On Tuesday, the new Lord Chancellor appeared at his first Justice Oral Questions in the House of Commons, where he and his ministerial team were asked about the impact of Brexit on the legal system, restoring legal aid for early advice and court modernisation. The Law Society’s campaign to restore legal aid for early advice was raised during the session.
Our priorities for the justice system were made in Joe Egan’s speech on the swearing in ceremony of the Lord Chancellor which can be read here.
On other news, the Financial Guidance and Claims Bill also passed its Second Reading in the Commons, and will be read at Committee Stage on Thursday this week.
Secretary of State for Exiting the EU David Davis MP gave evidence to the Exiting the EU Select Committee. He commented on the suitability of a CETA-style deal for the UK, the government’s position on a transition phase, and on a paper on financial services.
Trade Minister Greg Hands MP also appeared before the International Trade Committee as part of its inquiry into the continuing application of EU free trade agreements after Brexit. The Law Society submitted written evidence to this inquiry in December.
In The Sun, the Chair of the Conservative MPs backbench group, the 1922 Committee, noted that he has received 40 of the 48 letters he must obtain to trigger a leadership contest. With discussions at Cabinet on the UK-EU future relationship and unrest on the backbenches, we will be monitoring for any further developments.
This week David Davis gives evidence to the Lords European Union Committee on the scrutiny of the Brexit negotiations. The Law Society’s Head of International Mickaël Laurans will also appear before the EU Internal Market Sub-Committee in its Brexit inquiry on the future trade between the UK and the EU in services.
This week in Parliament
Monday 29 January 2018
- Oral Question – UK representations to the Turkish government on human rights abuses following EU withdrawal - Lord Balfe (Conservative)
- EU Committee Oral Evidence Session on ‘Scrutiny of Brexit Negotiations’, with David Davis MP
Tuesday 30 January
- Oral questions – Business, Energy and Industrial Strategy
- Westminster Hall debate – NHS negligence cases – Andrew Gwynne MP (Labour)
- Westminster Hall debate – Treatment of adults with autism by the criminal justice system - Kevin Brennan MP (Labour)
- Committee Stage – Trade Bill
- Committee Stage – Taxation (Cross-border Trade) Bill
- Second Reading (day 1) - European Union (Withdrawal) Bill
Wednesday 31 January
- Business, Energy and Industrial Strategy Oral Evidence Session on ‘Leaving the EU: implications for UK business’ with Emily Lydgate, Lecturer in Law, Sussex Trade Observatory
- Second Reading (day 2) – European Union (Withdrawal) Bill
Thursday 1 February
- Oral questions – Exiting the European Union
- Committee Stage – Trade Bill
- Committee Stage – Taxation (Cross-border Trade) Bill
- Committee Stage – Financial Guidance and Claims [HL] Bill
EU Internal Market Sub-Committee Oral Evidence Session on ‘Brexit: future trade between the UK and the EU in services: follow-up’, with Mickael Laurans, Head of International at the Law Society
Friday 2 February
Last Week in Parliament
Monday 22 January
House of Commons
Financial Guidance and Claims Bill Commons Second Reading
The Financial Guidance and Claims Bill undertook its Second Reading in the House of Commons. The Law Society briefed MPs ahead of the debate.
The summary of Monday’s debate:
Cap on personal injury claims: Justice Select Committee Chair Bob Neill MP (Conservative), referenced his Committee’s work on the small claims limit. He noted that the likely increase in the limit will mean more litigants in person in personal injury cases and so he thinks that the current cap on payment protection insurance should be extended to personal injuries cases. He also asked the Minister to consider a ‘fit and proper person’ test in relation to claims management companies (CMCs).
Cold calling: Following a question from Andy Slaughter MP (Labour), Secretary of State for Work and Pensions Esther McVey MP confirmed that there will be a ban on pension cold calling. She said that the Department for Digital, Culture, Media and Sport is currently working through the details of an amendment to prohibit CMCs from making live unsolicited calls unless the receiver has given prior consent. A number of MPs from across the house, including the Shadow Secretary of State for Work and Pensions, Debbie Abrahams MP, raised the need for this Bill’s scope to maximised to clamp down on cold calling.
