§ Order for Second Reading read.9.53 am
§ Mr. Frederick Willey (Sunderland, North)
I beg to move, That the Bill be now read a Second time.
This is an important Bill, but I hope at the same time that the House will allow progress to be made on other Bills. I know that my hon. Friend the Member for Cannock (Mr. Roberts) is waiting to move the Second Reading of the Bill that follows.
The Bill is to implement the Law Commission report on the sale of goods. As I was first in the ballot, I realise that I have priority in parliamentary time. I wish also to extend the statutory provision and protection of services as well as goods. The Bill is popular. It has the support of the National Consumer Council, the Consumers Association, the Scottish and Welsh Consumers Councils, the National Federation of Consumer Groups, the citizens advice bureaux, the Institute of Trading Standards Association, and, as far as I can see from my researches, it has the 100 per cent. support of articulate consumers.
I am sure that many people at Westminster are grieved by the death of Rosemary Delbridge. But for that she would happily have been assisting me during the progress of the Bill. I am greatly indebted to the Minister for Consumer Affairs and her staff. She had some doubts about parts of the Bill, but she overcame those doubts. She and her officials have been of great assistance to me in the presentation and preparation of the Bill. I am also obliged to my hon. Friend the Member for Norwood (Mr. Fraser), who has been a persistent aid to the consumer. I am obliged to the Director General of Fair Trading and to the officers of the National Consumer Council, especially to its legal adviser, Mr. Richard Thomas. Although I retain their anonymity, I am obliged to a few distinguished lawyers who have also given me assistance and advice.
I intended the Bill to cover the United Kingdom, but at the moment part I does not apply to Scotland. I have been anxious throughout the consideration of the Bill to retain the greatest consensus that I hope will follow the 1977 precedent and extend part I to Scotland.
The Bill has two objectives. The first is to implement the 1979 report of the Law Commission on the sale of goods. That is an excellent report which has proved acceptable to the Government. It contains a draft Bill. That has been a public economy because it has not been necessary for me to have drafting assistance. It means also that the House is as well informed as I am about that part of the Bill.
The Sale of Goods Act 1893 protects the sale of goods for a money price. The Bill aims to extend that protection to transactions analogous to sale, where goods are supplied but not bought only for money. A host of transactions will gain that protection under the Bill. One example is the trading in of one's car in part exchange for a new car. If we trade in coupons or vouchers or buy goods with a "10p off" voucher—or buy two articles for the price of one—that will have the sale of goods model protection.
Most important, the Bill will cover goods that are provided under work and materials contracts. For instance, 532 if a plumber provides and fits taps, the protection will be the same as though the taps were bought in a shop. That covers many goods. One can think, for example, of a garage servicing and repairing a car and also of domestic appliances such as central heating.
I emphasise that we are not trying to write any new law. We are consolidating and simplifying the law. We wish to make it as simple, accurate and accessible as possible. In doing that—as anyone who has read the report should realise—we are removing doubts and uncertainties. As the Law Commission said, uncertainty is undesirable. It is especially undesirable in relation to consumer goods. Those matters are dealt with in clauses 1 to 5.
The Bill also provides similar statutory protection for hire transactions. I emphasise that we are dealing with hire and not hire purchase. Hire purchase has been dealt with in previous legislation. Hire transactions are outside the provisions of the Sale of Goods Act 1893 because there is no transfer of ownership. It is possession that is transferred.
There are many goods which can be hired, such as cars, television sets and office equipment. In general, these services are satisfactory, but there is some dissatisfaction. The hire of television sets for instance exposes complaints in about 11 per cent. of cases each year, so that, although the services are in general satisfactorily provided, a considerable minority of people have cause for concern.
The Bill provides that the owner shall have the right to hire and that the hirer shall enjoy "quiet possession" throughout the period of hire. The sale of goods model applies to description, merchantable quality, and fitness for the purpose.
This is not new law; it is only a simplification and clarification. It is especially necessary to make statutory provision because there is very little case law and the Law Commission states, some of the cases are inconsistent one with another.
I have dealt with the provisions made in clauses 6 to 10. Clause 11 is the last clause of this part of the Bill. Its intention is to prevent people from wriggling out of the provisions.
