Clause 49 - Procedure for judicial review of certain decisions

National Security and Investment Bill – in a Public Bill Committee at 3:15 pm on 8th December 2020.

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Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy) 3:15 pm, 8th December 2020

I beg to move amendment 26, in clause 49, page 30, line 31, leave out “28 days” and insert “three months”

This amendment would extend the period within which applications for judicial review may be made from 28 days to three months.

Photo of Graham Brady Graham Brady Chair, Conservative Party 1922 Committee

With this it will be convenient to discuss clause 49 stand part.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

I have not spoken other than to intervene, so the amendment gives me a brief opportunity to commend the heroism of my fellow Committee members for carrying on proceedings when most of them wish they were somewhere else because they are too cold. I hope that the authorities will consider ameliorative steps so that we can be a little warmer when the Committee meets on Thursday. Alternatively, Sir Graham, we may need to invent a new Standing Order by which the Chair can rule on whether Members have permission to remove their coats, rather than the customary jackets, before the beginning of proceedings. I am sure that would not be necessary if reasonable action were taken.

The amendment concerns what is referred to in the clause title: the procedure for judicial review of certain decisions. It would be helpful if the Minister clarified what the clause means for other decisions that are set out in the Bill but not included in the provisions for judicial review set out in this clause.

The procedures in subsection (2) relate to judicial review of a “relevant decision”. Relevant decisions are specified in various clauses, and include the power to require information, the power to require the attendance of witnesses, the power to require the attendance of witnesses outside the UK, the discharge of information, data protection, CMA information, and so on. That means that a number of other decisions in the Bill are not covered by this clause, including, for example, decisions to call in a transaction.

My initial question to the Minister—I would be grateful if he intervened on me—is whether those other areas of decision, which are in the Bill but not covered by this clause, are covered by standard judicial review procedures, not covered by judicial review procedures at all, or covered by reference to the Enterprise Act 2002, which has procedures within it that do not appear to refer directly to some of the other decisions in the Bill that are not covered by this clause. Can he clarify what happens to those decisions in the Bill—I have mentioned one: the call-in notice—that are not covered in subsection (2) on what a relevant decisions means? Does he have any guidance that he can give the Committee on that?

Photo of Nadhim Zahawi Nadhim Zahawi Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), The Parliamentary Under-Secretary for Health and Social Care 3:30 pm, 8th December 2020

I am happy to write to the hon. Gentleman on that, but my understanding is that individuals or entities that feel that they have been wronged by the actions of the Secretary of State can JR the Secretary of State.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

I thank the Minister for that clarification, which appears to suggest that the whole of the Bill, or the decisions in it, are in principle covered by the ability to bring a judicial review. He will know that under the Civil Procedure Rules 1998 there is some pretty clear guidance about the time limits for judicial reviews. Indeed, the CPRs state that claims must be lodged promptly and, in any event, no later than three months after the grounds to make the claim first arose, unless the court exercises its discretion to extend. The judicial review rules are pretty much governed by that three-month time limit.

In the clause, the framers of the Bill have taken out certain elements of the Bill. I mentioned some of them, including the attendance of witnesses and the power to require information. They have said that, while no new procedure has been put in place for reviewing certain decisions—that is, the normal rules of judicial review apply—the big difference is that any action must be brought within 28 days of the event, and not within three months, as is the case in the standard judicial review arrangements.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank my hon. Friend for the excellent points that he is making, which give cause for concern and thought. Given the Minister’s earlier assertion that there was no need for a complaints procedure with regard to the provisions of the Bill, does my hon. Friend agree that neither the reporting requirement, which we have identified will not mean reporting on everything, nor the judicial review provisions, which we have now identified are not reviewable in the normal timescales for everything, will be sufficient to address the concerns of small and medium-sized enterprises? Does he also agree that that will clearly not be the case given the complexities that he has outlined?

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

My hon. Friend makes an important point about the extent to which justice in such circumstances might be like the Ritz: open to everybody, but not necessarily quite as open to some as to others.