CMCs role: Both the Secretary of State and her Shadow agreed that there is a role for a effective CMC management market which is in the interest of consumers.
Holiday sickness claims:
Debbie Abrahams MP noted the Association of British Travel Agents figures that there has been a 520 per cent increase in the number of gastric illness complaints and that one on five people have been contacted about a compensation claim for holiday sickness.
Director responsibility in CMCs: Patricia Gibson MP (SNP) noted that the Government had missed two deadlines to adopt provisions to have more director level responsibility for unsolicited marketing communications. A number of other MPs called for Ofcom and Information Commissioner’s Office to be more robust.
Personal injury claims: Chris Philp MP (Conservative) discussed his personal experience of persistent cold calling after a minor road traffic accident. He noted CMCs tried to persuade him to submit a fraudulent claim. He said that the number of whiplash or soft tissue injury claims has increased by 50 per cent over the last few years despite road traffic accidents going down by 30 per cent. He noted his objections to CMCs as two-fold:
- They incite otherwise law-abiding members of the public to commit fraud, which is clearly a morally corrosive phenomenon.
- The cost of all these compensation payments is ultimately borne by drivers through higher insurance premiums - some people estimate the total cost of that at an extra £2.5 billion - or by consumers through higher holiday costs.
Philp went on to encourage the government to introduce the Civil Liabilities Bill. Ben Bradley MP (Conservative) also noted a personal experience of being ‘plagued by calls’ following a minor car accident which were encouraging him to submit a false claim for whiplash.
Tuesday 23 January
House of Commons
Justice Oral Questions
Oral Questions to the Secretary of State for Justice took place in the House of Commons.
A summary of the key points:
Neil Gray MP (SNP) asked about the effect of the UK leaving the EU on the operation of the legal system in each legal jurisdiction in the UK, and said that the EU has criticised the government’s position papers on judicial cooperation. The Justice Secretary, David Gauke MP responded by saying that the government would prioritise a smooth legal transition in the wake of Brexit. He referenced how the government was working with the devolved administrations and that the ambition was to reach a strong deal on justice issues.
Chair of the Justice Select Committee, Bob Neill MP (Conservative) noted that much of the discussion on Brexit focuses around criminal cooperation, but identified that civil and commercial cooperation is also of vital importance and called on the government to provide contractual certainty and for these issues not to be lost in the negotiations. Gauke responded by saying that it was important to provide continuity and legal certainty on this issue during the Brexit negotiations.
SNP Justice spokesperson Joanna Cherry MP argued that the Scottish legal sector is being overlooked in the Brexit negotiations and asked for assurances that it would not be. Gauke responded by committing to work with representatives from all the UK’s legal systems to get the best deal for the legal sector.
Derek Thomas MP (Conservative) asked about the provision of legal aid and noted the impact on rural communities of changes to legal aid. Ellie Reeves MP (Labour) noted the lack of early legal advice in housing matters and called on the government to reintroduce legal aid for early advice in housing cases. Shadow Minister Yasmin Qureshi MP (Labour) raised the importance of legal aid in enabling people to seek judicial review. Responding, Parliamentary Under-Secretary of State for Justice, Lucy Frazer MP, noted the current availability of legal aid, and that the government is currently undertaking its post-implementation review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
Rights for victims and domestic abuse
Priti Patel MP (Conservative) asked for the criminal justice system to be reformed to better tackle domestic abuse. Gauke responded by noting that the Government was looking at options for strengthening measures for tackling domestic abuse.
Ruth George MP (Labour) asked whether it was right that victims of domestic violence had to increasingly represent themselves in court. Gauke responded by noting the work that the government has already undertaken on domestic violence and that the government is looking at options to strengthen measures to tackle domestic violence.
Rachael Maskell MP (Labour) argued that women were being taken to family courts multiple times as a form of abuse. Frazer responded by outlining the action taken in November 2017 to tackle this issue.
Court modernisation and closures
Andrew Lewer MP (Conservative) asked about court modernisation and improving the alternative dispute resolution scheme. Responding, Frazer outlined the technological changes taking place in the courts, and explained that the government was working to offer online mediation services as part of the alternative dispute resolution scheme.