The second objective of the Bill is to provide some statutory protection in the case of contracts for service. So far, the Bill has dealt with goods and materials in the case of materials and work contracts. The materials will have the benefit of the sale of goods model, and the service element should not be left without some statutory protection. Some statutory equivalent must be provided. For example, if a plumber fits taps to a bath, the Bill provides that he will do it under the same liability as if the taps were purchased in a shop. Suppose the plumber fits the taps wrongly or, having fitted the taps, he charges the earth for his services. If we are consolidating and making statutory provision, we have to make a comprehensive provision and provide not only for the goods and the materials but for the services.
I have been greatly impressed by the National Consumer Council's report "Service Please" which was published in October. It shows that there has been a vast increase in the provision of services. There has similarly been a large increase in the number of contractors providing such services. Firms have mushroomed and there are many cowboys about. The Office of Fair Trading recorded in 1979–80 that there were about 124, 000 533 complaints concerning services. Moreover, the inquiry by the National Consumer Council shows that this is only the tip of the iceberg.
§ Dr. M. S. Miller (East Kilbride)
Would my right hon. Friend's Bill protect people from cowboy salesmen operating on a door-to-door basis? Would there be some method by which the housewife could distinguish between someone genuinely selling goods and services and someone simply trying to con her?
§ Mr. Willey
Steps have been taken by some firms to deal with that aspect, but I think it is a matter which requires to be looked at outside the Bill.
With regard to car repairs and servicing by garages, the Consumers Association, through Motoring Which? says that there is an appalling picture of incompetence, wastefulness and even dishonesty.
With regard to plumbers, the Price Commission, in investigating charges for emergency calls, found thatthe total bill may be as high as an irresponsible plumber thinks he can get away with".I am suggesting not that all services are unsatisfactory but that there is considerable dissatisfaction. About one in 10 of those using garage services, buying household appliances and taking holidays complain.
The law is uncertain. There is a labyrinth of case law. With regard to charges, we have to go back to the seventeenth century, when there was a case concerning a man who agreed to obtain a pardon for a convicted murderer. Case law of that sort makes life very difficult for the consumer. Consolidation can help to make the law clear, simple and certain.
Clause 13 states that work should be carried outwith reasonable care and skill".Clause 14 states that where no time is fixed the work must be carried out "within a reasonable time".
Clause 15 provides for charges being reasonable.
I repeat that, in the main, the Bill is not making new law; it is simply providing a partial clarification of existing law. The only new law is in clause 16 which, dealing with consumer transactions, provides that there will be no exclusion or restriction of liability concerning skill and care—in other words, the exclusion would be invalid in all circumstances. My argument in favour of it is based largely on a consumer brief but I concede at once that, unlike the other provisions, this one is innovatory.
In general, providing statutory protection for service, the Bill makes only a modest and cautious contribution. It makes allowance for the statutory provisions which already exist for some contracts of service. It makes allowance for the continuance of the common law. Except for its specific provision, it does not prejudice or affect the common law. It does not trespass upon the present inquiry being made by the Law Commission, but, however modest the provisions may be, I realise that in regard to particular services it may be claimed that there has been insufficient or inadequate consultation.
I have not received any objections from those concerned with services, but that does not prove that there are no such objections. In regard to some services the Bill may cause unforeseen consequences. I recognise that. That is why the Bill provides, in clause 12, thatThe Secretary of State may by order provide that one or more sections of this part of this Act shall not applyto particular services. I have sufficient confidence in the Minister for Consumer Affairs to know that she can use that provision to ensure that the Bill operates equitably.
534 The Bill is no panacea. I think that it is a useful measure and that it will be of great help to consumers. One has only to think of the small claims proceedings in county courts and of the people—not legally qualified—in citizens advice bureaux who give day-to-day assistance to consumers, or of the activities of the consumer organisations and advisory bodies, to realise that in many areas the Bill should prove effective and helpful. I hope that it will have the confidence of the House.
§ The Minister for Consumer Affairs (Mrs. Sally Oppenheim)
It may be for the convenience of the House if I intervene at this stage in the debate. I begin by congratulating the right hon. Member for Sunderland, North (Mr. Willey) on obtaining first place in the ballot for Private Members' Bills and on his choice of subject—a choice, as he pointed out, that was originally made by many other right hon. and hon. Members who were not so fortunate as to win such a high place in the ballot. That signifies what a popular choice the subject is. I am particularly glad that my hon. Friend the Member for Tynemouth (Mr. Trotter), who is present today, is a sponsor of the Bill, because he has also provided us with one of our most valuable pieces of consumer protection legislation.
