§ Order for Second Reading read.3.57 pm
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)
I beg to move, That the Bill be now read a Second time.
The Bill's purpose is to improve the law of arbitration as it applies in England, Wales and Northern Ireland. Arbitration law has evolved over three centuries, with the development of commerce and industry. We are looking to refine the system of arbitration rather than to make any radical new departures.
At first sight, the Bill may appear to be no more than lawyers' law, but the Bill's benefits, both to business and to other users of arbitration, as well as what might be called the arbitration industry, will be substantial. The Bill is founded on the proposition that arbitration is a valid—and perhaps the preferred—alternativlitigation as a system for resolving disputes that inevitably arise in business and commerce. It certainly does not need excessive controls or to be made like litigation—what are needed are provisions that are primarily enabling and facilitative.
The Bill seeks to improve the current law in two main ways—it proposes certain changes to the substance of the law and introduces major improvements in the way the law is presented. Hon. Members may find it helpful if I say a little more about each aspect.
I start from the premise that commercial disputes are bound to arise from time to time. They are an inevitable part of business life. When such disputes occur, they need to be resolved as speedily as possible and without great expense if they are not to frustrate further transactions and divert time and resources from more productive activity.
Prompt dispute resolution, therefore, should contribute to competitiveness. At the same time, business looks to a system that is fair and delivers a final result. It is the responsibility of government to provide a framework that enables the parties to a dispute to settle it in a way that meets those needs.
The parties may decide that their dispute can best be dealt with through the courts. Last June, Lord Woolf presented an interim report to the Lord Chancellor on ways of improving access to justice in the context of the civil courts. He made a number of recommendations to reduce delays in litigation and tackle the complexity and cost of using the courts. The Bill has been framed with the same concerns in mind as they relate to arbitration.
We started from the principle that, if parties choose arbitration to resolve their dispute, their decision must be respected. We propose to curtail the ability of the court to intervene in that private arbitral process except where the assistance of the court is clearly necessary to move the arbitration forward. At the same time, we must uphold the integrity of the arbitral process by allowing access to courts where there has been or is likely to be a case of manifest injustice.
The concept of an arm's length relationship with the courts is certainly not new and has been refined and developed over the year. It reinforces the finality of arbitration. The involvement of the courts slows down the 1309 process and has the inevitable result of adding to costs. Freeing the process from unwanted interference by the courts is, therefore, positively deregulatory.
To this end, we have strengthened the powers available to the arbitral tribunal. For example, unless the parties agree otherwise, the tribunal has the power to order security for costs. Under current law, that power is exercisable only by the courts. We have given primary responsibility to the parties and, in the absence of such agreement, to the tribunal to decide all procedural or evidential matters and powers exercisable by the tribunal in support of the arbitration. The court can act in support of the arbitration only where the tribunal has no power or is temporarily unable to act effectively.
Of course it is necessary to provide checks in the Bill to ensure that the tribunal acts fairly and impartially in the exercise of its powers. Principles of fairness and impartiality are included in the general principles on which the Bill is based. They appear right at the start of the text so that users are left in no doubt about their importance. The duty of the tribunal to act fairly and impartially is restated at clause 33. The Bill provides that arbitrators who fail to live up to their responsibilities can be removed from office.
Another key principle that is central to the Bill, and is mentioned in clause 1, is party autonomy. That means, with a few exceptions for reasons of public policy, that the parties in dispute can decide how the arbitration should be conducted. That gives the parties control over such issues as how many arbitrators there should be and any arrangements for discovery. In that way, the Bill gives the parties the maximum possible freedom to keep the costs of the arbitration in check.
There is also a specific provision in the Bill whereby, with the parties' agreement, the tribunal can cap the recoverable costs of the arbitration. Where the parties have not taken the opportunity to devise their own arrangements, the Bill sets out default provisions so that the arbitration can proceed without delay. I am sure that hon. Members will agree that the improvements that I have outlined so far will assist business to resolve disputes more speedily and cost effectively while not compromising fairness. As I have said, that should contribute to enhanced competitiveness as it will enable companies to settle disputes with the minimum of fuss and distraction from their main business activities.
