§ 4.40 p.m.
§ Consideration of amendments on Report resumed.
§ Clause 7 [Constitution of appeal tribunals]:
§ Lord Archer of Sandwell
moved Amendment No. 4:Page 4, line 3, at beginning insert ("Subject to subsection (1A) below.").The noble and learned Lord said: My Lords, with this amendment it may be for your Lordships' convenience to discuss also Amendments Nos. 6, 7, 8 and 11.
This group of amendments relates to an issue which was the subject of much comment on Second Reading and in Committee, although in Committee some of our contributions were subject to the procedural constraint which was mentioned earlier by the noble Baroness, Lady Anelay. Nevertheless, the noble Baroness was able to make an extremely persuasive argument and was supported by the noble Lord, Lord Goodhart, and to some extent myself, although perhaps having the training that I have of another place, I was more troubled about the rules of order.
I do not propose today to repeat the arguments. I appreciate the advantages of having available a range of expertise among tribunal members. But one essential expertise is an expertise specifically in conducting a judicial hearing; in identifying the issue which falls to be decided; and in marshalling the arguments which have been presented. That is an expertise which is more likely to be found among lawyers. No doubt those were very largely the considerations which motivated the noble Lord, Lord Goodhart, and the noble Earl, Lord Russell, to table their Amendment No. 8 and the noble Lord, Lord Higgins, and the noble Baroness, Lady Anelay, to table their Amendment No. 11.
Being a natural peacemaker, following our debate in Committee, I considered whether there might be a compromise solution to the problem. There is. It might be provided that although it may not necessarily be the chairman who possesses the legal qualification, at least one member of the tribunal shall have such a qualification, leaving it to the president to decide who should take the chair on any specific occasion.
I hope that normally, if the tribunal consists of more than one member, the member so qualified would be in the chair. That would not necessarily and invariably follow from the suggestion in the amendment.
Accordingly, I ventured to table Amendment No. 6 which proposes that compromise. I am grateful to my noble and learned friend the Lord Advocate for discussing it with me through the medium of the international telephone system. I say at once to the noble 949 Lords, Lord Goodhart and Lord Higgins, that it was simply the geographical distance between us which precluded me from giving notice of what I was proposing to do.
I am sure that it would be in the interests of expedition if I were now simply to revert to silence so that your Lordships might have the reaction of my noble and learned friend and other noble Lords. Amendment No. 4 is a paving amendment for Amendment No. 6 and I beg to move.
§ Baroness Anelay of St. Johns
My Lords, at this stage, with the permission of the House, I shall speak to the other amendments which have already been mentioned by the noble and learned Lord, Lord Archer of Sandwell. My noble friend Lord Higgins and I have our names to Amendments Nos. 7 and 11 which are grouped with Amendment No. 4.
The noble and learned Lord has mentioned already that the substantive difference between Amendment No. 4 and our amendment is that Amendments Nos. 4 and 6 deal with a compromise situation, as it has been described, whereby at least one member of the tribunal would be legally qualified, whereas our amendments refer to the fact that the chairman should be legally qualified.
I state immediately that I should be in favour of a legal qualification being present at the tribunal in whatever capacity it were held. Therefore, I see the reason behind the amendments moved by the noble and learned Lord. In Committee, I argued in detail the reasons why I believe that a legally qualified, as I then said, chairman (but now I would say "member") is essential to the effective operation of the appeal tribunals. I shall not abuse the Report procedure by repeating those arguments at length.
As has been mentioned earlier, we were rather pre-empted by a matter of procedure, and at that stage I confined myself very carefully to the terms of my amendment. I was rather relieved that other noble Lords were not so constrained and therefore we were able to have a full discussion on the issue of whether or not a legally qualified chairman was an advantage to a tribunal.
I have sat as a member of a tribunal for 14 years during the period in which lay chairmen were removed and the element of having legally qualified chairmen was introduced. From personal observation, I felt that that did nothing except improve the operation of tribunals.
Social security law is notoriously complex and over half of those who appear are unrepresented and therefore, by definition, are disadvantaged if there is no legally qualified person available at the tribunal to interpret the complex law which must be dealt with. Although, as I mentioned, I recognise that not all lawyers are perfect in every respect, I believe that they possess abilities which they can exercise—and I am looking very carefully at the noble and learned Lord the Lord Advocate as I say this—which cannot be possessed by laymen and which are essential to the fair operation of a tribunal hearing.
950 I recognise also that although the Government have carried on from the previous government the very proper objective of getting decisions right first time, in practice, often when an appellant comes to a tribunal it is only to find that the papers have not been prepared properly nor the law properly interpreted. Therefore, it is an advantage if one has a legally qualified member there to assist in the unravelling of the case.
I merely endorse the words of the noble and learned Lord, Lord Archer of Sandwell. I believe that his compromise fully meets the objectives which I sought to achieve in my own amendments.
§ Lord Goodhart
My Lords, I rise to support the amendments in the name of the noble and learned Lord, Lord Archer of Sandwell, and I speak also to the amendment in the name of my noble friend Lord Russell, which seeks to insist on a legally qualified chairman.
I should say at once that while I might have preferred that the requirement was for a legally qualified chairman, I find the compromise of the noble and learned Lord, Lord Archer of Sandwell, totally acceptable if, as I hope, it is acceptable to the Government.
As we know, the requirement for a legally qualified chairman was introduced 14 years ago in 1984 as a result of a report a few years previous to that by Professor Kathleen Bell which found that tribunals without legally qualified chairmen had low standards. The noble Baroness, Lady Anelay, confirmed from her own experience that the introduction of legally qualified chairmen improved the standards.
Tribunals need, if not a legally qualified chairman, at least a legally qualified member. One would expect that the legally qualified member would normally be the chairman because tribunals must consider evidence properly; they must identify the relevant facts; they must reach the proper conclusions on those facts; they must identify the law to be applied; and they must apply the law correctly. Those are all skills in which those who have been legally trained are likely to perform better than those who have not.
I certainly would not say that a member of a tribunal without legal qualifications will always get it wrong or that a member with legal qualifications will always get it right. But I believe that it is significantly more likely that a legally qualified member will get it right.
In Committee, the noble and learned Lord, Lord Hardie, said that he would reflect on the argument that the chairman should be legally qualified. He has had time for reflection, and I trust that that reflection will have borne fruit in his willingness—as I hope it will prove to be—to accept the compromise put forward by the noble and learned Lord, Lord Archer. I simply endorse and repeat the comments of the presidents of the Independent Tribunal Service, quoted previously in our debate of 30th March:We are not therefore comfortable with the proposition that a single decision maker conducting an oral hearing alone should not he a lawyer or he legally trained. The demands of conducting and recording the proceedings and decisions of a tribunal in such a sensitive jurisdiction are such that it is argued that it may simply be too great a demand to place on such a person. Further, where the 951 tribunal is made up of more than one person, the chairman will invariably require legal training because of the additional procedural skills involved".—[Official Report, 30/3/98; col. 124.]As I said, I endorse those comments. Similar views have been expressed by the NACAB, the Legal Action Group, the Child Poverty Action Group and the Law Society.
Finally, I should like to read out one comment from the Legal Action Group, which is a pressure group concerned with the improvement of access to justice:The need for tribunal chairs to be legally qualified has become more, rather than less, pressing, because of both the complexity of the law and the procedural skills involved, including conducting proceedings and recording the decision. The chair has a pivotal role not only in ensuring that the law has been correctly applied, but also in substituting for legal representation. Appellants in social security cases are frequently unrepresented, and are often hopelessly at sea when a legal problem arises. People will frequently be vulnerable, socially excluded, and economically disadvantaged. For some, English will not be a first language, and many will have poor literacy skills, ill health and, increasingly, mental health problems. Many will be unable to understand the law, or to argue their case by reference to the legal rules. Part of the inquisitorial role of tribunals is to ascertain the matters in issue, elicit evidence and reach a view on the facts, as well as to identify and consider any issue of law pertinent to the case".That is in the context of the assumption that the legally-qualified member would be the chairman. However, it puts the point very strongly and clearly. Therefore, I shall be happy to support the noble and learned Lord's amendment.
§ Lord Dormand of Easington
My Lords, before the noble Lord sits down, perhaps he could explain to someone who is completely ignorant of all legal matters what is so magic about the five-year period mentioned twice in his amendment? I should point out that the amendment of my noble and learned friend does not mention that period at all so, presumably, the noble Lord has a special reason for specifying it. Can he tell the House what that reason might be?
§ Lord Goodhart
My Lords, the five-year period is one which appears in the Courts and Legal Services Act 1990 as the minimum period of service required for the holding of certain legal posts. It is not essential, but anyone with less than five years' experience would be unlikely to have the necessary experience for conducting an appeal tribunal of the kind under discussion.
§ Lord Hardie
My Lords, I shall deal, first, with Amendments Nos. 4, 6, 8 and 11, which all deal with the now-familiar subject of the legal qualifications of tribunal chairmen or members. As has been observed, we debated the subject of legal qualifications at length in Committee. I acknowledge the strength of feeling expressed by noble Lords on that and on this occasion. As the noble Lord, Lord Goodhart, reminded the House, I undertook to reflect on whether all tribunals need to have a legally-qualified chairman.
Before dealing specifically with the amendment moved by my noble and learned friend Lord Archer, I do not wish to understate the difficulties involved in the proper recording of evidence, the identification of 952 relevant facts, the reaching of proper conclusions, the identification and application of the correct law, and so on. However, like my noble friend Lord Borrie, who intervened in Committee when we discussed this issue, I remain convinced that, with appropriate training, there are a number of appeals which could be determined by a person without formal legal qualifications.
We want new arrangements for handling appeals which are more effective and efficient. In considering further the need for a legal presence on tribunals, we have looked again at the number of appeals which could be dealt with by a single non-legally qualified panel member and the administrative arrangements for selecting those appeals. It appears that less than 5 per cent. of appeals could be dealt with in that way.
Given the small number of cases involved and the complexity of the administrative arrangements, we have concluded that there would be little benefit in introducing such an arrangement at this time. In reaching that conclusion, we have been helped by the opinions of the President of the Independent Tribunal Service, Judge Michael Harris, who recently briefed Ministers on the administration of ITS.
The same arguments about small numbers of cases and complex sifting arrangements also apply to two and three-member tribunals. In view of this, and in view of the concerns that have been expressed about this issue in your Lordships' previous debates and today, the Government have concluded that, for the time being at least, there is a case for the retention of lawyers on all tribunals.
We may wish to revisit the issue in the wake of welfare reform. In saying that, it will be apparent to your Lordships that we will not readdress the issue in the course of the proceedings on this Bill. We therefore support the amendments tabled by my noble and learned friend Lord Archer—namely, Amendments Nos. 4 and 6. In view of the statements made by the noble Baroness, Lady Anelay, and the noble Lord, Lord Goodhart, that they will accept the compromise proposed by my noble and learned friend, I believe it is unnecessary for me to explain why we will not accept the other amendments in the grouping. In the interests of economy of time, I shall simply say that that is our position. I invite the noble Baroness and the noble Lord to withdraw their amendments on the basis of my outline of the Government's position.
§ Lord Archer of Sandwell
My Lords, I am most grateful for the support expressed by the noble Baroness, Lady Anelay, and the noble Lord, Lord Goodhart. Indeed, I am especially grateful to my noble and learned friend for his open ear. I accept that the Government cannot pledge their good behaviour in perpetuity, but my noble and learned friend could not have said fairer than that.
On Question, amendment agreed to.
§ Lord Goodhart
moved Amendment No. 5:Page 4, line 3, leave Out ("one, two or").The noble Lord said: My Lords, this amendment relates to the question of whether tribunals should necessarily, as at present, contain three members. Before I launch on the subject, I noted that the noble and learned Lord the Lord Advocate said in his last response that this was one of the matters that the Government had considered. The noble and learned Lord referred to the problems of "sifting", and so on. Therefore, I am not entirely sure whether the Government propose to retain three-member tribunals or to maintain their present position in the Bill; namely, that it should also be open to have one, two or three-member tribunals. The noble and learned Lord indicates that that is so. In that case, I shall proceed with my amendment. I was, perhaps, hoping for too much in that respect.
We believe that a three-member tribunal is an important safeguard. That is particularly so when one is handling large numbers of appeals very quickly. It may seem odd at first sight to insist on a three-member tribunal when an appeal from the tribunal lies to a social security commissioner sitting alone. But a case goes to a social security commissioner only when it raises some point of importance or uncertainty and is, therefore, certain to be looked at very carefully by the commissioner.
Cases going to the ordinary second-tier appeal tribunal may often be simple and straightforward and the facts in law may be entirely clear. However, one member going through a string of apparently simple and straightforward cases (and those are the cases that will be assigned to a one member tribunal) may well tend—and this is something that I feel I might do myself in that position—to lose concentration, especially where these are being dealt with as paper hearings. The member of the tribunal will miss the case that has hidden in it a real issue that needs to be looked at but is not necessarily all that clear on the surface. This is much less likely to happen if three people are considering the case. I do not believe that great savings would be gained from having one or two-member tribunals. I believe there would be a real loss of effective justice if the three member tribunal was not a requirement of the law, as it is now. I beg to move.
§ 5 p.m.
§ Baroness Anelay of St. Johns
My Lords, I support this amendment, to which I have added my name. Originally I had tabled exactly the same amendment in my name and therefore when I saw this amendment I simply added my name to it to save time. I, too, was somewhat encouraged for a few moments by the words of the noble and learned Lord the Lord Advocate with regard to the complexity of the Government's proposals. They have had to introduce that complexity in order to sift cases to render them capable of being dealt with by one and two-person tribunals. The noble and learned Lord also referred to small numbers of cases. It is not acceptable for this House to introduce further complexity in tribunal structures for a small number of cases. Three-person tribunals constitute a much fairer way of hearing cases. Appellants would not know whether one, two or three 954 persons would hear their case. I believe that an appellant whose case is heard by a three-person tribunal is in a much better position.
I believe that the current system works well. The so-called flexible model which the Government have described will alter the balance of fairness as between appellants whose cases are heard by three-person tribunals and those whose cases are heard by just one person. The balance of fairness will also be altered as between appellants and the Secretary of State. If we accept the proposals in the Bill that the number of persons on a tribunal could vary between three and one according to the substance of the appeal, we must accept that an administrator would have to identify in advance the precise issues which the appeal raises and therefore which experts will be needed. The noble Lord, Lord Goodhart, mentioned that. Decisions would already be made in advance of the appeal being heard. Judgments would be made as to whether it was a complex, simple or meritless case and whether any particular expertise would be needed on the part of the tribunal members.
However, I have a far more prosaic argument as someone who has sat on these tribunals week in and week out over many years and has seen the grinding work that is carried out and the difficulties that are faced by the independent tribunal service in summoning tribunal members on a regular basis. My argument is a straightforward and practical one. I believe that if an administration has the chance of summoning three, two or one members, it will inexorably work towards the easiest solution; namely, to summon just one member. At present if three members are summoned and one is sick or unable to attend for business reasons, it is open to the appellant whether he wishes the case to proceed with just two members being present.
The Bill already addresses problems such as the possibility that two members of a tribunal may disagree and how one deals with that disagreement; namely, rather than adjourning, the matter would be decided on the spot. I believe that the difficulties that have been faced on occasion by the tribunal service in summoning members for three-person tribunals would be obviated in future by simply failing to seek three members when it had determined that three members was the appropriate number of people to hear a case. It would be so easy to slip into the administrative convenience of summoning only one or two. I believe that would undermine the fairness of the system.
