moved Amendments Nos. 168 and 169:
Page 152, line 1, at beginning insert—
"( ) confer power to make subordinate legislation;" Page 152, line 8, at end insert—
"(8) Paragraph 1(1)(c) of Schedule 2 to the European Communities Act 1972 (c. 68) (restriction on powers to legislate) shall not apply to regulations which implement or give effect to a relevant Community instrument made after the passing of this Act."
On Question, amendments agreed to.
Clause 205 [Consumers]:
moved Amendment No. 169A:
Page 152, line 40, at end insert—
"( ) A consumer is also a person (whether an individual or not) who receives or seeks to receive goods or services from another person who supplies the goods to services in the course of a business carried on by him and—
(a) the goods or services are to be used in the course of the business of the person receiving or seeking to receive the goods, but
(b) the goods or services will not be supplied to another person in the course of the business of the person receiving or seeking to receive the goods."
My Lords, this is a late amendment, for which we apologise to the Minister. The issue was drawn to our attention by Trading Standards North West, which I believe is a group that represents trading standards officers. The purpose of the amendment is to give the same protection to small businesses that consumers will be given under the Bill. It would cover sole traders, partnerships and limited companies, all of which have been the target of traders seeking to make money by unattractive commercial tactics.
While we recognise that it can be argued that limited companies should be able to look after their own affairs, the truth is that many of them are small businesses in which the directors are also the only employees and often members of the same family. Even when the company is large, rogues specifically target them hoping that inertia and bad communications will work to their advantage. I beg to move.
My Lords, I declare an interest because this amendment comes, as the noble Lord, Lord Kingsland, said, from a group of trading standards officers in the North West, Greater Manchester, parts of Lancashire and so on, and I am the vice-president of the Trading Standards Institute.
When a business buys goods to resell, it is clear that the person buys them not as a consumer but as a business to sell on. It is therefore fair enough that the consumer protection provisions of the Bill that will be enforced by trading standards officers should not apply to such business-to-business situations. However, when a business buys goods not to resell but to use within the business, the business is behaving in many ways like an ordinary individual consumer. The theory may be—the noble Lord, Lord Kingsland, raised this when he discussed the reasons why a business should not normally be given consumer protection—that a business is always able to look after itself and its interests. In relation to goods that it does not buy to sell, it may be no more knowledgeable and no more expert about goods or services in order to protect itself than an individual.
In a letter to me, Trading Standards North West cited the case of a printer supplying headed writing paper to an ordinary individual consumer. In that example, the work was poorly done, frequently badly done and full of mistakes. That is covered by the Bill as a practice that trading standards officers could "go for". However, if the printer switched to supplying businesses, he would be outside the sanctions of the Bill. I shall not bore noble Lords with other examples cited by the group; they are examples of businesses supplying to other businesses goods and services that are not fit for the purpose or shoddy.
If the amendment is agreed to—noble Lords will understand that I feel that there is much merit in it—it would not be wholly without precedent. The Unfair Contract Terms Act applies when, for example, a firm buys cars for its staff—I refer to a firm that is not itself in the business of cars and does not know any more about cars than anyone else. Why not make the enforcement powers in the Bill available when businesses buy goods or services other than for resale? There is much merit in the amendment.
My Lords, I am glad to have had an opportunity to read the submission from the Trading Standards North West group, which represents not just small and medium-sized local authorities but all of the local authorities in Merseyside and Greater Manchester. It is a significant and serious group and we must take its arguments seriously.
The focus of the Bill is to strengthen the enforcement of consumer protection legislation. If we allowed enforcement orders to be made to stop unlawful conduct that harms the collective interests of businesses when they are purchasing goods and services for their own use, that would be a significant extension of the scope of this part of the Bill. That is true whether or not one adopts the presumed restriction to the amendment suggested by my noble friend Lord Borrie; that is, to goods that businesses buy for their own use rather than for onward sale, although the amendment does not say that.
