HC Deb 10 June 1996 vol 279 cc85-90

As amended (in the Standing Committee), considered.

Order for Third Reading read.—[Queen's and Prince of Wales's consent signified.]

7.50 pm
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)

I beg to move, That the Bill be now read the Third time.

I am grateful for the support that hon. Members have given the Bill, which has made for its smooth passage through the House. The fact that the Bill has completed its stages with such ease is due in no small measure to the care with which it was prepared and drafted.

I pay tribute once again to Lord Justice Saville and members of his advisory committee for all their work in advising my Department on the Bill's policy aspects. The advisory committee brings together a considerable weight of expertise on arbitration matters and its support has been invaluable. I also thank the draftsman for the magnificent way in which he has reflected the agreed policy with such clarity.

We made some minor technical amendments to the Bill in Standing Committee. Those have refined the text on the question of the courts and jurisdiction for arbitration matters. That will give us flexibility in the allocation of arbitration business that may not have been possible under the previously proposed arrangements.

I am pleased to have been responsible for steering the Bill through the House. It is an important Bill and its technical nature should not blind us to the benefit that it will bring to those who make use of arbitration throughout England, Wales and Northern Ireland. It is the responsibility of Government to ensure that business has access to a cost-effective and speedy mechanism to resolve disputes that crop up in the course of its activities. The Bill will much improve matters. It sets out the law more comprehensively and clearly, which is in itself a great improvement, and condenses the law into a single document.

Mr. Nigel Waterson (Eastbourne)

I should perhaps mention an interest as a solicitor who has long practised arbitration law in the City of London. Is my hon. Friend aware how much the Bill will reinforce London's paramount position as a world centre for arbitration, especially maritime arbitration; how much it is supported by my colleagues in the London Maritime Arbitrators Association; and how much they and I endorse his kind remarks—although justified—on Lord Justice Saville's contribution?

Mr. Taylor

I thank my hon. Friend. He expressed his remarks handsomely. I am glad that they are on the record and, with his permission, I shall not attempt to gild the lily.

The Bill also provides for a system that offers finality and the minimum involvement of the courts. At the same time, it offers the parties the maximum opportunity to decide how the arbitration will be conducted. I hope that business will take advantage of that possibility to shape the arbitration process to meet its needs.

The Bill will also help to strengthen the competitiveness of the arbitration industry. I feel sure that as well as attracting arbitration business from companies here, the Bill will enhance the attractiveness of London as a venue for international arbitrations. International arbitrations are a lucrative source of foreign earnings, but the business is highly mobile. I am confident that the Bill will do much to give London a more secure position in that competitive world and, indeed, advance London as the capital of the arbitration world.

I know that many people are looking forward to the Bill's enactment. Even as we speak, there is much activity across the country as preparations are being made for enactment. Even as we deliberate, books are being written and seminars are being held to explain the Bill's provisions. In the circumstances, we should wish the Bill well on its way to the statute book.

7.55 pm
Mr. Stuart Bell (Middlesbrough)

I am grateful to the Minister for Competition and Consumer Affairs for his brief eulogy to the Bill. How nice it is to be at the Dispatch Box with you, Mr. Deputy Speaker, in the Chair.

Sir Fergus Montgomery (Altrincham and Sale)


Mr. Bell

I shall not repeat the hon. Gentleman's sedentary intervention, but I remind him of Lord Jenkins's comment that flattery is not such a bad thing as long as one does not breathe in. I believe and have long since supported that.

I was intrigued by the Under-Secretary's remarks about all the books that are going to be written. Having done an annotated version of the Children Act 1989 some years ago, it is of great relief that no one has asked me to do an annotated version of the Arbitration Bill [Lords].

The Under-Secretary said that the principles behind the Bill are clear. They restate existing legislation on arbitration while, at the same time, codifying principles established by recent case law. They introduce certain changes in the law that are designed to improve arbitration as a fair, speedy and cost-effective way in which to resolve disputes. If I may use the more eloquent—almost grandiloquent—language of Lord Mustill, the Bill combines thoroughness and accuracy in all its contents with remarkable facility, felicity and clarity of expression.

