In Parliament, the week has been dominated by the Budget. For justice however, the main highlight was the announcement of £21.5m extra funding for the 'wider justice system'.
This week is Justice Week, and to mark this we have been calling on all our members to support our ongoing early advice campaign by writing to the Lord Chancellor. If you have not yet done so you can use our online form. To mark Justice Week, Law Society vice president Simon Davis spoke at an event hosted by the APPG on Legal Aid on Tuesday, while the future of legal aid will be the subject of a Westminster Hall debate on Thursday.
On the Parliamentary side, the week has been dominated by the Budget. The fiscal event was pitched as an end to austerity, with spending increases announced for the NHS and Universal Credit amongst other areas. For justice however, the main highlight was the announcement of £21.5m extra funding for the 'wider justice system'.
Last week Simon Davis gave oral evidence to the Justice Select Committee for a one-off session on the implications of Brexit for the justice system. The session covered assessments of the government's progress in negotiating an exit deal, as well as the potential impact on family law, legal services and international trade opportunities.
The Civil Liability Bill has passed through the final hurdles in the House of Commons. The Law Society briefed MPs on the Bill and were mentioned twice during the Report Stage debate by Ellie Reeves MP, a member of the Justice Select Committee, and Andy Slaughter MP, a former shadow minister. The Bill will return to the House of Lords for consideration of Commons amendments before it receives Royal Assent.
The Law Society was also referenced positively by both the Home Secretary and the Shadow Home Secretary during a Parliamentary statement on the use of DNA evidence in the immigration system. The Home Secretary stated his 'great regard for the Law Society', and noted that it is 'just the kind of organisation we should be listening to.'
This week in Parliament
Monday 29 October
House of Commons
- Budget statement
- Home Office oral questions
House of Lords
- Counter-Terrorism and Border Security Bill - Committee Stage (day 1)
Tuesday 30 October
House of Commons
- Treasury Select Committee oral evidence session on economic crime
House of Lords
- EU Justice Sub-Committee oral evidence session on intellectual property and the Unified Patent Court
Wednesday 31 October
House of Lords
- Counter-Terrorism and Border Security Bill - Committee Stage (day 2)
Thursday 1 November
House of Commons
- Attorney General oral questions
- Conclusion of the budget debate
- Westminster Hall debate on the future of legal aid
Monday 29 October
The Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, delivered the Budget to the House of Commons on Monday 29 October.
Presenting his Budget, the Chancellor said that the 'era of austerity is finally coming to an end'. The Budget documents can be found here, and a summary of the key points is included below.
There was no mention of legal services regulation, and no major announcements regarding the legal sector, however several announcements will impact on firms and solicitors.
Business rates - The Chancellor announced a one third cut in business rates for all businesses with a rateable value of £51,000 or less. He also committed to a £675m future high street fund for local authorities to support high streets.
Stamp Duty - the Chancellor announced an extension of Stamp Duty relief to cover shared ownership properties up to £500,000, adding it would also be backdated to include those properties purchased since the last Budget.
AI and technology - the Chancellor announced further investment of £1.6bn to support research and the modern industrial strategy:
- The Centre for Data Ethics and Innovation have been commissioned to study the use of data in shaping people's online experiences and the potential for bias in decision made using algorithms.
- The Digital Catapult will run a series of DLT Field Labs, working with businesses, investors and regulators focusing on a range of areas including construction and goods management.
- The Cryptoassets taskforce report will be published alongside the Budget. It will set out the country's approach to cryptoassets and DLT in financial services, including actions that will allow innovators to thrive and the benefits of these new technologies to be realised while at the same time mitigating risks that arise from cryptocurrencies. This will ensure the UK maintains its international reputation as a financial services centre with high regulatory standards.
- A new £50 million per year fund (for innovation and cutting-edge science) has been set up to address the challenges in cyber security and public health. The fund will focus on joint programmes between government and industry and will begin in 2021-22.