Decisions about the merits and the complexity of a case would have to be made before a hearing took place. I believe that could tend to favour the Secretary of State. On many occasions I have heard appeals covering perhaps eight or 10 cases in a day. I have looked at the papers of a case in advance and thought that the result was a foregone conclusion. It seemed to be the open and shut case which those who had drawn up the papers had obviously believed was the case. However, as the hearing progressed a different story emerged and it was vital that three people were present with varying expertise in order to tease out information and properly to evaluate the evidence. There may be facts which simply have not been recorded or have not been discovered or there may be a basic misunderstanding of 955 the legal significance of information which should have been supplied. I believe that without the retention of the three-member tribunal system there is a real danger that the fairness of the operation of the system for the appellant will be severely compromised. On that basis I support the amendment.
§ Lord Borrie
My Lords, the model of the three-member tribunal is now something of a tradition as it dates from the time of Lloyd George and the insurance legislation of 1911. Because of its success in the inter-war years it was retained by the Attlee government of 1945. That success has been undoubted. I refer to the "plus" points that the noble Lord, Lord Goodhart, and the noble Baroness, Lady Anelay of St Johns, have commented upon. The appearance of fairness and the different experiences of the members of the three-person tribunals are perceived to be most helpful and are almost certainly objectively extremely helpful. It is a model that is worth following and bearing in mind.
Nowadays we all think of the tribunal system as being part of our general judicial system. Even though that tribunal system has lasted for so long in relation to social security matters and has been copied elsewhere in fields as varied as industrial tribunals and employment appeals tribunals and the restrictive practices court, it is by no means the only or indeed the principal way in which matters are determined judicially in this country. Far more typical is the decision made by one person—sometimes of course with a jury which has a different role from those who sit on a tribunal. Certainly the tradition in the High Court and in the circuit courts of this country of the individual High Court judge or the circuit judge reaching a decision—I hope and believe—is perceived to be fair. However, that is, of course, subject to appeal. That is thought to be perfectly fair and reasonable.
I accept that the model of three-member tribunals is a good one. One would not wish to depart from it for any frivolous reason. The Government appear to want to depart from it because it is an expensive system and one that involves a great deal of personnel and administration. Some cases that must be dealt with at present by a three-person tribunal could be dealt with by one or two persons. They need not necessarily be qualified in relation to certain medical problems; a medical practitioner may determine such questions. However, it seems to me that there is a gap in the arguments of those who support this amendment saying, "This is the norm; this is the model; and this must always be the case". There is a difference between saying, "This is the norm", and, "This is one about which we should have no flexibility", with no possibility for the administration to say when it has studied the case with all due care that it can be dealt with properly by one member or two members. There must be sufficient reassurances—I thought that we were given them by my noble and learned friend the Lord Advocate on the previous occasion—that if there is any doubt whether there should be one or two members there should be two members. If there is any doubt whether there should be two or three members, there should be three members.
956 I read into the speech of the Lord Advocate the proposition that if for some reason the papers have been misread or not adequately understood, or the case turned out to be more difficult than had been originally perceived, one would say, "Halt, we had better convene a full three-member tribunal". The amendment allows no flexibility; and that is its weakness.
§ Lord Archer of Sandwell
My Lords, I agree with my noble friend Lord Borrie that whether one requires a three-member tribunal depends largely upon the issue which the tribunal has to address. We are dealing here with social security tribunals. The issues they have to address are very much of their own nature. Even in social security tribunals, some decisions can be, and sometimes are, decided appropriately by a chairman alone; for example, in interlocutory matters which arise in the course of the proceedings.
However, I should have thought that normally there are two great advantages in having a three-member tribunal. The first is the opportunity to discuss the matter. It is not an arithmetical question which falls to be decided. It is not a question of whether someone did or did not do something, but of the needs of a particular individual. There is a great deal to be said there for an opportunity for discussion. I have seen the chemistry which arises when a member of the tribunal who was perfectly clear about the issues comes to a different point of view after discussions with colleagues.
The second great advantage is how the tribunal appears to those who come before it. It makes for greater confidence to see someone on the tribunal who has shared your own problem, who has had the same kind of experience. It is the Government's own case that there is something to be said for the application of more than one expertise in the resolution of the issues we are deciding. For that reason, I follow my noble friend, too, when he says that in the majority of cases there is probably an advantage in having three members but that it does not follow that one has to have three members on every single occasion.
The noble Baroness, Lady Anelay, asked who is to decide on any specific occasion what expertise the tribunal will have, and how many members. I believe that my noble and learned friend gave us some assurance at Committee stage. If I may say so, the assurance that he gave at one stage was not wholly in accordance with the letter from my noble friend Lady Hollis at an earlier stage. I think that there is time for that to be resolved. We may receive some assistance when the Minister moves Amendment No. 9. The issue which among others has to be decided is whether there will be regulations which tell us which categories of case can be addressed by fewer than three members, and which categories ought always to have three members. In advance of our debate on Amendment No. 9, perhaps my noble and learned friend can offer us some reassurance on that matter too. I believe that there is a real problem to be addressed here and I am sure that he will address it.
§ 5.15 p.m.
§ Earl Russell
My Lords, the Government's position on this issue, and that of the noble Lord, Lord Borrie, 957 depends on a great deal of confidence in the ability to conduct the sift accurately and reliably, and to identify in advance from the papers which types of case will need which kinds of panel. My noble friend Lord Goodhart dwelt on the difficulties of the case in which there is a hidden and unforeseen issue. The Minister appeared unpersuaded. But I, too, have some little experience. It is known, I think, to some of your Lordships that five years ago in the medium of my own college I became involved in a case to which a great deal of publicity was subsequently attached. In my view, the principal error in that case, from which most of the subsequent confusion arose, was forming a clear opinion from the papers before hearing the parties. Therefore, in supporting the amendments, I, too, know just a little about that of which I speak.
§ Lord Hardie
My Lords, perhaps I may deal briefly with the comments made by the noble Earl, Lord Russell, about his experience almost five years ago. I think that noble Lords are well aware of the noble Earl's involvement in that case and the support he gave to the individual concerned. However, my recollection is that that was a criminal case. The noble Earl's comments about sifting might not be apt in the context of criminal procedures when discussing social security provisions.
I have listened carefully to the comments made by noble Lords opposite and by my noble friend and my noble and learned friend. I also share their concern that appellants must receive a fair hearing, but, like my noble friend Lord Borrie, I do not think that this can be achieved by having only a statutory provision for three-person tribunals in every case. That is the system we currently have within the ITS. Although a huge variety of issues come before the tribunals, it does not appear appropriate to us that identical provision should be made for every appeal. Even the most straightforward appeals have to wait in line to be heard by a three-person tribunal when they could be heard equally effectively by a single or two-person tribunal.
I shall deal later with the point raised by my noble and learned friend Lord Archer about the regulations and who determines what cases will be decided by one, two or three-member tribunals. I simply remind noble Lords of the statements that I made in Committee, to which my noble friend Lord Borne alluded today. I hope that those statements will give some comfort to noble Lords about the proposals we have in mind.
Under the present system, where an appeal hearing is finally arranged it is not unusual for it to be adjourned, at great inconvenience to everyone, because one of the members cannot attend. It is little wonder that appeals currently take on average more than six months to resolve and some take a year or more. I mentioned those statistics in Committee and I make no apology for reminding noble Lords of them. I think that such a delay is quite unacceptable when one is deciding the entitlement or otherwise of a claimant to benefit.
It has been suggested today, and it was suggested previously, that the Government are introducing the changes to the appeals system just to save money. It is true that there may be some small saving in abolishing 958 the statutory requirement for a three-person tribunal in all cases. However, the primary aim is not to save money. Indeed, there may be some increased costs in setting up the new service; for example, in the recruitment of panel members and in their training. We want to improve the service to claimants by introducing a streamlined, simple and efficient appeals process. The scope for improving the existing system is limited by the rigid framework of current legislation. The five appeal tribunals have different constitutions, different powers and different rules. All appeals have to be heard by three persons. That limits the scope for directing the appropriate expertise to different cases and makes hearings difficult to arrange.
We believe that greater flexibility in the composition of the tribunals will improve the service for all appellants. I have already reminded noble Lords of my remarks on unacceptable delays and have referred to the times involved. As the noble Lord, Lord Renton, said in Committee—he is not presently in his place—justice delayed is justice denied. Such delays cannot be tolerated. The flexibility that we are introducing will assist in improving the service to claimants and in reducing delays by using one and two person tribunals for appropriate cases; three person tribunals will have more time to deal more expeditiously with cases which are waiting to be heard.
However, I wish to reassure noble Lords that the greater flexibility does not mean a gradual move towards single person tribunals as the norm. Indeed, the majority of appeals will continue to need two or three person tribunals because of the nature of the issues raised. Very many appeals—for example, those relating to incapacity benefit—will require medical and legal expertise. Those relating to the mobility and care components of disability living allowance will need the expertise of a tribunal member with knowledge or experience of the needs of disabled persons.
But there are some cases which do not require the expertise of two or three tribunal members—for example, an appeal which is solely about whether a claimant satisfies the residence and presence requirements for a particular benefit could be heard by a legally qualified panel member sitting alone. In the light of amendments that have been accepted, it will be appreciated that one person tribunals will be comprised of a legally qualified person.
As I explained in Committee, we have amended Clause 78 to make regulations under Clause 7 subject to the affirmative procedure. That deals with the point raised by my noble and learned friend Lord Archer. That will give Parliament the opportunity to scrutinise our proposals on which type of appeal will go to different types of tribunal—the regulations will specify that—and to satisfy itself that all appeals will be dealt with by people with appropriate expertise.
To deal with the prosaic argument of the noble Baroness, Lady Anelay, these regulations would prevent the administrative drift that she fears. If the regulations, subject to the affirmative procedure, specify what type of cases will go to which category of tribunal, it will not 959 be open to administrators to decide that a case allocated for three people will be heard by two. That will not be an option.
I assure noble Lords that the Government will ensure that the high standards of tribunal decisions are maintained. No panel member will sit on a tribunal without proper training in the relevant legislation, in the powers and procedures of tribunals and in the conduct of hearings. The president will approve individual panel members for their expertise and suitability to sit on tribunals hearing particular types of appeal. He will also be responsible for arranging the training of panel members, in consultation with the Secretary of State and the chief medical officers, as appropriate.
As I said, I propose to speak at the same time to Amendment No. 69 standing in the name of my noble friend Lady Hollis. I understand that the new president of the Independent Tribunal Service, his honour Judge Harris, has recently written to the noble Lord, Lord Higgins, and the noble Earl, Lord Russell, about the difficulties he is experiencing with social security appeal tribunals. He has expressed serious concerns about his ability to continue to operate these tribunals with a chairman and two wing members. He fears that, unless some action is taken now, the delays will increase and the number of outstanding appeals will rise even further in the interim period before the establishment of the new appeals service. The only consequence of that will be a further delay to claimants in the determination of their cases.
The president has asked the Government to take action to allow the Independent Tribunal Service a more flexible regime for the composition of social security appeal tribunals during the transitional period. The Government have therefore responded to Judge Harris's concerns by tabling an amendment to Schedule 6 which will enable the flexible tribunal composition to be introduced as soon as possible after Royal Assent for social security appeal tribunals. Amendment No. 69 will allow social security appeal tribunals to comprise either a chairman sitting alone or a chairman sitting with one or two wing members. That will provide the Independent Tribunal Service with the required scope to continue to hear social security appeals with fewer people available. It would also allow some early testing of the practicalities of the move to flexible tribunal composition.
I invite noble Lords to give effect to the wishes of Judge Harris. He is surely in the best position to judge what is required for the efficient operation of the service of which he is—
§ Baroness Anelay of St. Johns
My Lords, I believe that on Report I am allowed to ask a question of the noble and learned Lord. He referred to the letter that was sent to my noble friend. Does he agree that the reason advanced by the judge in that letter for the fact that it is difficult to empanel sufficient people at present is simply that the bringing forward of this Bill, with the provision introduced by the Government to change the system of empanelment has reduced the morale of those who have been sitting as lay members of tribunals. 960 As I recall from a brief reading of the letter, the judge refers to people leaving the system "in droves". I believe those are his words. I hope that the noble and learned Lord will confirm my understanding of the letter; namely, that the judge is not saying that he endorses fully what the Government seek to do within the Bill and recommends the adoption of its provisions, but that, given the difficulties that he faces because of reduced morale among lay members who are now leaving the service, he finds it difficult to operate under the present conditions and therefore, since he has to operate on the basis of a belief that the Government's will may prevail and the provision may go through, he seeks in the best possible way to continue good administration and to expedite the introduction of the three-two-one system. I hope that the noble and learned Lord will be able to clear up that point.
§ Lord Hardie
My Lords, I am grateful to the noble Baroness for that intervention. It is stated in the letter that that is part of the reason for his concerns; namely, members are leaving because of the changes that are about to occur. However, at paragraph 6 of the letter, the judge also states:it is important that we have the opportunity of testing any proposed change before fully committing ourselves to it. I happen to believe that some reduction in the lay element for some types of appeal would not jeopardise our ability to reach fair decisions. It would also reduce our training burden, ease the work of the administration in arranging the attendance of members, and, in some cases, improve our ability to get through the workload quicker. This last point is particularly important in the context of reducing the time which it now takes to get an appeal heard".So that is obviously a factor which the judge has in mind. It is clear that in the paragraph referred to he supports the flexibility offered by this system. I accordingly invite noble Lords to support government Amendment No. 69. In the light of my remarks and particularly in view of the statements that I made in Committee which I do not think it necessary to repeat but which I confirm we are not departing from—statements about erring on the side of caution, to which my noble friend Lord Borrie referred—if there is doubt, the matter will go to a two member tribunal; if there is doubt as to whether it should be a two or three member tribunal, it will go to a three member tribunal. There will be affirmative regulations, subject to the scrutiny of this House, setting out the type of cases which will go to single member, two member or three member tribunals. In those circumstances I invite the noble Lord to withdraw the amendment.
§ 5.30 p.m.
§ Lord Goodhart
My Lords, I recognise it as a step forward that regulations will be made under Clause 7 to identify the way in which different appeals will be allocated to different tribunals and tribunals with different numbers of members. I also welcome the fact that this will be dealt with by the affirmative resolution procedure. I regret that the noble and learned Lord the Lord Advocate did not go further and accept the desirability of preserving the present structure of tribunals, for the reasons put forward from this side of the House. However, I believe that at least some of the 961 sting of the amendment has been drawn by the Government's acceptance of the necessity of having a legally qualified member of a tribunal. That means, of course, that, if it is a one-member tribunal, that member will have to be legally qualified. Of the two issues—whether there should be a legally qualified member or whether there should be a three-person tribunal—I believe that having a legally qualified member is the more important. In those circumstances, it might be regarded as churlish to take this matter further. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ Lord Archer of Sandwell
moved Amendment No. 6:Page 4, line 4, at end insert—("(1A) The member, or (as the case may be) at least one member, of an appeal tribunal must—On Question, amendment agreed to.
- (a) have a general qualification (construed in accordance with section 71 of the Courts and Legal Services Act 1990); or
- (b) be an advocate or solicitor in Scotland.").
§ [Amendments Nos. 7 and 8 not moved.]
§ Lord Hardie
moved Amendment No. 9:Page 4, line 10, leave out subsection (3).The noble and learned Lord said: My Lords, your Lordships will recall that during Committee I promised to consider issues raised by my noble and learned friend Lord Archer about the regulation-making power in Clause 7(3) and about the way expert assistance will be given to tribunals. Amendments Nos. 9, 10 and 26, if I may speak to them together, will, I believe, fully meet those concerns.