I am sure that hon. Members on both sides of the House will welcome the legislation, which will help all classes of consumers in what is an area of widespread and justifiable dissatisfaction and frustration. I am glad, therefore, on behalf of the Government, to welcome the right hon. Gentleman's initiative, and I am extremely grateful to him for his kind remarks.
As the right hon. Gentleman explained, parts I and III closely follow the draft prepared by the Law Commission and attached to its report No. 95 on implied terms in contracts for the supply of goods.
I should like at this stage to pay tribute to the detailed and painstaking work of the Law Commission, particularly in relation to the supply of goods and services. One of its early reports led to the Supply of Goods (Implied Terms) Act 1973, which put an end to the growing practice under which unscrupulous traders deprived consumers of some of their basic rights when buying goods. A later report—like the first, prepared jointly with the Scottish Law Commission—led to the Unfair Contract Terms Act 1977, with the passage of which I was proud to be associated when in Opposition, and which I hope I can say without immodesty that I was instrumental in strengthening considerably. A third report will be implemented by the Bill now before the House.
The Law Commission has since commenced work on a crucial, detailed study of merchantability, as a result of which I hope that further legislation will follow in due course to make clear the circumstances in which a consumer is entitled to reject goods and the nature of the remedy to which he is entitled in those circumstances.
I cannot put strongly enough my feeling that the outcome and implementation of the report is perhaps the most crucial and fundamental outstanding issue in consumer protection today. The Law Commission has continued and will, I am confident, continue to make a valuable contribution to the development of consumer law. I am sure that the House and, indeed, consumers everywhere will join me in paying tribute to its work on those matters.
535 The Law Commission Bill sets out and strengthens the existing terms implied by common law in contract for the transfer and hire of goods as opposed to the sale of goods. The effect will be that a consumer who buys a new car and offers his own in part exchange will benefit from broadly the same implied terms as those under the Sale of Goods Act 1979 if he had bought the car for cash. Similarly, a consumer who enters into a contract for work and materials under which contractors supply and build in new kitchen units and equipment will, following the passage of the Bill, benefit from the implied terms that the supplier owns the goods and can therefore transfer them to him, that the goods correspond with their description, are merchantable and are fit for the purpose for which ther are sold. Equally, a person hiring goods will benefit from similar implied terms and also from a term stating that he is entitled to enjoy quiet possession of the goods during the period of the agreement.
Since the report was published, my officials have consulted many organisations whose members would be affected by the draft Bill prepared by the Law Commission. Although there are one or two problems on matters of detail, which can no doubt be discussed in Committee, it is clear that there is widespread support for the Law Commission Bill.
As the right hon. Gentleman eloquently explained, part II has been inspired by the excellent and widely welcomed National Consumer Council report "Service Please" published last October. Indeed, it seemed to be the answer to a cri de coeur from many thousands of consumers throughout the country.
I have for some time been deeply concerned about the problems which my constituents and other consumers face when they receive unsatisfactory services. Their dissatisfaction and frustration are widespread and cover all classes, including both the less articulate poorer consumer and the more articulate middle class consumer. I know that they find it difficult, as we all do, and often impossible to obtain redress for unsatisfactory services—even more so than for unsatisfactory goods. I was therefore delighted that the National Consumer Council decided to study the problem of services. I congratulate it on preparing such a clear and readable report and on quoting so many examples to bring home to the public the difficulties which consumers—indeed, all of us—face in this sector.
The problems are exacerbated by the fact that, understandably, more and more Consumers are turning to the little man round the corner to do cheap building, plumbing and other service jobs, often for cash, many of which turn out to be disastrous, and recourse is often very difficult.
As I said in my education pack for schools—I reiterate it now—consumers should be warned that cheap can often turn out to be very dear in the end. I do not need to say that too often. Those services and others—even those carried out by reputable contractors—are often rendered under emotive circumstances in people's homes at short notice—for example, repairs to burst pipes, blocked toilets and similar household problems affecting people's living conditions. There are many examples and all too much evidence of people being taken for a ride by unscrupulous individuals and firms which insist on a cash deposit and either leave the job half done or unsatisfactorily carried out.
536 Car maintenance carried out by freelance mechanics is another area of growing concern. Apparently mechanics call on people at home and offer to service their cars cheaply, and then further disaster follows.
It is important to point out that consumers are particularly vulnerable, because they do not have the technical knowledge to know whether the services have been carried out correctly before they have to pay for them.
