HC Deb 21 February 1979 vol 963 cc479-92

6.16 p.m.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson)

I beg to move, That the draft Judgments Enforcement and Debts Recovery (Northern Ireland) Order 1979, which was laid before this House on 17 January, be approved. It might be for the convenience of the House if I were to deal also with the other motion on judgments enforcement on the Order Paper.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Does that have the approval of the House?

Hon Members


Mr. Davidson

The second of the two orders corrects only a minor drafting omission and I shall deal with it at the end of my remarks on the first order.

The main order, the Judgments Enforcement and Debts Recovery (Northern Ireland) Order, seeks to amend the Judgments (Enforcement) Act (Northern Ireland) 1969. That Act provided the machinery whereby judgments and orders of courts in Northern Ireland are enforced. The machinery set up by that Act has no parallel in the rest of the United Kingdom, and I am pleased to pay tribute to the right hon. Member for Belfast, East (Mr. Craig) who was instrumental in putting that Act on the statute book.

The right hon. Member's faith in the Act has proved justified and the procedure which he brought about—which, as I say, was a unique procedure—has been very successful indeed. For the benefit of the House, perhaps I could explain what that procedure is. I shall do so very briefly.

The Act set up a central office—the Enforcement of Judgments Office—in Belfast which deals with the enforcement of most judgments and orders made by Northern Ireland courts. A creditor obtaining a money judgment, or a person with the benefit of an order for, say, possession of property, and who cannot obtain satisfaction without further recourse to the judicial authorities, makes application for enforcement to the Enforcement of Judgments Office, commonly called the EJO. Perhaps I may refer to it as such during the remainder of the debate.

This is very different from the position in England and Wales, where, if a litigant gets a judgment or an order from a court, it is to that court that in most cases he or she returns for enforcement. The advantages of the Northern Ireland system, in a small community and a relatively small geographical area, are clear. Over the years, the office has been able to acquire considerable expertise with regard to enforcement, and all information about debtors in Northern Ireland is gathered in one place. Therefore, the EJO acts not only as an enforcement agency but as a reference agency.

The register of applications for enforcement is a public register, and so acts as a means of determining creditworthiness. A similar function is performed, although much less comprehensively, by the Registry of County Court Judgments in England and Wales. The 1969 Act followed upon a report of a working party chaired by Mr. A. E. Anderson, who is now the Master of the EJO. In another place, my noble and learned Friend paid tribute to the Master, to his chief enforcement officer and to his staff for the way in which they have continued to perform the very difficult task of enforcement of the judgments of civil courts in Northern Ireland. I am sure that the House would wish to join me in its appreciation of the work that the office has done. It has managed to keep the confidence of the community and to carry on working and performing its duties throughout all the recent, difficulties.

The office has had a remarkably high success rate, if it is to be judged by the amount of money that it recovers. Last year, it dealt with nearly 5,700 applications. However, it would be surprising if after eight years it had not been found that some degree of revision and streamlining was needed in a system which was entirely new when first set up.

The proposals before the House today are part of a scheme of improvements for the office, which began with the vesting of ministerial responsibility in the Lord Chancellor. The order comes before the House after a detailed series of consultations which have involved all those in Northern Ireland, and, indeed, in England and Wales, who have shown an interest in the order and its content. I am pleased to be able to say that, following upon that consultation, the order has met with a general measure of approval. Naturally, there are some slight points of difficulty, and I shall deal with them later.

The order is complex and technical, but its intention is to make the EJO more efficient and to speed up the making of orders and the obtaining of enforcement. The order will be followed by enforcement of judgment rules, which will fill in the details, since the order is only in a bare bones state. The final details of carrying out the procedure will be dealt with by rules, and these will come before the House as well. The result will be that the enforcement procedure will be simplified, and orders will be made with as little unnecessary work as humanly possible for practitioners, creditors and the EJO. Most important, it will see to it that justice is done both to the creditor, in seeing that he gets the money or order to which he is entitled as quickly as possible, and to the debtor, in seeing that he is treated as fairly as possible.

Having said that, I do not think that there would be much advantage, or that it would be the wish of the House, if I were to go through the 34 rather technical articles in detail. Perhaps I can confine myself to one or two of the main provisions, particularly those that have caused some difficulty.