Cat Smith MP (Labour) asked about Fleetwood Court and court closures announced last week. Responding, Frazer noted that the government is modernising the court service. She argued that courts and tribunal services were only used at 50 per cent of their capacity in the last year, and that the government are introducing a programme to modernise courts and new ways of resolving disputes online.
Paul Scully MP (Conservative) asked the Minister to note the potential improvements for court services that could result from modernisation and digitisation. Frazer responded in agreement and noted that the government was looking at modernisation closely.
Stamp Duty Westminster Hall debate
Solicitor John Stevenson MP (Conservative) led a debate on stamp duty land tax (SDLT) reform.
Stevenson said at the top end of the market properties are struggling to be sold because of the high stamp duty rates buyers are unwilling to pay.
Stevenson suggested the seller should be liable to SDLT, rather than the buyer. He wrote about this issue back in October 2017 in an article for Conservative Home. He also proposed adding the sellers NI number to the SDLT form, which he suggests would give HMRC an opportunity to check capital gains tax and payment of income tax. He gave the following explanations for this proposal:
It helps first-time buyers. Buyers would no longer be responsible for the tax and said when buyers take out a mortgage, the amount never includes the Stamp Duty. Instead, the buyer has to find that lump sum over and above the deposit they have just put down. He said it would help buyers without significant capital.
The seller is the one who has access to the large lump sum required and they are the ones who are better placed to pay the tax. Sellers will know ahead of time exactly how much they will be receiving for their property and how much they will have to pay – as will their mortgage advisers.
The change will help growing families move through the property chain to find the larger houses. A growing family would only pay Stamp Duty on the smaller, often lower-valued property – opening up the market for larger premises.
Stevenson acknowledged there were practical issues with the proposals:
- He noted at present it is the buyer’s solicitors’ responsibility to pay the tax, which he believes should continue. He said within the legal profession there would be a mechanism whereby, when the property was sold, they would ensure that they had sufficient money to cover that tax when the property was registered.
- There would have to be a transitional period, because people who have paid tax on a property that they have bought in the last few years would find it a bit hard to subsequently have to pay the stamp duty when they sold the property. He said he believes ‘that would be manageable.’
The Exchequer Secretary to the Treasury Robert Jenrick MP (solicitor) responded to this debate, saying:
- The government has conducted considerable research into the proposed changes but will only make the change if the benefits are clear. He acknowledged the legal liability for stamp duty rests with the purchaser, but evidence suggests that the cost of stamp duty is reflected in the value of the property.
- He would like to hear more on proposed changes to the SDLT reform and said HMRC would be interested in considering the idea.
Wednesday 24 January
House of Commons
David Davis Exiting the EU Committee appearance on progress of Brexit negotiations
Secretary of State for Exiting the EU David Davis MP gave evidence to the Exiting the EU Select Committee. You can watch the session in full here .
David Davis was asked for further details on several issues including the government’s position on a transition phase, the rumoured position paper on financial services and the Northern Ireland border.
Davis denied reports that the government had been planning on publishing a position paper on financial services imminently. He said that they may choose to, but at the moment have no explicit plans to publish one.
On transition, it was put to Davis by Jacob Rees-Mogg MP (Conservative) that what the government was seeking during the transition phase would turn the UK into a ‘vassal state.’ Davis rejected this, highlighting the necessity and purpose of the transition period for countries and businesses. Davis added he was relaxed about the arrangements for the transition period, refusing to rule out that the UK would still be participants in the single market and the customs union, and confirming the UK would accept ECJ jurisdiction during this period. Davis also said all of the substance of the UK's post-Brexit deal with the EU will be complete before the beginning of the transition. He added that he believed an agreement on a transition phase would be agreed by March 2018, and that this period would end sometime between December 2020 and the end of March 2021.
Asked by Joanna Cherry MP (SNP) about the desirability of CETA as a model for the UK-EU relationship, Davis said that while CETA had worthwhile provisions on labour law standards for example, ‘it doesn’t mean that we’re going to adopt every piece of CETA. That wouldn’t be enough for us anyway, it doesn’t do the job. It gives you a floor, nothing more.’