Practitioners, too, have welcomed the Bill, on which the hon. Member for Eastbourne (Mr. Waterson) touched. I have seen such descriptions as "user-friendly language" and "logical layout" which would certainly have appealed to the House, practitioners in the City of London and to King Solomon. One might ask what King Solomon is doing in our debates. His wisdom has been passed down the ages. He had to arbitrate in a particular non-commercial dispute. He had before him two women and a baby. Each woman declared the baby to be hers. Solomon offered to cut the baby in two to please both women. The real mother thought that that was a dreadful idea, the false mother did not mind half the baby, and Solomon entered his judgment accordingly. Lord Justice Saville, who chaired the committee and has been a leading light in the Bill's preparation, to which I shall return, might say that that was an example of adjudication rather than arbitration. The Under-Secretary, who was a solicitor, and I will leave that semantic argument for another day.

I am glad that the Under-Secretary referred to Lord Justice Saville, and I should like to refer to him, too. Lord Justice Saville, the Court of Appeal judge who formerly headed the commercial court, has, in the words of The Times, "almost single-handedly" rewritten all law on arbitration into a single statute. He has also modernised procedure in line with the trend towards more user-friendly ways in which to settle disputes. If he is following our proceedings with care, which I am sure he is, his honours fall thick on him.

According to the consultation document issued by the Department of Trade and Industry, the Bill's purpose is to restate the major aspects of the current law on arbitration in a clear and accessible so way that it is readily understandable to all those who are considering using arbitration. The Department of Trade and Industry hoped that the Bill would do something that present legislation does not—explain the main provisions of English arbitration law in non-legalistic English so that those who are contemplating arbitration and those who are engaged in such arbitration will know what that entails without the need to consult experts.

I have seen some criticism—not much, I grant—that ordinary persons will not understand the Bill's language, and that, therefore, it has failed. I imagine that most ordinary persons would not understand the intricacies with which the parliamentary draftsmen have to deal, and I am grateful to the parliamentary Under-Secretary for giving praise where it is due to the draftsmen. In this instance, we are not talking about ordinary persons, but with ordinary persons who have a dispute and wish to resolve it without going to court. It has been said that people may unwittingly be deprived of their right to go to court, but those who accept binding arbitration in a contract separate from the main agreement—as the Bill permits—will understand that that means that they can avail themselves of a route designed to be less costly and speedier than the route through our courts.

The Parliamentary Under-Secretary of State referred to the flexibility of the Bill. We prefer that Bills be flexible rather than inflexible. We do not want to fill the statute book with "thou shalts", but rather with "thou mayests". Indeed, the Bill has been praised by practitioners, who applaud its flexibility. They are attracted to its mandatory and non-mandatory provisions, where the parties are encouraged to make their own rules and provisions. Only in so far as they do not does the Bill then provide a model set of rules for the conduct of the arbitration that the parties can either include, exclude or rewrite as they wish.

In addition to clarity and certainty in the law as it relates to arbitration, it is hoped that the codification of past law and its fusion with case law will ensure that the City of London remains the world centre for the resolution of commercial disputes—a fact to which the Under-Secretary and the hon. Member for Eastbourne referred. In this sense, the Bill brings together current statute law which has hitherto been spread across three Acts of Parliament—the 1950, 1975 and 1979 Acts. It fuses into statute law the case law of the past few years. The Bill, among other things, is designed to ensure that the City of London does not lose its pre-eminence in relation to arbitration. A large proportion of arbitrations within the United Kingdom involve one or more foreign partners. The benefit—incremental no doubt, for who would wish to benefit from disputes—runs into many millions of pounds.

In the global economy; in the age of the Internet; in an age when communications span the planet with such rapidity and, sometimes, with such force; and in an age of domestic and international issues—to which the Under-Secretary referred—it is clear that our arbitration services need to be able to adapt. They need to be speedy and as low in cost as possible. As the European Union develops and—I can say this to such an empty House—moves towards the era of a single European currency, and as other European countries adapt their own laws to be able to compete within the Union, with arbitration, as with everything else, we cannot and should not be left behind.

I mentioned earlier the judgment of Solomon, which reminds me of the famous trip that Napoleon took to St. Helena, where he spent much of his time settling disputes between his cook and his butler. Perhaps it was at that time that he coined the famous phrase: There is only one step from the sublime to the ridiculous. Perhaps Lord Justice Saville will tell me whether Napoleon arbitrated or adjudicated, without having the clarity of this Bill, as Lord Mustill put it. Upon this piece of useless and irrelevant information, I commend the Bill to the House.