There are multiple problems concerning dissatisfaction over the provision of a wide variety of services rendered to consumers. Work is often carried out unsatisfactorily, and sometimes the so-called repairs leave the appliance or car concerned in a worse condition than when the repair was embarked upon in the first place. Delays are all too common, both in starting and finishing work. Costs often appear to be unjustifiably high. Complaints range across a wide range of services including, as the right hon. Gentleman and the Law Commission said, professional services.
I am sure that right hon. and hon. Members consider themselves as articulate and as knowledgeable as most people, but I doubt whether any hon. Member has not had experience of the difficulties that I have described. Only yesterday, an eminent medical doctor complained bitterly to me that he had just bought an expensive German ceramic hob which had broken twice. He had been told by the company concerned that he had no recourse, because there was an exclusion clause in the contract and because it had been supplied by an installer of kitchen equipment. These are not matters that affect only the inarticulate consumer.
Part II of the Bill, if it gains the approval of the House, will codify for consumers the quality of service they have a right to expect but—I emphasise this—it will still be of overriding importance, as I have already advised in my education pack, for consumers to obtain detailed specifications in advance, where possible, of services to be carried out. I accept fully that the vast majority of consumers do not have professional advisers to draft satisfactory specifications for them.
I agree that the consumer's position would be strengthened if the existing common law were codified so that those complaining about unsatisfactory goods and services could point to a specific statute instead of needing to argue that they had common law rights stemming from various court cases of which neither the consumer nor the trader often understood the merits.
I therefore warmly welcome the attempts in the Bill to codify the existing common law. Indeed, I should like to see wider codification of the common law in this field—a point to which I shall return later.
I must reiterate, because I do not wish to mislead the House or the public, that even the codification of the common law in the Bill will not make it less important for consumers clearly to agree in advance the precise terms and conditions on which a service can be provided, whenever and wherever that is possible.
All too often people place an order for services without first agreeing the details of the work to be carried out.
Part II of the Bill will cover a very wide range of services, ranging in the consumer field from the provision of complicated legal or financial advice, through household removals, to repairing cars and domestic equipment. Certain services, particularly in the professional field, are already regulated in part by statute. 537 In other cases—such as carriage by air—the liability of those providing the services is affected by international agreements. Clause 12 avoids any conflict between existing statutes and international agreements and the provisions of the Bill. It also ensures that the common law will continue to prevail if in particular circumstances it is more favourable to the consumer than the provisions of the Bill. It may in some cases prove to be so.
It is barely three months since the NCC report was published and only 10 days since the Bill was published. The very considerable number of professions and trades that will be affected have not yet had adequate time to consider its effect in detail. Nor have the Government. It may well therefore be that we shall need to move amendments at a later stage. I hope, however, that the power conferred on my right hon. Friend the Secretary of State to exempt particular types of contract by order will enable us to avoid any unforeseen or unwarrantable burdens being imposed upon particular sectors. My right hon. Friend will use the power very sparingly.
My right hon. Friend might not have needed such a power if there had been more time to discuss the NCC report before a Bill was introduced. We have, however, thanks to the initiative of the right hon. Member for Sunderland, North an opportunity for quick legislation. I am sure that the House will agree that, in this case, an exempting power is a small price to pay for quick legislation.
I should make it clear, however—as the right hon. Gentleman has referred to this—that the Government see considerable difficulty in clause 16, which proposes that traders should not be able to contract out of the implied term that they should exercise reasonable care and skill when providing services. It may seem surprising that anyone should ever be allowed to perform any service unless he was required to exercise reasonable care and skill. I am advised, however, that this clause may have serious commercial implications for a wide range of traders. I shall attempt to explain why that is so.
Clause 16 may well prejudice what is known as the "two-tier service" system operated by many traders—for example, carriers which offer a basic service at a low rate in exchange for a limited liability to compensate their customers for loss or damage of goods, and a premium service at a higher rate with more generous compensation arrangements. The consumer already enjoys a measure of protection in this field as a result of the Unfair Contract Terms Act, which provides that a trader cannot limit his liability to a consumer for damage arising from negligence unless he can show that the exclusion clause is reasonable.
A recent and interesting court case showed that the provision had teeth. A film processing company lost a film containing wedding photographs. It offered to replace the film and relied on the exclusion clause limiting its liability to the cost of a new film only. The customer, however, claimed that the photographs had been intended as a wedding present for a friend and that loss of the film meant that he had to buy another wedding present at considerable cost. He claimed damages equal to the cost of this wedding present.
