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Session 2000-01
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Delegated Legislation Committee Debates

Draft General Commissioners of Income Tax (Costs) and Draft Justices and Justices' Clerks (Costs) Regulations 2001

First Standing Committee on Delegated Legislation

Monday 26 March 2001

[Mr. Peter L. Pike in the Chair]

Draft General Commissioners of Income Tax (Costs) Regulations 2001

4.30 pm

Mr. David Atkinson (Bournemouth, East): On a point of order, Mr. Pike. Is it in order to ask what is the period of notice for the convention of the meeting of this Committee? I ask because I received the notice in my post only this morning, although it might have been waiting for me on Friday morning when I was back in my constituency. That is bad notice if it is in order.

Mr. Nick Hawkins (Surrey Heath): Further to that point of order, Mr. Pike. I know from talking to colleagues who are usually described as the usual channels that there is increasing concern that hon. Members of all parties are receiving notification extremely late. I do not know whether that concern is shared by the usual channels on the Government Benches. Like my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) I received my card only this morning, but as a shadow Minister I had been previously notified by the usual channels that I would be required today. However, there might be hon. Members on either side of the House who have views about a Committee but who simply do not receive notification until the day after it sits; if so, that is bound to be a matter of concern to all of us.

The Chairman: That is not a point of order, but we are looking into the matter. The point has been noted. When I get further information, I will see that hon. Members are notified. As far as I am aware, the Committee has been properly appointed and notices were sent out in the appropriate way. There have been one or two last-minute changes, although I am not sure exactly when they were made.

Mr. John Burnett (Torridge and West Devon): On a point of order, Mr. Pike. May I draw to your attention the fact that the notes on the back of the statutory instruments, which also came late, are exceptionally sketchy? As we seem to be dealing with an amendment to an Act under the Finance Bill, it is a shame that we cannot have reasonable information, especially when we get notification and copies of the instruments only shortly before we are about to debate them.

The Chairman: That is not strictly a point of order for me, but I am sure that the Minister has taken note of the hon. Gentleman's comments and that she will deal with them when she opens the debate.

4.33 pm

The Parliamentary Secretary, Lord Chancellor's Department (Jane Kennedy): I beg to move,

    That the Committee has considered the draft General Commissioners of Income Tax (Costs) Regulations 2001.

The Chairman: With this it will be convenient to consider the draft Justices and Justices' Clerks (Costs) Regulations 2001.

Jane Kennedy: I apologise to hon. Members if they found the explanatory notes insufficiently detailed. We are dealing with relatively technical issues and I hope that this non-controversial set of measures will be widely welcomed by justices of the peace, their clerks and general commissioners of income tax. I invite the Committee to approve two sets of draft regulations.

Section 102 of the Access to Justice Act 1999 inserts provisions into the Taxes Management Act 1970 that prevent a court from ordering a general commissioner to pay the costs in any proceedings in respect of an act or omission of a general commissioner in the execution of his duty. That immunity does not apply where a general commissioner is being tried for an offence, is appealing against a conviction, or acted in bad faith. Where the court is prevented from making such an order against a general commissioner, the court may instead order the making by the Lord Chancellor of a payment in respect of the costs of a person in the proceedings. Section 98 of the 1999 Act inserts similar provisions in respect of justices and their clerks in the Justices of the Peace Act 1997.

The regulations, each containing the same provision, provide first that an order for payment of costs by the Lord Chancellor cannot be made in respect of a public authority's costs. Secondly, when such an order has been made, the regulations make detailed provision for how the costs shall be determined.

The Justices and Justices' Clerks (Costs) Regulations 2001 apply in England and Wales. Northern Ireland will shortly make its own regulations, which will be subject to the negative resolution procedure. The General Commissioners of Income Tax (Costs) Regulations 2001 apply in England, Wales and Northern Ireland. That is the only significant difference between the two sets of regulations. Scotland will make its own regulations separately.

I do not propose to go through each regulation, as they mainly concern detailed provision about the determination of costs. It was with a sinking heart that my officials and I learned that the hon. Member for Torridge and West Devon (Mr. Burnett) was formerly a tax lawyer and specialist; we look forward to his contribution with some trepidation.

In outline, regulation 3 provides that a costs order cannot be made in favour of a public authority. Where a court orders that the Lord Chancellor make a payment in respect of a person in the proceedings, regulations 5 to 7 detail how costs shall be determined.

In my view, the regulations are compatible with the rights set out in the European convention on human rights, and I commend them to the Committee.