At first sight, presentation might seem of minor importance, but I suggest that it is a key ingredient of an improved arbitration Bill. Law is not just for lawyers. If users are to be attracted to arbitration, they must be able to establish with the minimum of effort what the law entails. Those hon. Members who are familiar with the current statutes will know that that is far from easy at the moment. The fact that the law is spread over three statutes—the Arbitration Act 1950. the Arbitration Act 1975 and the Arbitration Act 1979—is not helpful, and the language used is far from accessible to the layman.
However, the problem goes deeper. The statutes do not represent a coherent picture. To a large extent, they represent legislative reaction to particular issues as they have arisen from time to time. In the new Bill, we have tried to give a comprehensive and a coherent statement of the principles and practice of arbitration in England, Wales and Northern Ireland. The Bill combines a restatement of the current statute law, modified as I 1310 outlined previously, with codification of the more important principles of arbitration law developed through the courts. The layout of the Bill follows a logical sequence and the language used is as clear and as simple as possible. The draftsman should be congratulated.
I am sure that the improved presentation will find favour with business both here and overseas. Without the Bill, there might have been a question mark over the future of the City of London as a world centre for the arbitration of international commercial disputes. When international companies are negotiating contracts and have to decide—often at the end of a long, tough session—where any disputes will be arbitrated, they need to know quickly and easily what rights and obligations they have under the arbitration law of any given country.
The business of arbitration is highly internationally mobile. A number of other jurisdictions have been trying to make their legislation more accessible, and we cannot afford to be left behind. The fact that companies choose to arbitrate in London, despite the current muddled law, is a testimony to the high regard in which the arbitral community is held. However, we cannot afford to be complacent. The Bill will do much to enhance the competitiveness of the arbitration industry.
Hon. Members have had to wait a long time for the Bill to be placed before them, but I am sure that they will agree that the wait has been worth while. My Department has been responsible for its development since 1992, but work was progressing in the private sector for some time before then. As far back as 1989, Lord Mustill, in his capacity as chairman of the Department's advisory committee on arbitration law, first recommended that our arbitration law needed a serious overhaul. The work begun by Lord Mustill was carried forward first by Lord Steyn and it then fell to the current chairman of the advisory committee, Lord Justice Saville, to complete the task.
We owe an enormous debt of gratitude to the three chairmen—particularly Lord Justice Saville—and to the members of the advisory committee who have served under them. I took over responsibility for the Bill in the final days of its preparation, but I am fully aware of the immense effort that the judge and his team have made in the past 18 months to bring the complex project to fruition.
The Bill has been warmly welcomed by the arbitration world. It was scrutinised carefully in another place by noble Lords, including several noble and learned Lords, and I am glad to say that it passed muster. We were much gratified by the support given to the Bill by the official Opposition and by the Liberal Democrat spokesman, the hon. Member for North Devon (Mr. Harvey). It gives me great pleasure to commend the Bill to the House.
§ 4.9 pm
§ Mr. Ian McCartney (Makerfield)
Today, I have drawn the shadow Cabinet short straw and, instead of being in my constituency on local election day, I am left here. It is a pleasure to debate with the Under-Secretary and, in the past few weeks, we have been constant companions, either on the Floor of the House or in Committee, morning, noon and night. I have enjoyed the discussions with the Under-Secretary, but I think that this one will be the most pleasurable that he has had with me for some time because of the Opposition's position on the Bill.
I said earlier that I should be in my constituency as it is local election day. My local agent has substituted me on the loudspeaker with a tape of my favourite, 1311 Jimmy Krankie. Worryingly, I understand that nobody has yet been able to tell the difference. [Laughter.] That is the last of the jokes.
The Under-Secretary was right when, at the conclusion of his remarks, he said that the official Opposition and our parliamentary colleagues from the Liberal Democrats broadly welcomed the Bill in another place. Given the amount of international trade created by arbitration, and its contribution to this country's invisible earnings, we are pleased that proposals have come forward to simplify arbitration proceedings in England and Wales. We are relieved because the lack of commitment shown in the past by the Government had threatened the future of that important source of invisible earnings, of which London is an international centre. A movement to reform arbitration law has existed for 10 years yet, unbelievably, the Government still wasted time before making their proposals.