Certainly, that is the case with the time reduction applied to those particular things in the clause. Nevertheless, that reduction has to fit in with judicial review rules for everything else. That is, no new procedure is set out in the Bill, which is otherwise reliant on the standard judicial review procedures.

Hon. Members will see that elsewhere the civil procedure rules refer to the provision of skeleton arguments before a judicial review can be heard. Under those rules, such arguments must be undertaken within 21 working days of a hearing, which in practice means close to the 28 days in the clause, which are not as working days. Given the adherence to the rest of the judicial review rules, therefore, the 28 days can conceivably reduce to virtually nothing the period in which a person may apply for a claim to judicial review under the Bill.

Furthermore—this is what I think my hon. Friend was alluding to—given that brief timescale, it is important and I would say necessary to have a clear idea of when the event that caused the 28-day timescale to come in took place. I turned up an interesting article, one of Weightmans’ “Insights”, from October 2013, entitled “Is the clock ticking? The importance of time limits in judicial review”. The point made in that article is that getting the point at which the clock started ticking absolutely right is important.

I am not certain whether all the events specified in the clause have identical starting points. That is, is the starting point a trigger mechanism? Is the starting point the issuing of a notice? Is the starting point the receipt of a notice? If the receipt of a notice is delayed—and the judicial review procedure very much hinges on the actions of the Secretary of State in issuing notices—my hon. Friend can imagine that, for a small business, that could be very confusing and possibly difficult to adhere to. If it turns out that the point at which the 28-day clock starts to tick varies according to different provisions of the clause, descibed as the particular provisions that the Secretary of State has reserved for the 28-day reduction in judicial review, that will be pretty difficult for people to adhere to properly.

Judicial review is a very important part of the process; not that it would often be used, but it is important that it is there in the Bill. It is also important that the people affected by the arrangements have access to the judicial review process. The Government obviously recognise that by putting it into legislation. I am concerned not about the fact that it is in the legislation—it should be—but about whether placing certain areas of concern in the Bill under that 28-day heading has been completely thought out. If it has been completely thought out, why has it been thought out in that particular way? What is it about those things that requires the normal rules of judicial review to be reduced from three months to 28 days?

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I am sorry to interrupt my hon. Friend while he is in full flow, and I am immensely grateful for what I am learning about the intricacies of the judicial review process and the importance of understanding the initial timing and what the trigger event was. He mentioned that skeleton hearings must take place within 21 working days. Can he say a little bit more, for my understanding, about how those skeleton hearings affect the following timetables in the process?

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

My hon. Friend somehow suggests that I have knowledge and expertise beyond my calling. I should say that I am not a lawyer, so I have only limited guidance to give her on this. However, from my reading of civil procedure rules, there are certainly elements, which I think relate to working days in some instances and to simple time in others, that are sub-time limits within the overall limit for judicial review. Civil procedure rules give those sub-limits as working practices for the operation of judicial review overall. The skeleton argument rule requires skeleton arguments to be put to the court within a certain period before the hearing takes place. If the hearing is delayed for a long time after the initial event, the 21 days apply before the court hearing. However, if the court hearing is close to the event, those sub-rules within the overall judicial review rules could affect quite substantially an individual’s remaining time to get their case together prior to the hearing.

Under our current constrained court arrangements, there is no danger of that because court cases are in a serious logjam. However, It serves to put a question mark against how and why the 28-day period was decided upon. Why were these things in particular pulled out and put into the 28 days when other sections of the Bill do not come within 28 days but within three months? What is the rationale behind that?

The amendment suggests that this is probably not a good idea. While it might be seen as redundant in that it says that these sections should not be pulled up and put in a 28-day box, it is probably better for the general principle of upholding judicial review as a reasonable defensive remedy in respect of some of the Bill’s elements to put them back to the standard three-month period. That of course arises because that is what the Government have chosen to do with the Bill. They have chosen to go with standard judicial review proceedings. It would have been possible to write a different form of proceedings into the Bill.

