MPs and Peers are now on summer recess; Parliament rose last Wednesday and is set to return on Tuesday 04 September. Last week, a significant Brexit milestone was reached as the government published the White Paper on how they propose to legislate for and implement the Withdrawal Agreement between the UK and the EU. There was also an opportunity on Monday for peers to discuss the wider state of the Brexit negotiations and proposals for a future UK-EU relationship. On Tuesday it was the turn of the Exiting the European Union Committee to examine the progress of the UK’s negotiations on EU withdrawal, and the importance of mutual recognition of qualifications for solicitors was raised during the session.
The Women and Equalities committee published their report on Wednesday into sexual harassment in the workplace following a six month inquiry and recommended a five-point plan to tackle it. The report states that the government, regulators and employers are failing in their responsibilities to tackle sexual harassment in the workplace with legal protections often not available to workers in practice.
On Thursday, the Justice Select Committee published a report following their inquiry into criminal legal aid. Richard Miller gave oral evidence on behalf of the Law Society to the Committee as part of their inquiry. The Law Society were mentioned 19 times throughout the report, which highlighted our concerns regarding reforms to the Litigators' Graduated Fee Scheme (LGFS) and Advocates' Graduated Fee Scheme (AGFS), our judicial review on the LGFS, our criminal duty solicitor heatmap and our wider concerns on the sustainability of the criminal justice system.
This week in Parliament
The House of Commons will be in recess. The House will next sit on Tuesday 04 September 2018.
Last week in Parliament
Monday 23 July
House of Lords
General Debate on the Brexit Negotiations
On Monday, the House of Lords held a General Debate on the Brexit negotiations and preparations for EU Withdrawal.
We briefed peers ahead of the debate on our reaction to the White Paper and existing lines on our priorities on Brexit.
The debate was an opportunity for peers to discuss the wider state of the Brexit negotiations and proposals for a future UK-EU relationship. Speaking for the government, Exiting the EU Minister Lord Callanan repeated the government’s position as defined in the Chequers Statement and the White Paper on topics including the common rulebook, the role of the CJEU and security cooperation.
The key points from the session included:
Services: Lord Callanan stated that the government was committed to negotiating a wide-ranging deal for services, as part of the future UK-EU relationship. He stated that as part of this framework, the government intends to negotiate a deal which would protect businesses from unjustified barriers or discrimination, cover mutual recognition of professional qualifications and preserve regulatory freedom. He stated that, outside of the EU’s framework for services, the UK would be able to use new regulatory powers to encourage further growth in the services sector.
Immigration: Lord Callanan asserted that, post-Brexit, the UK would end existing rules relating to free movement of people. However, he stated that the UK was hoping to negotiate a reciprocal immigration policy with the EU that would allow businesses to attract the necessary talent to maintain competitiveness, as well as to allow the easy movement of students. He noted that such an arrangement must include the provision that the UK can have greater controls of migration flows.
CJEU: Callanan stated that the government would end the direct jurisdiction of the European Court of Justice (CJEU) post-Brexit. This would mean that the CJEU would no longer rule on domestic UK cases and would not be able to arbitrate disputes between the UK and the EU. Responding to peers arguing that the UK would be forced to be under CJEU jurisdiction if it chose to participate in the European Arrest Warrant (EAW), Lord Callanan responded that this was an ongoing point of discussion in the negotiations.
Security partnership: The government reaffirmed its commitment to negotiate with the EU a long-term security partnership. Lord Callanan stated that this should include secure data exchanges, practical cross-border operational co-operation and continued participation in important agencies, including Europol and Eurojust.
Financial settlement and future relationship: Peers questioned the government over comments by Brexit Secretary Dominic Raab MP regarding the UK refusing to honour its financial settlement to the EU if a future trade deal is not secured. Callanan responded that the financial settlement in the final Brexit deal would be contingent on a framework for a future relationship. However, he stated that the government did not expect for a no deal scenario to take place.
Tuesday 24 July
House of Commons
White Paper on EU Withdrawal Agreement
The government published a White Paper on how they propose to legislate for and implement the Withdrawal Agreement between the UK and the EU.
The paper focuses in particular on the provisions required to deliver the three parts of the Withdrawal Agreement which were agreed at the March European Council: citizens’ rights, the implementation period and the negotiated financial settlement. The final part of the paper sets out the procedures for Parliament’s approval of the terms of our withdrawal, including the vote on the final deal.
The White Paper confirms that the EU (Withdrawal Agreement) Bill will:
- be the primary means by which the rights of EU citizens will be protected in UK law;
- legislate for the time-limited implementation period; and
- create a financial authority to manage the specific payments to be made under the financial settlement, with appropriate Parliamentary oversight.
