HL Deb 06 February 1964 vol 255 cc348-62

8.26 p.m.

Order of the Day for the Third Reading read.

THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN)

My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read 3a.—(Lord Drumalbyn.)

On Question, Bill read 3a.

Clause 3 [Requirements relating to hire-purchase agreements and credit-sale agreements]:

LORD DRUMALBYN moved, after subsection (1), to insert: (2) In the said section 2(2), after paragraph (d), there shall be inserted the words 'and (e) either—

  1. (i) the agreement is signed by or on behalf of all other parties immediately before or immediately after it is signed by the hirer, and the copy referred to in paragraph (d) of this subsection is there and then delivered to him, or
  2. (ii) if, in a case not falling within the foregoing sub-paragraph, the relevant document (that is to say, the document which, on being signed as mentioned in paragraph (a) of this subsection, became the agreement) was presented, and not sent 349 to the hirer for his signature, then immediately after he signed the relevant document there was delivered to him a copy of that document in the form in which it then was, or
  3. (iii) if the relevant document was sent to the hirer for his signature, then at the time when it was sent there was also sent to him a copy of that document in the form in which it then was';
and in the proviso to the said section 2(2) for the words 'or (d)' there shall be substituted the words' (d) or (e)'. (3) In section 3(2) of the principal Act, after paragraph (c), there shall be inserted the words 'and (d) either—
  1. (i) the agreement is signed by or on behalf of all other parties immediately before or immediately after it is signed by the buyer, and the copy referred to in paragraph (c) of this subsection is there and then delivered to him, or
  2. (ii) if, in a case not falling within the foregoing sub-paragraph, the relevant document (that is to say, the document which, on being signed as mentioned in paragraph (a) of this subsection, became the agreement) was presented, and not sent, to the buyer for his signature, then immediately after he signed the relevant document there was delivered to him a copy of that document in the form in which it then was, or
  3. (iii) if the relevant document was sent to the buyer for his signature, then at the time when it was sent there was also sent to him a copy of that document in the form in which it then was';
and in the proviso to the said section 3(2) for the words or (c) there shall be substituted the words' (c) or (d)'.

The noble Lord said: My Lords, I hope your Lordships will not be unduly perturbed by the formidable list of Amendments on the Order Paper; they are really all concerned more or less with the same point. You will recall that during the Report Stage of the Bill on Tuesday, the Amendment I am now moving was on the Order Paper. I explained it along with Amendment No. 7 on the Order Paper to-day and then withdrew it. I said that I was doing that in order to give your Lordships more opportunity to consider the Amendment than if it had appeared on the Order Paper for the first time to-day, as it would otherwise have done. During the short debate which followed, I said that in this Amendment we were implementing the intention behind the first part of the Amendment to the cooling-off provisions that the House carried in Report Stage on January 30.

The intention was that a person who signed a document which was or might become a hire-purchase or credit-sale agreement should immediately have a copy to retain. This copy would be additional to any further copy he might be entitled to receive later. We thought it right that the principle that the hirer should have a copy immediately should be of general application; that is to say, that it should apply to cases where the document is signed at the shop or on the premises of the owner as well as the cases subject to the cooling-off provisions.

This Amendment contains two subsections in virtually identical terms. I have explained them before. I think there is nothing more for me to do than to move the Amendment, but before doing so perhaps I might just comment on an observation by the noble Lord, Lord Airedale, who picked up the words there and then "in sub-paragraph (i). I thought perhaps he was not attaching sufficient importance to the skill of the draftsmen. But the draftsmen assure me that they do mean "there" as well as "then"—there and then jointly and severally. I beg to move.

Amendment moved— Page 2, line 31, at end insert the said subsections.—(Lord Drumalbyn.)

LORD PEDDIE

My Lords, we welcome the acceptance of the general principle that was involved in our Amendment, that the hirer should have a copy of the agreement immediately. But, quite frankly, although the suggestion is made in these Amendments that that principle be made universal—and there may be some case for that—we would take this opportunity of emphasising that the real value of the copy is found on the doorstep, rather than in the store. Whilst we have no objection to its universal application, there is no doubt that the immediate possession of the copy is best justified on occasions where there is door-to-door trading. Even though there appears to be general acceptance of the point of view that we persuaded the House to accept, we regret that there is not included in this Amendment the suggestion which the House did accept: that there should be on the copy of the agreement an indication of the name and address of the person to whom the goods should be returned.

It is late in the day to be pressing that point, but I still feel, and my colleagues feel, that it is an important point. Probably it will be argued in another place. The draftsmen have presumably indicated that there are certain legal difficulties. One difficulty, apparently, is that at the time of a door-to-door transaction it is possible that the agent may not know the name of the owner; in other words, he will not know the hire-purchase company that will take on the hire-purchase business. But that is a rare case—in fact, I doubt whether it will ever arise. I think that where a person is engaged upon door-to-door transactions, persuading people to take goods on hire-purchase, he will in every case know the name of the hire-purchase company, otherwise he is wasting his time.

LORD DRUMALBYN

My Lords, would the noble Lord forgive me, so that I might perhaps expedite the business? I had rather expected to have an opportunity of dealing with this point when we come to the Amendment which omits the clause that was incorporated in the Bill.