The fundamental rationale for consumer protection legislation is that consumers are in a weak bargaining position when they deal with businesses. Consumers can be expected to have less knowledge of their legal rights and of how to enforce them than the business with which they are dealing. Consumer protection legislation, including the provisions in this part of the Bill—it is concerned with the effective enforcement of that legislation—seeks to address that imbalance. I do not deny the cases that the trading standards group raised and I recognise the point cited by my noble friend Lord Borrie about stationery that was poorly done or full of mistakes. However, the Supply of Goods and Services Act 1982 requires traders who contract to provide a service, whether to individual consumers or to businesses, to do so with reasonable care and skill. Any supply of goods—for example, printed stationery—must be of satisfactory quality and fit for the purpose. Failure to observe those requirements would constitute a breach of contract, and the purchaser could reject the goods and refuse to pay for them.
Of course, there is a grey area between small businesses, which often buy goods in areas in which they do not have expertise, and consumers. But, when a person goes into business, he is supposed to do so knowing that he will have to negotiate, bargain and form relationships with other businesses. As we recognise that small businesses have particular difficulties, we have resources available to help them. I refer, in particular, to the DTI's Small Business Service and Business Links.
When we were producing the consumer White Paper of 1999, we consulted on the idea of extending some consumer protection measures to small businesses. We recognised that small businesses can find themselves in disadvantageous negotiating positions similar to those faced by individual consumers. But we did not find widespread support for that proposal. Since then, we have not come under pressure from business groups—for example, the national association of trading standards officers—for the Bill to be amended to allow for enforcement orders to be made against businesses which act unlawfully. As I said, the trading standards community has not been pressing for it.
It would be quite wrong to amend the Bill in such a significant way at this late stage without having consulted stakeholders—particularly business and small business representatives—to discover whether there is any appetite for it. Careful consideration would be needed of precisely which businesses should be covered—that is, small businesses only or goods bought for the businesses' own use. The amendment would apply to all businesses, regardless of their size, when they are purchasing goods or services for their own use. That may well not be appropriate.
We need to ensure that widening the scope of Part 8 in this way would not result in trading standards officers devoting less effort to mainstream consumer protection, which is their primary function, and we would need to consider whether organisations which represent the collective interests of business should be designated as enforcers under Clause 208. These are very different questions from those which concern designating consumer organisations as enforcers because trade bodies are almost invariably funded by their member companies.
As I indicated when responding to the question about stationery, we are not leaving businesses without protection. Some of the legislation and common law obligations that we intend to specify in the orders already apply to businesses as well as to consumers; for example, in the Sale of Goods Act, the Supply of Goods and Services Act, the Trade Descriptions Act and the Control of Misleading Advertising Regulations.
Important protection for businesses also exists in company law. Under the Insolvency Act 1986, the Secretary of State can ask the court to wind up a company where she judges that to be in the public interest on the basis of investigations undertaken under the Companies Acts. That power is exercised to remove from the market place companies whose misconduct offers a threat to others, including other businesses. The DTI is reviewing the operation of company law powers and, in that context, is considering the protection for responsible enterprises available under company law. I can assure the House that the DTI has taken note of the concerns raised in the amendment, which I hope will not be pressed.
In responding, the Minister said two things. First, he said that, frankly, the amendment was too late. The Bill has been devised and to make such a radical change to Part 8 at this stage would mean that there would be consequential implications for other parts of the Bill which would be too complicated to introduce.
However, at the same time, the noble Lord also said that, to the extent that the Government had consulted on the matter, they were confident that the problem was not as widespread as the Trading Standards North West group believes it to be. That, I understood, was what the Minister said but I believe that he is about to correct me.
My Lords, I did not go quite that far. I said that no one else had drawn it to our attention. I did not express any confidence or otherwise in the degree of mis-selling to businesses. Rather, I argued that there are other remedies.
My Lords, I am most grateful to the noble Lord for that response because it leads me to ask him whether, if such further evidence were to become available, the Government would give urgent consideration to the matter. It is clear that this problem worries trading standards officers in the North West. If it transpires that there are equally strong feelings among trading standards officers from other parts of the country, will this be a matter to which the Government, at an early stage, will give careful attention?