The first provision with which I must deal is aimed at solving the problem of a litigant having to go to a court first and then to the office to enforce payment of a debt. The provisions of article 19 and schedule 3 allow the EJO to take enforcement proceedings in certain circumstances without prior judgment being obtained from a court. This will bring the procedure in Northern Ireland essentially into line with that which operates in England and Wales, where a default judgment can be followed immediately by enforcement, although usually through the same court as issued the writ or summons.

Under the new procedure, a creditor whose debt is for less than £300, and who feels that there is no defence to his claim, will be able to go direct to the EJO without going to a court first, thus seeking enforcement straight away. If there is a dispute, in that a debtor on receipt of the application says that he is not liable, or the sum claimed is not agreed, the application will be dismissed and the creditor will have to go back to court to take proceedings. Incidentally, he will also have lost his application fee. There is, therefore, a positive safeguard against the abuse of the procedure by capricious creditors. I think that that is something about which the Law Society has been worried.

The proposals have given rise to considerable discussions with the Northern Ireland Law Society and with the Belfast Solicitors' Association. The solicitors were concerned that the procedure should provide adequate safeguards for the debtor, and also that the office should be able to cope with any additional work caused by this particular proposal. I have already indicated that there are real safeguards and that the order will not lead to abuse by creditors.

This procedure is similar to that which already obtains in England and Wales. However, in another place my noble and learned Friend agreed that the proposal should not be brought into operation until there have been further consultations and until he is satisfied that the office can adequately deal with any extra work load that may ensue as a result of this procedure. Further consultations will take place with solicitors, who will also be consulted about any rules that are necessary to bring about the procedure. I am sure that that will satisfy the legal profession, which has expressed its concern.

The other major new innovation is the introduction of a system of administration orders. Such a system was introduced for England and Wales by the County Courts Act 1959. It has been found to be a successful way of dealing with debtors who owe small sums of money to a large number of creditors. In no strict legal sense are these debtors bankrupt, and in any event it would be inappropriate and useless to seek a bankruptcy petition because they usually have no assets other than their weekly income.

An administration order allows a debtor to apply to the EJO, listing all his creditors. If an order is made, he simply makes one weekly or monthly payment to the office, and the office distributes that sum pro rata among his creditors. It has considerable advantages for the debtor. There is a priority system in Northern Ireland which means that a debtor is normally pursued by only one creditor at a time. The priority is determined by the date of application to the EJO. That means that a debtor can be pursued successively by a large number of creditors for relatively small sums. For the creditor, especially in a multiple debt situation, this provision means regular small payments rather than his claim being deferred for a long time while others are paid first.

Further provisions in the order modify the Northern Ireland system of attachment of earnings. Again, this will bring the procedure into line with that operated in the remainder of the United Kingdom. When the present system was introduced, attachment of earnings was a new procedure and a large number of safeguards were built into the system. In Northern Ireland one of these was that such an order should not be made before the debtor had been given a chance to pay voluntarily through an instalment order. Only on default under that order could his earnings be attached. In practice, the debtor has had many opportunities of paying before an attachment of earnings order would be made. In many cases it was merely a lengthy method of deferring the inevitable. The debtor has shown by his previous conduct that he will not pay unless forced to do so.

Further opportunity for delay is not in the creditor's best interests or in the long-term best interests of the debtor. The attachment of earnings order procedure in Northern Ireland would be brought into line with the attachment of earnings procedure in England and Wales.

Other provisions in the order also simplify procedures. For instance, at present if one wishes in Northern Ireland to seize a debtor's goods—the procedure in England is known as a warrant of execution and in Northern Ireland as a seizure order—one has to list in the order the goods to be seized. That has disadvantages. The officer must attend and determine what goods are there and return to seize the goods. In England and Wales the bailiff simply makes a choice of the goods to seize when he attends the debtor's premises, and much reliance is placed on the experience and expertise of the bailiff. The provisions of article 11 will change the situation in Northern Ireland so that the enforcement officer can exercise his discretion as to which goods to seize. There are provisions in both jurisdictions that prohibit the seizing of certain goods regarded as necessities.

The same article, in conjunction with article 7, introduces a procedure in Northern Ireland in a modified form which is in England and Wales known as walking possession. That is a form of deferred seizure, which is most effective in England and Wales. In effect, the enforcement officer at that time does not take the goods away from the debtor if the debtor promises to make regular payments. Default in payment results in the goods being immediately removed. An additional advantage of this procedure is that at present in Northern Ireland goods have to be removed in every case. The cost of removal and storage can be expensive and has to be paid for by the debtor.