I think that that was a modest claim. He might have claimed that the whole wedding needed to be restaged. The court found, I am pleased to say, that the exclusion clause was not reasonable, partly, at least, because the 538 processing company did not offer a second-tier service at a higher price offering higher compensation, and it awarded damages to the customer.
I understand that as a result of that court case a number of film processors are now offering two-tier services. The consumer therefore has a choice between cheap processing, with compensation for loss or damage limited to the cost of a replacement film, on the one hand, or more expensive processing under which he can obtain higher compensation for loss or damaged film, on the other hand. He can then decide which service he wishes to buy, although I agree that it is important that it is made extremely clear to the consumer which service he is buying and what compensation is available.
§ Mr. John Fraser (Norwood)
The Post Office provides two-tier services. Does the Minister intend to amend the Bill so that it applies to the Post Office?
§ Mrs. Oppenheim
The hon. Gentleman and I had a number of exchanges about the inclusion and exclusion of the Post Office over various legislation of this type. We shall have further interesting conversations on the subject. He knows perfectly well where my heart lies on that matter.
During the Committee stage of what is now the Unfair Contract Terms Act, in which that matter came up under fairly emotive circumstances I drew attention, as an example, to some of the unreasonable exclusion clauses that were then included in the contracts for carriage. A steamship company, for example, claimed to be exempt from all liability, for any loss, expenses or damages arising from any death, injury or sickness of any passenger howsoever caused. It also excluded liability for loss or damage to baggage or goods belonging to or travelling with any passenger howsoever caused. As if this were not enough, it sought—unless the laws of the country otherwise required—an absolute limit on its liability of £100 for damage to or loss of property and £5, 000 for death or injury.
I am glad, and proud, to say that such exclusion clauses are seldom seen today. As a result of the amendment proposed by my hon. Friends and I during the Committee stage, both carriers and other purveyors of services can no longer exclude or limit their liability for death or injury to passengers arising from their negligence.
§ Sir Ronald Bell (Beaconsfield)
Are not Her Majesty's Government party to limitation contracts, in the case of international carriage by air, which sharply limit the liability of the carrier for death, injury or damage to baggage?
§ Mrs. Oppenheim
My hon. and learned Friend is right. I said earlier that clause 12 of the Bill, as does the Unfair Contract Terms Act, recognises international agreements. This is another matter.
As a result of that amendment made in Committee, not only carriers by air and sea but other purveyors of services can limit their liability for loss and damage to goods and property through negligence only if they can satisfy the courts that the exclusion clause is reasonable. The burden of proof rests not with the consumer but with the purveyor of the service. That was achieved as a result of our amendment.
Any such exclusion clauses must be subject to a reasonableness test which, as a result of our amendment, 539 must be proved to be reasonable by the carrier or other person or persons providing services, and not by the consumer. I pointed out in Committee that in the case of the outrageous steamship exclusion clauses, consumers would have little difficulty proving them to be unreasonable.
There are many other cases where technical information is not available to consumers, so the responsibility for proving the reasonableness of exclusion clauses must lie with the business concerned.
§ Dr. M. S. Miller
Would that point apply when a customer has signed a contract? Often, exclusion clauses are overwhelming and ridiculous in their exclusions. If an unsuspecting customer signs something that is palpably ridiculous, will the supplier be held responsible rather than the consumer?
§ Mrs. Oppenheim
Perhaps the hon. Gentleman will bear with me and allow me to give him a full and accurate answer if I am permitted to intervene later in the debate. Because our amendment was carried in Committee and puts the onus of the burden of proof on the reasonableness test for the purveyor of the service, it has greatly strengthened the position of consumers in relation to exclusion clauses. I am convinced that, at this stage, clause 16 is unnecessary. I have made that clear to the right hon. Member for Sunderland, North.
The existing law provides protection for the consumer, and that does not need strengthening at this stage. No doubt we shall debate that matter in Committee, but it is the firm view of both the Government and myself, and arising from the proceedings on the Unfair Contract Terms Act 1977. However, as I have already said, I accept that wider codification of the existing common law on contracts of services should be undertaken.
I am pleased to announce that my right hon. and learned Friend the Lord Chancellor has agreed to refer the question of services to the Law Commission, which will consider not only whether and how the existing common law should be codified, but how it should be strengthened. It will naturally also consider—
§ Mr. Douglas Hogg (Grantham)
Will there be a Royal Commission report on contracts of services? If so, are we wise to proceed with part II of the Bill?