8.4 pm

Sir John Stanley (Tonbridge and Malling)

This is a lengthy and extremely complex Bill of 110 clauses and four schedules. It is rare that the House has the opportunity to consider legislation in this complex and important area. That being the case, I believe that there is a real obligation on this House, and the other place, to give every opportunity for those outside to be able to convey their views to Members at all stages of the Bill's passage.

For those outside, the most important stage of a Bill's proceedings is its Committee, as that is in effect the only point at which amendments tabled that are in order are automatically debated. I make no criticism of the members of the Standing Committee that the Committee stage of this Bill took a total of 36 minutes, as that is a matter for them. But this House gave those outside much less than a fair opportunity to have amendments considered in Committee by the minimum gap between the appointment of the Committee members and the commencement of the Committee.

A constituent who is a practitioner in the field of arbitration and a member of the Chartered Institute of Arbitrators, Mr. Adrien Sturgeon, indicated to me at an early stage that he wished to raise a number of amendments with members of the Committee. I obtained the details of the membership of the Committee at the earliest possible moment when they appeared on the Order Paper on the Thursday, the day after the Committee of Selection had met. I sent those details to Mr. Sturgeon, who very rapidly wrote to all members of the Committee. The fact that the Committee sat the following Tuesday and for only 36 minutes meant in effect that the members of the Committee had no opportunity to consider Mr. Sturgeon's amendments. In effect, the Committee's proceedings concluded before the members could consider the amendments. I make no criticism of my hon. Friend the Under-Secretary because these matters are not in his hands, but I believe that there is a serious and substantive issue for the House to consider. There was no need in terms of the timetable for this Bill for it to be as speedily expedited as it was. The Committee Corridor is more or less deserted at this time of a Session, and in no way can the Bill be said to require the maximum accelerated progress. For such Bills, it would be infinitely better if a clear week elapsed between the selection of the Committee members and the commencement of the Committee's proceedings. I personally regret—and ask the House to note—that there has been a material inability in our democracy for expert members of the public to have their amendments considered by Standing Committee members.

Mr. Bell

I sympathise with the right hon. Gentleman's constituent in this matter, and I agree with him about the procedures of the House. He will be aware that the Bill was given a thorough hearing in the other place, where it began its life. It was then proposed that it should be sent to a Special Public Bill Committee in the other place, and that motion was discharged. The Bill was then considered by the whole House in the Moses Room. Every opportunity was available in the other place—a part of our institution—to give the Bill a thorough airing. Of course, the proceedings did not stop at Committee. They came to Report, when there were additional opportunities for Members—had they so wished—to table amendments.

Sir John Stanley

I am aware of the Bill's proceedings and the procedure in the other place. I make my point in relation to this Bill, but I believe it may have wider application. It is a desirable step that there should be a reasonable period between the selection of a Standing Committee and the commencement of the Committee proceedings for those outside the House to be able to contact members of the Committee, and for the members themselves to take a considered judgment as to whether they wish to table amendments at that stage. The House will understand that I wish to bring my remarks to the attention of the Chairman of the Procedure Committee for consideration by that Committee.

8.8 pm

Mr. John M. Taylor

By leave of the House, I had not intended to reply to the debate, but my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) has raised a point to which it would be discourteous of me not to respond. It is a matter of record that Lord Justice Saville's committee consulted very widely. However, not every representation won the day. Like my right hon. Friend's constituent, some were disappointed, but Lord Justice Saville's committee dwelt on the issues for more than a year. The total gestation period of the Bill has been no less than five years, including extensive consideration in the House of Lords.

I do not know whether it is seemly to refer to my right hon. Friend's constituent by name, but I should let him know that Mr. Sturgeon wrote to me. He made a number of points that I considered carefully and I replied to him at some length as to why we would not accept his proposals.

On a happier note and to bring my remarks to a conclusion, I omitted one name from the credits that I gave in support of the Bill. It was, of course, my hon. Friend the Member for Croydon, South (Mr. Ottaway), who worked closely as Parliamentary Secretary with the predecessor of my right hon. Friend the President of the Board of Trade. Having repaired that omission, I shall resume my seat.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

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