Further provisions in the order modify the procedure for requiring a debtor to attend for examination on his means to shorten the steps necessary to ensure attendance. Other provisions increase the penalties on persons who make misrepresentations in trying to recover a debt.

Lastly, article 34 empowers the Northern Ireland Housing Executive, in common with other public bodies in Northern Ireland, to take magistrates' court proceedings for the recovery of money owing to it without employing a solicitor. That has again been criticised by the Northern Ireland Law Society. But it is only right that, where a public authority has been sufficiently diligent to set up a team of officials to recover arrears, it should be possible to employ them to appear on its behalf in court to recover the debt. A private individual can always appear without employing a solicitor if he so wishes.

I shall not trouble the House with further details. If hon. Members wish to question me about a particular article, I shall deal with that later. The main purpose of the order is clear. It will make the office more efficient. The rules that will subsequently be laid before the House will add to that process. I hope that the order will have the blessing of the House.

I shall deal with the second order briefly. It remedies an oversight in the drafting of the Armed Forces Act 1971. The effect of the order is to amend provisions of the Services Acts which allow deductions from pay of members of the Armed Forces. It will bring within the scope of the Acts judgment debts that in Northern Ireland are enforceable by the EJO, and will make the position in Northern Ireland the same as in the remainder of the United Kingdom. I have pleasure in commending both orders to the House.

6.38 p.m.

Mr. William Craig (Belfast, East)

I appreciated the Parliamentary Secretary's remarks that were addressed to me at the start of his speech. I appreciated equally his lucid exposition of the order; it was most useful. But I cannot continue with that feeling of good will unless the Parliamentary Secretary can reassuringly explain what he means by the rules to be laid before the House. What opportunity will Parliament have to scrutinise the decisions of the rule-making authority? A negative resolution is not an adequate opportunity for Parliament to scrutinise a crucially important matter.

I am pleased with 90 per cent. of the order. It will greatly help the enforcement agency and answer many of the critics. But it is somewhat spoiled by the introduction of an article and a schedule alien to the concept of the enforcement agency. The agency was brought into existence to give effect to the decisions of the courts. It should remain just that and no more. The principle should be jealously guarded. I am nervous about interfering with a citizen's rights outside the normal judicial process without an exceptionally good reason. Article 19 and schedule 3 cannot be justified on the ground that it will facilitate and make more efficient the workings of the judgments enforcement office.

I want to spell out my objection to the change in public policy, and I shall do so as kindly as I can. It is another example of Parliament being treated almost with contempt when it comes to handling Northern Ireland affairs. Secondly, it is a good illustration of the inadequacies of direct rule and of legislating by Orders in Council. Some hon. Members may say that they are tired of hearing about this defect, but it is always worth emphasising it. Hon. Members from other parts of the United Kingdom could well find that a precedent is being established in this instance which could rebound upon them very badly if other parts of the United Kingdom decided to follow Northern Ireland on enforcing court judgments.

We are doing too much here. We are not only establishing a semi-judicial—or indeed a judicial—function for the office. We are giving that office and its rule-making body virtually complete power to rewrite the will of Parliament. The Parliamentary Secretary said that this relates only to debts which do not exceed £300. That is so; but the rule-making body has complete freedom to vary that sum at will, regardless of what we in Parliament want. I do not think that that is a happy situation. We do not allow any court in the land to vary its jurisdiction in this arbitrary manner.

This rule-making body can do other things as well which perhaps we do not intend. It can allow the jurisdiction of the office to give priority to its own judgments over debt judgments by the courts. What justification is there for this provision? What justification can there be for debt judgments in favour of public bodies obtained under this new procedure taking priority for enforcement over private debt judgments?

I hope that the Parliamentary Secretary will not fall back on defending the position on the basis that these matters can be taken into account when the rules are made. Such matters should be firmly decided in Parliament. We should certainly not give sweeping authority to this admirable institution when we would not be prepared to do so for any other court in the land.

The Parliamentary Secretary should take note of this important psychological point. Take, for example, the case of the small shopkeeper in some remote area of Northern Ireland who receives a notice from the judgments enforcement office to say that a creditor has made a claim for payment of a bad debt. This claim requires the shopkeeper to present himself to the office or to indicate one way or the other whether he will meet that debt. If I know my people, I would say that a considerable proportion of them would take that paper and dump it in the nearest waste paper basket. The office will then proceed to deal with the matter as an admitted debt, without even the protection of a formal hearing—something that we would not allow the courts to do in matters such as hire purchase. There are no such safeguards here as there are in our consumer legislation. The probability is that in many cases, because of ignorance of the legal position, judgment will be given in respect of a debt which should not be given.