This Bill will only be introduced once Parliament has approved the final deal under the terms of the EU (Withdrawal) Act 2018. The Bill must pass before the UK leaves the EU on 29 March 2019 in order for the Withdrawal Agreement to have domestic legal effect.
While not the subject of the Paper, the government say they will continue to bring forward legislation that will take account of a ‘no deal’ outcome of negotiations and continue to prepare for the end of the implementation period.
Other key points in the White Paper include:
Citizens’ rights and MRPQ
- This chapter of the paper sets out the content of Part Two of the Withdrawal Agreement and the legislation required to implement the agreement in the UK. It covers:
On MRPQ, as per the Withdrawal Agreement, the White Paper says the UK and the EU have agreed 'that there will be a continued recognition of professional qualifications for those resident in a host Member State and for frontier workers.'
The Paper goes on to say the Withdrawal Agreement will apply where recognition decisions regarding the qualification were received, or where recognition procedures were ongoing, before the end of the transition period. This will cover qualifications recognised under the Professional Qualifications Directive (including the sectoral professions), but not where the decision is related to the temporary and occasional provision of services. The Withdrawal Agreement will also cover decisions enabling lawyers to practice under the host state’s professional title under the Lawyers Establishment Directive.
It will be for the EU and its Member States to implement these arrangements as they relate to UK citizens living in the EU and they must do so in conformity with the Withdrawal Agreement. In the UK, the directives referred to have been implemented in UK legislation, including the EU (Recognition of Professional Qualifications) Regulations 2015.
The rights of lawyers are provided for under the EU Establishment of Lawyers Directive 98/5/EC and have already been implemented in UK law under the European Communities (Lawyer’s Practice) Regulations 2000 and the European Communities (Lawyer’s Practice)(Scotland) Regulations 2000.
The Paper references the UK’s proposal on the White Paper on the future relationship, that, after the transition period, there should be a broad system for MRPQ, enabling professionals to provide services across the UK and the EU (covering the same range of professions as the Mutual Recognition of Qualifications Directive). These arrangements will be provided for, as necessary, in separate legislation.
- rights related to residence;
- equal treatment;
- mutual recognition of professional qualifications (MRPQ);
- coordination of social security systems;
- protections for rights and monitoring authority.
- On the application of EU law during the transition, the EU (Withdrawal Agreement) Bill will ensure that the European Communities Act 1972 can continue to apply during the transition period. The Bill will amend the EU (Withdrawal) Act to specify that the European Communities Act will cease to apply in the UK after 31 December 2020. EU law will continue to apply to and in the UK during the transition period. The government will continue to ensure that the UK Parliament scrutinises all EU legislation and regulation passed during the transition period.
- On international agreements and trade negotiations during the transition period, the UK will be considered a Member State for the purpose of international agreements that the EU has signed during this period. However, the UK will be able to negotiate, ratify and sign international agreements during the transition. The government states that in these agreements the UK intends to prioritise greater liberalisation of global services, financial services, investment and digital trade packages.
- Due to the fact that there is considerable scope for variance in the UK’s financial settlement, the EU (Withdrawal Agreement) Bill will be sufficiently flexible as to the provisions relating to the UK’s payments to the EU.
- The Bill could include a statutory requirement on the government to provide regular updates on payments over the past year and on forecast payments and receipts to and from the EU (e.g. via Ministerial Statements).
- Reimbursements from the EU, to the UK, will be paid to the Consolidated Fund or the National Loans Fund.
- The funding settlement for international development programmes which are separate from the EU budget will remain unchanged.
Procedures for approval and implementation of the Withdrawal Agreement and framework for future relationship
- If Parliament passes a motion of approval for the Withdrawal Agreement and the framework for the future relationship, the government will bring forward the EU (Withdrawal Agreement) Bill to give the Withdrawal Agreement domestic legal effect.
- If Parliament approves the EU (Withdrawal Agreement) Bill, the government will ratify the Withdrawal Agreement (which will be an international treaty between the UK and the EU) via the provisions in the Constitutional Reform and Governance (CRAG) Act 2010. This is the mechanism by which all international treaties must be ratified in the UK.
Statutory Instruments (SIs)
- The White Paper states that the EU (Withdrawal Agreement) Bill will extend the sunset period regarding the government’s use of SIs to amend retained EU law from two years after exit day (29 March 2021) to 31 December 2022. This is to ensure that the government has sufficient time to amend any deficiencies in retained EU law.
- The government will continue to lay SIs to prepare for the event of a ‘No Deal’ outcome. However, the Withdrawal Agreement Bill will likely revoke or amend ‘No Deal’ SIs that are no longer deemed appropriate.
