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Lord Carter: My Lords, the Motion is necessary to enable us to take the regulations and the order in the name of my noble friend Lord Bach at the end of business today. Under Standing Order 40, Unstarred Questions always come last. In order to take today's Unstarred Question before the regulations and order, it is necessary to suspend the standing order.
I had understood that the noble Lord opposite was happy with that arrangement. It is true that the regulations and the order were tabled only on Tuesday. I can explain the reason why they need to be taken so quickly. They come into force tomorrow and they have already been agreed by another place. Attempts were made to find the time to debate them earlier this month, but no mutually convenient time could be found. Having said that, now it is clear that we are running out of time, I understand that the Opposition Front Bench has been extremely helpful and flexible in finding a time to debate the regulations and the order before the deadline. I am grateful for that co-operation.
Lord Henley: My Lords, that is certainly not satisfactory. My noble friend agreed the time of the regulations and the order. It is the duty of the Minister to come to the House to push her orders. It is not a matter of finding a mutually agreeable time. Ministers are always available to the House. Ministers' first duty is to the House. If my noble friend could not agree with the Government Whips' Office an appropriate time to take the regulations and the order, the Minister should have been here. It is only fair for the Chief Whip to tell us exactly who is responsible for putting us in this mess and forcing the House to debate at a very late hour matters that are of considerable importance. What is the noble Lord going to do at 10 o'clock or 11 o'clock tonight if three, four, five or six hours are still required for the Financial Services and Markets Bill? Will he come to the House and agree to suspend that business to allow my noble friend to deal with the regulations and the order at a reasonable time?
Lord Carter: My Lords, I am not completely briefed on all that has taken place on all the attempts to find a date. I understand that on the first date that they might have been taken my noble friend Lady Blackstone was in Lisbon on government business. Another attempt was made to find a date convenient for the noble Baroness, Lady Blatch. The noble Baroness says "no", but I understood that that was the case. They have to be dealt with today because they come into force tomorrow. I thought that an attempt had been made to find a time that was mutually convenient.
To avoid having a very long dinner hour this evening--to take the regulations and the order in the dinner hour with the Unstarred Question--with the help of the noble Baroness, Lady Blatch, for which I am extremely grateful, it was agreed to find time at the end of today's business. I do not think that there is any need for today's business to take exceptionally long. As I said, on the third Committee day we had 30 groups of amendments--exactly the same number as today--and we rose at 10 o'clock.
The noble and learned Lord said: This amendment has been prompted by the Law Society of Scotland and is essentially probing in nature. I trust that the Government will respond to it in that fashion. A number of other amendments have been prompted by the Law Society of Scotland. In the main, they are of the same character. However, I am bound to say to the Government that a number of administrative decisions may be taken before we reach Report stage on the Bill. If the Minister is not already aware, I hope he will take steps to appreciate that if the decisions are taken in a certain way, they are fraught with constitutional sensitivities and could cause some very real upset north of the Border.
I can be brief on the amendment because I discover from the Marshalled List that the Minister has indicated that it is his intention to oppose the Question that Clause 202 stand part of the Bill. I shall listen with care to what he has to say about that to try to understand his justification for doing so and what amendments he himself proposes in the fullness of time to bring forward. It will not be a new experience for us but it will be useful to know what the amendments are going to be.
The short point that arises here is that if a notice of penalty is to be given to an authorised person under Clause 202, the notice for payment must be in writing and require the person to pay the penalty before the end of such period as specified in the notice. From looking back to the preceding clause, Clause 201, I understand that in such circumstances where a decision notice has been given to an authorised person and where that indicates that there is a proposal to impose a penalty under Clause 199, the opportunity is then given to the authorised person to refer that matter to the tribunal. There is, if one likes, a right of appeal against such a decision notice.
However, unless I am missing the point, there seems to be something rather surprising and unusual here. If one takes that circumstance, and if indeed an appeal has been marked or a requirement that it should be taken up before a tribunal, notwithstanding that indication by the authorised person, he still has to pay the penalty, however vigorously he wishes to reject the imposition of the penalty on him before the tribunal. A more appropriate course would seem to be that suggested by the amendment; namely, until the matter has been satisfactorily resolved one way or another before a tribunal, there should be no requirement on the authorised person to pay the penalty. That is what I understand frequently happens; indeed, I understand it to be the ordinary practice in our courts. In the circumstances it seems appropriate that a comparable provision should be included in the Bill.
I shall not press the amendment, given that Clause 202 is to be withdrawn. However, I hope that the Minister will be able to give a clear undertaking that the point raised by the Law Society of Scotland will be addressed in the doubtless reconstituted Clause 202 before the Bill returns to this place. I beg to move.
Lord Bach: I hope to be able to satisfy the noble and learned Lord, Lord Fraser of Carmyllie, by speaking to the government amendments that are now grouped with his amendment. I am grateful to him for informing the Committee that this is a probing amendment.