Apprenticeships - The Chancellor announced a total package of £695m for apprenticeships, including that:
- The government will provide up to £240 million, to halve the co-investment rate for apprenticeship training to 5%.
- The government will also provide up to £5 million to the Institute for Apprenticeships and National Apprenticeship Service in 2019-20, to identify gaps in the training provider market and increase the number of employer-designed apprenticeship standards available to employers. All new apprentices will start on these new, higher-quality courses from September 2020.
- The Exchequer Secretary to the Treasury and the Minister for Apprenticeships and Skills will work with a range of employers and providers to consider how they are responding to the apprenticeship levy across different sectors and regions in England, as well as the future strengthened role of apprenticeships in the post-2020 skills landscape.
Departmental spending - the Chancellor announced that a full spending review will take place next year for government departments, and that if a deal on Brexit is secured departments could expect more funding. £21.5m is to be invested in the 'wider justice system', with no further detail. The Ministry of Justice's revenue budget will be £6.3bn in 2018-19 and £6bn in 2019-20. The capital budget is set at £0.6bn in 2018-19, £0.4bn in 2019-20, and £0.1bn in 2020-21.
Brexit - the Chancellor announced additional funding for government departments for no deal planning, from £1.5bn to £2bn. He committed to maintaining flexibility in the government's fiscal rules, to allow for possible increases in spending should it be necessary over the coming months. He also announced minor amendments to tax legislation to maintain the effect of the existing tax regime if the UK leaves the EU without a deal.
Taxation - A consultation is to be launched on aligning consideration rules of Stamp Duty and Stamp Duty Reserve Tax. An updated offshore tax compliance strategy is to be published. The government is set to bring in new legislation to allow the introduction of international disclosure rules about offshore structures that could avoid tax or could be misused to evade tax.
Last week in Parliament
Tuesday 23 October
House of Commons
Justice Select Committee oral evidence session - the implications of Brexit for the justice system
On Tuesday 23 October vice president Simon Davis appeared before the Justice Select Committee to give evidence on the implications of Brexit for the justice system.
This one-off session sought to identify the opportunities and concerns around civil justice (including family, commercial and criminal law), criminal justice (including extradition arrangements) and the impact on legal services.
Simon's session was followed by a session with Justice Minister Lucy Frazer QC MP. During this session the Minister referenced the work of the Brexit Law Committee and the LawTech Delivery Panel.
The following other witnesses appeared alongside Simon:
- Andrew Walker QC, Chair, Bar Council
- Kate Gibbons, Partner (Finance and Capital Markets), Clifford Chance.
Please find a summary of the key points from the discussion below:
Government progress: Asked by Bob Neill about the government's progress since the Justice Committee's Brexit report in March 2017, Simon said there had been a positive direction of travel – referencing the transition period, and mutual co-operation. He added that they were still in a position of uncertainty.
- On the technical notices, Andrew Walker said there had been progress on the withdrawal agreement, confirmation from the EU on its interest in family law co-operation, and on the crime and security pillar. However he said there was no information out there on what specifically was being discussed.
- On progress on data alignment and information sharing, Walker said EU regulations would have to be mirrored – given the detrimental impact on legal services from not being able to move data across borders.
Government engagement: Asked by Bob Neill if he was satisfied with the level of engagement with the MoJ or DExEU, Simon praised the Law Society's relationship with the MoJ and that the government were taking their constructive solutions seriously. He went on to reference the Brexit Law Committee and the fact that its views have been heeded – including wanting legal services to be treated more like goods in the Brexit process.
- Walker agreed with Simon on the positive relationship his organisation had with the government, but for the draft treaty the Bar submitted on civil judicial co-operation – criticising the government for a lack of substantive response to this.
Uncertainty consequences: Victoria Prentis MP asked if the witnesses were seeing concrete examples of uncertainty. Kate Gibbons said partners had indicated two concerns recently, institutions no longer recognising English law, and derivatives markets provisions for French and Irish law governed contracts.