The Lord Chancellor announced the outcome of five separate consultations on the future of eight courts within the HM Courts & Tribunals estate. Mr Gauke stated more than 700 responses to these consultations were received. As a result, it has been announced the following courts will close:
- Banbury Magistrates’ and County Court and Maidenhead Magistrates’ Court,
- Chorley Magistrates’ Court and Fleetwood Magistrates’ Court,
- Northallerton Magistrates’ Court, and
- Wandsworth County Court, and Blackfriars Crown Court.
The Ministerial statement said HMCTS will continue to explore further ways to manage under-utilisation of existing buildings across the country as part of its wider estates strategy.
In a separate statement the Attorney General has announced the appointment of Max Hill QC as the next Director of Public Prosecutions. We will write a congratulatory letter to Max Hill from the President and seek a meeting.
Exiting the European Union Committee
Hilary Benn’s Exiting the European Union Committee took evidence on the progress of the UK’s negotiations on EU withdrawal.
Giving evidence to the Committee were:
- Catherine McGuinness, Policy and Resources Committee Chairman, City of London Corporation;
- Adam Minns, Executive Director, Commercial Broadcasters Association;
- Huw Evans, Director General, Association of British Insurers; and
- Giles Derrington, Head of Policy: Exiting the European Union, techUK.
McGuinness reiterated the importance of mutual recognition of qualifications for solicitors and architects. She also argued that the UK should take unilateral action to underpin the strengths of English law so that it would remain enforceable and recognised, and raised the impact of no-deal on solicitors who would not be able to fly in and fly out to provide advice.
Please see below for a summary of the key points raised during the session, or you can view the full session here.
No-deal: McGuinness recognised that no-deal was a possibility, adding that large firms had made contingency plans for such an outcome since the referendum. However, she argued that other sectors would be more severely impacted, such as solicitors, who would not be able to fly in and out to provide advice. She also expressed concern for SMEs and unregulated companies who haven’t been able to prepare to the same level as larger firms.
Mutual recognition of qualifications: Stephen Timms MP (East Ham, Labour) raised the importance of the mutual recognition of professional qualifications for companies outside the legal sector, to which McGuinness replied that it was a very significant issue but that solicitors and architects were particularly badly affected. She noted the Professional and Business Services Council would be working on this moving forward.
Wider Brexit issues:
EEA membership: Evans stated that the EEA model was not ideal, particularly for a country such as the UK with a significant financial market. He added that companies operating in the UK market would be left as rule-takers, and those wishing to secure a European licence would need to have established a subsidiary in Europe. Due to this requirement he argued that it was now too late to pursue EEA membership. McGuinness agreed, stating that the UK needed to retain autonomy but recognising the need for continued mutual market access. She refused to compare EEA with equivalence given that the details on what ‘enhanced equivalence’ would look like are not yet clear. Minns was more accepting of the EEA model on account of the market access it would provide.
Recommendations to government: On advice to new Brexit Secretary Dominic Raab, McGuinness argued that more focus needed to be given to the transition period, as well as cliff-edge issues such as contract continuity. She added that the UK should take unilateral action to underpin the strengths of English law so that it would remain enforceable and recognised. The witnesses also agreed that there was a need for both sides to recognise the value of cooperation and good will.
EU positioning: Evans agreed with the statement that the EU’s approach could be 'stoking the fires' of a no-deal scenario. McGuinness also argued that there was a need for a 'pragmatic and responsible' approach from the EU, particularly on contract continuity. She recognised that the EU was looking to attract business from the UK and argued that the EU must give its regulators permission to be pragmatic, in line with the UK’s regulators.
Services and goods: Witnesses agreed that the service element of goods was slowly being recognised. McGuinness argued that there was a 'false distinction' between services and goods.
Fear-mongering: On questions from Sammy Wilson MP (DUP, East Antrim) that suggested there was still confidence in the UK financial services sector, McGuinness highlighted that there had been a tangible negative impact on people moving and reducing investment. Evans rejected the idea the insurance industry had been 'alarmist' stating that Brexit was objectively 'sub-optimal' for the sector.
Industry response to White Paper: Witnesses gave a largely negative assessment of the White Paper and McGuinness highlighted that the City of London Corporation did not welcome its approach to financial services, adding that what was now important was to ensure as much market access as possible. She added that the UK could not become a rule-taker though admitted that there were differing views on this across the financial services sector. Evans argued that the move away from mutual recognition was a result of the length of time it had taken for the government to establish a negotiating position.