Arbitration for the resolution of commercial disputes is of vital importance. England has been the preferred forum for the settlement of disputes by arbitration in vast areas of international trade—the Under-Secretary alluded to that fact—and we were in danger of losing much of the trade to the courts of arbitration in Holland, France, Switzerland and other areas, because English law had become outdated, unnecessarily obscure and far too legalistic.
A number of eminent lawyers, headed by Lord Justice Saville, have led the battle to defend London as the arbitration centre of the world. It is just as well that we did not have to rely on the Government to undertake that task over the past decade. Conservative Back Benchers have, on occasions, ranted and raved about the powers of the European Court of Justice, yet when urgent action was needed to defend our legal system, they, until now, sat on their hands. As the Minister of State at the Home Office might say, they should be chained up for their behaviour.
The United Nations Commission on International Trade Law adopted a model law of arbitration in 1985, which was the first worldwide step towards simplification. Scotland, not for the first time, was quick off the mark and adopted the United Nations model. England and Wales declined to do so.
The departmental advisory committee of the Department of Trade and Industry, chaired by Lord Justice Mustill, as he then was, reported in 1989 on the direction that English law should take. The committee said that a new Act, consolidating the existing arbitration statutes of 1950, 1975 and 1979, but making a number of innovations, was required and that, above all else, the law should produce an easily readable and accessible Act that could be understood and operated by lay arbitrators, reducing court intervention to the minimum. That was accepted by the then Secretary of State, but in the full flood of privatisation, the Government made neither funding nor other resources available to enact the policy.
The work of the departmental advisory committee was shelved until the Bill was produced. How often have we seen such a blinkered attitude? In the absence of DTI support, in 1990 a private group of arbitrators, funded by a collection of City solicitors, briefed counsel to produce a Bill. After two versions, the Department of Trade and Industry agreed to take it over and put it in the hands of a parliamentary draftsperson. A number of drafts have been 1312 produced, but by general consensus the version before the House this afternoon fulfils the requirements of the Mustill report. It is logical, it is designed to be acted on by the layperson and most sections of the arbitration community are in favour of it.
Labour recognises that, according to the Bill, the object of arbitration is to obtain the fair resolution of disputes by impartial tribunals without unnecessary delay or expense. As the Opposition employment spokesperson, I have a great interest in the speedy resolution of disputes, especially with regard to industrial tribunals. As with the arbitration system, it is vital that industrial tribunals be streamlined and disputes be resolved as simply as possible. Labour is developing proposals to make the resolution of disputes more efficient; the courts must be used only as a last resort. This would save the taxpayer a great deal of money—by contrast with the Government's proposals. They are determined to place even heavier burdens on the industrial tribunal system.
In February this year, the House debated the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995, but the Minister offered no regulations worthy of the name. He simply said that the lack of guidance could be dealt with by industrial tribunals. That was wholly at odds with the promise given to the House on 18 March 1996 by the President of the Board of Trade, who said that he would publish a Bill to streamline the industrial tribunals system. So the Minister piled on the burdens in February and his boss, the Secretary of State, promised reform in March. What, in fact, is the Government's position? Will they reform the industrial tribunal disputes system, or was the idea—like job insecurity—all in the President's mind?
The Bill states that parties should be free to agree how disputes are resolved, and the structure of the legislation follows that principle. Labour supports the fact that, when parties do not take full advantage of this freedom, the Bill lays down comprehensive fallback positions for the convenience of the parties and of arbitrators who do not wish to make their own decisions in these matters and are content to accept conveniently laid out structures.
