Let’s be clear: the original proposals in the Justice and Security Green Paper were too broad. The Government has listened and, as Tom Brake wrote last month, has ensured that the Bill before the House of Lords now is much narrower and more focussed on the problem at hand.

However, in the recent media furore about Nick Clegg’s red lines and changes to the Bill, I feel that a proper discussion about what this problem actually is has been lost.

So let me set out clearly the problem that we need to solve. At the moment, judges cannot hear evidence gathered by the Security Services if it threatens national security. As soon as details about informants, agents or methods become public, not only can we lose a valuable source of information, but we may even put the lives of our agents at risk. Equally, it is quite evident that our friends won’t share valuable information with us if they have reason to doubt our ability to protect it.

So this evidence has to be excluded entirely from the court, and the judge may not consider it when making his or her judgement.

Now – here let me pause and tackle a common misconception. This is not about criminal cases. The Justice & Security Bill only deals with civil cases: for example, compensation claims; where an individual accuses the Government’s intelligence agencies of carrying out, or being complicit in carrying out, wrongdoing; or a challenge to a government decision to exclude someone from the UK.

To defend itself, the Government needs to produce evidence – some of which, if publicly disclosed, could seriously damage the national interest.

Under the current system, the only method available to the courts to protect this type of material is through an application that results in the complete exclusion of that material from the proceedings. This means that any judgement made at the end of a case cannot take into account any of the sensitive material provided by Government. It is discounted, and the case is determined on the basis of the remaining non-sensitive material. This system works well, and ensures that cases are determined in open court on the basis material which is available to both sides.

But a problem arises on rare occasions when a case is so saturated in intelligence material that the exclusion of that material leaves the government unable to make the arguments it needs to win the case.

In these instances the Government has no option but to settle the case, paying out money to someone who may have no case at all, simply because a judge is not allowed to hear the evidence.

Paying out large sums of money when it is believed that there is a proper defence is damaging enough, but how do you justify it to the public during a period of financial restraint, when we are unable to fund causes and services which we should wish to fund, if only we had sufficient resources.

However, this is only one aspect of what concerns me. The present system fosters a lack of accountability for the security services in these cases. I want to know, and I believe the public has a right to know, if any of these accusations of wrongdoing against our agents are true.

But at the moment this evidence is never heard or seen by the judge so we simply do not know whether the Government would win or lose.

So the solution we are proposing is that, in a very small number of instances where the current system does not allow a case to be heard, the case should be heard in closed session. This would allow a judge and Special Advocates to see, discuss and challenge all of the secret material, and will ensure that civil cases which are currently not heard, will be heard. Nothing heard today in open court will be made secret by these proposals.

So critics of these proposals who say that they will allow the Government to cover up wrongdoing and embarrassment couldn’t be further from the truth.

In fact, Closed Material Proceedings will ensure that allegations made against the Government can be fully investigated and scrutinised by the courts.

And here let me pause again to address a second misconception: this is not an unknown practice in the UK justice system. Closed Material Proceedings are already available through statute in fourteen areas, including immigration, employment, TPIM and proscription hearings. They were also used with the consent of the court in judicial review proceedings and compensation cases up until the Supreme Court judgment in the Al Rawi case in 2011. That case held that it was for Parliament, not the courts, to decide where Closed Material Proceedings should be available in future.

So with Second Reading upon us, let us indeed allow Parliament to decide. I look forward to the debate in the House of Lords and working with colleagues over the coming weeks to discuss the policy in detail. But in the meantime, let’s not forget why we are doing this in the first place.

Open justice must and will always remain the model system for the UK. But limited closed justice is better than no justice at all.

Lord Wallace is the Advocate General for Scotland.

* Jim Wallace is leader of the Liberal Democrats in the House of Lords and was Deputy First Minister of Scotland from 1999-2005.