Clause 16 - Time orders
Consumer Credit Bill
2:30 pm
Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)
We are getting dragged into later issues, such as the unfair credit test and the burden of proof. The burden of proof in relation to time orders and default notices has not changed. As the hon. Gentleman said, it has changed in relation to the unfair credit test, and we shall discuss the merits of that later. For the time order, however, the burden of proof remains the same. I understand that one has to get the default notice in order to apply for the time order, but one has to know what the time order means. That is the point that I was making. We will discuss the burden of proof and the unfair credit test later, and I anticipate that hon. Members on both sides will attempt to get me to make all sorts of definitions of that test. I look forward, Mr. Conway, to reaching those clauses.
A specific request was made to ensure that people had the opportunity to apply for the time orders. Time orders may enable debtors or hirers to have more time to repay the sums owed under the agreement, and give them more time to remedy any breach of the agreement other than non-payment. Currently, the time order provisions of the Act are not often used. Few are applied for and fewer are granted. A large part of the problem is the lack of information. Debtors and hirers are not aware of the time order provisions, and we are working on ways of informing them about the orders. That will involve including information in arrears and default information sheets to be produced by the OFT.
Another part of the problem is that people cannot apply for time orders at appropriate times. The clause therefore amends section 129(1) of the 1974 Act to allow debtors or hirers to apply for a time order after they receive an arrears notice. That will ensure that the debtor or hirer has the opportunity to apply for a time order when the problem is still developing, not when it is too late.
It is a matter for concern that people will use the opportunity to apply for a time order simply to delay the inevitable. They may also apply simply because they can. We will therefore require people who want to seek a time order to go through certain steps. A debtor or hirer can make an application if he has notified the creditor or owner of his intention to apply for a time order, and in doing so gives details of his proposals; and if at least 14 days has passed since the notification was given to the creditor or owner.
The requirements should not be onerous in practice. It is important that we have simple criteria that can be met by debtors and hirers. Compliance should be simple. The clause encourages creditors and owners to seek to resolve payment problems early. In addition, new subsections (4) and (5) provide that, in Scotland, debtors making applications either for or concerning a time order may be represented by a person who is not a solicitor or an advocate. That means that Scottish debtors will be in the same position as those in England, Wales and Northern Ireland.
Notwithstanding the concerns expressed by hon. Members—I am sure that we will return to them—I hope that the clause will stand part.
Question put and agreed to.
Clause 16 ordered to stand part of the Bill.
Clauses 17 and 18 ordered to stand part of the Bill.