We welcome the fact that, for the first time, arbitrators are not to be held liable for anything they do or omit to do in the discharge of their duties unless they are shown to have acted in bad faith. Similar immunity is to be given to arbitration institutions in their capacity of appointing or nominating arbitrators. Parties now have greater freedom to say how they would conduct their arbitration; what rules of evidence should apply; and what procedures should be followed—whether according to law, and if so which law, or whether on the basis of the best solution for the parties without regard to law. This last is sometimes called an equitable solution. That is the basis on which a number of consumer-type arbitrations are conducted, either by an ombudsman or in areas of activity such as the travel industry.
The court is now to be involved only when the parties ignore the arbitrator's orders, and the court must be brought in for more powerful remedies. No longer will the parties, if dissatisfied with the arbitrator's directions, go to the court to have them overridden. The court's role now is to uphold whatever the arbitrators say, as long as they have discharged their duty in good faith. Thus, after an award, which must be reasoned, the court has certain powers not dissimilar to its present ones. The court can hear a challenge 1313 from the parties on the grounds that the tribunal lacked jurisdiction, despite the arbitrator's decision, or on the grounds of serious irregularity, or on a point of law.
As I have said, Labour supports the measure, but I want to raise a number of points and I would be obliged if the Minister responded to them, if not at the end of the debate then in writing.
First, I have heard suggestions that the Act will come into force on 1 January 1997, but that there may be delay. The Lord Chancellor's Department thinks that it may take longer to prepare what it considers necessary amendments with respect to the jurisdiction of the High Court and county courts in arbitration. Can the Minister confirm the target date of 1 January 1997 for enactment? Can he confirm that all steps will be taken to ensure that there is no delay? It would indeed be regrettable if this important measure were delayed for bureaucratic reasons—especially since the Lord Chancellor's Department has been represented on the departmental advisory committee since its inception.
I understand that the Department's role was specifically to avoid delay and conduct proper liaison. That being so, it would clearly be unacceptable—a charge of incompetence could be levelled—if the Bill were delayed because of inadequacies on the part of the Lord Chancellor's Department.
Secondly, Lord Justice Saville has raised a concern about a cross-reference between clause 107(5) of the Housing Grants, Construction and Regeneration Bill and the provisions of this Bill as applied to the scheme for adjudication. Lord Justice Saville is an eminent and experienced lawyer. In a letter to the business law unit at the Department of Trade and Industry, dated 17 April, he says:I am unhappy with present proposals (regarding the cross reference) which seem to muddle two quite separate concepts, namely arbitration and adjudication.It seems to me that there are two ways in which the problems could be addressed.Firstly, it would be possible to use the Arbitration Bill by incorporating into standard terms the agreement of the parties to operate Clause 39, giving the tribunal the power to order interim measures, which would (under sub-section (3) be subject to the final adjudication of the tribunal. If this course were adopted, then the rest of the Arbitration Bill would apply and there would be no need for any further detailed provisions.Secondly, it seems to me that it should be possible to devise a scheme of adjudication quite separate and distinct from arbitration, where the adjudicator is empowered to make temporarily binding decisions.Lord Justice Saville continued:The present proposals, to my mind, are likely to cause confusion and to distract from the Arbitration Bill. It also seems they are meeting substantial opposition. The overall impression that I get from what is indeed a very cursory look at the problem is that it would be unwise to continue with the present proposals, and that it would be far better to sit down with interested parties and try to work out precisely what is wanted and how it can best be achieved.
I am sure that the Minister will agree that I could not have put it better myself. Has the Minister read that letter? If so, what was his response?
The opposition to which Lord Justice Saville refers is widely shared in the construction industry. Will the Minister take into account the views of Lord Justice Saville and consider the removal of the cross reference? 1314 If not, there is a serious risk that, in construction industry dispute resolution, the purpose and effect of the Arbitration Bill, which we all support, will be blunted.
Thirdly, I shall speak about the construction sector in relation to the measure. The Bill, especially if Lord Justice Saville's point is acted on, should lead to arbitration in construction disputes becoming what it was once, and what it should be—a quick, effective and economical way of deciding largely technical disputes arising from construction contracts. The Bill is a sister measure to the relevant sections of the Housing Grants, Construction and Regeneration Bill, which will bring the Latham report into law. Sir Michael Latham's report was set up against a background of increasing concern about the number of disputes arising from contractual practices in the construction industry and the effect that they have on the industry's productivity and competitiveness.