In our courts an undefended action is most rigorously tested by the bench. It must be proved strictly, and the bench frequently acts as the devil's advocate. In this case the office will virtually rubber stamp the debt without a formal hearing. That is not satisfactory.

If we do not have this procedure, a summons to appear before a court will arrive at the home of the unfortunate shopkeeper. He will not turf that into waste paper basket as he did the notice. He will suddenly realise that he must appear before a court of the land to answer the charge of a debt. There is less risk of his case going by default in those circumstances.

Can the Parliamentary Secretary tell me why he believes there is such an advantage in encumbering the judgments office with these new procedures, particularly when the new Judicature (Northern Ireland) Act is being implemented and circuit registrars will be empowered to deal with many small cases? It is an unnecessary duplication of a facility available to the community at large. I believe that this duplication will be made at the expense of the efficiency of the judgments enforcement office. We should guard jealously that office's efficiency.

I appeal to the Parliamentary Secretary to have second thoughts on this matter. None of us wants to hinder progress on this order because there is a great deal of good in it, but we cannot overlook the points that I have made or the persistent and consistent opposition expressed to this provision. The Law Society has been very concerned from the outset. While supporting the order generally, it believes that this provision should be dropped. The Belfast solicitors have said the same thing. A year ago my right hon. and hon. Friends said quite firmly that this was a most undesirable provision. At that time we were assured by the Lord Chancellor's office that discussions would be held with interested parties and that it was hoped that an agreement along the lines that we suggested might be reached. Unhappily that has not occurred.

Why have we been presented with an order containing such sweeping powers? Paragraph 11 of schedule 3 gives the rule-making body the right to decide that none of schedule 3—or at least none of the first 11 paragraphs—need be implemented if that body does not wish them to be. It is very strange that, after Parliament has decided something, this rule-making body should be allowed to say it will not implement it. Nevertheless, it suits my purpose to suggest that this extensive power might be used to assure us that the rule-making body will not seek to implement article 19 and schedule 3. I would feel much easier in supporting this order if the Parliamentary Secretary would say that the rule-making body would be guided accordingly. Otherwise, we shall have to look at the whole matter again, even if it means a negative resolution to defeat it. There is strong feeling on the subject.

I shall not labour the point but I am jealous of the power to ensure that citizens' rights are adequately protected in the courts and elsewhere. I do not think that we can give anyone, no matter how eminent, such sweeping powers.

I should like to mention briefly the question of allowing statutory or public bodies to be represented in the new procedures by an official who does not possess legal qualifications. I do not feel strongly about this, but I know that many in the legal profession are deeply concerned—and not, as some quickly pointed out, in their own selfish interests. The Parliamentary Secretary knows that when a solicitor appears before a court he has an obligation to look after the interests not only of his client but of the court. The discipline within the profession ensures that the obligation is seriously undertaken and that is vital and necessary for the efficient working of our judicial institution. An official without legal qualifications is under no such obligation—indeed, he may lack the knowledge to discharge it adequately.

I see no good reason why the bodies cannot have a legal department within their own organisation. I do not suggest that they should have to employ a solicitor, but they could, if they so wished, employ qualified staff in their own legal departments. I ask the Parliamentary Secretary to give further thought to the matter. However, I hope that it will become academic and that my earlier appeal will be listened to and that the office will not be asked to perform judicial functions.

I have been asked to make a comment in a completely different tone. Since the Lord Chancellor's office has become responsible for the Enforcement of Judgments Office, I have heard nothing but praise for its handling of affairs and the extent of consultations. Perhaps representations are not always listened to, but the climate is good and the opinion of the Lord Chancellor's office is indeed high. I hope that that comment will be conveyed to the proper quarters.

6.53 p.m.

Mr. Philip Goodhart (Beckenham)

The Opposition share the view of the Northern Ireland Law Society and the Belfast Solicitors' Association and that put forward with such force by the right hon. Member for Belfast, East (Mr. Craig) that article 19 and schedule 3 of the draft order raise an important point of principle. The right hon. Gentleman reminded us that the provisions will allow the Enforcement of Judgments Office to enforce certain debts without the prior judgment of the court.