The Chairman: Before I call the Opposition spokesman, let me respond to the point of order that was raised. I am advised that the Committee was constituted on Wednesday 21 March. A small number of changes were made on Thursday, and notices were sent out appropriately. If some notices were delayed and received late, I shall ensure that that information is conveyed to the authorities. On Select Committees, I have sometimes received notice very late. I shall pass on that message, and I hope that that is acceptable.

Mr. David Atkinson: I am most grateful for that assurance, Mr. Pike. In the light of the information that you have just given us, it seems that the notices went out so that they would be received only this morning. That was the case with my hon. Friend the Member for Surrey Heath (Mr. Hawkins) and me, and for all I know, it was the same for all members of the Committee. I hope that you will agree that that is disgracefully short notice and totally impractical. I hope that you will convey our concerns to the appropriate authorities.

The Chairman: All members of the Committee should have received the notices in the mail system on Friday at the latest, and some should have received them on Thursday. I shall pass on the hon. Gentleman's message, because I am not responsible for the distribution of mail in the House.

4.38 pm

Mr. Nick Hawkins (Surrey Heath): I welcome you to our proceedings, Mr. Pike. Like the Minister, I think that they will not detain us long, although I, too, was impressed to see the yellow and orange tax handbooks sitting in front of the hon. Member for Torridge and West Devon. I remember them from what little tax law I did. This is one occasion on which I must confess that the hon. Gentleman is probably the most well qualified member of the House on tax law. It is a long time since I had to pass examinations in revenue law, and I certainly would not claim any detailed knowledge of that field.

I understand the Minister remarks about the way in which the regulations flow from the Access to Justice Act 1999. Having followed the logic of her speech, I see no problems with the regulations. I therefore have no further comments to make on behalf of the Opposition.

4.39 pm

Mr. John Burnett (Torridge and West Devon): My contribution will, I hope, be equally terse. The books are rather misleading. You will be interested to know, Mr. Pike, that my handbook does not contain the amendments that were introduced in the Access to Justice Act, so I must get hold of the publisher of ``Butterworths'' and make the appropriate complaint.

I should like the Minister to answer one or two questions about the regulations. First, have any steps been taken to introduce a similar provision in respect of special commissioners? Secondly, regulation 3, on the payment of costs by the Lord Chancellor, states:

    ``No order shall be made under section 2A(3) of the Taxes Management Act 1970 in favour of—

    a public authority'',

yet ``public authority'' is not defined in the regulations. Does the term include a local authority or employees of a local authority? It would be helpful if the Minister would say who or what is covered by the exception. I must state at this point that I am a lawyer and I practised in taxation, although I have not done so for three or four years.

I understand that there are caveats and that regulation 7 refers to work that has ``been actually and reasonably done'', but will the Minister say whether in the appropriate circumstances, if the work has actually and reasonably been done, the costs will be paid on a full indemnity basis and if they will cover the necessary representation by solicitor and accountant?

Finally, on the Justices and Justices' Clerks (Costs) Regulations 2001, it is not clear to me when a justices' clerk acts on his own in these matters. I should like to know when he does so act, as well the circumstances in which and by what authority he does so. I look forward to the Minister's reply.

4.42 pm

Jane Kennedy: I hope that I can respond to all the matters raised by the hon. Member for Torridge and West Devon. To answer his question about the definition of a public authority, we felt that the power to define a public authority should be left to the court's discretion, as is the case in the Human Rights Act 1998. Local authorities are already defined.

I shall come to the hon. Gentleman's point about the determination of costs when I have answered his question about special commissioners of income tax. We consulted widely on the regulations and took the view that special commissioners are lawyers of at least 10 years' standing. As the hon. Gentleman knows, general commissioners are unpaid lay volunteers. Consultations on the liability of judicial officers for costs did not point to the need for special commissioners to be included in the immunity and indemnity provisions contained in the Access to Justice Act, and there are no current proposals to take those matters forward.

On the matter of the costs orders—I hope I get this right—when the courts are making an order that the Lord Chancellor shall make a payment in respect of the individual, they will also determine the amount of costs that they consider sufficient reasonably to compensate the person concerned. The determination of what costs will be covered by the indemnity will be a matter for the court.

A further clarification is that a costs judge, rather than the court, will make the determination when the hearing has lasted more than a day, or the court hearing has insufficient time to determine costs on the allotted day, or the court considers that there are other good reasons for the costs judge to make that determination. I hope that that answers the hon. Gentleman's question; I am unsure what further clarification I could offer, so I hope that the Committee is satisfied with my explanation.

I was asked about the definition of ``actually and reasonably''. I draw the hon. Gentleman's attention to regulation 7(2), which explains how costs are determined and the criteria that courts take into account. Regulation 6(3) sets out what can be claimed by legal representatives or the litigant in person. I hope that I have pointed the hon. Gentleman to the regulations that answer his questions.


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