also the other persons referred to—

“of an offence under this Act or a related offence.”

It would appear that if what the Solicitor-General just said is correct, someone would retain their privilege if answering might incriminate them of a drugs offence. That was the Solicitor-General’s answer to my question. In those circumstances, the defendant would be entitled at the first stage to say to the civil judge, “I am not answering because my answer may incriminate me of an offence.” The difficulty I foresee is that the judge in a civil case will not be able to inquire much further. He may have to say, “Will you tell me for what offence you think I may afford you the grounds to refuse before I can decide whether you are correct?”

I foresee some difficulty that may benefit from further consideration by the Solicitor-General. Would he be good enough to write to me on how the system would work under clause 13? Clearly, if the offence is a drugs offence or another offence unrelated to property, the system will be highly unsatisfactory at the civil stage of proceedings. I imagine that it will be a judge with a glowering face who faces a litigant who says, “I am  taking the fifth and the offence is not one relating to property.” It is difficult to see how the system will work, so I would be most grateful for further examination.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

The hon. Member for Torridge and West Devon raised a point that I was coming on to: the fact that the litigant must decide during the civil proceedings what he might be accused of at a future stage by a prosecuting authority. He must decide about the range of offences on which he might be indicted before seeking to excuse himself of giving evidence. That is not an entirely satisfactory position to be in. Given that the Solicitor-General has said that he will reconsider the matter and communicate his views to the Committee, and with the specific leave of the hon. Member for Torridge and West Devon because I do not want to catch him out again, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 ordered to stand part of the Bill.