The Northern Ireland Law Society and the Belfast Solicitors' Association would like an unambiguous assurance from the Government that there will be the fullest consultation with the Lord Chancellor's office in Northern Ireland before the measures are implemented. The Parliamentary Secretary reminded us that on 15 February, in another place, the Lord Chancellor gave an assurance that he will not seek to bring the provision into operation until there have been further consultations with the users of the EJO—including the Law Society. However, the Northern Ireland Law Society is still apprehensive. No doubt that is because there was an uncharacteristic lack of consultation at an early stage. I hope that when replying the Parliamentary Secretary will go further than he did in introducing the draft order.

When the Minister introduced the payment of debt order last year he painted a depressing picture of debts in Northern Ireland. He told us that since 1975 debts for rent, rates, gas and electricity had increased from £28 million to £40 million. He told us that the rent debt had continued to increase but that electricity and gas debts had grown still faster. In opening the debate today, the Parliamentary Secretary told us that the EJO had dealt in the past year with more than 5,000 cases of debt. I should like to ask the Minister whether the overall position has changed since June of last year when the draft order was introduced. At that time, the Minister told us that the proportion of debtors to tenants in Northern Ireland was one to five.

Article 34 of the draft order makes it simpler for the Housing Executive to try to recover some of the debts. In another place the Lord Chancellor seemed to suggest that the process of trying to recover outstanding rent payments might now be speeded up. I should be grateful if the Minister would tell us whether the Government intend to increase their effort to reduce the volume of outstanding rent debts. The issue is one of substantial importance, because once debts to public authorities grow to the size that they had in Northern Ireland there are substantial consequences for the social life of the community.

The disease is highly infectious. Throughout the United Kingdom it is all too easy to say "If so many people are not paying their bills, why should I?" The failure on the part of the Government to collect the debt would be monstrously unfair to the poorest citizens of Northern Ireland who pay their bills fully and promptly.

6.58 p.m.

Mr. Arthur Davidson

My right hon. Friend the Minister of State, Northern Ireland Office will deal with the points raised by the hon. Member for Beckenham (Mr. Goodhart). I should like to refer to some of the comments of the right hon. Member for Belfast, East (Mr. Craig). I am grateful for his kind remarks about my noble Friend the Lord Chancellor and I should tell the right hon. Gentleman that the possible rules of which he has been critical will be made by my noble Friend the Lord Chancellor, as are rules of court in England and Wales. They will be laid before the House and will be subject to the negative resolution procedure, as are the rules of court for England, Wales and Scotland. The right hon. Member for Belfast, East indicated the office and knows intimately how it works, but I think that he is being unnecessarily worried about the rules, their effect and the opportunity for hon. Members to pray against the rules if they do not approve of them.

Article 19 is clearly the article which has given most cause for concern to the Law Society and hon. Members. The order will introduce a system under which a creditor may make application direct to the office if a debt is for Jess than £300 and if there is unlikely to be any defence by the debtor. If there is a defence, the application will be struck out and the creditor will have to proceed in a county court in the normal way. If the debtor does not object, the creditor will proceed to enforcement.

The safeguards of the system are that a simple objection by the debtor will result in the application being dismissed, and the rules will also provide a procedure allowing the debtor to apply for the order to be set aside if he claims that he has not received notice.

I repeat that the procedure will bring Northern Ireland into line with England and Wales. The default procedure in a county court and the High Court in England and Wales is a well-known procedure which has operated for many years and has not been subjected to abuse or objection. Bearing in mind that the master of the office is a judicial officer ranking just below a judge, I am sure that the right hon. Member for Belfast, East will agree that the master and his expert staff will ensure that the new procedure is effective and is not abused.

I appreciate the right hon. Gentleman's concern, but he was a little unfair to the prestige of the office which he set up. Most people going before the office or receiving a summons from it realise that it is held in high respect and regard and that its orders ought to be adhered to. Most of those who would attend on a summons in the courts would also attend on a summons from the office.

My noble Friend the Lord Chancellor will continue his consultations with the Belfast solicitors and the Law Society in Northern Ireland. Only when he is satisfied that the procedure can be properly put into effect by the office will he introduce it into the House. I hope that what I have said will go at least some way towards allaying the fears of the right hon. Member for Belfast, East.

Question put and agreed to.

Resolved, That the draft Judgments Enforcement and Debts Recovery (Northern Ireland) Order 1979, which was laid before this House on 17 January, be approved. Resolved, That the draft Judgments Enforcement (Consequential Provisions) (Northern Ireland) Order 1979, which was laid before this House on 17 January, be approved.—[Mr. Arthur Davidson.]