The government has lost another two votes in the House of Lords on judicial review reform – as it emerged that lord chancellor Chris Grayling has admitted misleading the House of Commons during a debate last week.

Crossbencher Lord Pannick persuaded enough Conservative and Liberal Democrat peers to rebel against the government last night on the Criminal Justice and Courts Bill.

Pannick’s proposed amendments introduced judicial discretion over what financial information applicants should disclose and whether to grant permission in certain cases. All three were backed by peers and will return to the House of Commons for further consideration, probably after Christmas.

The Commons has already rejected amendments voted for last month in the Lords, bringing on a period known as ‘ping-pong’ between the two houses.

But during yesterday’s debate it emerged that Grayling had given wrong information during the course of discussions on 1 December in the Commons.

In a letter to Conservative MP Geoffrey Cox, who voted against the government, the justice secretary admitted he had ‘inadvertently’ suggested that clause 64 of the bill contains a provision for the court to grant permission for JR where conduct was highly likely to have not made a difference in ‘exceptional circumstances’.

Graying’s letter added: ‘I would like to take this opportunity to clarify that that is not the case. No such exceptional circumstances provision exists in this clause.’

Justice minister Lord Faulks told peers the mistake was ‘clearly regrettable’ and several members made it clear they wanted the Commons to vote again on the bill because of it.

Conservative peer Lord Mackay of Clashfern said: ‘I would like to see this amendment going back to the House of Commons, not necessarily to change the result - that is a matter for the Commons - but so that the debate should proceed on a basis that is 110% correct.’

Pannick added: ‘The lord chancellor misled the other place on the very issue that is at the heart of this amendment. He wrongly suggested that there is an exceptional circumstances provision in this clause which confers discretion on the judge.

‘That alone is reason enough for this house to invite the other place to think again, and to do so on the basis of an accurate statement by the responsible government minister as to the terms and effect of the clause that he was putting before the House of Commons.’

On the subject of the amendments themselves, and specifically the issue of intervention costs, Pannick said current government plans would ‘undoubtedly’ deter interventions that the courts currently find helpful.

He added that bodies have warned they are concerned they cannot intervene in cases if they are going to be liable to pay costs.

Lord Faulks emphasised that the relevant clause involved a ‘minor change’ to the existing law.

‘We are not abandoning judicial review,’ he added. ‘We are not inviting the government, local government, ministers or public authorities to ride roughshod through the law. We are simply saying that judicial review may be reviewed.’

But several Conservative peers outlined their opposition to the bill as it stands, including former minister Lord Deben, the Conservative former minister John Gummer.

Deben said: ‘Having been a minister for 16 years, I would expect my civil servants to tell me very clearly if I proposed something that would break the law. I would take that very seriously indeed. I do not believe that ordinary people will respect the law in the same way that they do today if they think that ministers have a special arrangement.’