Engagement with government: On engagement with industry over the move from mutual recognition to equivalence, McGuinness highlighted that they had been told there would be a change. She stated that they respected the government’s decision, recognising that it was more likely to be accepted in Europe, and acknowledged the good engagement over the past 18 months on this issue. She did not believe the government was complacent on services but stated that it had an 'uphill task' ahead of it. Evans noted that the value of the engagement had been limited by tensions within government and Parliament. The difficulty of creating public noise on Brexit issues was highlighted with Evans highlighted that some companies were criticised by Cabinet Ministers for making their views known.
Insurance and long-term savings: Evans said the White Paper posed considerable risks to the long-term savings and insurance sector, particularly regarding the risk of remaining a rule-taker for an extended period of time and the issue of contract continuity. On a no-deal scenario, he stated that insurance companies would be unclear whether they could legally claim for contracts that had been written pre-Brexit to be paid out in EU countries. He highlighted that 38 million EU policy holders would be impacted by uncertainty on new contracts. This included insurance-based pensions which could be deemed illegal. He urged further regulatory cooperation and political agreement to resolve such issues.
Wednesday 25 July
House of Commons
The Women and Equalities Report
On Wednesday, the Women and Equalities committee published their report into sexual harassment in the workplace following a six month inquiry and recommended a five-point plan to tackle it.
The report states that the government, regulators and employers are failing in their responsibilities to tackle sexual harassment in the workplace with legal protections often not available to workers in practice.
The report calls on government to focus on five priorities to put sexual harassment at the top of the agenda for employers:
- Introduce a new duty on employers to prevent harassment, supported by a statutory code of practice outlining the steps they can take to do this; and ensure that interns, volunteers and those harassed by third parties have access to the same legal protections and remedies as their workplace colleagues;
- Require regulators to take a more active role, starting by setting out the actions they will take to help tackle this problem, including the enforcement action they will take; and make it clear to those they regulate that sexual harassment is a breach of professional standards and a reportable offence with sanctions;
- Make enforcement processes work better for employees by setting out in the statutory code of practice what employers should do to tackle sexual harassment; and reduce barriers to taking forward tribunal cases, including by extending the time limit for submitting a claim, introducing punitive damages for employers and reducing cost risks for employees;
- Clean up the use of non-disclosure agreements (NDAs), including by requiring the use of standard, plain English confidentiality clauses, which set out the meaning, limit and effect of the clause, and making it an offence to misuse such clauses; and extend whistleblowing protections so that disclosures to the police and regulators such as the Equalities and Human Rights Commission are protected;
- Collect robust data on the extent of sexual harassment in the workplace and on the number of employment tribunal claims involving complaints of harassment of a sexual nature.
Chair of the Women and Equalities Committee, Maria Miller MP, said:
'It is utterly shameful that in 2018, unwanted sexual comments, touching, groping and assault are seen as an everyday occurrence and part of the culture in many workplaces. Government, regulators and employers have been dodging their responsibilities for far too long. There is currently little incentive for employers to take robust action. In contrast, there is considerable focus on other corporate governance issues like protecting people's personal data and preventing money laundering, with stringent requirements on employers and businesses to meet their responsibilities. It's time to put the same emphasis on tackling sexual harassment. The effects of sexual harassment can be traumatic and devastating, and this is reinforced by the personal evidence we received. The lack of appropriate support for victims within the workplace cannot continue. The burden falls unacceptably on the individual to hold harassers and employers to account when they will already hesitate to do so due to fear of victimisation. The current system is inadequate: the tribunal system must provide an effective remedy for employees. NDAs have their place in settling complaints, but they must not be used to prevent or dissuade victims from reporting incidents as is clearly the case now. We expect proper regulation of NDAs and that any unethical practices lead to strong and appropriate sanctions.'
Law Society President, Christian Blacklaws, said:
'We have been clear that reintroducing section 40 of the Equality Act will force employers to think before sending their employees into potentially difficult situations. It will also give all workers, no matter their legal status, the right to hold those who might send them into an unsafe environment to account. We are pleased the committee has agreed with our recommendations on increasing employee rights and improving access to the employment tribunal. Those who are harassed should know that the legal process is on their side.'
- Among other regulators, the Committee questioned the SRA’s Chief Executive, Paul Philip, on the low number of reported sexual misconduct cases (23 since November 2015). Philip told the Committee that there had been no assessment of the potential number of unreported cases due to the lack of evidence on which to base an assessment.
- The report however notes the SRA’s recent work to raise awareness of workplace sexual harassment; for example, including a firm’s approach to preventing sexual harassment in meetings held by its Regulatory Management team.