Amendments Nos. 9 and 10 make it clear that regulations shall be made, to provide for the composition of appeal tribunals; the procedure to be followed for allocating cases among differently constituted tribunals; and the manner in which expert assistance is to be given to the tribunal. It has always been the Government's intention to make regulations to provide for those matters. These amendments put that intention beyond doubt, on the face of the Bill. I should like to remind the House that the regulations made under Clause 7(3) will be subject to the affirmative resolution procedure, as I said in speaking to Amendment No. 5.
Amendment No. 26 is a tidying amendment which moves the regulation-making power in respect of the procedure which takes place on an appeal or an application before an appeal tribunal to Schedule 5 to the Bill. Schedule 5 deals with regulations as to procedure, and the power would fit more appropriately there.
I trust that these amendments address the concerns raised by my noble and learned friend Lord Archer and other noble Lords. I beg to move.
§ Lord Archer of Sandwell
My Lords, I am most grateful to my noble and learned friend. Once again he has demonstrated the listening ear. It is a pleasure to 962 hear some of the speeches that we have heard from the Front Bench today. May there be many more such speeches in the years to come.
§ Baroness Anelay of St. Johns
But not for too many years to come, my Lords! But this is not a day for being churlish, as other noble Lords have said. I welcome the fact that the Government have brought forward these amendments in reaction to some of the comments made by noble Lords at Committee stage.
At this point I simply refer to the fact that Amendment No. 10 says:Regulations shall make provision with respect to—We come back to the point I made earlier: I still find difficulty in understanding at this stage how regulations will make the direction about allocation clearly and effectively enough for that allocation to be made fairly. If it is simply the case that regulations are to say that, if the appeal to be heard concerns DLA, a member shall have experience of working in the medical field or have themselves been disabled, that gives a qualification in that way. If the regulations merely say that, if the appeal is on a matter of income support, there will be no such restrictions on membership, or if they say that, if the appeal is contested there shall be three members and if it is not contested there shall be only one, or if they say that where an appeal seems to be unmeritorious there shall be only one member, there will he all kinds of difficulties. There may be cases which are unmeritorious in the eyes of the sifting organisation which later become meritorious. We then get back to the position, which the noble and learned Lord himself earlier recognised, where adjournment after adjournment has to take place, with all the attendant frustrations and difficulties for everyone, particularly for the appellant. In addition, appeals on DLA can be very different in character, not only with regard to the law which is to be discussed but also with regard to the way in which the evidence is to be tested.
- (a) the composition of appeals tribunals;
- (b) the procedure to he followed in allocating cases among differently constituted tribunals".
Although I genuinely accept that these are welcome amendments, I remain to be convinced that the problems which we discussed at Committee and again on Report can be resolved simply by saying that regulations will wave the magic wand, particularly when none of us has yet been able to see those regulations. I would not expect the Government to be able to give details of them at this stage. They have been very prompt in replying to comments made by noble Lords.
All of us, including those far more experienced than I in these matters, recognise that one can make mistakes. With regard to the previous group of amendments, the noble and learned Lord the Lord Advocate referred to the letter sent to a few noble Lords—not to myself—by the new President of the Independent Tribunal Service. I am aware that most noble Lords will not have had the advantage of reading that letter. I therefore feel constrained in quoting from it but, since it has been referred to, I shall do so. The noble and learned Lord the Lord Advocate referred to paragraph 6 and adduced 963 it as evidence that the new president, appointed in January, supports what the Government are doing. However, the president, the highly qualified judge, concludes paragraph 6 by saying that he may be wrong in saying that the flexible approach is the right way of going about the matter:But I may be wrong, and I want to be in a position to report to the Government on this issue before a new arrangement is fully implemented".I can only congratulate him on his perspicacity. I hope that, by accepting the amendments that the Government have put forward, we shall not leave ourselves in the position of having regulations which do not answer the queries we have put forward. Other people may be wrong, not just ourselves.
§ Lord Goodhart
My Lords, I welcome the amendments. I hope that it will be possible to give an equally warm welcome to the regulations when they are laid before the House.
§ Lord Hardie
My Lords, the regulations will, of course, be framed in consultation with the President of the Independent Tribunal Service and the ad hoc group, which includes NACAB and others. It is intended that they will deal with a requirement that tribunals on incapacity-to-work cases would include a medical practitioner and that cases on disability living allowance would require a doctor and someone with experience of disability, as well as a lawyer.
Secondly, the regulations concerning the allocation of cases would ensure that similar cases were allocated consistently to similar types of tribunals. Administrators would be able to seek the advice of a legally qualified member of the panel if, exceptionally, there were any doubt about the appropriate constitution of the tribunal to consider an appeal. These matters will all be dealt with in the detail of the regulations. I am sure that the noble Baroness, Lady Anelay, and others will scrutinise them carefully when they come before this House.
On Question, amendment agreed to.
§ Lord Hardie
moved Amendment No. 10:Page 4, line 23, at end insert—("() Regulations shall make provision with respect to—On Question, amendment agreed to.
- (a) the composition of appeal tribunals;
- (b) the procedure to be followed in allocating cases among differently constituted tribunals; and
- (c) the manner in which expert assistance is to be given under subsection (4) above.").
§ [Amendment No. 11 not moved.]
§ Schedule 1 [Appeal tribunals: supplementary provisions]:
§ Baroness Anelay of St. Johns
moved Amendment No. 12:Page 57, line 41, leave out ("Secretary of State") and insert ("President").The noble Baroness said: My Lords, in moving Amendment No. 12, with the leave of the House I shall speak also to Amendment No. 13. Similar amendments 964 were moved in Committee by the noble and learned Lord, Lord Archer of Sandwell. Today I seem continually to persist in stealing his good ideas. The effect of the amendments is to give the president of tribunals power to,appoint such officers and staff as he thinks fit for the President and for appeal tribunals".I supported these amendments in Committee when they were moved by the noble and learned Lord, Lord Archer, because they raise a fundamental issue which extends to all courts and tribunals; that is, what is to be the relationship between the judiciary and administrators? When the noble and learned Lord, Lord Archer, withdrew the amendments in Committee, he said that what troubled him about the response of the Lord Advocate was that there seemed to be little indication in his reply that the Government had reflected upon this difficult question.
I brought back the amendments on Report to give the Government an opportunity to tell the House whether or not they have been able to reflect further and also whether or not the Minister has now read the report, Tribunals, their Organisation and Independence. I note that at Committee stage the noble and learned Lord, Lord Archer, in his customary generous manner, offered to supply the Lord Advocate with a free copy. I beg to move.
§ Lord Archer of Sandwell
My Lords, I share the curiosity of the noble Baroness, Lady Anelay. I rise only to add one factual point to what is known already to your Lordships; that is, I came prepared with a copy of the report of the Council on Tribunals, only to discover that my noble and learned friend had already procured a copy for himself.
§ 5.45 p.m.
§ Lord Hardie
My Lords, I can confirm that I have read the report.
Amendments Nos. 12 and 13 seek to transfer from my right honourable friend the Secretary of State to the president of appeal tribunals the responsibility for appointing officers and staff for himself and for those tribunals.
It is clear from the full debate in Committee and from the points raised by the noble Baroness, Lady Anelay, today that the concerns centre on three issues. First, the potential for undermining the independence of the appeals system if responsibility for the administration of appeals is removed from the president; secondly, the potential for conflict between the president and the administration in terms of accountability; and, thirdly, the potential for a conflict of interest if the Secretary of State is responsible both for first-tier decisions and the administration of appeals.
I propose to address each of those issues in turn. But first I should like to reiterate a point I made in Committee. The Government's proposal to transfer the responsibility for administration from the president to the Secretary of State, and to establish an executive agency to deal solely with the administration of appeals, so that administration is separated from the judicial 965 function is not a new or strange concept within appeals systems. Rather, it is the current system of a judge as president with responsibility for administrative as well as judicial functions, which is unique to the Independent Tribunal Service.
Separation of administration and judicial functions happens in other appeal systems; for example, pensions appeal tribunals are administered by the Court Service, an executive agency; industrial tribunals and employment appeal tribunals are administered by the Employment Tribunals Service, also an executive agency. Our proposals will mirror those arrangements.
The noble Baroness, Lady Anelay, suggested that the independence of the president and of appeal tribunals would be enhanced if the president retained his current responsibility for appointing administrative staff to support their work. In saying that, I am assuming that the noble Baroness is adopting the argument of my noble and learned friend Lord Archer of Sandwell.
We are fully committed to preserving the independence of the president, of appeal tribunals and of the decisions they make. The provisions we have made in Clauses 5 and 6 for the Lord Chancellor to appoint the president and all panel members enhances their independence. The president will be the judicial head of appeal tribunals. He will be responsible for approving panel members for their expertise and suitability to deal with particular types of appeal. He will also be responsible for arranging the training of all panel members, in consultation with the Chief Medical Officers and the Secretary of State, as appropriate. I can assure noble Lords that the Secretary of State will have no role in the functions of appeal tribunals or in the decisions they make.
During Committee and again today, reference was made to a report by the Council on Tribunals, Tribunals, their Organisation and Independence. I have now had the opportunity to read the report and have found that it is generally supportive of the measures we are introducing. I do not propose to go through the areas in which I found support, but if noble Lords require clarification, I can do so. There are eight in number.
On the question of accountability, my noble and learned friend Lord Archer suggested during Committee that if the senior administrator or chief executive were answerable to the president, it would be the president who could be summoned to the Public Accounts Committee. Currently, the president is responsible for the administrative as well as judicial functions and he delegates responsibility for administration to a chief executive. However, neither the president nor the chief executive is accountable to Parliament for the performance of ITS.
This lack of accountability for performance within the existing system has the effect of limiting improvements in efficiency and service to claimants. We intend to put that right by separating responsibility for administration from judicial functions, an approach endorsed by the Council on Tribunals. Importantly, the chief executive may be appointed accounting officer, directly responsible to Parliament for the public money spent on administration and the efficiency of the service provided.
966 We do not believe that the changes we are making provide the potential for a conflict of interest. The setting up of an executive agency to deal with the administration of appeals is a measure which is welcomed by the Child Poverty Action Group, among others. Agency status will enable the new appeals service to operate at arm's length from Ministers, and separate from the agencies that are involved in first-tier decision-making.
It is the Secretary of State and not the president who will be responsible for the appeals service as a whole and it is she who will be accountable to this House for the standards of administration and the public money spent. In view of her responsibility and accountability, we believe the Secretary of State should exercise the power, through the appeals agency chief executive, to appoint administrative staff to support the president and appeal tribunals.
I hope that I have been able to reassure noble Lords that our proposals for the new system are already tried and tested in other systems and that the essential elements of it are supported by the Council on Tribunals' report and welfare rights organisations. For those reasons, I hope that the noble Baroness will feel able to withdraw her amendment.
§ Baroness Anelay of St. Johns
My Lords, I am grateful to the noble and learned Lord for reflecting further and for reading the report of the Council on Tribunals. Like him, I will not list specific areas in the report, in my case where they do not agree with the Government's way forward. However, I take seriously the arguments he put forward with regard to accountability issues and I shall read carefully what he said in Hansard. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ [Amendment No. 13 not moved.]
§ Earl Russell
moved Amendment No. 14:After Clause 8, insert the following new clause—ENTITLEMENT TO CERTAIN BENEFIT PAYMENTS AND INFORMATION AND EVIDENCE REQUIRED TO SUPPORT CLAIM(" .—(1) The Secretary of State shall, in such manner as is prescribed, inform with sufficient particularity a person wishing to make a claim for a relevant benefit what information and evidence is required to support the claim.(2) Subject to paragraph 4 of Schedule 1 to the Jobseekers Act, where the Secretary of State makes a decision awarding income support, or jobseeker's allowance, the claimant shall be entitled to payment from no later than the date when the claim for it was made.").The noble Earl said: My Lords, we covered much of the basic arguments on this amendment in Committee. We were left with the issue behind the basic argument, which is the Department of Social Security's immense confidence in its own judgment.
The basic purpose of Amendment No. 14 is to reverse the onus-of-proof regulations introduced in October 1997. The point of those regulations was that the start of a claim could be delayed if the claimant was late in providing supporting evidence except in certain specified circumstances set out in regulation. It is easy 967 to list circumstances in which the claimants may not be to blame for not supplying supporting evidence. The department's reply to that is that it can foresee all those circumstances and specify them in regulations.
That is a remarkable piece of confidence. The Department of Social Security increasingly reminds me of an 18th century enlightened despot. It is benevolent; it means well; but it has great confidence in its ability to do well according to its own standards of judgment. It does not very often see the need for those standards of judgment to be checked against an external point of reference. For example, exemption is provided in the regulations for mental illness, but we all know that many of those suffering from mental illness have not yet had it diagnosed and may be just as much handicapped as those who have had it diagnosed. There is provision for them to get help if it is needed, but those who most need help are very often those who least know that they need it.
I have not seen any provision in the regulations specifically for illiterates, although they might be covered under the provision that help is needed. I remember discussing in this Chamber a case involving an illiterate who had been summoned to attend the courts. The person who read his letters for him happened to be away for that week so he waited until he came back to get the letter read. When his reader did come back he found that it was too late and that he had already been disentitled to benefit. That is just the kind of thing that no department foresees. We may now foresee that particular case because it has happened before, but this regulation-based method of legislation is one which leads to the endless locking of stable doors after horses have been stolen. It does not lead to the recovery of the horses.
It has been argued by the department that claimants need to be under an incentive to get their supporting evidence in on time. But that argument can apply only to those who do not genuinely need the benefit. If you do genuinely need a means-tested benefit, you are actually in need; you need the money now. This is like an argument that people will not put in their claims for winning the lottery unless they have an incentive to do it. Camelot has thought of a lot of things but I do not think that it has yet thought of that one.
The necessity is very far from instantly apparent. Indeed, there are many people, especially people who may have just suffered a traumatic event, who do not get paper in on time simply because they cannot find it. When I think of the task of finding paper in my study I can think of the possibility of taking a month to find a document I need badly, even when I know perfectly well what it is I need and I know I have to look for it. I do not by any means believe that I am unique in that.
These are a bureaucratic series of provisions capable of causing gross hardship, imposed, I have no doubt, in the fullest good will but showing a confidence in the 968 department's judgment which is the kind of confidence to which I think none of us in this world is really entitled. I beg to move.
§ Lord Hardie
My Lords, this amendment to a large extent repeats the one put down by the noble Earl and the noble Lord, Lord Goodhart, at the Committee stage which was not pressed. The amendment has been redrafted, but the change does not overcome the Government's fundamental objection to it. Our objection is that it is unnecessary because the group which it aims to protect is already protected by existing legislation.
Subsection (1) seeks to place new statutory obligations on the Secretary of State to inform claimants of evidence requirements in such a way as will be prescribed in regulations. I am fully aware of the importance of ensuring that claimants understand what they are expected to provide when they make a claim. That is why we introduced the evidence or onus of proof regulations, to which I shall come later. However, we believe that the best way to achieve this is through agency communications and procedures, not through regulations.
Claim forms for benefits already request the required information and we will be looking to improve these forms further. In acknowledging that we will be looking to improve the forms, the department is not complacent. It recognises that improvements can always be made to any system. Regulations could remove the flexibility to experiment and to innovate in order to continue to improve the effectiveness of our communications.
