Viscount Eccles
Main Page: Viscount Eccles (Conservative - Excepted Hereditary)Consumer Rights Bill
Viscount Eccles Excerpts
Viscount Eccles (Con)
My Lords, I put my name to the amendment and I will make a brief addition to what my noble friend said. This is a very significant change to the law. It is quite complicated, moving from the present arrangements of opt in to the double arrangement of opt in and opt out, going beyond, interestingly, what the European Union advises, and perhaps not concentrating enough on alternative dispute resolution techniques. Having said all the way through that the one thing we do not want is a US-style lawyers’ charter—we are all agreed on that—unfortunately the Bill is drawn so widely that we run a real risk that that is what we will get.
We need to remember that we are in the Anglo-Saxon camp and have a tendency to do things in a similar way to the way they are done in the United States—in the creative arts or wherever, and including, I fear, the law. We also need to remember that where such arrangements have been made in other jurisdictions, they have not been free of problems. Australia, which is often cited, has had considerable trouble about the authorisation of those who are to conduct the class actions or collective proceedings. It has been described as skirmishing. The way the Bill is drawn, we will have very similar problems with the question of who is to be authorised and who is not—because the person who is not may not be very happy.
New subsection (8)(b) states that a representative can be appointed,
“only if the Tribunal considers that it is just and reasonable for that person to act as a representative in those proceedings”.
I will return to that on the next group, but it is very widely drawn. In support of my worry about the very wide drafting, there was a long and relatively confused debate in the other place in the Bill Committee. The answer, both there and here, seems to be, “Well, the Competition Appeal Tribunal will sort it all out”. I think that that puts too much of a burden on the tribunal and is unlikely to work well.
Baroness Neville-Rolfe
My Lords, I am delighted to see my noble friend Lord Hodgson back with us. We missed him on the day when the amendments were finally reached, but my noble friend Lady Noakes introduced his amendments with great clarity and verve. We had a good debate and we now have several different amendments, some of which we will be discussing in a minute. I am grateful for the efforts that my noble friends Lord Hodgson and Lord Eccles have made to explain their thinking to me in person. We have tried hard to meet their concerns. Having talked to my colleagues in the Government, I am now able to respond positively.
Although this amendment would require a review of the schedule, I believe that its driving force is to examine the effect of opt-out collective actions. I should say that the Government are happy with our proposals and believe that the existing opt-in regime is prohibitive, with only one collective case in 10 years involving 130 claimants. Therefore, the changes in the Bill are important. I do not share the pessimistic view about US-style claims, mainly because of the safeguards that we have written into the Bill, which we will no doubt come on to on the next amendment. However, I wanted to say that we have had a very good discussion, we have listened and we are happy to agree to a review after five years which covers the ground set out in the amendment. Following a further discussion that I had with my noble friend this morning, we will also commit to a ministerial Statement on the review here in Parliament. I am afraid that we cannot put the review in the Bill, as that would have ramifications for other possible reviews elsewhere in the Bill, but I can commit to a review, and I know that the Confederation of British Industry, which I met on Thursday because of its concerns about this part of the Bill, is content with that.
Of course, Schedule 8 does not just introduce an opt-out collective actions regime. It reforms the entire private actions regime for the benefit of both businesses and consumers. I think we are all agreed that consumers come first here. Therefore, the Government believe that it would be appropriate for the review of the impact of Schedule 8 to examine the whole range of reforms. The review would take into account both opt-in and opt-out collective actions, the fast track regime, the number of cases under the CMA redress power, collective settlement cases and, of course, the provisions outlined by my noble friend in his amendment. In those circumstances, I hope that my noble friend will feel able to withdraw his amendment.
Viscount Eccles
“( ) when it considers that the proposed collective proceedings are justiciable and have merit, ( ) when it considers that early settlement will not be achieved either by alternative dispute resolution or any other means of resolving the dispute.”
Viscount Eccles
The purpose of this group of amendments is to try to ensure that we begin as we mean to go on. It has been said right from the beginning that the focus of the regime is on the public, consumers, traders and small businesses that are given a bad time in the marketplace. I think we all agree that they are the people who should be enabled to settle their claims and not to make the fact that the claims can be settled into a charter for legal advisers, third-party funders and ad hoc organisations collected together. That has been the Government’s position right from the start.
Of course, the fact that we focus on the people who are in the best position to put the claim because they have suffered the damage does not mean that the legal profession will not be involved. No one would dream of accepting any form of settlement in this field without taking good legal advice. That would apply to defendants as well. Nevertheless, the endeavour should be, as my noble friend said, that the benefit does not go to what you might call the legal outriders: claims managers, hedge funds and so on.
The question I asked myself on this group of amendments was how to achieve more certainty that we will maintain the focus on consumers. That seems to me to be a matter of the balance between the statute and the tribunal rules. Those are the two places in which the rules of the game will be settled. To get the balance right, I think we must ensure that some things which are not at the moment mandatory under the Bill become things which must happen rather than things which may happen.