As I understand it, the theory behind consumer protection is the imbalance in the market between powerful commercial interests supplying, on the one hand, and the individual consumer purchasing, on the other. But there is not that great a distinction between powerful commercial interests, on the one hand, and, on the other, commercial interests which are more or less in the same position as individual consumers. I refer to the sole trader or the very small company—the type of company that obviously concerns trading standards officers.
Therefore, if the core of this issue concerns commercial power—differential commercial power in the market—that suggests that, if the evidence that the Minister's investigations establishes supports the case set out in the Trading Standards North West group's own paper, then the Government should give consideration to early legislation.
My Lords, with the leave of the House, I have been asked a direct question. My argument was that we had already carried out the consultation—in other words, we consulted organisations representing business and, of course, the national association of trading standards officers. They did not express that view, and I believe it unlikely that they will express that view before we come to consider the matter at Third Reading.
However, I am certainly glad to say to the noble Lord, Lord Kingsland, that we always keep these matters under review and we always take representations of this kind very seriously. If a body of opinion and evidence builds up, of course we shall seek to respond to it.
My Lords, again, I am most grateful to the Minister for his reply. I am sure that the trading standards officers, not only in the North West but in other parts of the country, will have their attention drawn to this exchange. I believe we can say that it is now for them to raise this issue with the Government if they feel that it is as widespread as some suggest. Meanwhile, I beg leave to withdraw the amendment.
My Lords, in moving Amendment No. 170, I shall speak also to Amendments Nos. 171 to 173. These amendments deal with the enforcement order aspects of the Bill. They are intended to be helpful to us and to the Minister by clarifying a number of matters.
As a preamble, the Bill introduces enforcement orders. They are basically "stop now" orders extended to UK consumer protection legislation. Although there will be one regime, they will also replace "stop now" orders in relation to EU legislation. The Explanatory Notes to the Bill claim that these are similar to injunctions.
Although there will be one regime, there will be differences within the regime for domestic and EU legislation. In the case of domestic legislation a consumer will be an individual who receives, or seeks to receive, goods or services other than in the course of his business or, with a view to setting up a business, from a person who supplies them in the course of business. This inclusion of prospective business people is intended to cover individuals who participate in "homeworking" schemes. For Community infringements, consumers must include all people who are consumers for the purposes of the nominated directives. I understand that the department will list the laws to which each of those apply.
The Secretary of State will have the power to make an order conferring enforcement powers on other UK public bodies and private consumer organisations that have as one of their purposes the protection of the collective interests of consumers. Such a private organisation will need to meet specific criteria set down by the Secretary of State by order. Different criteria may be set for Community and domestic purposes.
From experience on this Bill and others, I am well aware that it is possible that the words in the amendment, the case that I make, and the impact of that on the Bill may not be as one. It may help the Minister if I raise one or two points for clarification. I have previously declared a marginal interest in that I still have contacts with the Co-operative movement and with the British Retail Consortium with whom I have consulted on these matters. There is a need for clarity as to the character of the orders; a need for legislative confirmation of damages and costs for a business where appropriate; a need for guidance to be issued prior to action being undertaken; a need for co-ordination; and a need to avoid the use of the orders to clarify the law rather than to prevent an action that is clearly beyond the law.
Reputable retailers, both large and small, believe that their reputation and profitability rely on serving their customers to the best of their ability. As such they strongly support measures to root out rogue traders who rip off consumers and undermine consumer confidence. The new enforcement orders introduced in the Bill to replace and to supplement the "stop now" orders introduced earlier in the year should have that as their primary purpose. However, the Bill gives us an opportunity to put behind us the disappointing experience of the "stop now" orders which were introduced hastily without proper consultation and which the OFT used to clarify the law in ways that had not been foreseen and without the necessary guidance having been produced. That guidance has still not been forthcoming. The guidance is essential to allow retailers to understand what is required of them. I hope that the Government will consider not bringing this part of the Bill into force until such guidance has been produced by the OFT. The main thrust of the provisions should be directed against rogue traders.
I am sure that the Minister will understand the tentative way in which I have put the case. In seeking to clarify the respective powers and responsibilities concerning businesses and consumers, I am well aware that there is a great deal of misunderstanding. In my view, the Minister can help the British Retail Consortium and the many bodies that it represents to understand better the thrust of the legislation. I beg to move.
