I thank the noble Lord for his comments and support for the measure. We have acted swiftly to hold Russia to account for its attack on Ukraine. The UK is inflicting devastating pain in areas of strategic importance to Putin and Russia following the unprovoked and illegal invasion. The Government brought forward this legislation before the Summer Recess and, as the noble Lord said, the cap will apply to all proceedings brought before 4 March.
We continue to make maximum use of our sanctions powers to ensure the strongest possible response to Putin’s illegal invasion of Ukraine. We must ensure that the measures and cases are carefully targeted on the basis of robust evidence before we sanction individuals, goods or companies. That is why we are taking it step by step but noble Lords may rest assured that we will continue to sanction where it will have maximum impact.
It is important to recall that, when this House decided to restrict damages to cases of bad faith, it also gave the Government the power to set a cap. That was done precisely to send the message that no one should benefit from massive payouts from sanctions litigation. We have concluded that £10,000 is appropriate. I am confident in the integrity of our process but this is about sending a message. By imposing a cap, we are removing incentives for deep-pocketed oligarchs or financial institutions to bring unfounded or vexatious litigation. A court cannot neglect to apply the damages cap except in specific circumstances where failure to do so would be in breach of the individual’s human rights.
The starting point will always be that the damages cap applies and will be disapplied only in those very particular circumstances. Any designated person may challenge their designation in court and have it removed if it is not justified, and has the right to receive damages where the Government have acted in bad faith. The core right remains for any designated person to challenge their designation in court and have it removed if it is not justified. This House considered the arguments and supported without objection the Government’s proposal to exclude damages for negligence during the passage of the Economic Crime (Transparency and Enforcement) Act.
I apologise that reference was not made in the letter that the noble Lord, Lord Collins, saw last night to the two mixers he mentioned in his comments yesterday. I am not able to be specific in my answer to him now other than to say that we are working in concert with our allies and will continue to act where appropriate. Absolutely no entity is off the table. We will go further to bring about an end to Putin’s war. I note the recommendation made by the noble Lord; he makes a strong argument. I will make sure that there is appropriate follow-up by government but I hope he understands why I cannot go into more detail now.
The noble Lord asked about 4 March and, I think, how many processes would pre-apply before that date. I think the answer is none. He also asked what has been paid out as a result of actions that precede these measures coming into force. I think the answer to that is also nothing. I think that is correct—I am getting a nod of agreement behind me. That is good news.
The noble Lord rightly raised the question of capacity. I hope I can reassure him by saying that, in December last year, there were 48 substantive roles in the sanctions unit, which has now become the sanctions directorate. We have doubled the number of officials focused on our response. We now have more than 100 permanent staff delivering our response. This number does not include those working across the FCDO and its overseas network, who cover sanctions as part of their wider roles.
The Office of Financial Sanctions Implementation—the OFSI—has also doubled its size this financial year and continues to grow to meet the challenges of the sanctions introduced under the Russia sanctions regime. The recruitment of new permanent staff continues following the former Chancellor’s announcement in March to double the size of the OFSI.
It is the responsibility of the UK and our allies to ensure that our sanctions regimes are maintained and updated appropriately so that we can respond at pace to the activities of malign actors around the world. I once again thank the noble Lord for his insightful contributions and support.