He said prior to this that the value of CETA, South Korea and Swiss arrangements and other existing FTAs with the EU is they give you template of what can be achieved already, adding: ‘They are the floor not the ceiling. That’s why I said [CETA] plus plus plus.’
Transition: Davis said a Brexit transition agreement can be made in about eight weeks and added that the EU Council has hinted that this is possible. He said that two years for the length of transition was a suitable length of time to allow countries and businesses to put new systems in place, and that any longer than two years and there is a danger the UK could be sucked into a more permanent transition phase. He added that he could not rule out continuing to participate in the single market and customs union during the transition but that the government is not seeking to remain a member, but wish to stay within the existing framework so that businesses and people will not have to undergo two sets of changes. The UK would accept the jurisdiction of the ECJ during this transition phase. Asked by Rees-Mogg why the government do not just extend Article 50 rather than have a transition phase, Davis said that negotiating trade deals is the big advantage of leaving, and delaying this would be problematic.
Possible disputes over transition period: During negotiations with the EU on the transition period, Davis said there may be an argument on whether the UK will be able to negotiate trade deals with other countries during this period. He said there are people in the EU who want to restrict any advantages for the UK.
Financial services paper: Davis said that he wasn’t sure where the belief came from that the Department were going to publish a financial services position paper. He said only that he ‘suspects’ that they might publish something, like they will do with other areas, but at the moment they have no explicit plan to. He added that he had not promised any financial services firms himself that they were planning on publishing one imminently.
Future negotiations: Davis said he will be meeting Michel Barnier next week following the conclusion of the General Affairs Council. He added that his officials have been in Brussels continually over the last couple of weeks in order to discuss how to convert the phase one joint report agreement into the final withdrawal agreement treaty, and have been scoping the issue of the implementation period but will not go into the substance of this until the EU has published its transition guidelines.
Divergence: Davis said the UK do not anticipate that it will remain in lock step with the EU when it comes to EU regulation. Davis said the aim is to maintain the best possible access to EU markets while the UK exercises its own freedom and that how this freedom is used will be a matter for different governments and parliaments as time goes on. He admitted that there is trade-off between alignment and access, and the UK are seeking outcome equivalence in many areas but not harmonisation, as if the UK was to seek harmonisation then there would be no point in leaving.
International Trade Select Committee: Continuing application of EU trade agreements session
The International Trade Select Committee took evidence from Brussels-based experts and Minister of State for Trade Policy Greg Hands MP as part of its inquiry into the continuing application of EU free trade agreements (FTAs) after Brexit.
DIT outlook: The response from trade partners has been positive, with wide recognition of the value of these agreements. Britain’s role of championing free trade continues to pay dividends. None of the more than 70 nations has any interest in erecting barriers to trade where none exist. There have been discussions on the official level and face-to-face discussions with the Secretary of State and the Ministerial team. They are confident that there will be no disruptions to trade with the countries covered by those agreements. When the Trade Bill is passed, they will be able to transfer the agreements into UK law. The agreements are substantially about trade but can also include other aspects. There are 11 straight FTAs. They are in dialogue with many other countries on Association Agreements, Mutual Recognition Agreements (MRAs) or Economic Partnership Agreements. DIT and the Department for International Development (DfID) are taking the lead on the economic partnerships. DIT and the Foreign and Commonwealth Office (FCO) are taking the lead on Association Agreements. The Department for Exiting the European Union (DExEU) is taking the lead on agreements with Andorra, for example.
Rolling over EU trade deals: Lord Price, the former Department for International Trade (DIT) Minister, had said that all third countries have agreed to roll over their EU trade deals to the UK. Hands said that the agreement in principle is there to do so, and no one has raised objections. Partners want to ensure continuity, and the technical work on this with some partners has now begun. Of the more than 70 partners spoken to, none have given any principled reason not to roll this over.
Customs union: Hands said that the government’s policy is to have a customs arrangement with the EU, but not to be in the customs union.