Both the Arbitration Bill and the Latham report are welcome, but some arbitrators have raised doubts about clause 69 because most of the joint contracts tribunal family of building contracts and sub-contracts contain a provision by which the parties agree in advance to refer any question of law to appeal. If, at the end of clause 69(2) (a), the wordsprovided that any such agreement shall not be effective unless reached after the dispute to which the arbitral proceedings relate has arisenwere added, there might be less clogging up of the courts. Perhaps the Minister will consider that amendment when the Bill goes into Committee. If not, perhaps he will write to me saying why he will not consider it.
What of the appalling contracts sometimes offered to construction workers? Cowboy employers tend not to enter into arbitration agreements, so there is nothing in the Bill for exploited employees. Is the Minister aware that trade unions in the construction industry have been forced to launch a major drive to end tax fiddles by contractors who force building workers into bogus self-employment to avoid national insurance and tax payments? Mr. George Henderson, construction secretary of the Transport and General Workers Union, is quoted in Construction News of 25 April 1996, as saying:This campaign is a drastic measure which we are forced to take after years of urging these employers to play by the rules.My officers are working undercover on the situation so that we can expose crooked labour agents, "—labour agents in construction, not Labour parliamentary agents—and the guilty contractors and subcontractors.
I understand that the main construction employers are supporting the union's actions, because they recognise that such dishonesty benefits neither side of industry. Will the Minister offer his support to the campaign?
The self-employment trick is not confined to small projects. An estimated 10, 000 construction workers are in bogus self-employment. Quite apart from being illegal, the practice poses a serious threat to health and safety. A report in Contract Journal, also dated 25 April 1996, quotes a trade union official as saying:There are cases of injured people being dumped outside hospitals and left there to be picked up by hospital staff because the employer was too frightened to call an ambulance because this would reveal the location of the work site.
Labour will give the Bill a fair wind, and assist in its speedy implementation. In return, will the Minister consider proposals to assist construction employees and 1315 taxpayers who are cheated by those underhand, Arthur Daley-style practices? As I have said, Labour supports the Bill because it is a commonsense measure to assist dispute resolution. It is in line with our commitment to streamline dispute resolution in general. If the Government share our support for a reform of general industrial dispute resolution, will the Minister tell us when the House will be presented with the legislation to reform tribunals which was promised by the President of the Board of Trade on 6 February? Given that his right hon. Friend promised consultation, will the Minister tell us whether the consultation process has begun? Will he give details of whom he will consult, and will he give us a guarantee that the consultation submissions will be published so that hon. Members can give proper consideration to the proposals following their publication?
Does the Minister accept the urgency of reform? He will be aware that, in order to cope with an unprecedented increase in its caseload, the Central Office of Industrial Tribunals was forced to open another tribunal office in north London. The Department of Trade and Industry advertised for lay members on a temporary basis, and that created further confusion. Temporary members were subject to different selection and reselection criteria from permanent members. Will the Minister explain why? Surely a lay member is either competent or not competent. Can we not simply have one set of rules for all appointees?
As part of their reform, will the Government also consider giving reasons for non-reappointment, and a right of reply? That would avoid any repeat of the embarrassment that was caused last year when a lay member was given no reason for non-reappointment, but a memo from the president of The Industrial Tribunals in England and Wales questioning his mental capacity for the task subsequently came to light.
Labour's commitment to a fair resolution of conflicts goes further than contracts between companies. We seek the meaningful resolution of disputes between companies and their employees, another concept that is sometimes alien to the Government. They have created unprecedented job insecurity among employees, paving the way for fat-cat excess among some unscrupulous employers. Those are wider issues, however; we intend to pursue them relentlessly with the Government, but today we shall assist the passage of the Bill into Committee—and, in the time that is left, we shall gleefully await the results of the local government elections.
§ Mr. Nick Harvey (North Devon)
I, too, welcome the legislation, which defines new powers for arbitrators and parties to arbitration.