My Lords, I am grateful to my noble friend Lord Graham for his strong support for the orders and I am grateful for the way in which he introduced his amendments. I shall speak about them first and then turn to the guidance and the consultation.
Amendment No. 170 seeks to ensure that consumer organisations that carry on a commercial activity are not eligible to be designated as enforcers under this part. Amendment No. 171 is an alternative to Amendment No. 170 which would allow the Secretary of State to designate a consumer organisation with a trading arm as an enforcer but only in respect of those areas where the organisation does not have a trading interest.
We believe that the fact that a consumer body has a trading arm should not of itself disqualify it from being designated as an enforcer, provided that the trading arm does not control the body and that any profits made by the trading arm are used only for the purposes of furthering the stated objectives of the body. Excluding bodies with trading arms would exclude many, if not most, charities that use commercial activities to fund their stated objectives.
I understand the point about the potential conflict of interest, which is why the draft criteria I have made available to the House and on which we shall consult fully after Royal Assent includes the strict requirement that before the Secretary of State can designate a private consumer organisation as an enforcer, she must be satisfied that the organisation is so constituted, managed and controlled as to be expected to act independently, impartially and with complete integrity. If, after being designated, a consumer organisation uses its powers to further its own commercial interests it would be breaching that criterion and the Secretary of State would remove its designation.
We shall consult widely on the draft criteria giving all interested parties the chance to raise their concerns. The consultation will also include draft guidance, to which my noble friend referred, on the applications and designation process, including pragmatic proposals on dealing with potential conflicts of interest where an applicant has a commercial trading arm, and on removing a body's designation if it ceases to meet the criteria. I welcome comments on the consultation on the draft criteria.
Amendment No. 172 seeks to substitute the existing power for the Secretary of State to make orders under this clause subject to negative resolution procedure with one subject to affirmative resolution procedure. I appreciate that the power will be used to make statutory instruments setting out the criteria that private consumer organisations will have to meet to be given enforcement powers, but I point out that the Delegated Powers and Regulatory Reform Committee has examined all the proposed delegated powers in the Bill and is content for the power in this clause to be subject to the negative resolution procedure.
Amendment No. 173 seeks to ensure that this part could not be used solely for the purpose of clarifying legislation where the intention of that legislation is in doubt. It is for the OFT or another enforcer to decide whether it is appropriate to initiate the enforcement procedure provided for in any given circumstance. I recognise that there may be some situations where the enforcer and the trader disagree as to whether a breach has taken place because they have different views as to what the legislation means. However, Clause 209 generally requires enforcers first to consult the OFT (if it is not the enforcer) and the person against whom the enforcement order may be made and give the latter the opportunity to stop the infringement without the need for court action. I would expect that discussion period to be used to try to resolve any different views.
I accept that there may be some cases where a genuine difference of view remains, but in those cases only the courts could resolve such a difference. The courts can find that there is an infringement only if the collective interest of consumers is being harmed. I understand the concerns, but I hope that I have reassured my noble friend Lord Graham that those points are already being dealt with.
My Lords, I am grateful to the Minister and his colleagues who have taken seriously the points I wanted to raise. We are talking about the consumer population of this country who could be affected by the manner in which the interpretations take place. The Minister has satisfied me that all my points have been considered in one way or another by himself and his colleagues. I do not believe that I shall return to the matter again. I am grateful to the Minister for his action. I beg leave to withdraw my amendment.
My Lords, we are all grateful for the Minister's guidance. He is extremely skilled in dealing with these matters—even when it comes to battling with things that apparently do not mean very much. It would be interesting to know more about the injunctions directive. I am not as intimate with every line of the Bill as the Minister, so he is in a much better position to guide us. Perhaps he could say who or what is the injunctions directive to which Clause 210(8) refers:
"The purpose of a Community enforcer must be construed by reference to the injunctions Directive"
I do not have a clue what any of that means. I may be simple, but I consulted my noble friend on the Front Bench and he was unable to enlighten me. Perhaps we may both be enlightened by the Minister.
As to Amendments Nos. 178 and 179, Clause 217 seems cast very wide to catch people, including an associate of an individual—he can hardly help being that—who can be
"the spouse of a relative of the individual's spouse".