- Walker said more questions were being asked about English law in contracts, and that the Netherlands, France, Germany and Belgium were all setting up courts to try and secure a 'slice of the work.'
- Simon referenced the recent Thomson Reuters report which said that the choice of law and jurisdiction was already intensely competitive, regardless of Brexit. He said he thought the story was likely to be more positive than currently thought.
- Asked by Neill, Simon said 1000 solicitors had sought to requalify in Ireland to ensure rights of audience in EU courts, and that firms were merging and setting up new operations to secure rights of establishment.
Family law: Asked by Ellie Reeves if they agreed that there would be a profound impact on family law if civil judicial co-operation was lost post-Brexit, Walker said none of the fall-backs were as good or broad as the current EU provisions.
- Simon said people and families were often forgotten in this debate, and that there was potential for there to be a nightmare scenario if the UK just falls back on Hague. He added that they wanted to avoid people asking, in this context, ‘what is going to happen now?' Simon went on to say that there were large numbers of EU families in the jurisdiction, and that unscrupulous individuals will seek to take advantage of any uncertainty in this area.
Legal services impact: Labour MP Bambos Charalambous asked if Brexit would impact the legal services sector. Walker said he thought it would start small, and that the final deal will impact whether this impact grows. He added that there were intangibles around persuading people about the competitiveness of the jurisdiction – and that the sector would be impacted by the impact on the economy, especially the financial services sector.
- Kate Gibbons said the sector had a really good chance of managing through it there was clarity with contracts and if lawyers were free to operate as they do now through Fly In Fly Out.
- Simon referenced the legal sector's economic contribution, saying if there was a slowdown in the economy and commercial activity then this would translate immediate to the bottom line of law firms. He went on to spell out the implications of the UK leaving the single market for legal services, adding that it was impossible to price uncertainty.
International trade opportunities: Asked by Conservative MP Kemi Badenoch if there were any potential benefits or trade opportunities for the legal sector, Walker said legal services were at the bottom of the list for free-trade agreements. He added that legal services markets were the hardest to break into, that the EU has not stopped the UK from doing this elsewhere, and that Brexit did not make this easier for the sector.
- In a later answer, Walker added that the legal services sector had the best and easiest single market regime of any services sector – telling Ms Badenoch that regaining control of laws and reducing ECJ jurisdiction would not present benefits to the legal sector.
- Kate Gibbons said the sector would have to fight just to stand still after losing the ability to operate freely in the EU market – in her words, giving up something that works, in the hope for something else was naive and unrealistic.
- Simon said he was more optimistic, as by definition uncertainty meant some benefits. He went on to draw a distinction between how financial and legal services were regulated in Europe. Simon added that lawyers wouldn't benefit from any reduction in regulation, but that opportunities in disputes would arise from substantial trade deals.
No deal guidance: In response to questions from Labour MP John Howell, Walker said the Bar had been advising the government on the no deal guidance. Simon said the guidance given had said all they possibly can say – for example that Hague and Lugano could be signed up to (subject to member state agreement). He added that the structure the UK would be falling back on is not as adequate as the current situation.
EAW: In response to further questions from Hanson on the European Arrest Warrant (EAW), Walker said the government should have an equivalent regime in place that preserves what the UK has. Simon said the government had shown itself to be amenable on the ECJ's limited role in European agencies the UK wishes to stay part of.
Ministry of Justice (MoJ) Parliamentary Under Secretary of State Lucy Frazer QC MP also gave evidence after Simon at the session, where she was joined by the MoJ's Director of International and Rights Paul Candler.
Please find a summary of the key points from the discussion below:
Substance: Asked by Bob Neill to put flesh on the bones of the government's Brexit vision, Ms Frazer said the negotiation had been taken in stages – adding that while leaving the single market has consequences, there were fall backs for the UK.
Lugano: Quoting from a letter to the Ministry of Justice from the chair of the Lords EU Committee Lord Boswell, Bob Neill asked why the government appeared to have missed the opportunity of securing Lugano membership for the UK before March 2019. Ms Frazer said the government were having positive conversations with their counterparts on the continent about this.