There is no doubt that new provisions are required to provide a more effective management procedure and to give the courts a supporting rather than an interfering role. The Bill modernises the existing processes of arbitration, and also provides a viable and attractive alternative to litigation as a means of resolving disputes. In many ways it is an admirable and much-needed Bill, relying as it does on three main principles—the provision of an impartial tribunal to resolve disputes, the giving of greater freedom to parties in regard to how they resolve those disputes, and the confining of judicial interference to the bare minimum.
1316 Moreover, as both the Minister and the hon. Member for Makerfield (Mr. McCartney) pointed out, the implications of the Bill are commendable. The role of London as an eminent centre for international commercial arbitration is particularly important. The Bill can only exemplify the quality of our legislative framework and serve the interests of parties both at home and abroad when they enter into arbitration.
Having said that, I wish to make one observation about the Bill on which I hope that the Minister may be able to reassure me. The explanatory memorandum states that the Bill seeks to introduce certain changes in the law to confront the existing complex nature of the legislation and to make it fair. I agree that the Bill has more clarity than before and is logical in its language, and I echo the Minister's commendation of the draftsmanship.
There is one particular difficulty that I would like to look at before the measure becomes law. The Bill sets out mandatory, as well as non-mandatory, provisions for the parties involved to take on board and to consider before entering into arbitration. So long as mandatory provisions are recognised, users of arbitration can, as the Minister said, put forward their own provisions and proposals. My point is that members of the general public or representatives of small businesses entering into arbitration may not be fully aware of the option open to them of proposing some arrangements on their own part. They may not realise the extent to which they are entitled to propose their own ground rules. The outcome of this may be that they will rely very much more on the mandatory provisions, which might have the effect of giving arbitrators more power than ever before.
For those who do not understand the complex nature of the provisions, there is no protection against the immense power that the arbitrators will have. I would like to see some warning or information given to the parties that they have the option of employing their own provisions before they simply resort to taking on the mandatory provisions.
The Department of Trade and Industry has said that people ought to read the Arbitration Bill, or Act as it will become, before entering into arbitration, and that if they do not do so, it is their look-out. I wonder whether we would normally expect members of the public or small firms to have read through statutes and to have understood an Act of Parliament. If we are talking about large companies with legal departments, it is not a problem. But the Government should indicate how they intend to publicise the fact that individuals and small firms have this opportunity for discussion, and what guidance the Government will give to people on how to make use of it. For example, a great deal of information and help is given in guidance to those using small claims courts, and I wonder whether it would be possible for something comparable to be done for the provisions in the Bill.
We ought to give careful consideration to that matter and to the various other issues raised by the hon. Member for Makerfield (Mr. McCartney). In no way am I opposing the Bill, but I hope that we will look at the point that I have raised before we nod it through this afternoon.
Mr. John M. Taylor
I should like to thank, in reverse order, the speakers who contributed to this debate. I thank the hon. Member for North Devon (Mr. Harvey) for his thoughtful contributions and his support. I shall certainly 1317 reflect on the possibility of providing guidance on the use of this legislative instrument, but he will not be entirely surprised if I say that many practitioners of arbitration law have been able to contribute to the legislation and are well versed and skilled in it.
The hon. Member for Makerfield asked me about a number of matters concerning industrial tribunals. Without wishing to trespass on your job, Mr. Deputy Speaker, it occurs to me that this legislation is not about industrial tribunals at all. Since the hon. Gentleman was gracious enough to say that there was another channel of communication between us—that of correspondence—I invite him to write to me on the matter that he raised, and I shall do my best to furnish him with pertinent replies.
The hon. Member for Makerfield also asked me when we intended to enact the Bill. We will enact the Bill as soon as possible and we are working to a commencement date of January 1997. We must give sufficient warning of the changes to users and to the arbitration community. However, we certainly pledge ourselves to that date.
§ Mr. Ian McCartney
Will that date be placed on the face of the Bill or is it just a personal commitment?