§ Mrs. Oppenheim
The Law Commission review will refer to matters presently covered by clause 16 of the Bill, but not necessarily to those matters covered in other parts of part II of the Bill.
§ Mr. Hogg
I do not wish to delay my right hon. Friend longer than necessary. However, is she aware of the terms of reference to be given to the Royal Commission? With deference to her, I suspect that the Royal Commission will wish to investigate the whole area of contracts of service. Its previous report, published in 1979, clearly showed that it wished to investigate contracts for service. I do not believe that it will be restricted to the exclusion of liability aspect.
§ Mrs. Oppenheim
I made it clear at the outset of the debate that the Bill has been brought forward at short notice. Had there been a free choice in the matter, we would have preferred to refer to the whole matter to the Law Commission. Thanks to the initiative of the right hon. 540 Member for Sunderland, North, we have an opportunity for quick legislation that will not preclude a review by the Law Commission. In the short term, this legislation will codify the law for consumers. My hon. Friend the Member for Grantham (Mr. Hogg) is right to think that it will not help consumers to obtain redress. Until the Law Commission report is obtained, it will not be easy for consumers to obtain redress, but at least the law will be codified. We feel that that would be of quick benefit to consumers during the inevitably lengthy period needed by the Law Commission to consider the wider issues, especially those covered by clause 16. The terms of reference have not yet been clearly stated.
§ Mr. Willey
I appreciate the Minister's remarks about clause 16. I am willing to withdraw clause 16 when we reach Committee stage to allow the Law Commission inquiry to proceed. I am sure that that is the most helpful way to deal with the problem.
§ Mrs. Oppenheim
I am grateful to the right hon. Gentleman. The Law Commission will naturally consider problems with any types of contract—it will not be prevented from doing that—but my right hon. Friend the Secretary of State may, later, exclude those matters from the provisions of part II of the Bill. The Law Commission can consider them after the Bill has become law. I expect that it will, in due course, issue a working paper seeking the views of interested parties before making final proposals. That is infinitely desirable. That would be the appropriate way to consider proposals to strengthen the present law. I am grateful to the right hon. Member for Sunderland, North for his co-operation, which will be in the long-term interests of consumers.
I hope that the debate will be instructive for consumers in an area where there is a great deal of confusion. I wish to give a simple example of how the Sale of Goods Act 1978, the Unfair Contract Terms Act 1977 and the two parts of the Bill will act together to protect consumers. Let us take the example of a consumer who wishes to get his dining room painted. The first, and cheapest, method is to buy the paint and do it himself. If he asks for matt magnolia paint to paint his dining room the retailer must supply him with merchantable paint with a matt finish and of magnolia colour. He must also supply paint that is suitable for use on a dining room wall. If the retailer fails in any of those respects the consumer is entitled to redress under the Sale of Goods Act 1979.
The second method is to employ a decorator. If the consumer adopts that course he will have the same rights about the merchantability of the paint as in the first case after the Bill is enacted. If the decorator fails to use matt magnolia paint that is fit for dining room walls the consumer will be entitled to look for redress because of part I of the Bill. If the decorator uses good quality paint but makes a bad job of the painting, the consumer will be entitled to seek redress under part II of the Bill on the ground that the decorator has not used reasonable care and skill.
If, however, the decorator spills paint on the dining room table and spoils it, the consumer can choose between making a claim for damages arising from negligence or arguing that the accident showed a lack of care and skill. If in either case the decorator argued that he was not liable because he had said that he would do the job at the owner's risk, the consumer could challenge such an alleged 541 exclusion clause under the Unfair Contract Terms Act 1977, and the decorator would have to show that the exclusion clause was reasonable. Unless he could do so, the consumer could claim damages.
§ Mr. Neville Trotter (Tynemouth)
My right hon. Friend has given a clear exposition on the rather confusing background about exclusion clauses. If clause 16 is withdrawn, will it be possible for a painter to get out of the liability for his work?
§ Mrs Oppenheim
That would apply only if the decorator could show that his exclusion clauses were reasonable. If they were not reasonable, the court would find against him as happened in the film processing case that I described. That aspect is of great importance to the reasonableness test and the burden of proof.
§ Mr. John Fraser
The right hon. Lady spoke in high praise about the Sale of Goods Act and said that it prevents unscrupulous traders taking valuable consumer rights away in the sale of goods. What is the intellectual justification for maintaining those inalienable rights on the sale of goods, but not on the provision of services?
