RIGHTS OF APPEAL (Hansard, 4 June 1986)

§ Mr. Ian Stewart
I beg to move, That the clause be read a Second time.

§ Mr. Deputy Speaker
With this it will be convenient to discuss the following:
Government new clause 10 — Determination of appeals,
Government new clause 12 — Further appeals on points of law,
Government amendments Nos. 24, 32, 135, 139, 235 and 293 to 300.

§ Mr. Stewart
The new clause and the amendments deal with the system of appeals. The clauses provide for a new system whereby building societies may appeal to an independent tribunal against decisions of the commission regarding matters of authorisation. Under existing legislation, the chief registrar's use of discretionary powers on prudential matters is subject to Treasury consent and, ultimately, of course, to judicial review in court.
Under the new building society regime, we have concluded that- societies should have available a formal system of appeal which is designed to take account of the new system of authorisation to be established by the Bill and which can be brought into operation as rapidly as possible in cases of dispute. The clauses have been discussed extensively with interested parties, and particularly with the Building Societies Association, which has welcomed their inclusion. I hope that they will also be welcomed by the House.

§ Mr. Weetch
The commission that was set up earlier in the Bill will have considerable powers. It is right that there should be comprehensive rights of appeal. The Opposition accept that fully in principle. We have scrutinised the new clauses and the amendments. The clauses cover rights of appeal, the determination of appeals, costs and related conditions, and appeals on points of law. They appear to be comprehensive, which we welcome.
I have one question on the detailed text of new clause 9. Similar points arise later on other new clauses and on some of the amendments. The imposition of conditions, as well as the impositions themselves in terms of the subject matter, is now to be subject to appeal. An appeal 924 may be mounted on both aspects—the principle as to whether conditions will be imposed and the factual content of the conditions themselves.
As I understand it, a building society can appeal against the principle of conditions being imposed and against the subject matter of the conditions. In new clause 10(6)(c), the tribunal will have power to direct the commission to determine conditions. Therefore, do I understand correctly that if a building society loses the day on the imposition of conditions, the tribunal can say what the conditions are to be? Subsequently, could another appeal be mounted against the factual contents of the conditions that were declared as a result of the request of the tribunal ?

§ Mr. Ian Stewart
The hon. Gentleman has rightly drawn attention to the technical operation of the provisions. We decided that appeal should be available across the range of decisions which the commission can make, that is to say, not only on the granting or on the revoking of authorisation but on the imposition of conditions. The hon. Gentleman has put his finger on a difficulty; a society can appeal against conditions absolutely but it can also appeal against the conditions themselves.
If the commission is clear that the society should be able to continue with authorisation only provided that conditions are attached, an appeal against any conditions being applied would in effect be a challenge to the commission on its assessment of the position. The commission might well respond by suggesting revocation. It is more likely in practice that the appeal will be on the nature of the conditions rather than on the imposition of conditions. That means that it is more likely to be a single exercise of the appeal procedure than a to-ing and fro-ing. I shall read later what the hon. Gentleman has said and if I have anything to add I shall write to him.
The matter was considered for its practical implications during the consultation period. I am advised that the points which the hon. Gentleman has raised have been dealt with in the proposed system and that that system is the one most likely to operate cleanly and quickly. One of the most important requirements for any appeal procedure in relation to a society is to deal with the appeal with as little fuss and bother as possible so that the affairs of the society are not held up to public view and its dirty linen is not washed in public, which might cause anxiety to members and depositors and therefore damage the credibility of the society in the market. We want to avoid that. Therefore, we want as direct and rapid a system as possible. We think that we have achieved it. That is what the amendments are designed to do.