No deal: Ms Frazer said a lot of work had been completed on no deal preparations for legal services, including the publication of technical notices, drafting of Statutory Instruments (SIs) and clarity around Rome and Hague applying to domestic law.
- In response to later questions from Labour MP David Hanson, Ms Frazer said the MoJ were spending roughly two-thirds of its allocated Brexit spending on staffing, as well as on IT and judicial training.
- At the conclusion of the session, responding to Bob Neill's questions about contingency planning for no deal, Ms Frazer said this outcome would lead to an increase in volume, complexity, a change to forms. She added that the MoJ have bid to Treasury to ensure they are prepared for that scenario, and are engaged in all these matters with the judiciary and HMCTS.
Legal and financial services: Bob Neill said there were concerns that civil judicial co-operation may be sacrificed in the horse-trading in EU-UK trade negotiations. Ms Frazer said the MoJ were ensuring this wouldn't happen – adding that the Lord Chancellor had made this clear in his meetings with member states.
Consultation with profession: Bob Neill asked what practical things the MoJ were doing to ensure proper consultation. Paul Candler said one of the key, useful forums was the Brexit Law Committee, which were monthly meetings to discuss the negotiating position of the UK, including progress on SIs.
- Ms Frazer added that she had attended Brexit Law Committee (BLC) meetings, and had been to the Law Society to meet lawyers and businesses in Brussels. She added that she had met with BLC sub-committees on family law and civil judicial co-operation.
Family law: Asked by Labour MP Marie Rimmer, Ms Frazer said it was important that the best possible arrangements were replicated in the family sphere. She added that the EU's guidelines in March specifically mentioned family law co-operation, and that there were some fall-backs in pieces of Hague legislation on child abduction, divorce and maintenance conventions.
Impact assessments: Conservative MP Victoria Prentis asked if MoJ had made a financial assessment of the different Brexit outcomes, including no deal. Paul Candler said it was very difficult to put specific figures on scenarios. Ms Frazer added that the economic contribution figures Simon raised were well known in the Department and were used often, and put to many people.
Technology: Asked by Ms Prentis if sufficient time and resources were being spent by MoJ to sell the jurisdiction, Ms Frazer spoke about the Legal Services are Great campaign and the Department's support for LawTech innovation – including in establishing the LawTech Delivery Panel, chaired by the President of the Law Society, which was looking into areas where they could innovate.
International trade: Paul Candler spoke about the MoJ's work in strengthening links with the Department of International Trade (DIT) to support the legal sector internationally beyond Brexit. Asked by Bob Neill about the details of the Lord Chancellor's recently signed MoU with India, Candler said it was about sharing expertise on regulatory models and Ms Frazer pledged to write to the Committee with further details.
Civil Liability Bill - Remaining Stages
The Civil Liability Bill had its remaining stages in the House of Commons on Tuesday last week and passed at Report Stage and Third Reading.
The Law Society briefed ahead of the debate and were mentioned twice at Report Stage:
- Ellie Reeves MP (Labour), member of the Justice Select Committee, noted the Law Society's support for the Justice Select Committee's report and recommendations on the small claims limit.
- Andy Slaughter MP (Labour) used an example from the Law Society's briefing comparing the amount of compensation somebody would receive for a delayed flight and the amount somebody would receive for an injury which could cause months of pain and suffering.
The Law Society Gazette was also mentioned twice during the debate, in the context of comments made on whiplash by former Lord Chancellor Jack Straw in an article published in the Gazette.
Read the full transcript of the debate.
At Report Stage, debate was held on:
New Clause 1, tabled by the Opposition, would have limited increases in the whiplash small claims limit to inflation (CPI) and allow the limit to increase only when inflation had increased the existing rate by £500 since it was last set. This new clause was defeated by 287 votes to 240.