The Minister has never been able to conceal the fact that he has a sense of humour. I am sure that he has a lively sense of the ridiculous. I wonder whether the noble Lord does not find that provision somewhat ridiculous. I will not make a long speech because I do not know what that subsection means. If the Minister would be good enough to provide guidance on those two matters, I would be extremely grateful. Then I might be in a position to make a slightly more sensible reply than has been possible with my opening speech. I beg to move.
My Lords, I support my noble friend in Amendments Nos. 178 and 179. As I understand Clause 217(10)(e),
"the spouse of a relative of the individual's spouse" could be the wife or husband of a relative of my wife—which is a wide net to cast. When read in conjunction with subsection (13), where the definition of a relative is also extremely wide, it seems that the Bill has created a huge pool of people—many of whom will not be aware that they are or could be associates.
The key to this is whether an associate could reasonably be expected to know that he or she was an associate. The clauses are drawn so wide as to mean that all sorts of people will, quite unwittingly, find themselves dragged into the net. In the case of a second or third-generation family firm, together the family might control one-third of the voting power and therefore fall within the provisions of the clause but, after three generations, family members might have spread all over the country or the world. I have acted for long-standing family businesses where the relatives have dispersed as far as New Zealand and the United States. For them to be considered associates and therefore caught by Clause 217 seems a catch-all too far.
My Lords, I will do my best to enlighten the noble Lord, Lord Peyton, and to persuade him that the Bill is not entirely trivial or pointless.
Amendment No. 174 seeks to remove the requirement that where a court may examine whether the purpose of a Community enforcer justifies its making the application, the purpose of the Community enforcer must be construed by reference to the injunctions directive. That is set out on page 80, paragraph 452, of the Explanatory Notes:
"Directive 98/27/EC of the European Parliament and of the Council of
"designated by the Member States"— so it is up to them to say who they should be—
"to apply to the courts or competent administrative authorities for orders to require traders to cease conduct that constitutes a breach of any of the consumer protection directives listed in the annex to the Injunctions Directive and that harm the collective interests of consumers. Qualified entities can bring proceedings in their own Member State and in another Member State if an infringement there has effects on consumers in the qualified entity's home State".
That really means that if rogue traders operate in one member state against consumers in another, those traders cannot escape. That is why there must be European rather than national legislation. I hope that the noble Lord agrees that seeking injunctions to stop traders acting in a roguish way is a well-established principle and form of consumer protection. The injunction directive ensures that rogue traders cannot get away with it by targeting consumers in a different country.
I do not know whether the noble Lord, Lord Peyton, is interested in pursuing Amendment No. 174. Perhaps he is more concerned about the meaning of the injunction directive. I hope that I am not misjudging him. The directive only gives Community enforcers the right to make applications for enforcement orders in respect of those interests protected by the enforcer in its home state. Removing subsection (8) could inhibit a court from refusing an application from a Community enforcer that was taking action in respect of infringements that it could not act to prevent in its home state. It is a case of, "Do as I do, not as I say".
Clause 215(3) gives enforcers the discretion, where a person has failed to comply with an undertaking given to the court, to apply for an enforcement order or interim enforcement order instead of an order finding that the infringer is in contempt of court. Subsection (5), which Amendment No. 176 would remove, disapplies certain procedures of the original enforcement process that are inappropriate. I will explain why the provisions in subsection (5) are right.
First, although we would certainly expect the enforcer to approach the infringer before bringing further court proceedings, we do not see a need for the enforcer to consult the Office of Fair Trading under Clause 209 and delay bringing action for 14 days, for enforcement orders, or seven days, for interim enforcement orders, where successful court action has already been taken but the infringer has then breached an undertaking that he has given to the court.
Secondly, the power for the OFT to make directions as to which enforcer may make an application for an enforcement order is unnecessary in these cases because Clause 215(2) means that only the enforcer who made the original application or the OFT can make an application to the court to enforce the order or undertaking.
Thirdly, we think it only right that the court which heard the original application, and which therefore knows and understands the background to the case, should hear the further application.