- The report concludes that regulators should take a more active approach to addressing sexual harassment in the workplace. The report specifically calls on the Health and Safety Executive to hold employers to account for failures to protect employees from harassment, and asserts that the government should require all regulators to put in place an action plan setting out what they will do to ensure that the employers they regulate take action to protect workers from sexual harassment in the workplace. Regulators should also make clear that sexual harassment constitutes a breach of regulatory requirements and set out the sanctions for perpetrators.
Non-disclosure agreements (NDAs)
- The report claims that unethical use of NDAs to threaten, bully and silence victims has in some cases been facilitated by members of the legal profession.
- The report pointed to two main instances of such unethical use: The Presidents Club Dinner and the case of Zelda Perkins (a former employee of Harvey Weinstein and Miramax). Regarding the Presidents Club Dinner, the report cited the Law Society’s verdict that the NDAs signed by the hostesses at the dinner were likely to be unlawful, but that their main purpose was to intimidate the signatories.
- Such NDAs often include clauses that are void under section 43J of the Employment Rights Act 1996, such as clauses designed to prevent whistleblowing and disclosures in the public interest. The report highlights its concern that signatories may not be aware that such clauses are legally unenforceable and calls for the government to legislate to require that confidentiality clauses are clear about their meaning and effect and explain where a disclosure may be protected.
- The Public Interest Disclosure Act 1998 (PIDA) also provides legal protections for whistleblowing to certain ‘prescribed persons’; the report noted however that the SRA are among the organisations that are not considered prescribed persons under the legislation and argues that the legislation should be widened to cover protected disclosures to the police and all regulators, and to any court or tribunal.
- The report called on the government to make it an offence for an employer to propose a confidentiality clause designed to prevent or discourage protected disclosures, and for the use of unenforceable clauses in confidentiality agreements to be considered a professional disciplinary offence for lawyers advising on such agreements.
- The Committee expressed its encouragement that the SRA had issued new guidance on reporting sexual harassment and the use of NDAs in March 2018 and hope that the Bar Standards Board and Bar Council issue similar guidance.
- However, the SRA Chief Executive, Paul Philip, admitted to the Committee that the SRA’s enforcement work on improper use of NDAs amounted to 'not very much', with only three open cases that he knew of.
- The report expresses the Committee’s disappointment at the SRA’s 'apparent lack of rigour' in investigating the potential unethical practice in the Zelda Perkins case. The report makes clear that the regulators of the legal profession must demonstrate that members of the legal profession will face sanctions for the misuse of NDAs in sexual harassment cases.
Thursday 26 July
House of Commons
Report on Criminal Legal Aid
The Justice Select Committee’s main finding is that the ‘government reforms to criminal legal aid risk eroding rights to legal advice and representation, tarnishing the reputation of our justice system and undermining the rule of law.’
The Committee recommends that the government commission a comprehensive and independent review, echoing our key recommendation.
Other conclusions and recommendations from the report:
The Committee considers it regrettable that the Law Society has had to resort to bringing a judicial review to pursue its grievances about the LGFS, and it recommends that the Ministry of Justice take urgent steps to avoid this dispute having to be resolved by the courts; whatever the outcome of the case, there should be a wider review of criminal legal aid.
The Committee also considers it regrettable that the Criminal Bar felt compelled to take direct action in response to the new AGFS, given the potential for adverse impact on defendants, claimants and the functioning of the courts. However, the underlying reasons for the dispute can be understood: the staged reductions in fees from April 2010 onwards, unhappiness about the revised scheme and the Criminal Bar's heartfelt concerns about the future of their profession and under-funding of the criminal justice system.
While the Committee welcomes the government's additional funding for the AGFS, and the Criminal Bar's acceptance of the offer, it does not believe that the underlying issues have been resolved; many barristers remain deeply unhappy about their situation and about the future of the criminal justice system.
The Committee acknowledges the challenges facing the Ministry of Justice in reworking the AGFS so that it is fair to all advocates, and in ensuring that the scheme is future-proofed against changes in the profile of Crown Court cases. It also acknowledges that the Ministry has made genuine efforts to address the concerns of the Criminal Bar. The Committee recommends that, without further delay, a system of annual review be built into the AGFS, overseen by a panel which includes representatives from the Criminal Bar and Solicitor organisations; the panel's remit should include considering the inter-dependency between the AGFS and the LGFS.
The pressure placed on defence lawyers to fulfil their professional obligations by reviewing increasing quantities of unused prosecution material is fundamentally unfair and likely to become unsustainable, and increasingly prejudicial to the defendant. We recommend that restoring legal aid payments for reviewing unused material above a certain page threshold be considered as part of the comprehensive and independent review of criminal legal aid that we have recommended above.
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