The Enterprise Act 2002 provides for an appeal to a tribunal, which then proceeds along standard judicial review rules but is not the standard judicial review procedure. The Government have not decided to do that, but to do something else. My question to the Minister is why. The question that follows if there is no good answer, is why not just leave it as it is? Why not leave it to the judicial review procedure with three months? That would not cause anyone any real problems but, on the contrary, might ensure that smaller businesses and organisations have a reasonable opportunity to defend themselves and pursue judicial review in the knowledge that they have more than a very small amount of time to get the judicial review procedures together when they wish to mount them.

As I have said, I am sure that it will be a pretty rare procedure, but it is nevertheless important to maintain it in the Bill. I am sure we all agree that it is an important part of UK law that that should be a remedy open to everyone to undertake, as the Minister mentioned. I hope that I will get a compelling argument from him about why this has been done in this way and what advantages outweigh the disadvantages that I have outlined. If he can do that, I hope that it will not be necessary to divide the Committee this afternoon, but I fear that it might be if the argument that comes forward proves on examination not to be as compelling as I am hoping.

Photo of Nadhim Zahawi Nadhim Zahawi Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), The Parliamentary Under-Secretary for Health and Social Care 3:45 pm, 8th December 2020

I am grateful to the hon. Gentleman for his reasoned and thoughtful remarks. As I said in my intervention, all decisions in the Bill are subject to judicial review. Clause 49 does not apply to information sharing post screening or enforcement decisions. The exception to JR is monetary penalties and cost recovery, which have a bespoke appeals process, as he probably knows.

Clause 49 concerns the procedure for judicial review of certain decisions. The clause provides that any claim for judicial review of certain decisions, which are set out in the clause, must be no more than 28 days after the day on which the grounds for the claim first arose, unless the court considers that there are exceptional circumstances. That period is shorter than the usual period in which a judicial review may be sought, as we have heard from the hon. Member for Southampton, Test. Generally, judicial reviews must be sought within three months, and in England and Wales, but not in Scotland or Northern Ireland, they must also be sought “promptly”.

I will set out why that is the case shortly when I turn to amendment 26, but I believe that the shortened time limit strikes the right balance for the regime, enabling sufficient time for a claim to be lodged while providing for timely certainty about the effect of relevant decisions made under the Bill. I should also note that the court may entertain proceedings that are sought after the 28-day limit if it considers that exceptional circumstances apply. The usual route to challenge a decision made by the Secretary of State is via judicial review, and this is entirely appropriate for decisions made under the Bill. However, it is vital that this route does not result in prolonged uncertainty over decisions relating to screening.

I now turn to amendment 26, which seeks to extend the period within which applications for judicial review may be made from 28 days to three months. As I have set out, the Bill’s 28-day period in which claims for judicial review of certain decisions made under the Bill generally must be filed is shorter than the usual period in which judicial review may be sought. Again, it is entirely right that the hon. Gentleman wishes to probe us on why that is the case as judicial review plays a key role, which he clearly agrees with, in ensuring that the Government, and the Secretary of State in the case of this regime, act within the limits of the law. We have thought carefully about that while developing the Bill, and I welcome this discussion.

Why the shorter period? It is undeniably important that the Secretary of State is held independently accountable for his decisions under the regime. That must, however, be balanced—this is the important thing—against the need to avoid prolonged uncertainty over the status of screened acquisitions or the general functioning of the screening regime, which may have a chilling effect on investment, leaving the types of questions that a judicial review would answer, such as whether a decision to clear a transaction was unlawful, potentially still open for three months before it is clear that a judicial review is not going to be sought, which could make it extremely difficult for the various parties affected to plan and adjust following such a decision. Any party with a sufficient interest could seek a judicial review and all parties affected could be impacted. That is why we have come to this decision.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for the points he is making, which I am seeking to understand. Clause 49(2) mentions “relevant decisions”. Why would “section 19”, “section 20” and “section 21” that deal with the powers to require information and so on cause uncertainty, and not other provisions in the Bill?

