My Lords, Amendment 41C also seeks to insert a new clause after Clause 80, but does so with a rather different objective from that of the noble and learned Lords who have just spoken.
The proposed new clause is titled, “Review of operation of Schedule 8”, which is fairly self-explanatory. Before going any further, I must take this opportunity to thank my noble friend Lady Noakes for having moved amendments on my behalf to this part of the Bill. I tabled them some months ago for discussion in Committee but unfortunately malign fate intervened to ensure that I was abroad on the day that they came to be discussed.
Reading the record of the Committee’s deliberations, there were a number of questions still in my mind. As a result, I tabled the amendment we are debating tonight. I also thank my noble friend Lord Eccles for having joined me in taking up the cudgels. He has his own characteristically insightful amendments, which we will come to in a moment and to which I have put my name. Finally, I thank the Minister and her officials for the courtesy and kindness in meetings that they have afforded both my noble friend and me. With those thanks, to horse.
It is easy to characterise amendments to Clause 8 as anti-consumer. Indeed, reading the remarks of the noble Baroness, Lady Hayter, in Committee, I felt that that was somewhat her default option. However, for me and my noble friend Lord Eccles, the reason for tabling the amendments is not—I repeat, not—anti-consumer; rather they aim to improve the chances that consumers will receive the compensation justly due to them, and it will not flow in large measure to third-party funders, professional advisers and the like.
I was grateful to the Minister for the meeting at which my noble friend Lord Eccles and I explained this, and attempted to explain how the Competition
Appeal Tribunal—the CAT—would, in our view, find itself in the front line of legal wrangling of a type and range which, by reason of its past experience, it was ill fitted to handle. I confess that I returned from that meeting with my noble friend somewhat depressed at the outcome. I returned to my office to reflect on what could be said that would cause my noble friend and the noble Baroness, Lady Hayter of Kentish Town, better to understand the potential ramifications of the Pandora’s box they are so casually preparing to open.
While awaiting inspiration to strike, I leafed through the Financial Times—and there it was, on page 8. It is a full page advertisement in very large type:
“We won over $28 billion in judgments and settlements in the past two years”.
We have,
“650+ lawyers worldwide—all devoted exclusively to litigation, arbitration and white collar matters. Get us on your side”.
Equally characteristically, in very small type down the bottom, which one does not read so easily:
“Attorney advertising. Prior results do not guarantee a similar outcome”.
That is the sort of 500-pound legal gorilla that the CAT is going to have to deal with. One does not win $28 billion-worth of damages by saying, “After you, please, Claude. After you, please, George”. Your weapon of choice will be the legal equivalent of a knee in the groin.
Lest any noble Lords think I struck lucky, I refer the House to an article the next day in the Times. These cases will undoubtedly require, find and use expert witnesses. The article states:
“A High Court judge last week called for a cap on legal fees … Mr Justice Mostyn said that the fees in a case in which lawyers and experts were paid a total of £920,000 during a dispute over assets worth £2.9 million was “madness”. A key factor was the use of experts: six reports by forensic accountants were filed, as well as a joint expert statement at a cost of £154,000. In eight months since April, a ‘staggering’—
that was the judge’s word—
“further £700,000 was spent”.
These are the sorts of things that lie ahead for the Competition Appeal Tribunal. That is my thinking in wishing to see the Government implement the amendments we are discussing, to ensure that the 500- pound legal gorillas do not run off with all the money.
Having said that, I accept that there has to be a little worm of doubt in my apple of certainty. Maybe my fears are wrong: just suppose, despite all my concerns, the new system works well and delivers the right outcomes for consumers. I am not able to foretell. Equally, I hope my noble friend on the Front Bench will accept that she, too, has to have a little worm of doubt in her apple of certainty. I hope the noble Baroness, Lady Hayter of Kentish Town, who I know to be an individual of discernment and sound judgment, can accept that she, too, cannot be certain. Only the passage of time, with its attendant experiences, can answer this question.
That is why I have tabled the amendment—so we can see what really happened in real life and not in our potentially fevered imaginations tonight. My amendment requires the Secretary of State, before the
end of five years, to appoint a reviewer of the operations of Schedule 8. The reviewer can roam widely but he must answer three key questions. The first is a description of the cases brought under the schedule and the outcomes to them, so that we can form an overall strategic view of how the schedule has worked.
Secondly and most importantly, he has to split the proceeds paid between consumers, professional advisers and third-party funders. This will enable us to see the level of benefit to consumers. If, for example, consumers receive 90% of the total, it would be one thing. If, as I fear, they receive less than 50%, it will be another. Finally, a report on the general operation of the schedule, and how it benefits consumers, would open the way for some recalibration of legislation in the light of experience.
As this piece of legislation has such potentially huge implications as we move from an opt-in regime with, to date, only one body authorised to bring proceedings—Which?—to an opt-out regime where anybody is free to have a go, there is a need for a degree of formality. My amendment requires the Secretary of State to lay a report before Parliament, which will ensure the appropriate level of debate, scrutiny and follow-up.
To conclude, this is an amendment by which nobody loses. The only winners are truth and accuracy. I fear that my noble friend will be told to resist. There will be the usual guff about creating precedents. I argue that this change in our law is unprecedented and that the potential implications deserve a serious, formal, forensic follow-up and analysis. My noble friend will no doubt be told that her department will carry out a thorough review of the outcomes. Quite possibly. However, a review by an outsider, poking his or her nose disobligingly into various corners, is likely to be far more effective. We would also avoid the risk, if the results of the review are unwelcome and disobliging, that the press release, if any, may by some strange alchemy appear at 4.30 on a Friday afternoon.
I do not suggest that my amendment meets the exacting standards for parliamentary draftsmen. All I am asking my noble friend to do today is to accept that there has to be some uncertainty in all our arguments—mine and hers—and that she will, in consequence, take the amendment away for one final look before Third Reading. I conclude by saying to my noble friend, to paraphrase the famous phrase, that if she has nothing to hide, she has nothing to fear from my amendment. I beg to move.
7 pm