Section 38: Time limit for applying for judicial review

91.     The aim of this section is to reduce the time limit for judicial reviews of decisions that could delay an inquiry. This is because the prospect of a challenge to a procedural decision can halt the inquiry until it has been resolved by a court. For example, a challenge regarding a decision as to whether a witness could give evidence anonymously (perhaps to ensure his right to life was protected) would mean that the inquiry could not require evidence from that individual until the court had decided the matter. This time limit does not extend to challenges about the contents of reports or interim reports.

92.     Unlike that in the Civil Procedure Rules, the time limit set by this section runs from the date on which an applicant became aware of the decision, not from the date on which the decision was made. Subsection (2) ensures that this change cannot serve to increase the time limit beyond the standard time limit in the Civil Procedure Rules or the Northern Ireland equivalent.

Section 39: Payment of inquiry expenses by Minister

93.     This section sets out what the establishing Minister is obliged to fund and what he has discretion to fund.

94.     Under subsections (4) and (5), the Minister is not obliged to fund activities that he has certified to the panel as being outside the inquiry's terms of reference.

95.     The withdrawal of funding may be temporary and the Minister will resume funding if he is satisfied the inquiry is working back within the terms of reference. It is envisaged that any withdrawal of funding would only occur in exceptional circumstances. The Minister would be expected to notify the chairman if he had any concerns that the inquiry was working outside terms of reference, giving the inquiry an opportunity to address those concerns and avoid the need to remove funding.

96.     Under subsection (6), the Minister is required to publish the total amount that he has paid for the inquiry under section 38. This requirement to publish costs would not cover all those costs to which the chairman must have regard under section 17(3), such as costs borne by witnesses themselves.

Section 40: Expenses of witnesses etc

97.     Legal costs of participants often constitute the most significant part of the total cost of an inquiry. The non-statutory position adopted in recent inquiries has been for the Minister to decide, in consultation with the chairman, to fund those participating in the inquiry who are considered to have such a direct interest in the inquiry that they require representation but who may be unable to pay for representation themselves. The Government would not normally meet the costs of large organisations. This section enables this practice to continue. The chairman automatically has the power to pay costs, but the Minister can place qualifications on that power. The Minister will generally set out any broad conditions under which payment may be granted, and the chairman will then take the individual decisions.

98.     The legal costs of Government witnesses might be met by the sponsoring department under the mechanism set out in this section, but not necessarily. If the witnesses were from a different department, their own department might pay for their representation, putting them in the same position as any other large organisation, to whom the inquiry would not usually grant funding.

GENERAL

Section 41: Rules

99.     It is envisaged that the Lord Chancellor will make procedural rules for United Kingdom inquiries under this section. There is however no requirement for such rules to have been made before an inquiry may be established under the Act.

100.     Subsection (2) enables rules to make provision for assessment of costs by a Costs Judge, among other things.

101.     It is for the devolved administrations to make rules for their own inquiries. The rules will generally be subject to annulment by the relevant legislative body, as explained in subsections (5) and (6). However, there is no need for subsection (5) to make provision for Wales, because sections 66(2) and 67(3) of the Government of Wales Act 1998 set out the procedures for all general subordinate legislation made by the National Assembly for Wales.

Section 42: Notices

Section 43: Interpretation

102.     These sections are self-explanatory.

Section 44: Transitory, transitional and saving provisions

103.     Section 44 contains provisions for inquiries that have been set up under legislation that is being repealed by the Act. It will ensure, for example, that inquiries set up before this Act was introduced will not be affected by the provisions contained in this Act and will be able to continue as if the old legislation were still in place. It also provides that a Minister may still in the future set up an inquiry in ways other than under this Act, whether on a statutory basis or otherwise.

Section 45: Suspension of devolved government in Northern Ireland

104.     This section ensures that during suspension of devolved government, the Secretary of State for Northern Ireland can exercise the powers of Northern Ireland Ministers to establish Northern Ireland Inquiries under section 30 and to make rules of procedure under section 41. The Secretary of State will be consulted, in place of the Northern Ireland Ministers, when consultation is required under section 27 or section 51.