Finally, we see no reason why the court should be able to accept a further undertaking from a person who had already breached an undertaking that he had given. What we are doing here, I hope it will be agreed, is simplifying the procedures; we are removing unnecessary steps but maintaining the necessary protection.
I turn to Amendments Nos. 178 and 179, to which the noble Lord, Lord Hodgson, spoke. The definition of an "associate" is relevant for the purpose of determining whether an application for an enforcement order can be made against a person who consents to, or connives at, conduct by a body corporate that constitutes an infringement.
Amendments No. 178 and 179 seek to remove two elements from the definition of "associate" in subsection (10), namely, paragraphs (e) and (g). I understand concerns that paragraphs (e) and (g) might be seen as defining the word "associate" too widely. But we do not want a person to be able to avoid enforcement action being taken against him simply by placing shares nominally in the name of a member of his extended family—for example, his wife's sister's husband. They could be living in the same house or be close friends. Paragraph (e) is intended to prevent that.
Paragraph (f) covers unmarried couples, including same sex couples who live together in an established relationship. In exactly the same way as paragraph (c) includes within the definition of an "associate" a person who is a relative of the individual's spouse, paragraph (g) covers relatives of a person's established partner. We see no good reason to make a distinction between relatives of an individual's spouse and relatives of an individual's partner. I hope that that deals with the points raised.
My Lords, I am grateful to the noble Lord. I remind him of my purpose, which was slightly clearer than the clause. Nevertheless, I am grateful to him for reading out that illuminating passage from the Explanatory Notes. It would not be the first time that an explanation has resulted in greater length and more obscurity. That is in no way his fault. To ask the noble Lord to exert his talents in improving on these things without much notice would, I realise, be asking far too much and be more unreasonable than even I could ever dream of being.
It was never my intention to spoil the clause or to lacerate it in some way by leaving out such gems of language as these two amendments cover. What I had hoped to do was to penetrate slightly its opaqueness. I realise that that was taking on rather a big task and was asking the noble Lord to do really more than he had the time to do today, despite his immense talents. In the circumstances, there would be no point in going back to this rather wearing subject. I merely take the opportunity to appeal to the noble Lord's good nature and wisdom, and to ask whether he could exert these great qualities, which we know he has, to leave out, wherever possible, such awful language, instead of marring that wastepaper basket which is familiarly known as the statute book with more garbage than it already has. I beg leave to withdraw the amendment.
moved Amendment No. 175:
Page 159, line 19, at end insert—
"(5A) An application for an interim enforcement order must refer to all matters—
(a) which are known to the applicant, and
(b) which are material to the question whether or not the application is granted."
My Lords, in moving Amendment No. 175, I shall speak also to Amendments Nos. 180, 181 and 182. Amendment No. 175 responds to the opinion of the Joint Committee on Human Rights that it would be beneficial to draw attention on the face of the Bill to the need for the courts to take account of the whole picture when considering an application for an interim enforcement order under Part 8 and not to simply accept the applicant's ipse dixit. I thought we did not do that any more—I am shocked—but it comes from the Joint Committee on Human rights and not from the Government.
Clause 224 requires the OFT to publish advice and information to explain the provisions of Part 8 and to indicate how it expects them to operate. It would be inappropriate to legislate to tell the court to look at the evidence before it in deciding whether to make an interim enforcement order. However, when an application is made without notice being given to the person named in the application, the whole picture is necessarily limited to the evidence put before it by the applicant.
It is our view that on an application without notice the applicant will be obliged to put before the court all material facts and the court will consider them in deciding whether to make an interim enforcement order. The Joint Committee agrees that this is likely to be the case. But, for clarity, Amendment No. 175 includes the obligation on the face of the Bill.
The amendment, which applies to applications made both with and without notice, matches a similar provision in practice direction 25 in England and Wales on interim injunctions. The obligation to disclose all matters which are known to the applicant and which are material to whether or not the application is granted will enable the court to consider the whole picture. This will be true both when an application is made without notice and when an application with notice is not contested by the defendant. Where an application with notice is contested, the defendant will be able to put before the court any additional considerations against making the order sought and which may not be known to the applicant.