I must rest with best endeavours because the Bill is perfectly clear about the date of operation. Clause 108 states:
I had better cover myself by saying that there will be best endeavours towards the date I mentioned. However, one never knows; things happen when taking legislation as far as Royal Assent. We are working to a target commencement date of January 1997.
- "(1) The provisions of this Act come into force on such day as the Secretary of State may appoint by order made by statutory instrument, and different days may be appointed for different purposes.
- (2) An order under subsection (1) may contain such transitional provisions as appear to the Secretary of State to be appropriate."
§ Mr. Michael Stephen (Shoreham)
I had a case in which my constituents suffered financial loss as a result of misconduct by an arbitrator. I appreciate that that is very rare, but it did occur in my constituents' case. I had great difficulty extracting from the Chartered Institute of Arbitrators information about whether the arbitrator was insured. I eventually found out that he was not insured and that the institute had no rules requiring arbitrators to be insured. Will my hon. Friend consider legislating to require arbitrators to be insured so that they can satisfy any claim for damages against them in respect of misconduct?
I also discovered that the Chartered Institute of Arbitrators seems to be answerable to nobody. Will my hon. Friend consider to whom it is answerable? And if it is answerable to nobody, will he consider legislating to make it answerable to somebody?
That is an interesting experience. I should like to reflect on the subject of answerability and insurance. My hon. Friend will know that before I went straight I used to practise one of the learned professions. Insurance was essential in order to practise, and mighty expensive it could be from time to time. I have a certain personal affinity for that subject. I will reflect on it and let my hon. Friend know my further thoughts in due course.
1318 The hon. Member for Makerfield mentioned read-across or interference between certain of the provisions of this Bill and some construction legislation that will be brought before the House next week, if I heard my right hon. Friend the Leader of the House correctly during Business Question Time. No doubt the hon. Gentleman and others will look at that matter then, although I believe that the previous anxieties are now considerably allayed.
I should say that neither we nor anyone else is trying to force arbitration on a reluctant industry, be it the construction industry or any other sector. Arbitration is a consensual process and it must be chosen freely by the parties. As to the point on clause 69(2)—
§ Mr. Ian McCartney
On clause 69, I am not sure that the Minister has dealt adequately with Lord Justice Saville's argument about cross-reference between the Housing Grants, Construction and Regeneration Bill and this Bill. I asked the Minister clear and specific questions. First, I asked whether he had knowledge of or had been made aware of Lord Justice Saville' s letter to the relevant Departments. Secondly, I asked whether he had considered it and what response he had given to Lord Justice Saville. The Minister's reply was nicely put, as is the way of lawyers, but it did not adequately cover the questions I asked him. I need to know precisely whether Lord Justice Saville's point has been met, rejected or partially rejected. The point that he raises merits serious consideration as he is one of the leading experts in this area of legislation.
The hon. Gentleman has already told me that he would be happy for me to pursue certain of these matters in correspondence. I shall take advantage of that. He also knows that there is a Committee stage to the Bill—when, no doubt, all those matters will be examined very carefully. My understanding on these matters, which I offer to the House in good faith, from the last instruction that I took before coming to the House today, is that anxieties about some form of read-across or interference between the two Bills have now been considerably allayed. The hon. Gentleman can take comfort from the fact that there will be a Committee stage to this Bill before very long, and he has the actuality of the other Bill next week.
I should like to say something about clause 69(2) and the suggestions made by the hon. Member for Makerfield.
§ Mr. McCartney
I am trying to do this in a manner that enables us to reach a conclusion earlier than we normally would. When the Minister says "considerably allayed", it again does not answer the point. As he rightly said, the Leader of the House announced today that the Housing Grants, Construction and Regeneration Bill, about which there is some dispute, will have a Second Reading debate next week. It is therefore important to all those concerned that before that debate takes place the Government are absolutely clear about it and are able to provide clear and adequate information that there is no difficulty about cross-over in respect of the two pieces of legislation.