This group of government amendments all deal, in one way or another, with the end of a notice procedure and the manner in which the final determination of the matter may be notified to the person concerned and published more widely.
First, if having issued a warning notice or a decision notice, the FSA decides not to proceed with the action which it originally proposed, we consider that the person concerned is entitled to know that the proposal is being dropped. That is an important part of ensuring fairness. Accordingly, the FSA will be required to give formal notice to the person concerned under the new clause with the rubric, "Notice of discontinuance".
Such a decision might be the result of having considered the person's representations, or further evidence having come to light. On the other hand, in some cases the FSA will wish to proceed with the action proposed, in which case the right will arise to refer the matter to the independent tribunal (and thereafter to appeal on a point of law to the courts against the tribunal's decision).
We propose in due course to amend Clause 124 to make it clear that the authority may not take any further action in relation to a decision contained in a decision notice until such time as the person has had the opportunity to refer the matter, or until a reference (and any appeal) has been finally determined.
If the decision has not been referred to the tribunal within the time permitted under Part IX of the Bill, the final notice simply confirms and gives effect to the decision in the decision notice. But if the matter has been determined by the tribunal or the higher courts, the final notice will set out the action the authority is taking to fulfil its obligation (under subsection (2) of the new clause) to give effect to the determination and any directions which have been given to it.
Thus the authority is the instrument by which the determination of the tribunal or court is given effect. The tribunal or court might, for example, direct the FSA: to impose the penalty originally proposed, or a different penalty; to make a public statement instead of a penalty, or vice versa; to make a public statement as originally proposed, or in different terms from those proposed; or to take no further action on the matter.
The final notice clause replaces a number of existing clauses relating to notices for payment which we shall be opposing in Committee or on Report. These are: Clause 202, plus Clauses 67, 92 and 118. Those are the financial penalty clauses under Parts V, VII and VIII respectively.
The final notice given by the FSA under our new clause will have to include full details of any action which the FSA is taking and the date it takes effect. In the case of a penalty, this will include details of how much has to be paid, when and how, and how it will be recovered if it is not paid.
I now turn to the noble and learned Lord's amendment. There was concern among Members of the Opposition in another place that there was a lack of clarity on whether a notice for payment could be issued before a reference had been made or determined. Therefore, we hope that the noble and learned Lord and all other Members of the Committee will be pleased to note that the final notice clause makes it clear that final notices, which will serve that purpose in cases where penalties are proposed, may not be issued before the deadline for reference to the tribunal, and if referred, until the matter is finally determined. That would seem both common sense and justice. That is made clear in subsections (1) and (2) of the new clause.
I have already referred to the Joint Committee's deliberations on publication of decisions. The determinations of the tribunal and higher courts will, of course, be matters of public record. But whether or not the matter was referred to the tribunal it is important for the reasons given by the Joint Committee that the final outcome of the matter is made public.
The remainder of my remarks relate to publication. The new clause on publication, therefore, requires the authority to publish such details about a final notice as it considers appropriate, except for information the
The Government believe, however, that it is necessary to avoid any risk that a person might be unfairly tainted, by giving publicity to the fact that some contravention had been alleged by the FSA, before the person concerned had had an opportunity to refer the matter to the tribunal, or before a matter referred to the tribunal had been finally determined by the tribunal or the appeal courts. Under the new clause on publication, the authority is, therefore, prevented from publishing details about warning and decision notices.
Where action has been proposed in a warning notice or decision notice but is then not pursued by the authority, it would be equally unfair if any suggestion of guilt were given by giving publicity to the fact that the authority had decided not to proceed with the action. At the same time, there might be circumstances where the person concerned might wish that information to be made public in order to clear up any suspicion or rumour which was already in the public domain. Accordingly, this clause allows the authority to publish details about notices of discontinuance only with the consent of the person concerned.
The remaining government amendments in this group are consequential and I shall not weary the Committee with a description of them unless I am asked to do so. My reply has been rather full, but it relates to an important matter. I hope that it has satisfied the noble and learned Lord who moved the amendment.
Lord Elton: I wonder whether the noble Lord can help me by telling me a little more about the new clauses to which he is speaking, and whether they are all on the Marshalled List. At one point he appeared to indicate that the new clause would be produced in the future, after the Committee stage had been completed. If that is the case, I am sure that most Members of the Committee will want to know what scrutiny the new clause has received and the proposed procedures for seeing that it is properly considered by this House and another place.
The noble Lord also used the phrase, "we shall be opposing in Committee or on Report". I do not know whether he was referring to a group of clauses, some of which would be dealt with today and some later. Again, when he comes to them, I hope that we may be told the extent to which the principle and the detail were discussed in another place--that being the procedure that is supposed to replace what we should normally do in Committee in this House.
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