Amendments Nos. 180 and 181 are in response to an amendment tabled in Committee which the Government agreed to consider. The amendment recognises that the existing wording of Clause 224(5), which states:
"If the OFT is preparing advice or information", is inappropriate, given that this section requires the OFT to produce such guidance.
I turn to Amendment No. 182. Clause 227(4) and (5) set out the circumstances in which the supply of goods or services wholly or partly outside the United Kingdom are to be regarded as being supplied to a consumer in the UK so that the provisions on domestic infringements will apply to those transactions. The existing definition of the arrangements for supply which had to be satisfied mirrored those currently in Section 138(3) of the Fair Trading Act 1973. That Act uses rather old-fashioned language about documents and correspondence which are too restrictive in today's world of Internet transactions and other forms of electronic communication. Amendment No. 182 updates those provisions to include arrangements made by electronic means. I beg to move.
moved Amendments Nos. 180 and 181:
Page 165, line 39, leave out "If the OFT is" and insert "In"
Page 165, line 39, leave out "it" and insert "the OFT"
moved Amendment No. 182:
Page 167, line 16, leave out from "made" to end of line 20 and insert "by any means and—
(a) at the time the arrangements are made the person seeking the supply is in the United Kingdom, or
(b) at the time the goods or services are supplied (or ought to be supplied in accordance with the arrangements) the person responsible under the arrangements for effecting the supply is in or has a place of business in the United Kingdom."
On Question, amendment agreed to.
Clause 233 [Information]:
My Lords, in moving Amendment No. 183, I shall speak also to Amendments Nos. 184, 186 and 187, which are government amendments. I shall also refer to Amendments Nos. 185 and 188 standing in the name of the noble Lord, Lord Kingsland.
Amendments Nos. 183 and 184 are minor technical amendments. They ensure that the definition of "enactment" in Clause 233 can include Scottish and Northern Ireland legislation, and subordinate legislation. This is to ensure that Scottish and Northern Ireland legislation can be added to Schedule 14 by order after Royal Assent, and so brought within Part 9.
Amendments Nos. 186 and 187 bring the disclosure gateway for criminal proceedings in Part 9 into line with the equivalent gateway in the Anti-terrorism, Crime and Security Act 2001. Amendment No. 186 amends the gateway to allow disclosure to any person for the purpose of criminal proceedings. We propose that change after listening to concerns expressed by the Local Authorities Coordinators of Regulatory Services and the Alliance Against Counterfeiting and Piracy that Part 9 as drafted would prevent trading standards officers from disclosing information to consumers and private bodies to assist them in bringing private prosecutions.
We are aware of a number of successful cases in which industry bodies, in particular, have used such information to assist with private prosecutions for copyright theft. We do not want to prevent such cases being taken in future and see no reason why the gateway for criminal proceedings in the Bill should be narrower than that in the Anti-terrorism, Crime and Security Act 2001.
We are accompanying that widening of the gateway for criminal proceedings with an additional safeguard that must be taken into consideration by a public authority before information is disclosed under that gateway. Amendment No. 187 adds a requirement that, before disclosing information for the purposes of UK criminal proceedings, the disclosing authority must have satisfied itself that the disclosure is proportionate to what is sought to be achieved by it. That responds to an amendment tabled in Committee which my noble friend Lord Sainsbury agreed to consider. It also brings Clause 237 into line with the Anti-terrorism, Crime and Security Act 2001.
Amendment No. 188, tabled by the noble Lord, Lord Kingsland, is virtually identical to the amendment that my noble friend Lord Sainsbury agreed partially to consider in Committee. I hope that our version is satisfactory.
Finally, No. Amendment 185, tabled by the noble Lord, Lord Kingsland, and others, would prevent an investigator or prosecutor from using any information obtained under Part 6 of the Bill for the purpose of subsequent proceedings under the Competition Act 1998 unless that information could have been obtained by the Office of Fair Trading or the Serious Fraud Office in any event using their existing powers. All of the powers contained in Part 6 are modelled on existing powers contained in Part II of the Criminal Justice Act 1987, but for one exception that I shall describe. So those powers are not novel and are regularly applied during criminal investigations. Furthermore, the powers are also available to the OFT under existing provisions of the Competition Act 1998.
