Clause 20 - Powers of court in relation to unfair relationships
Consumer Credit Bill
3:45 pm
Charles Hendry (Shadow Minister, Trade & Industry; Wealden, Conservative)
Clause 20, particularly when one reads the explanatory notes provided by the Government, appears extremely innocuous, and very simple indeed. It runs to three and half lines. Again, however, it highlights a lack of detail in this Bill. It spells out a great range of punishments and penalties, but it does not say what you have to do to incur them. It is a bit like having traffic offences: people need to know what they have done wrong in order to incur a certain fine or number of penalty points. There is no guidance in this whatsoever. It is a bit like a Minister coming in and saying ''We have introduced a new punishment, which is a fine of £3,000'' and when we ask, ''What is it for?'' he replies, ''Well, I haven't actually thought of that yet, but I am sure it must be for something.''
All we have here is a list of penalties and punishments, without knowing what goes wrong. They are fairly broad ranging. New subsection (1)(b) says that it is to
''require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement''.
That seems to cover virtually everything ever invented. It really is wide.
I think that before we start signing up to these things, we need to know what the Minister has in mind. Borrowers and lenders both need to know. There are clearly going to be great worries about going to court with absolutely no grounds for thinking that you are going to be successful. It goes back to one of the issues that my hon. Friends raised: the solicitor will say ''I do not know,'' but what people call ambulance chasers will be happy to take a test case on a no win, no fee basis, simply to find out if there is a little minefield that they can open up.
The measure will mean that the borrowers will not want to take legal action, because they will not be certain of their ground, and the lenders will become more cautious in how they lend. That will particularly damage the people at the margins, the people whom we most seek to protect through this legislation.
It also appears that there are different structures for different parts of the UK. It would be helpful if the Minister told us who would resolve the disputes if, for example, they were between a Scottish borrower and a Northern Irish lender, or an English borrower and a Scottish lender. The position is not clear. Once again, it comes down to the fact that there is a distinct lack of clarity in what has to be done wrong in order to incur the penalties that are set out in clause 20.