AMENDMENTS ETC

Section 46: Inquiries under the Financial Services and Markets Act 2000

105.     This section amends section 14 of the Financial Services and Markets Act 2000 ( "FSMA") which provides a mechanism for the Treasury to appoint a person to hold an independent inquiry in various circumstances relating to the regulatory framework for the financial services industry. The amendment is intended to extend the possible scope of inquiries under FSMA to cover failings in the previous regulatory system (albeit only where the events triggering the inquiry have occurred after December 2001). References to subsections below are to those of section 14 of FSMA.

106.     An inquiry may be held in two types of cases. The first case, set out in subsection (2), relates to events concerning persons carrying on regulated activities or collective investment schemes. To trigger the power, it must appear to the Treasury that two conditions are met. The first of these is that the events posed, or could have posed, a grave risk to the financial system, or that they caused, or could have caused, significant damage to the interests of consumers. The second condition is that a serious failure in the regulatory system, or in the operation of that system, might have caused or exacerbated the risk or damage, or potential risk or damage.

107.     The second case, set out in subsection (3), relates to events concerning the listing function under Part VI FSMA and significant damage to holders of listed securities. Here the Treasury must be concerned with the damage, or potential damage, that might have been caused by a serious failure in the listing regime or its operation.

108.     In both cases, the power to arrange an inquiry relates to serious failure in the regulatory system established by FSMA. Subsections (2) and (3) of the section expand the scope of subsections (2) and (3) to include serious failure in the regulatory system under predecessor legislation, albeit that the event triggering an inquiry (e.g. grave risk to the financial system or significant damage to consumers) is subject to a separate requirement (see below)

109.     Subsection (4) of this section inserts a new subsection (5A). This provides that an inquiry cannot be triggered where events described in subsection (2) and (3) occurred before 1 December 2001. An inquiry into similar events after 1 December 2001 could though consider circumstances surrounding these events, regardless of when these circumstances occurred.

Section 47: Inquiries etc under Northern Ireland legislation

110.     This section amends the Interpretation Act (Northern Ireland) 1954 which applies the powers set out in Schedule 8 to the Health and Personal Social Services (Northern Ireland) Order 1972 (referred to below) to inquiries and investigations set up by Ministers. Schedule 8 is being repealed by this Act. Subsection (2), which introduces Schedule 1 to the Act, ensures that any legislation under which these powers have been implicitly given to inquiries by virtue of the Interpretation Act (Northern Ireland) 1954 will be unaffected.

Section 48: Minor and consequential amendments

111.     Schedule 2 to this Act contains minor and consequential amendments to other legislation. Many of the amendments are to pieces of legislation relating to other types of inquiry that explicitly incorporate the powers in Schedule 8 to the Health and Personal Social Services (Northern Ireland) Order 1972, which is being repealed by this Act. The relevant provisions of that order are reproduced in a new schedule to the Interpretation Act (Northern Ireland) 1954 which is inserted by Schedule 1 to the Act, so that they can continue to apply to the legislation that will remain in force.

Section 49: Repeals and revocations

112.     This section repeals the Tribunals of Inquiry (Evidence) Act 1921 and also introduces Schedule 3. The provisions being repealed in Schedule 3 are mainly ministerial powers to hold inquiries that could, in future, be established under the Inquiries Act.

FINAL PROVISIONS

Section 50: Crown application

113.     This section ensures that the Act binds the Crown, so that the powers conferred on inquiries by this Act can be exercised in relation to Government Departments.

Section 51: Commencement

Section 52: Extent

Section 53: Short title

114.     These sections are self-explanatory.

COMMENCEMENT

115.     The provisions in the Act will come into force on a day appointed by the Lord Chancellor by order, after consultation with the devolved administrations (see section 51).

HANSARD REFERENCES

116.     The following table sets out the dates and Hansard references for each stage of the Act's passage through Parliament.