I turn now to subsection (2) of the proposed new clause. The concerns of the noble Earl cover two issues relating to the date of claim; first, the relationship between the date of claim and the evidence or onus of proof requirements; and, secondly, the backdating of claims for benefit. These are separate issues. It may be helpful to your Lordships if I explain how the evidence regulations on backdating work to understand better why the amendment is unnecessary.
The evidence requirement regulations currently apply to income support and jobseeker's allowance. They apply only after a claim has been made. Those words are significant. Once the claimant has indicated an intention to claim, he or she has one month in which to provide the evidence and information required by the Secretary of State to satisfy evidence requirements. If this is done within that period then the date of the first contact is the date of the claim and the date from which benefit will be paid. The vast majority of people have no difficulty in complying with these regulations.
However, I acknowledge, as the noble Earl pointed out, that there will be people, often vulnerable groups, who for reasons beyond their control cannot provide the information or evidence required. These people are explicitly recognised by the exemption criteria written into the regulations. Perhaps I may pause to consider the examples used by the noble Earl. Although they are not specifically referred to in the exemption to the evidence requirements, they are the kind of cases that the department would look at sympathetically and would 969 probably exempt in any event. I am thinking of the example of the person who was illiterate and through not fault of his own was unable to understand that there was a time limit within which he had to make the application.
For people in the vulnerable categories who are covered by exemptions the date of the claim will also be the date of the first contact. In other words, under the current evidence requirements the regulations have been drafted so that no one should lose benefit. I hope your Lordships will be reassured to learn that this will not be changed under the new system.
The time limit for providing evidence to support a claim for income support or jobseeker's allowance should not be confused with the time limit for backdating a claim for benefit. The evidence regulations are concerned with events after the claim has been made. Backdating the date of claim is concerned with events before the claim is submitted. People usually claim income support or jobseeker's allowance immediately because, as the noble Earl observed, they have an immediate need for the money. However, benefit will continue to be backdated by up to three months if there are special reasons for delaying a claim. Those reasons would include illness, disability, domestic emergencies and incorrect information by the department. Another example used by the noble Earl at the Committee stage was bereavement. That would fall within the category of a domestic emergency. The department would look upon that favourably. Subsection (2) of the amendment would not improve on the provisions. For these reasons we cannot support it.
I have listened carefully to what has been said and I sympathise with the concerns expressed by the noble Earl. I fully appreciate that he and other noble Lords quite properly wish to protect vulnerable groups. I can assure the House that the Government already do so, will continue to do so and are committed to doing so. I hope that I have reassured the noble Earl that the amendment is unnecessary and I trust that he will feel able to withdraw it.
§ 6 p.m.
§ Earl Russell
My Lords, I thank the noble and learned Lord for what he said about the claimant who was illiterate and the reader who was away. Unfortunately, that is not what actually happened in that case: he did lose benefit. The noble and learned Lord has also illustrated the great value of the concession that he made earlier about lawyer-members of appeal panels. He has set out to discern the principle behind the regulations and attempted to apply that principle to the kind of cases that I have cited in just the sort of way for which legal skills are most valuable.
But behind that there still remains a very real area of disagreement. I did not suppose for a moment that I had overcome the Government's most fundamental objections. We have here a clash of cultures which is even more a constitutional matter than a social security matter. We are here arguing about two different methods of legislation. Legislation by detailed regulation involves confidence in the department's capacity to enumerate in advance all possible causes of hardship.
970 I am sure that the noble and learned Lord is already aware of the comments on that subject in the Renton Report which I have repeated many times and will not repeat again today. We have a culture clash here to which we shall return. I hope that over the years we shall have a little more meeting along the edges of it. I do not believe that we are getting any further tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Appeal to appeal tribunal]:
§ Lord Goodhart
moved Amendment No. 15:Page 7, line 41, at end insert—("() Regulations under subsection (6) above shall provide that—The noble Lord said: My Lords, I believe that this is an amendment of considerable importance. Since October 1996 the rule has been that appeals are dealt with on paper unless the appellant asks for an oral hearing. This amendment seeks to reverse that position and return to the situation as it was until October 1996—that is to say, the appellant will get an oral hearing unless he or she asks specifically for a paper appeal. At first sight one might think that there was some justification for the present rule, and indeed there is to some extent.
- (a) a person's appeal shall he determined at an oral hearing, unless he requests otherwise;
- (b) the panel member who constitutes the appeal tribunal or, as the case may be, is its chairman shall order that there be an oral hearing where he believes one to be desirable in the interests of justice, irrespective of the wishes of the person bringing the appeal.").
The noble and learned Lord, Lord Hardie, pointed out during the debate in Committee on this amendment that 30 per cent. of appellants failed to attend the oral hearing at the time when an oral hearing was automatic unless a paper hearing was asked for. As he rightly said, that involved a waste of time and money. Again, it can be said that it is not difficult to ask for an oral hearing if that is what the appellant wants. It was pointed out by the noble and learned Lord that the Government's literature properly explains the right to an oral hearing and refers to the greater success rate that is obtained as a result of such a hearing.
That would be fine were it not for the astonishing difference in the success rates of oral and paper appeals. In 1996 the success rate was 53 per cent. where the claimant appeared in person or was represented at the tribunal hearing. Where the appellant did not appear and was not represented, the success rate was 13 per cent. As regards incapacity benefit, where a personal appearance is particularly important, there was a 57 per cent. success rate for attended appeals and a 7 per cent. success rate for non-attended appeals. It may be that people with stronger cases are more likely to request oral hearings, but that cannot remotely account for the full difference in the success rates between attended and non-attended hearings.
I suggest that there are two other reasons at least for the difference in the success rates. The most important one is that claimants are unlikely to understand the regulations or be skilled in presenting their cases on paper. They need help in explaining their case and at an 971 oral hearing that help is obtained from the tribunal. If essential facts have been omitted from a written case they may be brought out by the tribunal. In a paper appeal that cannot be done because there is nobody there to answer questions that the tribunal might wish to ask. Another reason might be a feeling by the tribunal that if the appellant does not want an oral hearing he or she cannot have a serious case to make.
It stands to reason that if claimants have to ask for an oral hearing a good many of them will not do so. Tony Lynes, who is an expert in this field, has estimated that as a result of the 1996 changes to the procedure, some 10,000 people a year lose benefits to which they are entitled. The noble and learned Lord the Lord Advocate, in the debate at Committee stage, said that the Government do not have sufficient data to draw conclusions. Mr. Lynes has written to me to confirm that success rates for attended and unattended hearings since the change in procedure have remained roughly constant, but the proportion of hearings which are attended has fallen steadily. Mr. Lynes accepts that the DSS statistics on which its conclusions are based are not as complete as they should have been. But the problem of waiting for more statistics from the DSS is that the opportunity for action will have passed. It is unlikely that any initiative to increase the percentage of oral hearings will come in future from the DSS given that there will indeed be some increase in the time and expense of appeals if that change is made.
It may be that there will be no new legislation on appeal tribunals for some years to come. Indeed, I hope that there will not be because that will prove that the new system has succeeded. So this may well be the only opportunity we have for many years to go back to the system of making oral hearings a default procedure, which is a procedure which takes effect unless the appellant asks specifically that it should not. We surely know enough already to be satisfied that the October 1996 changes have worked an injustice and I believe that that should be reversed now. I beg to move.
§ Lord Higgins
My Lords, we have already discussed this matter at some length. The statistics are fairly impressive. Perhaps the Minister can confirm that the chance of success on appeal is three times as great if there is an oral hearing as opposed to the matter being dealt with on paper. That being so, we would need to consider further what attitude one should take to this matter.
I have more problems with the second part of the amendment which refers to there being an oral hearing where the panel member or the chairman,believes one to be desirable in the interests of justice, irrespective of the wishes of the person bringing the appeal".The noble Lord, Lord Goodhart, has just pointed out that about one-third of the people who are expected to appear at an oral hearing do not do so. As regards the second part of the amendment, I am not clear as to what happens if the chairman decides that there should be an oral hearing, but the appellant does not appear. Perhaps 972 that is a point on which the Minister can comment. We may give further consideration to the matter between now and Third Reading.
§ Lord Hardie
My Lords, this issue has been discussed a number of times during the passage of this Bill. I have listened carefully to the arguments of the noble Lord, Lord Goodhart, as to why he believes that this amendment is necessary. I would like to explain to the House why we have taken our position. Noble Lords will recall, as the noble Lord, Lord Goodhart, outlined, that there used to be automatic provision for an oral hearing. But as I said in Committee, officials found that about one-third of appellants failed to attend the hearing, which resulted in an inordinate waste of hearing time. That is expensive to set up and it also causes delays to others when arrangements are not used.
We were concerned about the amount of time people have to wait—it is even longer if hearings are set up to no purpose. As a result, a change was introduced under which an appellant had the right to an oral hearing, but an oral hearing was not automatically set up unless the appellant requested one.
The forms that are sent out are quite clear. The front page explains clearly that there is an advantage to the appellant in asking for an oral hearing. Indeed, there is a specific question asking, "Do you want a hearing?" and the applicant has to tick either the "yes" or the "no" box. The appellant should therefore be aware of the advantage of going to a hearing if he so chooses. The change that was introduced allowed the Independent Tribunal Service to organise hearings more quickly and effectively. We believe that it is a sensible system and we want to retain it.
We want people to get the benefits to which they are entitled, but we also believe people have a responsibility to make claims, to provide information, and to make appropriate representations to receive benefit.
This Bill does not remove the right to an oral hearing. The right remains. All appellants receive a letter asking them to confirm whether they want an oral hearing. The letter states:If I do not hear from you within 14 days of the date of this letter I will assume you wish the appeal to be decided on the papers".That is to cover the situation where an appellant chooses not to return the form.
A leaflet is sent out with the letter, which explains the difference between an oral hearing and an appeal decided on the papers. It is made very clear that all the appellant has to do if he or she wants an oral hearing is to request one—by ticking the box on the enclosed form, and sending it back in a pre-paid envelope. As my noble friend Lord Borrie indicated in Committee, the leaflet attached to the appeal form clearly points out that claimants who attend the hearing of their appeals usually do better than those who do not.
We are asking people to confirm that they do want a hearing. The noble Lord's amendment would require people to say that they do not want a hearing. The risk is that people will not make a decision until the day—and then not turn up, as in the past; and, as in the past, a proportion of hearings will be convened unnecessarily.
973 The noble Baroness, Lady Gardner, described in Committee her experience on industrial tribunals where the situation is very similar. She highlighted that claimants who realise their appeal has no chance of success often do not turn up for their hearing as they would be wasting their time, but these people may not opt out of an oral hearing. This means that oral hearings are arranged for people who do not want one and the whole process is delayed, to the disadvantage of those people who are entitled to benefit and to have their case dealt with as expeditiously as possible.
My noble and learned friend Lord Archer told us that he, too, had seen tribunals where the claimants simply do not turn up, leaving the tribunal waiting for customers. It is unfortunate that resources could be wasted in that way when there are thousands of people who are waiting for their appeal to be heard. There is no question that we should return to that position. Appellants can exercise their right to an oral hearing, but they must shoulder the responsibility for the simple process of letting the appeal service know that is what they want.
The noble Lord, Lord Goodhart, supported a similar amendment in Committee. In moving this amendment today, he suggested that following the introduction of paper hearings in 1996, the proportion of hearings attended has fallen from 62 per cent. to 44 per cent. and the success rate from 40 per cent. to just over 30 per cent. Those figures, however, relate to single year quarters. It is difficult to rely upon a single quarter as indicative of a general trend. However, I should also add that there are doubts about the validity of the published figures due to problems with the Independent Tribunal Service's computer system. A new computer system is being introduced. We are committed to undertaking an evaluation of the 1996 changes when robust data is available and will publish the results. We expect to be able to do so later this year.
I believe it is reasonable to expect people to think carefully about their appeal and to decide whether they want the oral hearing to which they have a right. If they make a positive choice, we believe they are more likely to turn up for the hearing. The fact is that all appellants have to make a decision about whether to turn up for an oral hearing. They should not leave it until the last minute.
The second part of the amendment would place on the face of the Bill a requirement for tribunals to order oral hearings irrespective of the applicant's wishes. This provision already exists under Regulation 22(1)C of the Social Security Adjudication Regulations. It is our intention to retain it, as we think it is a valuable tool for tribunal chairmen. For example, the tribunal may wish to examine the Secretary of State's representative or her expert witness. An oral hearing will be convened if the tribunal considers it necessary, but only after the claimant has been invited to attend. The claimant will also be given the reasons why it is thought that this may allow a better opportunity to examine the case. I do not, however, believe it is necessary to write this on the face of the Bill. With those assurances, I hope that the noble Lord will withdraw his amendment.
974 Before sitting down, perhaps I may answer the point raised by the noble Lord, Lord Higgins. The chances of success are greater if one attends a tribunal. That is explained to all applicants in clear terms. It is explained that it is in their interests to attend. Therefore, they can make an informed choice. I appreciate that some people have less ability to take in information than others but, as the noble Earl, Lord Russell, explained, such people often receive assistance from friends who can read or they can obtain help from citizens advice bureax which would, I am sure, direct them to having a hearing. I invite the noble Lord to withdraw his amendment.
§ 6.15 p.m.
§ Lord Goodhart
My Lords, the noble and learned Lord's arguments would be very convincing were it not for the enormous disparity in the success rates between oral and paper hearings. For that reason, I believe that every effort must be made to give priority to oral hearings and to encourage people to seek such hearings. I believe that the system that has been in operation since October 1996 has been a cause of genuine injustice in probably thousands of cases. For that reason, on this occasion I feel it necessary to take the opinion of the House.
§ 6.17 p.m.
§ On Question, Whether the said amendment (No. 15) shall be agreed to?