§ Mrs. Oppenheim
The hon. Member argued the point when he advanced the validity of using the reasonableness test in exclusion clauses when he took the Unfair Contract Terms Act 1977 through its various stages. If the hon. Gentleman wishes me to do so, I shall quote later reams of his speeches in support of the exclusion clauses subject to the reasonableness test. The only difference is that he wanted the burden of proof to rest with the consumer. We have reversed the burden of proof in order to strengthen the consumer's case so that he would not have to prove the reasonableness. It therefore ill befits the hon. Gentleman to press that point.
My view was that the hon. Gentleman was not being fair to consumers. We have succeeded in strengthening the consumer's case on contracts. I direct the hon. Gentleman to his arguments on exclusion clauses with the reasonableness test in the Unfair Contract Terms Bill. He rather asked for that answer.
Although I do not wish to take up too much time, I shall take the opportunity to express my gratitude to the NCC, the Consumers Association and the Office of Fair Trading, which all met at short notice to discuss the Bill and, particularly, to the NCC for the constructive and co-operative way that it listened to the anxieties expressed by my officials about the original draft clauses attached to its report which have subsequently been redrafted.
I express thanks to my officials who worked extremely hard on the Bill within a short period. We all accept that some amendments may be necessary. In conclusion, I congratulate the right hon. Gentleman on his choice of subject and commend the Bill. As a whole, it represents a further useful step in codifying and strengthening the common law on goods and services. I hope that it will be of particular benefit to the many thousands of sorely deprived consumers.
§ Mr. Thomas Cox (Tooting)
I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) on introducing the Bill which is long overdue and much needed. I am sure that all hon. Members listened carefully to the Minister's comments and her general welcome to the Bill.
542 I was interested to hear the right hon. Lady's comments on the protection to be provided to people having houses or rooms painted, because I intend to comment briefly on the sort of abuse I have tried to deal with. I am sure that all hon. Members warmly welcome the right hon. Lady's speech and the clear indication that the Government will give as much help as possible to ensure that the Bill becomes law.
We live in an age of much advertising on television, radio and in the press offering many services to the public. However, time and again, we hear that the protection offered to the consumer for services is not worth the paper that any guarantee is written on. It is often a case of "So what? Something has gone wrong, and you will just have to put up with it."
People pay large sums for work and services, but have no redress against a large or small company or an individual providing the services. People's complaints can be heard by listening to the radio. Credit should be given to radio programmes that highlight the problems.
I often listen to the BBC's "Checkpoint" and much credit should be given to that programme for drawing the public's attention to the problems. In addition, the BBC's television show "That's Life" hosted by Esther Rantzen also highlighted the problems often faced by consumers. The BBC and independent radio stations try to provide services for the consumer in alerting them to the problems they may experience if they do not closely scrutinise contracts.
All constituencies contain citizens advice bureaux. One soon knows, from listening to the problems expressed by people at CAB offices, that the Bill is needed. The clauses relating to services put a clear requirement on those providing services for work to be fully detailed and costed and for a reasonable time to be given for it. There must also be a compulsion for receipts to be given for any work undertaken. The lack of such commitments often leads to many problems when consumers attempt to gain redress when they feel that the work that they have asked to be done—the money often already having been paid—leaves much to be desired. I hope that in Committee that aspect will be considered in detail.
We shall not today slang each other on political issues but in Wandsworth and other areas, because of Government policy on public expenditure cutbacks, consumer protection offices and law centres, where people involved in disputes sought qualified advice have been closed—not because there was no demand, but because the local authority said that it did not have the money and the Government restrictions imposed on expenditure forced them into that position.
Many hon. Members agree that the Minister has a full commitment to benefit consumers and I hope that she will ensure, as soon as possible, that facilities and moneys are made available so that those advice services can be reopened. From the comments made to me, I have no doubt that they provide a worthwhile and appreciated service in many localities. I hope that that aspect will be considered.
The hon. Member for Hornchurch (Mr. Squire) received much publicity last week for the problems that many of his constituents faced as a result of burst pipes caused by the severe weather conditions. They suffered enormous abuse from individuals or companies that offered a 24-hour service, but only at enormous cost. I am sure that many hon. Members know of similar cases.