That is the reason for Amendments 41D and 41F. Three matters are added by those amendments to what will be subsection (5): two at the beginning and one at the end. The first to be added at the beginning is for the competition authority to make sure that,
“it considers that the proposed collective proceedings are justiciable and have merit”.
There is much evidence of vexatious claims being made in other jurisdictions. If those claims are speculative or even worse—I think there is evidence of this in some provinces in Canada whose systems have been cited—they become blackmail claims. The argument is put that it would be less expensive to settle and pay over some money than to fight through a collective action.
The second addition that Amendment 41D seeks to insert is that the tribunal may make a relevant order only,
“when it considers that early settlement will not be achieved either by alternative dispute resolution or any other means of resolving the dispute”.
There is, of course, a concentration on alternative dispute resolution, and that comes also from Europe. I think we would all want to feel that the tribunal had a statutory duty to find out not just whether or not such a system is available, which is the way the measure is drafted in its rules at present, but to satisfy itself that these matters had been considered and that if there was a faster and cheaper way of coming to a resolution which was in the interests of all the parties, it would be followed. As we know, sometimes irrationality creeps into disputes, when a rational approach tells you that it would be better to settle.
Thirdly, another of my proposed amendments seeks to deal with the fact that my noble friend on the Front Bench said in Grand Committee that the Government did not want to restrict the flexibility of the Competition Appeal Tribunal. I quite accept that. Therefore, I have included in Amendment 41F the catch-all provision:
“Nothing in subsection (5) prevents the Competition Appeal Tribunal from taking into account any other matter which it considers to be relevant”,
so that it is not constrained.
I have tabled two small amendments because I was concerned with the thought that the Bill as drafted seemed to imply that only one person would apply for authorisation. It seems to me likely that if there is a fairly big issue and the Bill is very open regarding who may apply for authorisation, two or three people may apply. Therefore, Amendments 41E and 41G seek to replace “the” with “a” at lines 4 and 14 of page 113. I am told that that drafting is defective but I would like to understand the Government’s position on this point. If more than one person seeks authorisation, how do the Government see that situation being dealt with? Presumably, some form of appeal procedure will need to be made available to those who are not chosen. I do not think the Bill covers that issue. I refer back to my short description of a Bill Committee debate in the other place where that point was raised. As far as I can see, it was never settled, and is not settled in the Bill as drafted.
Amendment 41H seeks to define and limit who can bring a claim. It seems to me that it has been Which?, and now we are going to an open field. Would it not be much more sensible to make a move which greatly expands the number of people who can make a claim and, of course, expands the type of claim they can make from that of opt in only to opt in and opt out, and not to have the possibility of a very wide range of people applying for authorisation? Indeed, if we are to keep the focus on the public, traders and businesses, we want to make sure that those affected are represented by people who collectively have their interests at heart and know a bit about the detail of the business that they are in as well. Therefore, Amendment 41H seeks to leave out “a person”, which is the general description at the moment, and insert,
“any appropriate consumer representative body or trade association”.
I am bound to say this seems to me to be completely in line with what the Government have said throughout.
Viscount Eccles
My Lords, I am very grateful to the Minister for having met some of the underlying issues in her answer. Possibly the most immediate is that I wanted to change the word “the” into the word “a” twice. My noble friend’s answer showed just how complex that was. She went into a great list of things that could happen if you did not have “the” and suddenly found you had only “a”. I fully accept that. This is a very complex situation. My worry is that I do not believe that it has been carefully thought through.
Now we are dependent on the consultation. The questions that arise are: who will design the consultation? What questions will be asked? What are the answers? What is the Government’s response to those answers? That is a great worry, particularly on the SME point, and here I thank my noble friend Lord Hunt for his professional contribution.
I worked in industry for a great deal of my career, and for quite a lot of the time I was involved with small and medium-sized enterprises. I cannot imagine any of those that I was involved with thinking of going into a collective action unless they were represented by their trade association or some body that would manage to get itself organised in such a way that it could be defined as a trade association, which is not a very difficult thing to do. The idea that bodies representing consumers and trade associations are not wide enough but all that needs adding are small and medium-sized enterprises does not seem to run.
I will think very carefully about what was said about this amendment and what was said in reply and see whether there is a case for bring the matter back at Third Reading, obviously on a somewhat different basis. In the mean time, I look forward to the assurance that there will be meetings with people who know about these matters before the consultation goes out.
It is quite surprising that the legal profession, apart from my noble friend Lord Hunt, has been absent from these discussions. The legal profession is very keen to participate in your Lordships’ discussions. This is a major change in the law. We had very helpful assistance from the noble and learned Lord, Lord Hope, but no other. That is quite surprising.
I retain the apprehension that this is a minefield and that we may get blown up. I beg leave to withdraw the amendment.