Photo of Nadhim Zahawi Nadhim Zahawi Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), The Parliamentary Under-Secretary for Health and Social Care

The point I was trying to make is that the uncertainty in any of those sections means that any party to a transaction can, if they feel they could frustrate the process because the outcome might not be advantageous to them, use the judicial review process to add to the uncertainty of a transaction. In addition, there is also a public interest in timely certainty and finality about decisions made under the regime that are, after all, imposed for the purpose of safeguarding national security. The 28-day limit is also in line with the current merger screening regime that the hon. Member for Southampton, Test asked about, where applications for the competitions appeal tribunal made under the Enterprise Act 2002 to review a merger decision must be made within four weeks, a time period chosen after public consultation. There may be some situations where, for legitimate reasons, 28 days is simply not enough. It is therefore important to remember that this Bill provides that the court may “entertain proceedings” that are sought after the 28-day limit, if it is considered that exceptional circumstances apply.

This shortened time limit and flexibility is for the courts to deal with exceptional circumstances. It strikes the right balance for this regime, in my view. It allows sufficient time for parties to obtain legal advice and mount a challenge, while also providing timely certainty about the effect of the relevant decision made under the Bill. I therefore hope that the hon. Member for Southampton, Test will withdraw the amendment.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

I have to be honest, I did not think that was very good. Let us start with who is shortening and who is not shortening. The Minister said that the Opposition seek to lengthen the period; no, the Opposition are not seeking to lengthen the period. The Government are seeking to shorten the period that is standard in the UK justice system as far as judicial reviews overall are concerned.

That is a very important point, because the Opposition are not trying to do something that is not an ordinary principle of British justice; the Government are trying to that. The Minister’s remarks could have applied to a lot of other areas, where it might be a bit inconvenient to have a judicial review being tenable for a three-month period after an event had occurred. However, it is not a question of inconvenience. Is a matter so important to national security that the 28 days can be justified under those terms?

The Minister has sought to justify the 28 days under the terms that there may be some uncertainty if there is a longer period for judicial review to be undertaken. He is potentially right about that, but not right as far as this Bill is concerned. He is right potentially as far as any application for judicial review is concerned, in all sorts of areas in this country. That is the problem of judicial review for the Administration, under any circumstances. When someone comes along and says, “I’m going to JR this,” a lot of people clap their hands and say, “That’s very inconvenient. It really does foul things up, because we would like to do this, that and next thing, but because we have been judicially reviewed, we have to carry out the procedure that is there.”

As several people have said in a number of different circumstances, the fact that the JR procedure is there and that often ordinary people have a reasonable amount of time to get their case together to undertake the JR process, is an important principle of the British justice system. The Minister has made no serious case for why these things should be so special under these circumstances. Interestingly, the consultation document did not make any case at all for the 28 days, other than to note that it was a shorter period. I am sorry to say that this appears to be a shortened period simply for administrative convenience.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

Does my hon. Friend think that shortening the JR period for administrative reasons is especially contentious, given that the judicial review process would be the only option for small and medium enterprises to complain about the way in which they are being treated under this process? The Minister says that their only option to make a complaint is effectively to JR it, yet they are given less time to JR it.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

My hon. Friend hits the nail on the head. In many circumstances, we are not talking about the sort of JRs that we hear about in the press, where a big corporation has been judicially reviewed on some subject by another large corporation, or some big body has judicially reviewed someone else about a planning decision.

Firms that employ very small numbers of people often find themselves tied up in this process. They need to have this remedy available to them in a way that they can genuinely use, so that they are not constrained by the imposition of what is, as I said, essentially an administratively convenient reduced timescale. I do not think that that ought to be in the Bill. For that reason, we need to press the amendment to a Division, to see whether we can restore to the Bill the three-month period in which people can exercise their right to JR.

Question put, That the amendment be made.

Division number 17 National Security and Investment Bill — Clause 49 - Procedure for judicial review of certain decisions

Aye: 5 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 5, Noes 10.

Question accordingly negatived.

Clause 49 ordered to stand part of the Bill.