Clause 101
Tribunals, Courts and Enforcement Bill [Lords]
1:45 pm
Brooks Newmark (Braintree, Conservative)
Once again, we have quite a few points to go through, but I will try and be brief. If I have any questions for the Minister later, I will also try to brief, as I appreciate that time is pressing.
In seeking to move our amendments Nos. 163 to 167, we are looking at the repayment requirement that can be imposed on debtors who are placed under an administrative order by a county court. To be clear to the Minister, this is a probing amendment. We are trying to establish who is in control of determining the repayment requirement imposed on debtors. My concern with the clause is that there seems to be two sources of authority when it comes to determining the requirement. First is the implied discretion of the court making the order—I emphasise implied. Second is the regulations to be made in due course by the Lord Chancellor.
Amendments Nos. 163 to 166 seek to make the discretion of the court explicit, not implicit. Amendment No. 163 specifically gives the court discretion over whether the debtor must pay scheduled debts in full or to some other extent. AmendmentNo. 164 would ensure that the court has discretion over arrangements made in respect of several different creditors. That is vital because only the court is in the proper position to be aware of special circumstances that may affect the treatment of different creditors; meaningful guidance would be difficult to offer simply by regulation. Amendment No. 165 makes it clear that the court has discretion over ordinary payments other than by instalment, when there are appropriate circumstances. Amendment No. 166 tackles the rather ominous stipulation that the
“repayment requirement may include provision in addition to any that is required or permitted by this section.”
The amendment stipulates that any such inclusion is also at the court’s discretion and cannot spring, like a jack-in-the-box, from regulations that are yet to appear.
At the very least, the clause must distinguish more clearly between what the court may make a condition of an administrative order, at its discretion, and what it must do, as required by the regulations. Administration orders will be used by vulnerable people in difficult circumstances. I believe that the clause, as drafted, will sow the seeds for conflict between proper judicial discretion and administrative prescription. I should like the Minister’s assurance that no such conflict is anticipated. The amendment is thus just a probing amendment.
Amendment No. 167 is an attempt to clarify what the Government intend by the stipulation that repayments should be made by instalment. I am not sure that we share a common definition of an instalment. Proposed new section 112E(10) of the County Courts Act 1984 will provide for repayments
“to be made by other means”
including lump sums, in addition to instalments. That is not necessarily a sinister suggestion, and I can see the intention behind it. If a debtor has a meagre income stream but access to a lump sum, the lump sum should be available for use in settling the debt. However, it is not clear to me that subsection (10) is necessary for the achievement of that objective, and I believe that it would be better to omit it.
The repayment requirement is based on payment by instalments, but instalments are, to my mind, merely sums of money provided at agreed times in part settlement of a debt. It is perfectly conceivable for one large initial instalment to be followed by several smaller, regular instalments. Indeed, that is common practice in credit agreements that I have seen, whenthe first sum represents a deposit or when there is an agreed scope to vary instalments depending on an individual’s circumstances. Credit card debt is predicated entirely on the principle that payments are regular but that the amounts vary depending on the debtor’s available resources. They are still instalments in settlement of a debt. It would therefore be in the spirit of an instalment plan for the court to require one or more lump sums followed by smaller regular payments based on surplus income.
It seems to me rather complicated and potentially confusing to tell a debtor, “Here is your initial instalment plan, but the court may still ask you for additional lump sums on top of that.” I should welcome the Minister’s comments on whether an instalment plan, within the normal meaning of the phrase, is capable of achieving what the Government intend, without the inclusion of new subsection (10).