§ Their Lordships divided: Contents, 34; Not-Contents, 100.975
|Division No. 1|
|Addington, L.||Razzall, L.|
|Beaumont of Whitley, L.||Rodgers of Quarry Bank, L.|
|Calverley, L.||Russell, E. [Teller.]|
|Carlisle, E.||Sandberg, L.|
|Dacre of Glanton, L.||Steel of Aikwood, L.|
|Falkland, V.||Thomas of Gresford, L.|
|Geraint, L.||Thomas of Swynnerton, L.|
|Goodhart, L. [Teller.]||Thomas of Walliswood, B.|
|Hooson, L.||Thomson of Monifieth, L.|
|Ludford, B.||Tope, L.|
|McNally, L.||Tordoff, L.|
|Maddock, B.||Ullswater, V.|
|Mar and Kellie, E.||Waddington, L.|
|Meston, L.||Wallace of Saltaire, L.|
|Methuen, L.||Williams of Crosby. B.|
|Newby, L.||Winchilsea and Nottingham, E.|
|Perry of Walton, L.||Wynford, L.|
|Acton, L.||Clinton-Davis, L.|
|Ampthill, L.||Cocks of Hartcliffe, L.|
|Archer of Sandwell, L.||Coleraine, L.|
|Ashley of Stoke, L.||Craig of Radley, L.|
|Barnett, L.||Currie of Marylebone, L.|
|Bassam of Brighton, L.||David, B.|
|Berkeley, L.||Davies of Coity, L.|
|Blease, L.||Davies of Oldham, L.|
|Borrie, L.||Desai, L.|
|Brooke of Alverthorpe, L.||Dixon, L.|
|Burlison, L.||Dormand of Easington, L.|
|Carmichael of Kelvingrove, L.||Dubs, L.|
|Carter, L.||Erroll, E.|
|Evans of Parkside, L.||Merlyn-Rees, L.|
|Ewing of Kirkford, L.||Milner of Leeds, L.|
|Falconer of Thoroton, L.||Mishcon, L.|
|Farrington of Ribbleton, B.||Molloy, L.|
|Fitt, L.||Monkswell, L.|
|Gallacher, L.||Montague of Oxford, L.|
|Gilbert, L.||Morris of Manchester, L.|
|Gladwin of Clee, L.||Murray of Epping Forest, L.|
|Gordon of Strathblane, L.||Nicol, B.|
|Graham of Edmonton, L.||Orme, L.|
|Hanworth, V.||Palmer, L.|
|Hardie, L.||Pitkeathley, B.|
|Hardy of Wath, L.||Prys-Davies, L.|
|Haskel, L. [Teller.]||Puttnam, L.|
|Hattersley, L.||Ramsay of Cartvale, B.|
|Hayman, B.||Randall of St. Budeaux, L.|
|Hilton of Eggardon, B.||Rendell of Babergh, B.|
|Hogg of Cumbernauld, L.||Renwick of Clifton, L.|
|Hollis of Heigham, B.||Richard, L. [Lord Privy Seal]|
|Hoyle, L.||Rogers of Riverside, L.|
|Hughes, L.||Sefton of Garston, L|
|Hughes of Woodside, L.||Sewel, L.|
|Hunt of Kings Heath, L.||Simon, V.|
|Irvine of Lairg, L. [Lord Chancellor.]||Simon of Highbury, L.|
|Stoddart of Swindon, L.|
|Islwyn, L.||Stone of Blackheath, L.|
|Janner of Braunstone, L.||Strabolgi, L.|
|Jay of Paddington, B.||Symons of Vernham Dean, B.|
|Jeger, B.||Taylor of Blackburn, L.|
|Jenkins of Putney, L.||Taylor of Gryfe, L.|
|Kennedy of The Shaws, B.||Thomas of Macclesfield, L.|
|Lockwood, B.||Turner of Camden, B.|
|Lofthouse of Pontefract, L.||Varley, L.|
|Lovell-Davis, L.||Wedderburn of Charlton, L.|
|McIntosh of Haringey, L. [Teller.]||Whitty, L.|
|Williams of Mostyn, L.|
|Mallalieu, B.||Winston, L.|
|Mason of Barnsley, L.||Young of Old Scone, B.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 6.26 p.m.
§ Lord Goodhart
moved Amendment No. 16:Page 7, line 42, leave out ("may") and insert ("shall").The noble Lord said: My Lords, I beg to move Amendment No. 16. The purpose of Amendments Nos. 16 and 17 is to retain the three-month period for appeal and give greater discretion to allow appeals out of time. As the noble and learned Lord, Lord Hardie, confirmed at Committee stage, the Government intend to impose by regulations a one-month limit for appeals to appeal tribunals. It is true, as the Government have said, that most people if they intend to appeal do so within one month, but those who do not are likely to be the most vulnerable: the disabled, the mentally ill, the very old, the immigrant and the illiterate. They are the people who need help. While there are organisations which will give claimants help, they may not know where to go. They may take some time to find out where to go to get help. The organisations which provide help may take some time to organise a visit or meeting to enable claimants to find out what the situation is and to give them advice as to whether an appeal should be brought and how to bring it.
At Committee stage I read comments by the Richmond citizens advice bureau. I do not propose to repeat them at this stage. Those passages can be found at col. 416 of the Official Report of 2nd April. Those 976 comments are made by people who have great experience of the system and I believe that they make a very strong case for a longer and more flexible time in which to appeal. The noble and learned Lord, Lord Hardie, said that the appeal period de facto would be two months because time would run only from the end of the one-month dispute period. I am not clear what is meant by "dispute period", but I understand from what the noble and learned Lord has said that that period arises only if some action is taken by a claimant within one month of the decision to query that decision. Effectively, we are back where we started; that is, people who do not know what to do will not initiate the dispute provision.
The problem occasioned by the reduction in time for an appeal would matter less if there were greater flexibility in allowing leave to appeal out of time. The present position is that under regulations made in February 1996 time limits can be extended only if an appeal has reasonable prospects of success and it is in the interests of justice to grant leave. The reference to "interests of justice" has been interpreted very narrowly. Under the existing practice of tribunals the power to extend the time limit is considered to apply only if there are special reasons which are wholly exceptional. In the view of the citizens advice bureau, in practice it is virtually impossible under the present system to obtain leave to appeal out of time.
The noble and learned Lord, Lord Hardie, said that new regulations for setting time limits would be discussed with the interested parties. However, in replying to this amendment at the Committee stage, he gave no undertaking to relax the present criteria for leave to appeal out of time. If the regulations provided that a chairman of the tribunal or another legally qualified member of the panel could give leave to appeal out of time whenever the complainant had a reasonable excuse for failing to comply with the time limit, that would to a very great extent draw the sting of the reduction in the standard time for making an appeal.
Is the noble and learned Lord the Lord Advocate willing to accept that the corollary of shortening the time is that the present criteria for appealing out of time should be relaxed and leave to appeal should be capable of being given whenever there is a reasonable excuse for failing to comply with the time limit?
§ 6.30 p.m.
§ Lord Borrie
My Lords, at the Committee stage I spoke generally in favour of the amendment, partly because the Government had already indicated that most people made their application within a month. It was not logical to say that just because most people made their application within a month that should be a rule, an outside limit, and that anybody who applied outside one month would not be entitled to make a claim.
The argument goes completely the other way. If there are only a few people who apply beyond the month, why are the Government being so rigid in saying that there must be a one-month time limit? The Government must bear in mind the kind of points made by the noble 977 Lord, Lord Goodhart, both today and more extensively at the Committee stage and the quotations of the Richmond CAB and so on.
As to the point that the kind of people who are likely to apply for social security benefits need advice and do not know where to go, I suggest that they may go to the citizens' advice bureau or some other adviser. They in turn then need time to consider whether the claim is justified, and before you know where you are the four weeks are up. The Government suggest that only in a minority of cases more than a month expires before the claim is made.
In response in Committee, my noble and learned friend the Lord Advocate mentioned the dispute period, which would add one month. I would be grateful if the noble and learned Lord could explain that further. As I understand it, if in the example I mentioned the CAB—which is a lot more knowledgeable than individual claimants about these things—simply put in a claim without any reasoning it would have another three or four weeks in which to substantiate the claim. The claim would then be allowable.
If that is so, the Government have modified what some thought was the rather rigid position of having only one month within which to make a claim. I am not sure that that entirely solves the problem because, as I asked a moment ago, if only a relatively few number of claimants claim outside the one month period, why do the Government stand firm on this being an outside limit with no possibility of the claim being made at a later date?
§ Lord Hardie
My Lords, perhaps I may first respond to the points raised in relation to Amendment No. 16 where it is proposed to change the word "may" to "shall" in Clause 12(7). I can assure the House that we will make regulations under the power in Clause 12(7) to prescribe the time and manner in which appeals may be brought. As I indicated in Committee, in this context "may" and "shall" have the same meaning. It is drafting convention that leads us to prefer "may".
The real issue is Amendment No. 17, which seeks to ensure that the time limit for appealing is not less than three months. As I stated in Committee, the Government intend to make regulations setting a time limit of one month in which an appeal can be made. We have previously stressed our view that rights go hand in hand with responsibilities. A person who is dissatisfied with the decision has the right to appeal, but the responsibility to do so within the time limit rests with the appellant. We believe that one month is a reasonable period and most appellants make their appeal within one month.
As to my noble friend Lord Borrie's point, if people know that they have a month within which to appeal they will aim to achieve that target. The one-month period must also be seen in the context of the dispute period. That point was raised by the noble Lord, Lord Goodhart. The effect of the dispute period and the appeal period is that 978 effectively one has two months within which to lodge an appeal. The decision will be issued and there will be one month in which to dispute it.
§ Lord Goodhart
My Lords, is this provision in the Bill or does it arise somewhere outside the Bill? I have looked for it but am unable to find anything of that kind in the Bill.
§ Lord Hardie
My Lords, I will try to have it confirmed. My understanding is that it is in the regulations. That is just being confirmed.
There will be in the regulations a provision for a month's dispute period. Within that one-month period, if there is a dispute and if the department considers that the decision was wrong, the department will correct the decision, confirm it and intimate that to the claimant. If the department considers that the decision is correct, that again will be confirmed in writing. If the claimant is unhappy with the decision at the end of the dispute period he has a further month in which to appeal.
As to the proposal in the amendment that the chairman should have a discretion to extend the appeal period, regulations will cover the question of late appeals and make provision for them.
Returning to the question of the timescale, the effect of the dispute period is that an aggrieved claimant would have two months within which to lodge an appeal. This would have the effect of ensuring that appeals were lodged reasonably soon after the decision complained of and, it is to be hoped, tribunals would be seized of the decision sooner rather than later. The longer one allows for an appeal to be lodged the more likely it is that people will wait until the last minute before doing so. It is human nature to delay until the last minute, at least for some people.
§ Lord Higgins
My Lords, I am still trying to adjust to the rules of order in your Lordships' House. I apologise if I am not correct in intervening at this point.
I have had considerable difficulty in understanding the point which the noble and learned Lord the Lord Advocate made earlier. I am not clear whether he was saying that the existing regulations provide for this two-month period or whether it is the intention that future regulations would cover the two-month period. I am not at all clear how this two-month period comes about.
§ Lord Hardie
My Lords, the two-month period is a combination of two separate months. The first month is a dispute period within which a claimant may raise concerns about the decision with the department. At the end of that month a letter will be issued confirming the decision or stating the final decision. So the claimant will receive a letter indicating what the decision is. If the claimant is unhappy with it he goes back to the department. If the department accepts there is a mistake it will issue a corrected decision. If it does not accept there is a mistake it will issue a letter confirming the original decision.
979 At the end of that period of a month, the appeal period will commence. There is a period of one month after that within which one has to lodge an appeal. The regulations to which I have referred are future regulations which will be made under Clause 9 of the Bill.
The amendment which we are considering would also require the regulations to give discretion for a legally qualified chairman to accept a late appeal where he considers that the claimant has reasonable excuse for not bringing the appeal within the time limit. There are at present late appeal provisions. They were tightened in February 1996. The changes that were introduced at that time were to help chairmen decide special reasons under which late appeals could be admitted. That was necessary because over a number of years the application of special reasons had become diluted, with some chairmen granting applications where there were no special reasons, and there was no consistency across the country. I am able to say that the department is discussing with the Independent Tribunal Service and welfare rights organisations the new provisions for regulations on late appeals. They will be brought forward in conjunction with and after discussion with these parties, who obviously have an interest, both from the point of the view of the tribunal service and from the point of view of claimants.
We are anxious to ensure that we get the provision for late appeals right. As I have said, we will discuss these with interested parties, including claimant representatives, through the ad hoc group that we have set up to consider draft regulations and new procedures. In doing so, we will have regard to the sort of instances described by the noble Earl, Lord Russell, at Committee where some of the most disadvantaged people are unable to make their appeal within the time limits.
We will also give consideration to the suggestion to include a ground for unforeseen circumstances, but we see no reason why a general time limit of one month—in practice, with the dispute period, two months—which is manageable for the vast majority of appellants, should be extended. We feel that that would have the effect of delaying appeals unnecessarily.
I should like to repeat a point that I made previously concerning the requirement for legally qualified panel members to make decisions on late appeals. We consider that it is unnecessary for a legally qualified panel member to make that decision of whether to allow a late appeal in every case. Such a restriction would be an obstacle to our efforts to establish a modern, efficient service and a service which makes optimum use of legal expertise. There will certainly be occasions where decisions on straightforward cases can be taken by a clerk. They will be rare, but, for example, current regulations specify an absolute time limit of six years for making a late appeal but clerks are not allowed to dispose of those appeals. In no way could an appeal be allowed after that period. That is the sort of issue which could competently be dealt with by a clerk and does not require a legally qualified member.
980 With the explanation and assurances that I have given, I hope that the noble Lord will feel able to withdraw the amendment.
§ 6.45 p.m.
§ Earl Russell
My Lords, before the noble and learned Lord sits down, he said, if I have him right, that "may" means the same as "shall". When he said that, was he speaking with the case of Pepper v. Hart in mind and, if so, how far does the principle extend?
§ Lord Hardie
My Lords, I was not speaking with the case of Pepper v. Hart in mind. I think that it is a principle of draftsmanship with which the noble Lord, Lord Goodhart, will be familiar.
§ Lord Goodhart
My Lords, in view of the fact that discussions are continuing with voluntary organisations concerned with these matters, and in the hope that the Government will be prepared to introduce a greater degree of flexibility in regulations than exists at the moment, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
§ [Amendment No. 17 not moved.]
§ Schedule 2 [Decisions against which no appeal lies]:
§ [Amendment No. 18 not moved.]
§ Lord Hardie
moved Amendment No. 19:Page 59, line 34, at end insert—("Reduction in accordance with reduced benefit direction(" . A decision to reduce the amount of a person's benefit in accordance with a reduced benefit direction (within the meaning of section 46 of the Child Support Act).").The noble and learned Lord said: My Lords, with your Lordships' permission I shall speak to the group of amendments comprising Amendments Nos. 19, 81, 83, 76, 79, 80, 82, 84, 87, 88, 78, 104, 85 and 86. They all amend provisions relating to child support appeals to ensure that parents with child support assessments can have related issues considered easily and effectively.
The procedure which a tribunal follows in dealing with a departure from a child support assessment differs in detail from other appeals because decisions are largely discretionary. Amendments Nos. 81 and 83 insert a provision maintaining the existing rules which govern how a tribunal approaches these issues.
In addition, Amendments Nos. 19, 81 and 83 clarify the appeal rights against a reduced benefit direction. These amendments ensure that claimants are able to appeal the decision to reduce benefit based on its foundation in child support legislation.
Turning to the second group of amendments, Amendments Nos. 76, 79, 80, 82, 84, 87 and 88, these provide for appeals relating to the requirement that certain groups of non-resident father pay a contribution to child support maintenance by deduction from their benefit. These amendments correct an omission from the initial draft of the Bill.
I now turn to Amendments Nos. 78 and 104. These amendments provide a delegated power which will enable us to extend the appeal rights available against 981 child support decisions. They allow us to specify additional appeal rights as child support policy and operations develop.
Finally, Amendments Nos. 85 and 86 correct a minor drafting error in the provisions of the new Schedule 4C introduced into the 1991 Child Support Act.
I commend these amendments to the House. I beg to move.
On Question, amendment agreed to.
Clause 13 [Redetermination etc. of appeals by tribunal]:
§ Lord Goodhart
moved Amendment No. 20:Page 8, One 10, leave out ("shall") and insert ("may").The noble Lord said: My Lords, Clause 14(10) provides that no appeal shall lie from a tribunal to a social security commissioner unless leave to appeal is given by the chairman of the tribunal which decided the case, if available, or of a social security commissioner. Clause 13, which is somewhat back to front—one might have thought that Clause 13 would follow rather than precede Clause 14 but that is a matter for the parliamentary draftsmen—provides that the person to whom the application for leave is made must, in certain circumstances, instead of giving leave or refusing leave, set aside the decision and refer the case back for redetermination by the tribunal. Those circumstances are two: first, that the person hearing the application for leave thinks that the decision of the tribunal was wrong in law; or secondly, that both the parties to the appeal think that the decision was wrong in law, whether or not the person to whom the application for leave is made agrees.