I think the Minister used the phrase "considerably allayed". Frankly, that leaves a gaping hole between the gate-post and the gate. He knows that in legal terms that leaves a lot that needs to be covered. I assume from the Minister's phraseology that he is not quite clear—I do not 1319 mean this in a derogatory way—about the status of the discussions taking place between his Department and the Lord Justice. I will accept from him a commitment in good faith that he will write to us, but I ask that we receive the correspondence before the Second Reading debate next week; I can then consult my colleagues who are to deal with that piece of legislation so that Opposition Members can be clear about the fact that the matter has been satisfactorily resolved.
I have two things to say about that. First, the letter from Lord Justice Saville to which the hon. Gentleman referred was a private letter to an official. I am therefore not prepared to comment on it.
Secondly, the hon. Gentleman must understand that arbitration is a consensual process. The Bill has had distilled between its two covers what people more learned than I consider to be a comprehensive statement of the English law of arbitration—the law of arbitration applicable in England, Wales and Northern Ireland. One of its virtues is that all the information is in one "manual", and it is well and congenially written.
All hon. Members who have spoken in this debate—not least the hon. Member for North Devon—have said that they would like to see London as the arbitration centre of the world. I would rephrase that and say that I should like to see London as the arbitration capital of the world. Anyone wishing to settle their disputes by arbitration in London can—by obtaining a copy of the Bill once it has become law—have access in a single document to the basic ground rules. But the process remains consensual, and it is for the parties themselves to decide the ground rules for resolution of their disputes.
Inasmuch as I am not an expert on what the Department of the Environment's Bill will say about adjudication, the hon. Member for Makerfield should consult Environment Ministers if he wants to pursue whatever changes may be contained in that Bill. I am not the sponsor of that Bill, I am the sponsor of this Bill. The hon. Gentleman could pose the question of what is meant by "adjudication", and it might be a good question. We are not dealing here with adjudication, which is undefined—nor, in fact, is the word "arbitration" defined in the Bill—but I think that I can safely say that, over the best part of three centuries, custom and practice has developed in this country in such a manner that one knows from first principles what arbitration is, and here are the rules.
§ Mr. McCartney
We have been very fair in how we have asked that question. We support the Bill, so I do not understand why the Minister is suddenly becoming a little belligerent. The questions have been put reasonably, and in a manner that is meant to facilitate the passage of the legislation and its effectiveness.
The letter that I quoted is between officials in the Department of Trade and Industry who are dealing with this legislation and the Minister. It is highly unreasonable for 1320 the Government now to say that it is private correspondence and make no comment on it. It is something that goes to the heart of a specific part of this legislation. I should have thought, with all due respect, that the Minister would already have consulted the Minister for Local Government, Housing and Urban Regeneration, who is responsible for the other Bill, to ensure that there is not a cross-over. So I ask the Minister again: will he ensure that, before the Second Reading debate next week, there will be clarification of those points?
Yes. However, I am responsible for the content of this Bill, and I cannot anticipate what is in the other Bill. But I will oblige the hon. Gentleman—[Interruption.] There was an intervention from a sedentary position which I did not hear. So the fact that I am not responding to it is in no sense intended as a discourtesy. I remember the conventions of the silent ones who sit next to Ministers—that their opportunities to rise in their places and intervene in debates is severely circumscribed. It is a discipline that I observed myself for nearly four years.
I think that it might be convenient for us all if I concluded my remarks. We have had some interesting exchanges. The hon. Member for Makerfield has had his afternoon in the Chamber, and for all I know may yet get back for the local elections.
That is the right word.
While this is a long and technically complex Bill, if is of great importance to business and companies across the country, as well as to those from overseas who choose to come here to resolve their business disputes. Although it is technically complex, I hope that hon. Members will have been impressed with the clarity with which the concepts and procedures that make up arbitration have been expressed in the Bill. If hon. Members have had an opportunity to look at the current legislation, I am sure that they will agree that we are making a major step forward.
I should like to see this Bill reach the statute book as soon as possible, and I hope that I can count on hon. Members to support me. The Bill's next stage, in Committee, will give us an opportunity to consider its provisions in more detail than has been possible today, and I look forward to continuing our debate.
§ Question put and agreed to.
§ Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).