Progress of talks on EU FTAs:
Chris Leslie MP (Labour) said that Hands' predecessor Lord Price had said that all third countries had agreed to roll over their EU trade deals to the UK. Hands said that of the more than 70 partners that the Department has spoken to, none has given any principle reason not to roll the agreements over, and they have agreed in principle to do so. He said that the process of talks is ongoing, and they are moving into the technical work with some partners. He said that there are some issues on certain deals, like tariff rate quotas (TRQs) and rules of origin, which must be ironed out, but these are not insurmountable and the agreements will remain substantively the same.
Important trade deals: DIT has not chosen a subset of trade deals to prioritise rolling over (per BBC Newsnight reporting). The government's intention is to talk to all counterparts. Some agreements are more valuable to the UK economy than others, but the government is not selecting individual agreements, rather it wants to roll over all agreements. In terms of the most important agreements, in terms of trading volumes, there are important agreements with South Korea, SADCA, the various Swiss agreements, and the European Economic Area (EEA) Agreement.
Exchange of letters option: Committee Chair Angus Brendan MacNeil (SNP) suggested that the government was considering adopting EU trade agreements with third countries by copying and pasting them, or through an exchange of letters with the third country. Marcus Fysh MP (Conservative) also said he was not convinced that an exchange of letters would be sufficient.
Customs union: Greg Hands said that the government's policy was to have a customs arrangement with the EU, but not to remain in the EU customs union.
House of Lords
Sanctions and Anti-Money Laundering Bill Lords Third Reading
The Sanctions and Anti-Money Laundering Bill was debated at Third Reading in the House of Lords. The Bill now passes to the House of Commons. The list of amendments can be found here. The Law Society briefed a number of Peers before the Report Stage.
Tabling a series of amendments, some of which were in conjunction with Opposition and crossbench peers, Foreign Office Minister Lord Ahmad of Wimbledon explained that the changes would ensure that the Bill’s clauses remain legally consistent throughout. He said the amendments follow the careful discussion and collaborative engagement that had taken place since Committee Stage.
Government-sponsored amendments 1, 2, 3, 5 and 6-8 were all agreed to and now stand part of the Bill.
Key points from the debate included:
Money laundering and terrorist financing: Speaking in favour of his amendment 1, Lord Ahmad said it would require that future regulations made under Clause 43 can only make provision which enables or facilitates the detection or investigation of money laundering or terrorist financing. He added that power remains under this Clause to make regulations that prevent money laundering or terrorist financing and to implement the standards of the Financial Action Task Force, and that the amendment clarifies the purposes for which regulations can be made and addresses concerns raised by Lords.
- Lord Ahmad said the government’s amendment 2 was a technical change to extend the definitions of money laundering and terrorist financing contained within Clause 43 to a proposed new clause for the register of beneficial ownership of overseas companies that own UK property (through government amendment 3). He added that amendment 2 was necessary to ensure the definitions under Clause 43 were consistently applied throughout the sections of the Bill that relate to anti-money laundering.
- In tabling amendment 6, Lord Ahmad said it would provide further certainty for firms by ensuring that any regulations requiring a relevant person to adopt policies, controls and procedures must also be proportionate to the size and nature of the person’s business.
- On amendments 7 and 8, Lord Ahmad said they were necessary to technically define ‘relevant business’ as business which entails: ‘risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system.’
Commencement: To address concerns raised over the breadth of paragraph 2 of Schedule 2, Lord Ahmad tabled amendment 5, which limits the ability of regulations made under Clause 43 to require only relevant government departments, anti-money laundering supervisory authorities, and persons carrying on a relevant business to identify and assess risks relating to money laundering and other financial threats. The amendment also clarifies the scope of this power and narrows the scope of potential duties to carry out such risk assessments – consistent with the approach taken by the UK’s anti-money laundering framework.
Thursday 25 January
House of Commons
Taxation (Cross-border Trade) Bill Commons Committee Stage
The Taxation (Cross-border Trade) Bill has had its first and second days of Committee Stage in the House of Commons. The Bill was previously known as, and is still commonly referred to as the Customs Bill.
Any votes pressed to a division were won by the government and so the Bill remains unchanged to date.
Friday 26 January
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