Originally, in Committee, I took the view that what is now Clause 13 was in fact wholly misguided. The noble and learned Lord, Lord Hardie, persuaded me that that was not so and that there are cases—for example, where it becomes obvious that a mistake in law has been made by the tribunal, perhaps because a regulation has been overlooked—in which it is appropriate, instead of referring the matter up the tree to the social security commissioner, to pass it straight back to another hearing before the tribunal. Therefore, I accept that there should be a power to order a redetermination, either by the same or another tribunal as appropriate, on an application for leave to appeal to avoid the need to go back up the tree to the commissioner and then be sent down again for redetermination of the case.
But the person to whom the application for leave to appeal is made should have a power to take the short cut of sending it back and never be under a duty to do so, because a mandatory obligation to order a redetermination produces some absurd results.
Let us take the decision of a three person tribunal: there is a split decision; the tribunal has been unable to agree. That particular appeal has raised an important point of law. The chairman believes that it is therefore suitable that that important point of law should go to the commissioner. If the chairman was in the majority, he can give leave to appeal. But if the chairman was the odd one out, then he obviously thinks that the decision of his colleagues was wrong. By definition he does so.
982 Therefore, he is bound by Clause 13(2) to refer back the case for redetermination. That is a completely ridiculous result.
Under subsection (3) as it is to be amended, the case would be referred back if both the parties believe that it was wrongly decided. But let us assume a case in which the claimant believes that the tribunal was wrong in law because it gave him too little and the Secretary of State believes that the tribunal was wrong in law because it gave too much. Therefore, the case would simply be in limbo and it could not reach the commissioner even though it was entirely suitable to do so.
This is not by any means the most important amendment to come before your Lordships' House and there is no point of principle here. But there is what seems to me to be an obvious drafting misconception which is producing potentially some very odd results. Therefore, I ask the noble and learned Lord the Lord Advocate to accept the amendments or, alternatively, to refer back Clause 13 for redetermination. I beg to move.
§ Lord Higgins
My Lords, I am surrounded by lawyers, but there seems to be a degree of unanimity about this. I listened with great care to the noble Lord, Lord Goodhart, and, subject to being persuaded the other way by the Minister, the noble Lord, Lord Goodhart, seems to have a good point.
In an earlier discussion on a previous amendment, we were told that there was no difference between "may" and "shall" in relation to drafting. Now we all seem to be agreed that we should change "shall" to "may". I am not quite clear what is the relationship between those two issues.
§ Lord Hardie
My Lords, in supporting Amendment No. 20, I should like also to speak to Amendments Nos. 21 and 22. Our previous debates on this matter have resulted in our decision to improve the drafting of the clause through Amendments Nos. 20 and 21. In fact, when the Government amendment was tabled, it was in identical terms to that tabled by the noble Lord, Lord Goodhart. Hence, the name of my noble friend Lady Hollis has been added to that amendment. However, we can support Amendment No. 22 and it may be helpful if I explain the Government's thinking.
Where leave to appeal against a decision of a tribunal is sought, Clause 13(2) requires that, if the chairman or other person considering the application agrees that the tribunal erred in law, he will set aside the decision. The case may then be referred for re-hearing by a tribunal. The intention is to prevent cases being passed to the commissioners unnecessarily.
Where the chairman does not consider that the tribunal erred in law, he may grant leave to appeal to the commissioner. If the chairman is not available, regulations will provide for another panel member to consider the application.
Amendment No. 20 will give the chairman the power to remit a case to a tribunal or grant leave to appeal to the commissioners instead of, as currently drafted, impose a duty on them to remit the case to a tribunal 983 where they considered there had been an error in law. That introduces an element of discretion and that is the difference between "may" and "shall" on this occasion.
During debate in Committee, the noble Lord, Lord Goodhart, raised the question of a chairman, outvoted at the tribunal, and he raised that point today. As drafted, the subsection could require him to consider the application for the decision to be set aside. That might place him in a difficult position.
I promised to give the matter further consideration and am now pleased to support Amendment No. 20. Government Amendment No. 21 is a simple tidying amendment.
I turn now to Amendment No. 22. Currently, even if all the parties to an appeal agree that a tribunal decision is wrong in law, the appeal must proceed to a commissioner. Of course I agree that there may be different reasons for thinking that something is wrong in law, as the noble Lord, Lord Goodhart, has indicated. But if everyone is agreed, for different reasons, that it is wrong in law, on any view, the decision is wrong. There are very few exceptions to the rule which requires that a decision wrong in law must proceed to a commissioner.
The effect of that is that commissioners have to deal with many appeals which a tribunal could resolve more easily and quickly. Many of those appeals relate simply to procedural errors; for example, where a tribunal has failed adequately to record facts or give adequate reasons for a decision. From my experience as a chairman of a tribunal, I am aware that many of the commissioners' decisions relate to the fact that a tribunal has failed to give adequate reasons for a decision. If parties were agreed that there were not adequate reasons, it seems inappropriate to burden the commissioners with that.
Clause 13(3) requires that where the principal parties to the appeal agree that the tribunal's decision was wrong in law, the tribunal chairman must set aside the decision and refer the case to a different appeal tribunal for determination. That will have the effect to which I referred that commissioners will not be burdened except in cases which concern substantive points of law. That is a more sensible use of the expertise of commissioners.
The effect of Amendment No. 22 would be that even in cases where the appellant and the Secretary of State agree that the decision was wrong in law, chairmen could refuse to refer the case for redetermination. Such discretion is not appropriate in those cases. If the principal parties to the case agree that the decision was wrong in law, there is little value in passing on the case to the commissioner. Appellants could be denied speedy resolution of their appeals and backlogs and long delays at the commissioner stage would continue.
I hope that my explanation has clarified for the noble Lord, Lord Goodhart, why the Government consider Clause 13(3) as drafted offers benefits both to claimants and to the commissioners and that he will, therefore, 984 not move Amendment No. 22. As I indicated, I support Amendment No. 20 and will move Amendment No. 21 in due course.
§ 7 p.m.
§ Lord Goodhart
My Lords, I greatly welcome the fact that the Government have accepted Amendment No. 20. As regards Amendment No. 22, I must say that I still believe that the Government are wrong. It is well known in the ordinary courts to have situations where both parties think that the judge has got part of the decision wrong and where the conclusion is one which satisfies neither party. I believe that that could well occur from time to time—although I do not suppose that it will be at all frequent—in the appeal tribunals here. However, I am quite happy to accept half a loaf rather than no bread. In the circumstances, it is not my intention to move Amendment No. 22.
On Question, amendment agreed to.
§ Lord Hardie
moved Amendment No. 21:Page 8, leave out lines 13 to 16 and insert ("each of the principal parties to the case expresses the view that the decision was erroneous in point of law,").On Question, amendment agreed to.
§ [Amendment No. 22 not moved.]
§ Clause 14 [Appeal from tribunal to Commissioner]:
§ Lord Hardie
moved Amendment No. 23:Page 10, line 2, leave out ("The Lord Chancellor may by regulations') and insert ("Regulations may").The noble and learned Lord said: My Lords, in speaking to this Amendment I shall, with the leave of the House, speak also to Amendments Nos. 24, 25, 64, 65 and 66: The amendments are designed to ensure that the Lord Chancellor retains the necessary regulation-making powers in respect of proceedings before commissioners. Section 189(2) of the Social Security Administration Act 1992 provides the Lord Chancellor with the power to make procedural regulations with respect to proceedings before commissioners. Section 189(10) goes on to state that the Lord Chancellor must consult the Lord Advocate before making regulations under the administration Act. Both subsections are repealed by the Bill.
Amendment Nos. 65 will re-enact the provisions to ensure that, as now, only the Lord Chancellor will be able to make regulations in respect of proceedings before commissioners. The regulations in respect of proceedings may relate to the determination of any matter by commissioners, or leave to appeal to, or from, the commissioners. Where the Lord Chancellor proposes to make such regulations he shall consult the Lord Advocate. In the light of that amendment, references to the Lord Chancellor's regulation-making powers in Clauses 14 and 15 are no longer necessary. As a result, Amendments Nos. 23, 24, 25 and 64 remove references to the Lord Chancellor in Clauses 14(11), 15(6) and consequently Clause 77(1).
Amendment No. 66 simply clarifies that the definition of a commissioner in Clause 77 has the same meaning as in Chapter 11 of Part I of the 985 Bill, as a reference to "Commissioners" is made in Amendment No. 65. The amendments clarify the Lord Chancellor's regulation-making powers in respect of proceedings before commissioners. I trust that your Lordships will agree to them. I beg to move.
§ Baroness Anelay of St. Johns
My Lords, I simply rise to ask a question of the noble and learned Lord. Indeed, far be it from me to object to anything which I suppose strikes out reference to the Lord Chancellor in such matters. However, be that as it may, reference is made in Amendment No. 65 to consultation with the Lord Advocate. In Committee, I recall that we removed Clause 7 with regard to the Lord Advocate's powers. As noble Lords will recall, that was as a direct result of the procedure that will be required upon the introduction of devolution.
The question that I have for the noble and learned Lord is: does he foresee that there will be any further amendments put forward on Third Reading with regard to the Lord Advocate's powers, or absence of them? It appears that we are having a considerable number of government amendments placed before us in an attempt to improve the Bill—amendments which are of their own, shall we say, promulgation or gestation, rather than being prompted by either of the Opposition parties. Since the Bill started its passage through another place last July, there have been several months in which to consider the administrative side of such matters. I am somewhat concerned that there appears to be quite a large number of amendments that might, perhaps, have been thought through earlier. Therefore, can the noble and learned Lord tell the House whether there will be other consequential amendments on Third Reading with regard to devolution matters.
§ Lord Hardie
My Lords, this is not a matter which is consequential upon devolution. I certainly do not anticipate any further alteration in the powers of the Lord Advocate during the course of the proceedings on this Bill.
On Question, amendment agreed to.
§ Lord Hardie
moved Amendment No. 24:Page 10, leave out lines 5 to 7.On Question, amendment agreed to.
Clause 15 [Appeal from Commissioner on point of law]:
§ Lord Hardie
moved Amendment No. 25:Page 11, line 5, leave out subsection (6).On Question, amendment agreed to.
Schedule 5 [Regulations as to procedure: provision which may be made]:
§ Lord Hardie
moved Amendment No. 26:Page 64, line 9, at end insert—(" . Provision with respect to the procedure to be followed on appeals to and in other proceedings before appeal tribunals.").On Question, amendment agreed to.
986 Clause 17 [Finality of decisions]:
§ Lord Hardie
moved Amendment No. 27:Page 12, line 27, leave out from ("to") to end of line 28 and insert ("such a decision, or on which such a decision is based, shall be conclusive for the purposes of—The noble and learned Lord said: My Lords, in moving Amendment No. 27 I shall, with the leave of the House, speak also to Amendments Nos. 74 and 77. In Committee we had the opportunity to debate the provisions in the Bill which make decisions final, and which allow for regulations to be made for findings of fact contributing to such decisions to be made conclusive for the purposes of further decisions. I explained that the purpose of these provisions was to allow, by regulations, for findings contributing to decisions to be made once only. Findings or determinations made in relation to one benefit or business area could be made to apply across the whole system, without the need for the matter to be re-investigated. I subsequently wrote to noble Lords giving a fuller explanation of the policy underlying the provisions with more details of how we expect them to work in practice. In fact, the letter emanated from the department in my name because I was absent at the time in question.
These technical amendments ensure that subsection (2) of each of the finality provisions for benefits, child support and vaccine damage payments, mesh together properly. They do not change the policy as set out in earlier debates and subsequent correspondence.
As currently drafted, the Bill may only allow regulations to provide for findings contributing to decisions on benefits, child support and vaccine damage payments to be conclusive for the purpose of further decisions in those particular benefits or business areas. Our intention is that we should be able to make findings contributing to any decision covered by the Bill conclusive for the purpose of any other decision covered by the Bill. The amendments achieve this by ensuring that each of the provisions enabling sub-issues to be conclusive cross-refers to the others.
It is our aim for the future development of the welfare system to find ways for information to be collected from claimants once only, and then used as appropriate across all areas of the department's business to reduce the burden on claimants and agencies alike. These amendments ensure that there is maximum flexibility for findings to be made conclusive in regulations across the boundaries of the Bill, the Child Support Act and the Vaccine Damage Payments Act. I commend them to the House. I beg to move.
My Lords, first, may I say that I was grateful to receive a letter sent on behalf of the noble Baroness, Lady Hollis, dated 16th April on this question of finality of decisions. It is right that we should aim at finality of decisions, but there are circumstances—I should have thought—in which further facts arise 987 which were not available at the time the decision was made. The decision might have been made differently if those facts had been available. It seems to me that there should be some provision for exception to finality when these further circumstances appear. I realise that it is not an easy matter. I realise that it is a matter that would not arise very often, but in order that justice should be done on those rare occasions I think we should have some provision which, so to speak, makes an exception to finality. I should be glad to go on talking a little while in order to enable the noble and learned Lord to receive the advice which no doubt he wishes to have, but perhaps by now he is in a position to reply.
§ Lord Hardie
My Lords, I am grateful to the noble Lord for giving me time to receive the necessary information. All new information will be taken into account and any decision can be reviewed at any time where there is a change of circumstance. In a situation where new facts apply the claimant ought to make that new information available to the department and the decision will be reviewed in the light of those new facts. Those new facts would then become the final facts for the purpose of benefits.
My Lords, I thank the noble and learned Lord for that explanation, which is obviously a satisfactory one.
On Question, amendment agreed to.
Clause 18 [Matters arising as respects decisions]:
§ [Amendment No. 28 not moved.]
§ Clause 25 [Decisions involving issues that arise on appeal in other cases]:
§ 7.15 p.m.
§ Baroness Anelay of St. Johns
moved Amendment No. 29:Page 15, line 21, at beginning insert ("Subject to subsection (2A) below,").The noble Baroness said: My Lords, in moving Amendment No. 29 I wish to speak also to Amendments Nos. 30 and 31. Clause 25 deals with the power to stay a decision pending another decision in a lead or test case. These amendments would restrict that power. Amendment No. 30 seeks to delete the words "it possible". If those words were deleted, Clause 25(2) would state,In a case relating to a relevant benefit, the Secretary of State need not make the decision while the appeal is pending if he considers that the result of the appeal will be such that, if it were already determined, there would be no entitlement to benefit".If the Secretary of State has only to consider it possible that the test case is relevant, this gives her the licence to withhold decisions in a wide range of cases. The proposed amendment does not require the Secretary of State to be certain that the test case is relevant, but it places a greater burden of certainty on her than is the case at present.
Where a decision is withheld under Clause 25, the claimant could be left without benefit for a considerable period of time while the test case is decided. In view of 988 that, I believe that the exercise of these powers should be restricted to those cases where the Secretary of State is of a firm view that the test case is relevant.
Amendment No. 31 requires the Secretary of State to give the claimant an opportunity to make representations as to why a decision should not be withheld in his or her case. The reason for this is that there is no right of appeal against the exercise of the powers under Clause 25. Before 1996 the Secretary of State used the power to suspend benefit in similar circumstances. In theory, it should have been possible to get the Secretary of State to lift a suspension either on the grounds that the case was not a look-alike or because the claimant was experiencing hardship. In practice, however, I am told by the Child Poverty Action Group that the experience of advisers was that once a decision to suspend was made it was difficult to get it lifted. If the Secretary of State is required to consider representations before she makes a decision, I believe that she is more likely to consider them with an open mind. I beg to move.
§ Earl Russell
My Lords, this is a sensible amendment. It is a little milder than mine, which is to come next. It might perhaps therefore be rather more acceptable as a compromise. The trouble with the Secretary of State's power here is that she at least risks the appearance of acting as judge and party in her own cause, being herself a party to a number of the cases which are being disputed. It is a good idea that there should be some machinery which causes the Secretary of State to pause before making such a declaration. The noble Baroness may perhaps have found it. I shall listen to the Minister's response with a good deal of interest.
