Civil Procedure (Amendment) (EU Exit) Rules 2019

Motion to Approve

Moved by

That the Rules laid before the House on 31 January be approved.

My Lords, I beg to move the two Motions standing in my name on the Order Paper.

Object.

It may assist the noble Lord if I explain that I am not taking the two instruments together. I am going to speak to them together but they will be moved separately.

They should be debated separately; not only moved separately.

Then let us start the debate.

My Lords, the Sanctions and Anti-Money Laundering Act 2018 passed through this House last year. For noble Lords not familiar with this legislation, the sanctions Act provides the legislative framework for the UK to continue to meet its international obligations, to implement UK autonomous sanctions and to update our anti-money laundering framework—although the latter is not part of our discussion today—after we leave the EU.

Before I explain the nature of these instruments, I would like to provide some background and to share the context of our approach to sanctions. The UK has strong expertise in this area and, following our departure from the EU, we want to continue working together with international partners to ensure we can develop and implement effective sanctions in the future. As an EU member state we currently implement more than 30 sanctions regimes, designating around 2,000 individuals and entities. These include country-specific sanctions regimes, as well as regimes targeting Daesh, al-Qaeda and other terrorist groups. Noble Lords will be aware that the Prime Minister has committed that the UK will look to carry over EU sanctions into UK law after the UK’s departure from the EU. Applying pressure through sanctions, together with international partners, is one means of enabling us to deliver our foreign policy objectives.

One important feature of the sanctions Act that noble Lords discussed in detail during its passage through this House is the right provided to designated persons to challenge their designation. Chapter 2 of the Act provides a route for the designated person to request that the Minister carry out an administrative review of their designation. The sanctions review procedure regulations came into force on 7 January and set out the process to be applied in relation to such reviews. A review can be requested for various reasons, including where a designated person believes that the reasons for their designation are incorrect or that particular information associated with the designation is not correct. If, following the review, the Minister’s decision is to uphold the designation, the designated person has the right under Section 38 of the Act to apply to the High Court in England and Wales and Northern Ireland or to the Court of Session in Scotland for the decision made against them to be set aside.

The two statutory instruments before us today set out the process applicable in relation to such court challenges, and are a technical step in the establishment of the new autonomous UK sanctions regime. They make technical amendments to the Civil Procedure Rules in England and Wales and the Rules of the Court of Judicature in Northern Ireland. They do not make any new substantive provisions. The instruments provide the procedure that will apply when challenges to sanctions decisions are brought before the courts of England and Wales, and Northern Ireland, under the sanctions Act. These instruments will allow the Government to apply to the courts to use the closed material procedure where appropriate in relation to such challenges. This will enable the Government to defend legal challenges against sanctions decisions which are underpinned by sensitive information. I should make it clear to noble Lords that the UK will use public unclassified material wherever possible when maintaining and pursuing sanctions listings. In a minority of cases, classified material may be necessary to support or sustain certain listings. These rules of court thus provide for closed sessions for those exceptional circumstances where the Government have used classified information to support a listing which is then challenged in court.

As I said earlier, the mechanism for considering such information is an extension of the existing tried and tested procedure, which allows full consideration of the facts and protects the rights of entities. Under Section 40 of the sanctions Act, we will apply Sections 66 to 68 of the Counter-Terrorism Act 2008 to any such challenges against sanctions decisions made under the sanctions Act. Rules of court already made under the Counter-Terrorism Act 2008 and amended in a similar way to these instruments by the Terrorist Asset-Freezing etc. Act 2010 allow the Treasury to ask for closed material procedures to apply to proceedings involving challenges to financial restriction orders made under that Act.

The instruments we are considering make technical amendments to Part 79 of the Civil Procedure Rules 1998 and to Order 116B of the Rules of the Court of Judicature (Northern Ireland) 1980 to extend existing procedures to challenges against decisions made under the sanctions Act. They state that challenges against sanctions decisions under the sanctions Act should be treated in the same way as challenges against financial restrictions decisions made under the Counter-Terrorism Act 2008.