The exception is the intrusive surveillance powers under the Regulation of Investigatory Powers Act 2000, which are not provided for in earlier legislation but which are appropriate and necessary for the investigation of cartels. It is accepted and common practice by law enforcement agencies that if, during a properly conducted investigation, evidence is uncovered that points to a different civil or criminal offence having being committed, that evidence can be used in a court of law.
The decisive point is that evidence must be obtained using proper powers and observing all existing safeguards. Information gathered under the Part 6 powers will have been obtained to the highest standard. In particular, any investigation using powers under the Regulation of Investigatory Powers Act 2000 is subject to high safeguards. That Act was passed by both Houses to ensure that any type of surveillance powers are exercised in such a manner as to ensure the safeguarding of the human rights of those under investigation.
The Joint Committee on Human Rights expressed itself as content with Part 6 of the Bill. In its 18th report, it stated:
"In our view the rights of suspects, including the privilege against self-incrimination, are adequately protected".
If we were to accept the amendment, we should put in question any evidence currently obtained under the Criminal Justice Act 1987 subsequently used in civil proceedings.
For all those reasons, evidence obtained through an investigation under Part 6 should be admisssible for the purpose of civil proceedings under the Competition Act 1998. I hope that in anticipating the speech to be made by the noble Lord, Lord Kingsland, or his colleagues, I have accurately expressed the intention behind Amendments Nos. 185 and 188. I beg to move.
My Lords, in calling this group of amendments, perhaps this is the appropriate time to say that, were Amendment No. 187 agreed to, I should not be able to call Amendment No. 188.
My Lords, I thank the Minister for his response. On Amendment No. 188, the noble Lord, Lord Sainsbury, was kind enough to say during Committee that he would go away to reflect on our draft. He has done that; the Minister has returned with his preferred version. Although it does not meet everything that we would have wanted, in my view it is sufficiently comprehensive for us to allow our amendment to fall by the wayside.
On Amendment No. 185, the noble Lord, Lord Sainsbury, gave us no ground for hope in Committee and that approach has been largely mimicked by the noble Lord, Lord McIntosh. The matter was dealt with in Committee on 29th July 2001 at col. CWH 739 of Hansard. Our concern was that powers that could quite properly be used under Part 6 of the Bill in respect of the new cartel offence—powers that were the equivalent of powers in Part II of the Criminal Justice Act 1987—could be used in relation to purely civil offences. I accept that many of those powers could also be used in purely civil offences under the terms of the Competition Act 1998.
The Minister rightly pointed out the one exception to that are the intrusive surveillance powers, which, for obvious reasons, did not exist when the Competition Act was passed in 1998. The Minister is saying that those powers ought, in certain circumstances, to be available to the authorities for civil offences under that Act. I think that the use of those powers would be inappropriate and, for that reason, I shall reflect on whether to table the amendment again on Third Reading. Meanwhile, I shall not press it.
My Lords, I am grateful to the noble Lord for his response. I shall think carefully about what he said about Amendment No. 185.
moved Amendment No. 184:
Page 169, line 20, at end insert—
"( ) The power to make an order under subsection (4) includes power to add, vary or remove a reference to any provision of—
(a) an Act of the Scottish Parliament;
(b) Northern Ireland legislation."
On Question, amendment agreed to.
Clause 236 [Statutory functions]:
[Amendment No. 185 not moved.]
Clause 237 [Criminal proceedings]:
moved Amendments Nos. 186 and 187:
Page 170, line 38, leave out from "to" to end of line 4 on page 171 and insert "any person—
(a) in connection with the investigation of any criminal offence in any part of the United Kingdom;
(b) for the purposes of any criminal proceedings there;
(c) for the purpose of any decision whether to start or bring to an end such an investigation or proceedings." Page 171, line 5, leave out from "the" to end of line 11 and insert "person to whom it is disclosed for any purpose other than that for which it is disclosed.
( ) A public authority must not make a disclosure under this section unless it is satisfied that the making of the disclosure is proportionate to what is sought to be achieved by it."
On Question, amendments agreed to.
[Amendment No. 188 not moved.]