§ Lord Hardie
My Lords, this group of amendments seeks to alter the provisions in subsection (2) of Clause 25. Amendments Nos. 29 and 31 would make subsection (2) subject to a new subsection (2A). This would require the Secretary of State to provide a 14 day period for a claimant to make representations before exercising the provisions of subsection (2). Amendment No. 30 narrows the provision in subsection (2).
We have previously discussed the operation of Clause 25 and I shall not repeat all the arguments we rehearsed in Committee. But I should like to explain to the House why we have taken the position set out in the Bill.
In Clause 25 as drafted, if the Secretary of State considers it possible that the result of the appeal in a lead case will be such that if it were already determined there would be no entitlement to benefit in a look-alike case, she need not make a decision on that case until the appeal in the lead case has been decided. Amendment No. 30 seeks to remove the qualifying words "it possible". Presumably, the intention is to require a greater degree of certainty on the part of the Secretary of State that the case is indeed a "look-alike". But I am not convinced that removing these words will achieve this. Nor do I consider that it would be realistic to expect an absolute certainty that an appeal will be decided in a particular way.
989 If there is an appeal pending in a lead case in which the Secretary of State is an interested party, she will have either made or joined in that appeal on the basis of legal advice as to the proper interpretation of the issue of law in question. She will not have acted on a whim. She therefore considers her interpretation—that there would be no entitlement to benefit—to be correct and that it should be upheld by a court. However, as a matter of common sense, this cannot be held to be an absolute certainty.
Amendments Nos. 29 and 31 would prevent the Secretary of State from exercising her power to delay making a decision until the person concerned has had 14 days in which to make written representations about why the power should not be exercised. But as the Bill stands, this would not have any material effect. If the Secretary of State were required to make a decision immediately in a look-alike case, she would make an award and then suspend payment of benefit, until the lead case was resolved. Following determination of the appeal, she might, in some cases, then be required to revise this decision. The amendment would introduce an additional administrative step into all cases which are stayed in this way, even where there is no disagreement that an individual case is a "look-alike". Any claimant who considers his or her case is not a genuine "look-alike" will be advised to make contact with the relevant office of the Benefits Agency so that the case can be reconsidered.
I hope that with this explanation the noble Baroness, Lady Anelay, will feel able to withdraw these amendments.
§ Baroness Anelay of St. Johns
My Lords, I am grateful to the noble and learned Lord the Lord Advocate for that explanation. I shall read carefully his words in Hansard. His closing remarks did much to reassure me with regard to Amendment No. 31 to which I have spoken. As I have remarked on previous occasions, I have no intention of clogging up the appeals process unnecessarily where that is of no material advantage to the appellant. I shall look with care at his words with regard to Amendment No. 29, and in particular Amendment No. 30. However, at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ [Amendments Nos. 30 and 31 not moved.]
§ Clause 26 [Appeals involving issues that arise on appeal in other cases]:
§ The Deputy Speaker (Lord Lyell)
My Lords, before I call Amendment No. 32 I must inform the House that if Amendment No. 32 is accepted I shall not be able to call Amendments Nos. 33 and 34.
Earl Russell moved Amendment No. 32
Page 16, line 13, leave out subsections (2) and (3).The noble Earl said: My Lords, this is a more far-reaching amendment. It deals with provisions in subsections (2) and (3) of Clause 26 which allow the Secretary of State, if she considers it possible that the result of an appeal would affect the determination of another, to require the tribunal or commissioner not to 990 determine the appeal. That is curious language. The Secretary of State is a member of the Executive and must speak in that capacity. So we have the courts required by the Executive to take a particular type of action. That is not the language that I am used to finding in Acts of Parliament. The independence of the judiciary is a vital principle. It should be preserved. It should have at least a show of being preserved. That is not available here.
These provisions have caused some dismay to Judge Bassingthwaighte, the former president of the Independent Tribunal Service. He draws attention to a ruling by deputy commissioner Edward Jacobs who says:The constitutional difficulty is that it is the Secretary of State who makes the decision that a case is to be so treated"—that is treated as a test case.The Secretary of State is a party [or at least would be a party if an appeal were allowed to be brought] and will be the one under the adjudication procedures to be introduced under the Bill who made the decision on the claimant's benefit which the claimant might now wish to challenge. This does seem very like a case of 'nemo judex in causa sua'. [No-one should be a judge in his own cause]".We have here a power—shall I say startlingly expressed?—to do something about which there is at least room for some doubt as to the constitutional propriety. I am not at all happy about seeing that sort of provision in an Act of Parliament.
I am not happy either about how the provision might fare under Article 6, the fair trial provision, of the European Convention on Human Rights. It might appear, to put it no higher, to be casting doubt on the independence of the judicial tribunal which is making the ruling. As the noble and learned Lord will remember, that clause provides for a fair trial by an independent judicial authority. It will be a little difficult to assert that a tribunal to which the Secretary of State may so unambiguously give directions is independent. I hope that the Government can find some other way of going about this. It is not something with which we can be content. I beg to move.
§ Baroness Anelay of St. Johns
My Lords, Amendments Nos. 33 and 34 are grouped with the amendment. With the leave of the House I shall speak to them. On this occasion, I cannot be as extreme as the noble Earl, Lord Russell, and accept the amendment he has moved. But I understand the great misgivings he expressed about the clause.
Amendments Nos. 33 and 34 follow closely those which I moved with regard to Clause 25. As the noble Earl explained, Clause 26 deals with appeals which may be affected by other test cases. I believe that the arguments against my amendments here are not exactly the same as the arguments against the amendments I put forward to Clause 25. I noted that, with some mental agility, the Minister in another place tried to argue that the arguments were the same.
Amendment No. 33 deletes the words "it possible" from subsection (2), thus requiring a greater degree of certainty before the relevant powers can be used. Amendment No. 34 requires the Secretary of State to give notice to a panel member of her intention to 991 exercise powers under Clause 26. That panel member is then given an opportunity to consider whether this is a case in which the exercise of those powers is appropriate. In other words, is the case under appeal in fact a look-alike case such that a decision in a lead case would affect its determination? If the panel member considers that there are grounds for believing that the lead case is not relevant to the decision on the appeal in question, he or she gives the Secretary of State notice to that effect. The Secretary of State is thus prevented from exercising her powers under Clause 26. The superior status of the appeal tribunal is thereby maintained.
If the tribunal goes on to make a decision with which the Secretary of State is unhappy, she can then appeal that decision and use her power to suspend payment of benefit under Clause 21(2)(c).
I cannot support the amendment which has been moved. I am grateful for the opportunity to speak to my amendments.
§ Lord Hardie
My Lords, I speak to Amendments Nos. 32 to 34.
Amendment No. 32 proposes to remove the Secretary of State's ability to direct how a tribunal or commissioner should handle a look-alike appeal. Amendments Nos. 33 and 34 would prevent the Secretary of State from exercising her power to direct the tribunal or commissioners when she had not secured the agreement of a panel member.
We had a detailed debate about Clause 26 at Committee stage of the Bill and I recognise the concerns that noble Lords voiced then and have repeated today. I should like to try to meet those concerns.
Clause 26 makes arrangements for look-alike cases which have gone to appeal. It is intended to prevent decisions being made on appeals which rest on an issue of law that is being challenged in the courts on another case. Its purpose is to reduce the burden on the appeal system which has become clogged up with look-alike cases which could be dealt with more efficiently by the department. It aims to enable tribunals and commissioners to focus their attention on other appeals and deal with them more speedily.
Under the current arrangements, there is no formal legislative provision to delay or stay appeals where the appeal concerns an issue of law which is being challenged in another case. In practice, tribunals and commissioners have often delayed listing cases of this sort. However, there is great variation in practice between different tribunals. Thousands of cases which turn on the same point of law as a lead case may be decided before the lead case is resolved. If, following the decision in the lead case, it emerges that the tribunals have made erroneous decisions in these look-alike cases, each individual case has to be appealed to the commissioners, in order to have that erroneous decision overturned. This means that the commissioners have to hear a series of straightforward appeals where the point at issue is identical—namely the point of law decided in the lead case. It also means that overpayments of benefit may have been made which are impossible to recover.
992 Under the new arrangements, the Secretary of State will identify which cases are look-alikes. Subsections (2) and (3) of Clause 26 allow her to require an appeal tribunal or commissioner to return these cases to her if an appeal rests entirely on the same issue of law as in the lead case. Apellants will be advised that their appeals will not proceed and that if the lead case is decided in their favour the Secretary of State will revise or supersede the decision under appeal in accordance with the decision in the lead case. Our position is that this is more sensible than requiring commissioners to handle blocks of straightforward look-alike appeals where there is no substantive point of law to consider. Each appeal is simply a matter of applying the law as it has been interpreted in the lead case.
This new provision will be better for claimants than the current arrangements and will not be a burden on the valuable resources of tribunals and commissioners. As soon as the lead case is settled, claimants can have any increased benefit due paid immediately, rather than wait for their case to be heard by a tribunal or the commissioner. Decisions on whether to stay appeals will be taken by the Secretary of State based on guidance from her legal advisers.
Perhaps I may deal with the constitutional point—if I may put it that way—raised by the noble Earl, Lord Russell. Decisions will not be taken on a whim; they are subject to the checks and balances which are well established in administrative law. In view of the concerns expressed, we intend to consult with the president of the Independent Tribunal Service and the Chief Social Security Commissioner on the preparation of the guidance on the identification of look-alike cases.
Anyone who believes that their circumstances are materially different to the lead case should contact the appropriate office of the Benefits Agency without delay. I can assure your Lordships that any representation made by the claimant, or any evidence which is provided, will receive urgent, careful and sympathetic consideration. The claimant will receive a full explanation of the decision as to whether his or her case is a "look-alike" or not.
If a new interpretation is put on a law that has been in operation for some time, most claimants affected by the new interpretation will have arrears paid back to one common date. That is fair and reasonable. Full arrears will be paid to the lead case. People whose claim was withheld by the Secretary of State, and those who had their appeal stayed or determined unfavourably due to the lead case will also be awarded any increase in their benefit from the date of their original application.
To deal with the point relating to the human rights issue, I do not accept that this is an interference with a fair trial by an independent body. The point is that there will already be an issue which has been determined by a tribunal or which is awaiting determination. All that is happening is that the decision in this case is being delayed pending the decision in the lead case.
§ 7.30 p.m.
§ Earl Russell
My Lords, perhaps I may ask for clarification. What if the tribunal thinks that it is not a look-alike case and the Secretary of State thinks it is?
§ Lord Hardie
My Lords, I thought I had dealt with that point earlier by indicating that there will be guidance set out indicating how one identifies a look-alike case. That guidance will be formulated in consultation with the president of the Independent Tribunal Service and with the Chief Social Security Commissioner.
Clearly the Secretary of State, if she is involved in an appeal, must obviously think that the issue is worth pursuing. If, in terms of the guidance, the case can be determined by the same legal point as in the lead case, then it is appropriate that the Secretary of State should determine that this is indeed a look-alike case.
If at the end of the day the Secretary of State, having called back the decision and having decided in accordance with the determination of the tribunal—this would arise only where the determination was against the claimant; clearly, if it was in his or her favour, the Secretary of State would find in favour of the claimant—that the decision of the look-alike case was against the claimant, then the Secretary of State would reach a similar decision. At that point the claimant would have the right of appeal to the tribunal against that decision. So we are not cutting out a right of appeal. The claimant can still appeal to the tribunal against the decision of the Secretary of State if the claimant considers that the Secretary of State is wrong in determining that this is a look-alike case.
Amendments Nos. 33 and 34 would prevent the Secretary of State from requiring a tribunal or commissioner to refer the case to her or to deal with it as though the lead case had been decided unfavourably to the claimant without the agreement of a panel member. That could result in inconsistent treatment of look-alike cases, as panel members may have different interpretations as to whether or not a case is a look-alike..
As I have indicated, we think there is a role for the judiciary in the identification of look-alike cases and in the preparation of guidance. That is where the consultation with the president of the Independent Tribunal Service and the chief commissioner would come into play.
There is a balance to be struck between judicial consideration of cases and administrative efficiency, and, where many cases turn on the same straightforward issue of law as a result of a decision in a lead case, it is our view that the arguments for continuing to allow judicial consideration of each individual case are not sufficiently strong. As it stands, the Bill will prevent cases where there is a substantive issue of law to consider from waiting in line to be decided by commissioners while a run of "look-alike" appeals are determined.
994 It is our submission that these provisions are sensible, and in the light of my explanation I invite the noble Earl, Lord Russell, to withdraw his amendment, and, ultimately, the noble Baroness, Lady Anelay, to withdraw hers.
§ Earl Russell
My Lords, I thank the noble and learned Lord for his small crumb of comfort in relation to the guidance. But it was a very small crumb indeed. If the Secretary of State is not a competent authority to identify a look-alike case, then arguably the claimant is not either. After all, we have been talking all day about the difficulty of ordinary claimants in understanding precisely what are the legal issues behind their cases. That provision may lead to a good many representations. However, I am not at all sure that they will be directed to the cases where they are most needed.
I think that the noble and learned Lord has not entirely taken on board the case that I am making; namely, that the identification of a look-alike case is actually a judicial power. The Secretary of State is no doubt a person of very great ability and very wide knowledge. But she is not judicially qualified. She does not have the authority to take judicial decisions. I think the noble and learned Lord came very near to shooting himself in the foot at one point when he referred to courts in the past having refrained from listing cases of this type. If the courts take such a decision, they are at least a competent authority to take it. Whether it is a good thing from a social security point of view and from the point of view of the interest of the claimant is quite another question and one that is not before us at this moment. The courts at least have the authority and the knowledge and legal understanding to do it.
Part of the trouble with talking about a look-alike case is that whether matters look alike depends on exactly where you are looking from; it is not an absolute question, it is a relative one. So the Secretary of State will probably be considering only one legal principle, which happens to be the one that is the present object of departmental policy. That is fair enough. But cases may be look-alike or not look-alike from completely different perspectives, according to some completely alien legal issue which, although it has not occurred to the Secretary of State because it is not what she happens to be thinking about, would occur fairly quickly to somebody who is properly and professionally legally qualified.
Naturally, I do not intend to divide the House at this time of night. However, in begging leave to withdraw my amendment I am a long way from being satisfied that these issues have yet been properly addressed. I hope that thought about them may continue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ [Amendments Nos. 33 and 34 not moved.]995
§ Clause 27 [Restrictions on entitlement to benefit in certain cases of error]:
§ Earl Russell
moved Amendment No. 35:Leave out Clause 27.The noble Earl said: My Lords, this amendment seeks to delete Clause 27. That deals with what has come to be known as the anti-test case rule. This deals with cases where there is a dispute about how far back an entitlement to benefit may go. Where there is a case that finds an entitlement in a particular place, the position under the anti-test case rule is that entitlement goes back only to the point of the judgment in the case. In fact, the judgment is being treated as if it were legislation.
In Clause 27 the anti-test case rule is extended from appeals and reviews to the High Court, to the House of Lords and even, to my great surprise, to the European Court of Justice. Here again I believe there is real room for doubt about Parliament's competence. According to my understanding, it is not within the power of Parliament to bind the powers of the European Court of Justice. Those powers are derived from the European treaties, which we in this House cannot unilaterally alter. At the very least, I hope to hear that the European Court of Justice will be taken out of this clause.