I should emphasise that failure to have these instruments in place by the day we leave the EU would represent a significant risk. It would mean that there would be no closed material procedure set out for court reviews against designation decisions under the sanctions Act, including the availability of the closed material procedure. The Government would not be able to defend legal challenges to sanctions where sensitive information underpins a sanctions designation. This could result in the designation being revoked. Obviously revoking designations could have a significant impact on the delivery of key foreign policy objectives, reduce our ability to co-ordinate sanctions actions with close allies and potentially allow individuals involved in dangerous activities to travel to or invest in the UK.

Before making the rules of court, the Lord Chancellor consulted the Lord Chief Justice of England and Wales and the Lord Chief Justice of Northern Ireland in January 2019, and they raised no concerns. I welcome this opportunity to discuss the statutory instruments and to answer questions from noble Lords. I beg to move.

My Lords, I hesitated to rise because I was sure that a number of other people would raise issues. A number of distinguished lawyers, people who understand the constitution better than I do and people who understand, even more than I do, the implications of what we are doing are present. We are dealing with something of monumental importance. Those of us who are astonished at the way that the Prime Minister is acting at the moment—as though she were a dictator in a banana republic—are amazed at the way that some Members of Parliament of both Houses seem to be sitting back and letting it happen.

The implications are astonishing. We have already looked at them in relation to visas. We are now told that if we come out of the European Union at the end of March we will have to have visas, and it will cost €60 to go to countries which we can now go to freely and as many times as we like. We will have lorry parks all over Kent because of the arrangements for customs clearance. There are questions over medicines and food supplies, which people are really worried about. The president of the CBI is warning us on behalf of all industries of the Armageddon that we face. On aviation, we have already discussed how we are still concerned that flights might not be guaranteed to all destinations after the end of March.

We now come to a life or death matter which is of great importance to everyone. We are talking about sanctions against Daesh or ISIS, action against Russian oligarchs and dealing with terrorists. These are major issues. All it needs is for some mistakes to creep into the statutory instrument that we are considering for something dreadful to happen and for us to fail to be able to deal with terrorists in the future or impose sanctions when we wish to. There are likely to be unintended consequences if we get this wrong.

Normally, if we were starting from scratch, we would go through primary legislation line by line. The noble and learned Lord, Lord Mackay, with his huge knowledge, would alert us to some of the imperfections contained in it and my good friend, the noble and learned Lord, Lord Hope—again, from his great experience—would point out some of the difficulties. We would go through it line by line and be able to consider and vote on amendments. However, because this is being dealt with through a statutory instrument it is, again, a take-it-or-leave-it situation.

I am not outraged. I welcome the statutory instrument. I have merely a factual question to put to the Minister. Paragraph 3.4 on page 1 of the Explanatory Memorandum says:

“In the view of the Department, for the purposes of Standing Order … the subject matter of this entire instrument would be within the devolved legislative competence of the Scottish Parliament if equivalent provision in relation to Scotland were included in the Act of the Scottish Parliament”.

My understanding is that the current legislation is governed by the regulations adopted in Scotland in 2017. Can the Minister tell us how the department in question reached that conclusion, and what discussions were had with the relevant department and with the Scottish Parliament itself before bringing forward the statutory instrument today?

My Lords, closed material procedures were introduced by the Labour Government around 2008—or possibly before then—when they were subject to considerable controversy and discussion. They were introduced for a number of named, specialist tribunals in the context of terrorism; the applicability of closed material procedures in cases that involved the safety of the public were obviously a matter of balance as to where the public interest lay.

Since then, these procedures have crept in scope—the noble and learned Lord, Lord Hope, used that expression in one of the cases to have been decided in relation to them. There was great controversy as to whether a court of appeal should hold proceedings with closed material procedures in place. The Supreme Court has now come round to them but was very reluctant to do so. The creep of the scope has now extended to the challenges to sanctions decisions. As the Explanatory Memorandum makes clear, this will be the first instance of the use of the powers in Sections 66 to 68 of the Counter-Terrorism Act 2008 in the context of sanctions.

It is unfortunate that a Minister who is challenged on a decision that he has made with material in front of him, can go to the court and say, “We must have in place these closed material procedures so that the person who is challenging my decision never sees the full basis upon which that decision was made”. A special advocate is then brought in to represent his interests—but I think it is regarded by all as a very unsatisfactory way of doing justice and carrying out the duties of the court.