543 Where can people get reliable and reasonably priced services in an emergency? Many of us are left at the mercy of the individuals or companies that we can find as quickly as possible. I should like local authorities to keep a list of approved contractors in the locality so that local people would know which decorators, roofers and so on had guaranteed the service that they give.
Local authorities would not have to spend enormous sums in advertising the services. I am sure that many companies would willingly pay the small cost involved and it would give local people the assurance that companies on the approved list had guaranteed to the local authority that they would provide first-class services at a reasonable cost. That would be welcomed by many of our constituents who have suffered great abuse from some of the people they have turned to.
The Minister mentioned the protection that the Bill will give to a person having a room painted in his house. We could all quote cases of abuse, but I shall quote only two as examples of why the Bill is necessary and why I welcome the contributions of the Minister and my right hon. Friend the Member for Sunderland, North.
The first case concerns an elderly gentleman in my constituency who was approached by someone working on a roof across the road and asked "Do you know that your roof is in a bad state?" The old fellow said "No, I had no idea." The roofer went up on to the roof and the poor old gentleman paid £400 for what turned out to be one hour's work. He could not check what work was done and he had no redress.
The other abuse involved an elderly lady who had the outside of her house painted. When she asked the workmen whether they would put on an undercoat she was told "No. We do not put on undercoats now. We mix the undercoat with the gloss and put them on together. That is the new system." We would have questioned that, but, because of the modern developments that we hear about every day, many people would think that that was a new development.
The sad aspect of both these cases is that there was no redress to those elderly people who paid what to them were large sums. Therefore, I welcome the provisions for the protection of our constituents.
Obviously, legal points will have to be considered in Committee and I am sure that hon. Members with legal experience will be able to formulate what should be in the Bill, but I hope that it will go through Committee quickly and will become law as soon as possible.
The Bill will benefit all those whom we seek to represent. We discuss important issues in the House, but many of them are far removed from the day-to-day problems that confront our constituents. The Bill is of interest to many of them and the publicity that it will receive will quickly make them aware of the safeguards that it contains. I warmly congratulate my right hon. Friend on introducing the Bill and the Minister on confirming that the Government will support it.
§ Mr. Neville Trotter (Tynemouth)
I also congratulate the right hon. Member for Sunderland, North (Mr. Willey), both on his luck in coming first in the ballot and on his wisdom in the choice of subject. The right hon. Gentleman and I tend to agree on many matters, especially those affecting shipbuilding, and it is good to be able to support him. I was happy to lend my name to the Bill, which is a worthy cause.
The Sale of Goods Act 1893 was the bible on the subject when I was an accounting student. We did not have to study it as closely as did lawyers, but we had to read it. The Act is an old measure, and the law relating to the sale of goods goes back into history. It is important that there should be clarity and certainty in this area of the law, especially where consumers are concerned. Businesses are better able to look after their own interests.
Reading "Chalmers", the standard textbook on the subject, last night, I was struck by the fact that there are more than 70 pages of cases referred to—more than 2, 000 cases on the subject. Any contract not covered by the specifics of statute law would have case law applied to it, but the law is a jungle and many decisions are difficult to follow and sometimes illogical and contradictory. That makes it difficult for someone to go to law on the basis of general contract law rather than a specific Act. I am sure that the right hon. Member for Sunderland, North is wise to try to codify the law.
I was interested to see that there have been 18 editions of "Chalmers" going back to 1893. The first 10 editions, which were published in the 30 years after 1893, were all penned by the draftsman of the 1893 Act. I know that we shall be sad to say goodbye to the right hon. Gentleman at the next election and I do not know what he has in mind for the next 30 years, but perhaps he will have a career in drafting works on the Bill. I wish him every success!
There are two main deficiencies in the present statute law. The first is that the Sale of Goods Act does not apply unless a contract is one for a money consideration. Anything with an element of barter or hire in it is excluded. We should point out that when we are talking about hire we are not talking of hire purchase but of what the consumer thinks of as rental.
There are two ways in which consumers can acquire objects by hire. One is by a hire purchase agreement whereby at the end of the agreement the consumer has the right to buy the object, usually for a small sum. The other is by rental or lease agreement, and I understand that the Bill seeks to bring in rental agreements, which are not at present covered by the Sale of Goods Act. Moreover, the Act does not apply to services.
§ It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 5 (Friday sittings).
§ Mr. Speaker
Before I call the Minister to make his statement, I remind the House that we have already lost 20 minutes of private Members' time due to the long petition that was presented this morning, so I do not propose to allow much time on the statement.