The anti-test case rule has been a matter of considerable litigation in the past and of some dispute in this Chamber. The question that arises is: what is the distinction between judgment and legislation and what is the nature of entitlement? The department's position, if I understand it correctly—and I should be grateful to be corrected if I do not—is that the entitlement is to be treated as if it were created by the judgment. But the judgment does not change the law; the judgment interprets the law as it already was from the making of the statute or the regulation which is before the court.
I believe that the entitlement to the benefit is much more like a peerage in abeyance than like something conferred for the first time by the judgment. It is the practice of this House that a peerage in abeyance is legally a peerage, whether the House's Committee for Privileges recognises it or not, until—in some cases maybe five centuries later—the House recognises that there is a valid line of succession and the person takes his or her seat. Since I accept the assumption of the noble and learned Lord, Lord Scarman, that all social security law rests on entitlement, with a few exceptions which have been made by recent legislation, I believe that that is the right way to treat the matter.
In the case of Bate v. Chief Adjudication Officer, which went to the Court of Appeal, Lord Justice Millett, commenting on the provision in the 1990 Act that the court should treat past judgments as if they had not been made, said that this provision attempted not so much to change the law as to rewrite history. He said in that case that the Secretary of State's interpretation of Parliament's intention was so unreasonable that Parliament could not possibly have intended it. The Appellate Committee of this House saw that case otherwise. There is here a real issue to be addressed.
When there is so much doubt about whether this is the right way to set about the matter, whether the function of a judgment is correctly interpreted and 996 whether the nature of entitlement is correctly interpreted and a much more fundamental doubt about how far this Parliament can bind the European Court of Justice, I believe that there is something here that needs a good deal more thought and more round-table discussion, preferably in private, than we have yet had. I beg to move.
§ Lord Hardie
My Lords, we had a long and interesting debate on this clause during the Bill's Committee stage, at which time the Government brought forward a number of amendments to address concerns which had been expressed by noble Lords. Indeed the noble Earl, Lord Russell, and the noble Baroness, Lady Anelay, acknowledged the significant movement on the part of the Government in meeting their concerns.
I have listened carefully to the continuing concerns of the noble Earl, Lord Russell, about some of the provisions of the clause and will try to provide him with some reassurance. However, it is clear that there may be some fundamental disagreement about the Government's policy in this area and I therefore cannot promise to meet all his objections.
The noble Earl, Lord Russell, suggested a round-table discussion. I and my fellow Ministers are more than happy to discuss concerns with noble Lords at any time. If the noble Earl wishes to have a further discussion between now and Third Reading, about this or any other matter. I shall be pleased to accommodate him.
It might be helpful if I first explain the intention behind the clause. The clause deals with restrictions on entitlement to benefit where a decision by commissioners or a court overturns the view of the law that was previously applied by the Secretary of State. It replaces and clarifies existing provisions currently in Sections 68 and 69 of the Social Security Administration Act 1992. The clause applies where a commissioner or a court makes a decision in an individual case which reinterprets the law in a particular area. Where the Secretary of State makes a decision after the lead case has been decided following a claim for benefit or to revise or supersede a decision, the restrictions provided for in the clause will apply. Claimants to whom the restrictions apply will have the increase in entitlement as established in the lead case paid from a common date, set in regulations.
Occasionally, a long-standing interpretation of the law is overturned by the courts. The restrictions on arrears are intended to protect the public purse. Without a power to restrict arrears, the new interpretation of the law could mean that increased benefit would be payable to large numbers of people from the date of their original benefit decision. The Government do not believe that it is an effective use of limited resources to make large payments of arrears of benefit for past periods following a reinterpretation of the law. The Government want to target benefits better and not become involved in a system of poorly targeted and arbitrary payments. What is more, trawling through thousands of cases to find the ones affected would cost time and money—money which would be better spent on improving services for all claimants. We want to make sure that the department's expenditure is focused 997 where need is greatest. This clause means that the department can exercise proper stewardship of the public purse by making sure that changes in interpretation of the law do not consequently result in a large amount of unforeseen pubic expenditure.
The noble Earl, Lord Russell, referred to the question of binding the European Court of Justice. The provisions of this clause, and those currently included in Section 68 of the Social Security Administration Act, do not seek to bind the European Court of Justice. The clause restricts arrears in certain cases where a new interpretation is placed on the law by a commissioner or a court. Subsection (6) makes it clear that decisions of the European Court of Justice are determinations of a "court". It is not a new provision. Restrictions on arrears in look-alike cases will apply equally following decisions made on a lead case by the European Court of Justice and decisions made by other courts. The provision does not propose to bind the European Court of Justice. The restrictions of the clause do not apply to the lead case which is decided by the European Court of Justice. In his judgment on the Bate case, the noble and learned Lord, Lord Slynn, was not persuaded that the result of the application of the anti-test case rule was incompatible with European Community Law.
An analogy was made with peerages in abeyance. I regret that I am unable to advise noble Lords of the precise reference, but it is my recollection that there was a report of the Committee for Privileges about peerages in abeyance. The noble Earl referred to a period of 500 years. My recollection is that the committee indicated that after a hundred years peerages in abeyance ought not to be resurrected. If I am wrong, I shall write to the noble Earl about that.
I believe that we are all agreed that this is a very complex area of social security law. I have tried to explain these provisions as clearly as I can. I have also pointed out the Government's wish to meet as many of your Lordships' concerns as we possibly can and I have indicated our willingness to have further discussions with any noble Lords who wish to have such discussions. I have also indicated that we have moved a considerable way forward on this matter. In the light of my explanation, I commend the clause to the House and hope that the noble Earl will feel able to withdraw his amendment.
§ Earl Russell
My Lords, I am grateful to the noble and learned Lord for what he said about the European Court of Justice. That was extremely helpful and clarified a great deal. I am grateful to him also for his offer of a meeting. However, what is really needed here is better communication between the Executive and the judiciary.
I will be extremely glad of a meeting if there is a prospect of any change in the clause. However, I doubt that there will be between now and Third Reading. If we can arrange a much wider round table discussion to help to improve communications between Ministers and judges roughly along the lines recently suggested by the noble and learned Lord, Lord Ackner, that would be very helpful. Were such a thing possible, I would be extremely proud to participate in it.
998 The noble and learned Lord referred to the law being "re-interpreted". That is absolutely correct. But it is not the same as the law being changed. If the law is re-interpreted, it means that previously it was incorrectly perceived. Obviously, there must be protection for what happens when cases are re-opened after a long time. But I ask again the question I asked before: which is more in need of protection, the claimant to a means-tested benefit or the public purse? I admit that a balance must be struck, but it is not self-evident that as a general matter of principle the public purse is always entitled to the greater protection.
In relation to the earlier point of peerages in abeyance, I look forward to the noble and learned Lord's letter. My recollection is that a peerage which had been in abeyance since 1497 was revived by the Committee of Privileges in this House in the recent past. That is, to be precise, 501 years. That was the reason for the choice of 500 years; it was not simply a figure of speech.
It is possible, when we read the noble and learned Lord's report, that it turns out, as prudent rulings do, to contain the word, "normally". That is merely a hypothesis, but it seems to me to meet all the known evidence.
The disagreement between us about the nature of "entitlement" remains wide and deep. I thank the noble and learned Lord for the care he has taken in attempting to answer the questions. He attempted to take them seriously and has done his level best to narrow the gap between us as much as possible. There remains an underlying difference. It is not the kind of issue which, if we can possibly avoid it, we should resolve in the Division Lobbies. As with so many other issues, there is a culture clash and those are best resolved by interpretation. With that principle in mind, I withdraw my opposition to this clause standing part of the Bill, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 50 [Payments treated as remuneration and earnings]:
§ Lord Haskel
moved Amendment No. 36:Page 35, line 19, at end insert—("(1A) After subsection (5) of that section there shall be inserted the following subsection—(6) For the purposes of section 3 above regulations may make provision for treating as remuneration derived from an earner's employment any amount on which the earner is, by virtue of any provision of sections 140A to 140H of the 1988 Act, chargeable to income tax under Schedule E in respect of an acquisition of shares or an interest in shares." ").The noble Lord said: My Lords, in moving Amendment No. 36 I shall speak also to Amendments Nos. 37, 38, 110 and 111.
At Committee stage in this House, we said that we intended to introduce amendments at Report to change the national insurance treatment of employee-acquired shares which are subject to risk of forfeiture or conversion. These measures are needed to keep national insurance in step with income tax changes announced in another place by my right honourable friend the Chancellor of the Exchequer in his Budget. These 999 changes affect a small number of payments made in the form of shares outside Inland Revenue approved employee share schemes.
When we debated this matter during Report on 2nd April, the noble Lord, Lord Higgins, raised the matter of Commons' privilege. He also raised it earlier today. My noble friend Lady Hollis, when responding to Amendment No. 1, replied to that point and it is not therefore necessary for me to repeat the arguments. Perhaps I can move straight to the amendments.
The amendments deal with the national insurance treatment of non-approved schemes involving restricted shares and convertible shares which are not able to be used in Inland Revenue approved schemes. I will not detain the House with a detailed account of those schemes, though I shall be happy to say more if noble Lords find that helpful.
The Finance Bill inserts new Sections 140A to 140H into the Income and Corporation Taxes Act 1988. Those sections change the income tax treatment of shares carrying a risk of forfeiture and of convertible shares. The inserts will help businesses by giving them legislative certainty about the tax position. Similar changes are needed so that business will also have legislative certainty for national insurance purposes. The amendments do precisely that.
The new amendments to mirror those Budget income tax changes are placed in Clause 50 because they also require an amendment to Section 4 of the Social Security Contributions and Benefits Act 1992 which treats certain kinds of payments as earnings for national insurance. Amendment No. 36 provides for regulations to match the income tax changes. There will be a direct read across to the relevant tax provisions when they are introduced. Amendment No. 37 is a minor change which simply provides greater clarity by inserting the full title of the Income and Corporation Taxes Act 1988. Amendment No. 38 provides that the regulations made under Clause 50 shall come into effect after the passing of the Finance Act 1998, but will have effect in relation to this type of share acquired on or after 6th April.
We intend to use the regulations to provide for liability in respect of shares acquired on or after the date that the amendment was introduced; that is, 9th April 1998. This is important because it will enable business to apply the same regime for tax and national insurance as early as possible. Amendments Nos. 110 and 111 amend Clause 84 so that this measure comes into force following Royal Assent.
We believe that these arrangements provide the most practical way to mirror in national insurance legislation the income tax changes in the Finance Bill. They will ensure that business is not faced with the burden of administering two different sets of rules over an extended period. I beg to move.
§ Lord Higgins
My Lords, as the noble Lord pointed out, in Committee and again earlier today we raised the question of the relationship between the two Houses. I do not wish to pursue that point in any detail now; it arises more appropriately on some of the later amendments.
1000 These amendments relate to a fairly narrow and technical point, as I understand it. It is essentially an anti-avoidance measure on the part of the Treasury and when that is debated in another place it will no doubt be duly considered. As the noble Lord rightly pointed out, the measure brings into line with the tax changes the changes in relation to social security provisions.
What gives me more concern is that the distinction between a national insurance contribution and a tax has now disappeared effectively to vanishing point. The contributions are now to be transferred to the Inland Revenue, so they come under its province rather than otherwise. In addition, for the first time the Government are fundamentally undermining the contribution principle which has been the main reason for maintaining the distinction between taxation, pure and simple, and national insurance contributions in the past.
People will now be allowed to have the benefit of social security payments without, in some cases, having contributed. The contributory principle is therefore being undermined. This is a fundamental matter. There will be no distinction at all between tax and national insurance contributions. I am not clear why the Government are timing it in this way. The timing is somewhat strange. Indeed, the Government's own brief accepts that it is unusual. Effectively, the change is backdated on the one hand and delayed in implementation on the other.
The amendments suggest that the provision will come into operation only when the Finance Bill receives Royal Assent. It is highly unlikely that the Finance Bill will not receive Royal Assent. I presume that what is intended is that the provision will come into operation only if this set of tax clauses come into operation. Otherwise we will be landed with the situation whereby the social security benefits side is implemented but the tax side is not. That would be an absurdity.
Having said that, what the amendments together with the proposals in the Finance Bill do is to remove the income tax charge when the shares are given to someone and impose it when, for want of a better expression, they are cashed in. As has rightly been pointed out, that means that a possible way of avoiding taxation is prevented. I make no complaint about that. However, it brings out another point. This is said to be a national insurance contribution, but the charges that will be imposed as a result of the amendments impose a contribution on people for which they will get absolutely nothing. The fact that they are paying the contribution will in no way entitle them to any increased benefits. That brings through once again my fundamental point that national insurance contributions are now pure and simply a tax.
I do not want to delay the House, but I wish to raise one point which was made by the noble Baroness in her opening remarks this afternoon. She said that it would not be possible to make any of these changes with regard to national insurance contributions in the Finance Bill. If it is now the case, as I believe it is, that national insurance contributions are a tax, I am not clear what the basis is for the noble Baroness's assertion that this could not be done in the Finance Bill. All the horrible 1001 problems of timing which the amendments now present in terms of the implementation being delayed but when they are finally implemented being backdated, which is a strange situation to envisage, would be overcome if the whole matter could be tied up in the Finance Bill. As I understand the position, the Bill is not to receive a Second Reading until tomorrow, so there is time for the matter to be sorted out. Having said that, I understand why the Government are proceeding as they are with the basic decision on taxation. In due course it will no doubt be considered in another place.
§ 8 p.m.
§ Lord Goodhart
My Lords, I agree with the noble Lord, Lord Higgins, that the distinction between tax and national insurance contributions has now for all practical purposes been eliminated. I may have more to say about that when the Report stage resumes on Thursday, but I do not propose to deal with it now.
These amendments are directed to stopping an extremely artificial tax avoidance scheme which will enable companies to provide benefits to a small number of "fat cat" employees without having to pay employers' national insurance contributions. It will not affect employees' national insurance contributions because anyone who benefits from the scheme will be earning more than the upper earnings limit anyway. The companies which make use of this scheme will, as a result, be throwing a greater burden on other contributors and other taxpayers. I therefore give completely wholehearted support to this group of amendments.
§ Lord Haskel
My Lords, perhaps I may point out to the noble Lords, Lord Higgins and Lord Goodhart, that national insurance and income tax are entirely separate. National insurance is what it says. One gets benefits from national insurance by being insured. Income tax is what it says. It is a tax. If the noble Lord, Lord Higgins, would recognise that there is a difference between the two, he would not have such difficulty in understanding why these regulations are having to be handled in the way that they are.
§ Lord Higgins
My Lords, I am most grateful to the noble Lord for giving way. The fact is that the additional contributions which will be collected as a result of the amendments in no way give any additional benefits.
§ Lord Haskel
My Lords, I take the noble Lord's point. We are dealing with it in this way because it is a national insurance matter and we have to deal with it in national insurance legislation. All employees pay national insurance charges on earnings. After a certain level the effect on benefits is non-existent. I think I have dealt with the points that the noble Lord raised. I beg to move.
On Question, amendment agreed to.
§ Lord Haskel
moved Amendments Nos. 37 and 38:Page 35, line 21, leave out ("1988 Act") and insert ("Income and Corporation Taxes Act 1988").Page 35, line 22, at end insert—("(3) Regulations under subsection (6) of section 4 of the Contributions and Benefits Act (as inserted by subsection (1A) above)—On Question, amendments agreed to.
- (a) shall not he made before the passing of the Finance Act 1998: but
- (b) may make provision having effect in relation to acquisitions on or after 6th April 1998.").
§ Lord Haskel
My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.