Employment Bill

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Mr. Hammond: The intention is not to fetter the Minister but to create additional classes of procedure regulations and allow the Minister to tell us how he intends to achieve what he wants with regulations. The amendments were not intended to reduce the Minister's scope to regulate.

Rob Marris: In that case, I do not think that that needs to be in the Bill. It would send the wrong messages and possibly encourage applicants or respondents to ask their paid advocates, whether barristers or solicitors in England and Wales, to conduct proceedings in a way that delayed the tribunal—hon. Members on both sides of the House do not want tribunals or EATs delayed—on the basis that they then might not have to pay their own representative's bill.

Alan Johnson: The amendments have been grouped, but I will deal with them separately and leave aside their inelegant wording. I agree with my hon. Friend the Member for Wolverhampton, South-West that they are unnecessary.

New section 13(1A), as inserted by clause 22, authorises an employment tribunal to order a representative of a party to meet the costs or expenses incurred by a party, or any allowances paid to a party by reason of the representative's conduct of proceedings. Amendment No. 11 would prevent representatives from recovering such costs, expenses or allowances from the person whom they represent. That is unnecessary, because new subsection (1A)(a) already allows the Secretary of State to make regulations that enable tribunals to prevent representatives from recovering costs from their clients.

In the extremely unlikely event that a representative sought to recover costs from his client that he had to pay to another party under a wasted costs order, the tribunal could be asked to make an order under new section 13(1A)(a) disallowing those costs. A separate paragraph is not needed, but I share the hon. Gentleman's concerns about representatives' actions during proceedings. The Government's position is set out in ''Routes to Resolution'' and we will consult on the draft regulations.

Amendment No. 13 would allow the tribunal to make an order under new section 13(1A)(a) to prevent representatives from recovering costs from clients, ensuring that costs payable to the other party were not passed on. Again, the amendment is unnecessary. Any doubt about the scope for unscrupulous representatives to avoid wasted cost provisions will be dealt with by regulations drafted under new section 13(1)(a). If a representative's costs are disallowed so that he cannot recover them from his client he, by definition, will suffer the disallowance. The amendment adds nothing to the provisions.

I agree with the hon. Gentleman's intention to ensure that costs incurred by a representative are not transferred to an unfortunate client. However, clause 22 already ensures that, so the amendment is unnecessary and I ask the hon. Gentleman to withdraw it. Amendment No. 22 is unnecessary for the same reasons. The provisions for dealing with errant EAT representatives are the same as those for employment tribunals. The EAT may order a representative who has misbehaved not to recover fees from a client. The representative will meet the cost of a disallowance, so the amendment adds nothing to the clause.

In line with employment tribunal provisions, new section 34(2A) authorises an EAT to order a representative to meet costs for expenses incurred by a party. Amendment No. 23 is designed to prevent representatives from recovering such costs from a client, but the Bill already allows the Secretary of State to make regulations enabling tribunals to prevent that. In the extremely unlikely event that a representative sought to recover costs from a client under a wasted costs order, the EAT would make an order disallowing the costs.

The hon. Member for Runnymede and Weybridge made important points about the effects on the legal profession and policing the system. In the previous debate, my hon. Friend the Member for Wolverhampton, South-West pointed out that the civil courts provide a precedent, although only 247 cases have occurred. I suppose that the legal representatives had indemnity insurance, but premiums will increase if they continue to pursue such cases. That sort of self-regulation is necessary and healthy. Tribunals will go into the contractual arrangements between representatives and parties, but they will not be permitted to examine privileged documents—an arrangement similar to that between lawyer and client in courts. However, they will have to conduct a thorough investigation into representatives' behaviour, and give them an opportunity to put their case. We will deal with those important issues again in the regulations.

I hope that I have given the hon. Gentleman enough comfort to enable him to withdraw his unnecessary amendments. I believe that he also regards them as unnecessary, as they were designed only to tease out the Government's position. I ask the Committee to defeat the amendments if he will not withdraw them.

Mr. Hammond: I make no apology for unnecessary amendments. The purpose of many amendments is to allow the Minister an opportunity to clarify precisely the Government's intention, and I am grateful to him for doing so.

It is not as immediately apparent to me as it is, perhaps, to those on the Committee who have legal training that new subsection (1A)(a) in clause 22(1) deals with the disallowance of costs or expenses between the representative and the person represented rather than between the representative and third parties. However, the Minister's clarification of subsection (1A)(a) captures entirely the spirit of the amendment.

The issue that the hon. Member for Wolverhampton, South-West raised a few minutes ago is still dangling. Clearly, the intention of the measure is to catch lawyers or other representatives who abuse the tribunal process for their own purposes. However, representatives may be faithfully carrying out the instructions of clients who insist on pursuing a certain line. The essence of our judicial and quasi-judicial system is that a person who believes that they have a case is entitled to test it before an impartial tribunal, however mad the rest of us may think that it is. Indeed, the Human Rights Act 1998 requires that.

I am concerned about what would happen to a representative who had properly said to his client, ''I think you're nuts, you have no chance of winning the case'' but is then told by the client that they passionately believe in the merit of the case and want it prosecuted to the full. The representative should be able to ask the client to indemnify him against any award that is made by the tribunal. I hope that the regulations will deal with that issue. The tribunal should be aware of such situations and should not be forced into disallowing costs or making an award against a representative because of his conduct if it is clear that the client was pulling the strings.

Rob Marris: I may be able to assist. If a professional adviser pursues a hopeless case on behalf of a client in a professional manner, costs might be disallowed under paragraph (a). Pursuing a hopeless case in an unprofessional manner might lead to costs being disallowed under paragraph (b).

Mr. Hammond: I am grateful to the hon. Gentleman for his useful contribution. However, costs disallowed under paragraph (a) for pursuing a hopeless case professionally would still be inequitable if the representative were merely carrying out his client's instructions.

The Minister made the point that the tribunal normally would not have access to privileged documentation; therefore, it would be in the dark about the instructions that had been given by the person represented to the representative. We must address the issue, in order to ensure that the system works fairly in dealing with a mischief, recognise without unfairly catching a representative who is doing his best to follow his client's perhaps bizarre instructions.

Alan Johnson: That is an important point, but if a professional has properly advised a client and the client still pursues the case, the professional has not behaved disreputably. There are no grounds for a cost order. That is the Government's position, and it is the same in the civil courts. I mentioned that there would have to be a thorough investigation in which the individual had the right to put their case. One assumes that the advice given to the client would be part of that case. In that event, a cost order would not be proper.

11.15 am

Mr. Hammond: Can the solicitor disclose his client's instructions to the tribunal? Would that not be privileged?

Alan Johnson: I cannot answer that question, but I know that that is how the civil courts operate, and that is the proper benchmark for us to use. The hon. Gentleman raises an important point. However, I think that he would agree that we should tackle the issue in our discussion of the regulations, not the amendments. We must ensure that professionals who have given sound advice and have still been told to pursue the case are not hit by cost orders. There is no difference between us on that issue. That is not our intention. That is why our proposals were so widely supported in the responses to our consultation document ''Routes to Resolution''.

Helen Jones: As my hon. Friend the Member for Wolverhampton, South-West said, there is a difference between pursuing a hopeless case on the instructions of a client and pursuing it vexatiously. Any legal representative instructed by a client to behave improperly would be under a duty to advise the client that their behaviour was improper and, if the client persisted, to advise them to seek representation elsewhere. Legal representatives have a duty of legal conduct. For that reason, the situation that the hon. Gentleman suggests is not likely to arise or be influenced by the failure to disclose correspondence with the client. The representative has a clear legal duty of correct professional conduct in every case.

 
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