New Clause 2, tabled by the Opposition, would have limited increases in the small claims track limit for those suffering whiplash injuries to inflationary rises only, for people who are either children or lacking capacity. This new clause was defeated by 288 votes to 243.
Amendment 2, tabled by the Opposition, would have removed the creation of tariffs for whiplash injuries and retain the existing system where judges decide compensation levels with reference to Judicial College Guidelines. The amendment was defeated by 298 votes to 243.
Amendment 1, tabled by the government, made a minor correcting amendment to the drafting of the Bill in one area. This amendment was passed without division.
At Third Reading:
- Justice Minister Rory Stewart MP said that the was first proposed in 2012, and that since then there has been a series of consultations on the Bill and pre-legislative scrutiny by the Justice Select Committee. He argued that the Bill will save motorists money and tackle fraudulent whiplash claims.
- Shadow Lord Chancellor Richard Burgon MP argued that the Bill undermined access to justice. He described it as an attack on the vulnerable, saying that it will result in ‘tens of thousands of working people [being] priced out of obtaining legal assistance.'
- The Third Reading of the Bill was passed by 294 votes to 238.
Following the debate, Shadow Lord Chancellor Richard Burgon commented that the Bill will create a two-tier justice system.
The Bill will now return to the House of Lords, for peers to consider Commons amendments.
Thursday 25 October
House of Commons
Statement from the Home Secretary on immigration
On Thursday the Home Secretary, Sajid Javid MP, made a statement to the House of Commons on the subject of the use of DNA evidence in immigration applications.
The Law Society was mentioned by Shadow Home Secretary Diane Abbott MP in her response, in which she cited the Law Society's concerns regarding the 'serious flaws' in the immigration system.
Sajid Javid in his response to the Shadow Home Secretary stated that he has a 'great regard for the Law Society, which does just this type of work. It is just the kind of organisation we should be listening to.'
In his statement, the Home Secretary said:
- DNA evidence is sometimes offered by immigration applicants on a voluntary basis in order to improve family links and benefit their application.
- However, in some recent cases it emerged that authorities were requiring applicants to provide DNA evidence, which is illegal.
- He extended an apology to all those affected.
- The Home Office is today publishing a review that covers:
The review will outline areas where existing guidance was incorrect, and will make recommendations on how to address the root causes of the emergence of this practice.
The review would not be the conclusion of this work, as further work is needed to ascertain the full scale of the issue.
The Home Office is aware of 83 applications that were rejected, 7 of which were solely due to a failure to provide DNA evidence and 6 of which were due in part to a failure to provide DNA evidence.
He also stated that there were 51 cases of dependents of Gurkhas being required to provide DNA evidence, with 4 from the same family unit having their application refused for a failure to provide DNA evidence; this has since been corrected.
He also stated that Afghans who worked for the UK government were subject to the same requirements, although he was not aware of any Afghans who had their applications rejected on these grounds.
He listed five actions the Home Office would be taking:
- The legal aspects of DNA use;
- Policy and guidance;
- Casework and practice;
- Correspondence with applicants;
- And oversight arrangements.
- Issuing guidance to officials making clear that they must not seek DNA evidence on a mandatory basis;
- Setting up a taskforce to advise those affected;
- Looking to reimburse anyone who has suffered financial loss as a result of these requirements;
- Examining whether this approach was taken in any other part of the immigration system;
- And reviewing the structures and processes in the immigration system, ad considering what form this independent review should take.
In response, the Shadow Home Secretary Diane Abbott MP said:
- The immigration system must be fair.
- She asked the Home Secretary to clarify if there would be any legal consequences for those officials involved.
- She cited the Law Society's concerns regarding the ‘serious flaws' in the immigration system.
- She cited statistics that 50% of appeals being upheld and waiting times for appeals being up 45% as evidence of the failure of the immigration system.
- She noted that the visa system faces its largest ever influx of applications after Brexit, and said it was a matter of urgency that processes are put in place to ensure the system is fit for purpose.
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