LORD PEDDIE

Yes, I agree, but this is a prelude to it. I have made reference to the point that in this Amendment there is no indication of what is an important principle so far as we are concerned—that of the inclusion of the name and address of the person to whom the goods are to be sent. However, I make that comment only with regard to this Amendment.

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, this Amendment, and the next, are both consequential and drafting Amendments. I beg to move the first Amendment.

Amendment moved— Page 3, line 4, leave out ("(d)") and insert ("(e)").—(Lord Drumalbyn.)

LORD PEDDIE

My Lords, I am not going to repeat the comments I made a few moments ago that have a bearing upon this Amendment. I see, and appreciate, some of the arguments that has been advanced—

LORD DRUMALBYN

This is a consequential Amendment.

LORD PEDDIE

Yes, it is consequential.

On Question, Amendment agreed to

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 3.

Amendment moved— Page 3, line 11, leave out ("and (c)") and insert ("to (d)").—(Lord Drumalbyn.)

On Question, Amendment agreed to

Clause 4 [Right of cancellation of certain hire-purchase and credit-sale transactions]:

LORD DRUMALBYN

My Lords, when I explained during the Report stage that the Government proposed to introduce the Amendments which your Lordships are considering to-day, I also said that this would involve taking out the words which had been inserted by the Amendment carried on January 30. That is what this Amendment does. I realise that this still leaves part of what was contained in that Amendment—namely, telling the hirer from the beginning the name and address to which he may return the goods, if that is what he wishes to do. We are looking as a whole at the mechanism for the operation of the cooling-off provisions, and this is one of the matters which arises. The solution may well lie, I think, in the eventual inclusion in the Bill of powers like those under Clause 5(3) and (4) in relation to the copy of the agreement to be sent to the hirer. We could then prescribe words to go at the top of the first copy telling the hirer his rights. We should, of course, have to keep these words brief or we should defeat our purpose.

The first point to get across is that the hirer has a right to cancel and need only send a notice to do it. What I have in mind that we might add is that he need not return the goods but that should he wish to do so, he can send them to the address given. In this way I think we could cover the point to which many noble Lords attach importance without running a risk of confusing the hirer about the minimum that he needs to do in order to cancel the agreement. I hope your Lordships will agree to let us work out just how best to do this, and that in the meantime you will agree to this Amendment which I now beg to move.

Amendment moved— Page 3, line 29, leave out from ("premises") to end of line 33.—(Lord Drumalbyn.)

LORD PEDDIE

My Lords, with those assurances, I would accept the Amendment. I appreciate the difficulties that have been involved. It seems to be obvious that there is an earnest endeavour to follow out the idea that we put before the House.

LORD GRENFELL

My Lords, I must say that I am distressed that we were not able to accept this point, or rather to reverse this Amendment tonight. I think it is absolutely fundamental. May I again stress the case of the housewife who has taken on a commitment—it may be simply a hair dryer or something like that. Her husband comes back and she tells him, and he says, "We cannot afford this article. You have signed something." He then immediately says to her, "Where did you get this from?" and you cannot get away from the fact that she has to answer, "I do not know". I fully accept the assurances which my noble friend has given, but I think it would have been a happier thing if this Amendment, which was passed on the Committee stage, could have gone forward to another place and then, if necessary, could have been cancelled out there. At this time of the night it is useless to argue about it; but I think it is important to say that once this had been done, it is unfortunate that it should have been reversed at this time of night and at this stage of the Bill. I would not in any way wish to impede the progress of the Bill.

LORD SHEPHERD

My Lords, may I say just this in response to the noble Lord opposite? This has been a pretty long battle. We fought it on Committee stage and we fought it on Report. I think we have won the battle, having regard to the assurances of the noble Lord opposite. I am sure that he will see that the words that we want will be written into the Bill. Whilst, perhaps, there is some reluctance to seeing the words of a victory being removed, we have achieved what we set out to do and we can, I think, look with confidence to the Government to see that the words that we want to meet the spirit which was felt in the House in Committee and on Report will be written into the Bill in another place. At a later stage we shall see those words ourselves, because the Bill will come back to us for approval.

LORD CHORLEY

My Lords, as one who had something to do with this Amendment in the first place, may I say how much I agree with the noble Lord on the other side in his reaction. I felt most disturbed about it when I first saw the Amendment; but the Minister has given pretty explicit assurances which I think we can accept. I hope the Bill will not come back here without the insertion of something really satisfactory from that point of view. I will reserve my fire, and hope that it will not be necessary to make further comment.

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, this is a consequential Amendment. I beg to move.

Amendment moved— Page 4, line 25, leave out ("(e)") and insert ("(f)").—(Lord Drumalhyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, this, too, is consequential. I beg to move.

Amendment moved— Page 4, line 28, leave out ("(d)") and insert ("(e)").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Clause 5 [Information as to right of cancellation]:

LORD DRUMALBYN moved, at end of subsection (2), to insert: and as if, in paragraph (e) of the said section 2(2) and in paragraph (d) of the said section 3(2), sub-paragraph (i), and in sub-paragraph (ii) the words 'in a case not falling within the foregoing sub-paragraph', were omitted.

The noble Lord said: My Lords, this is the Amendment which I moved on the Report stage and which, after I had explained its purpose, I withdrew so as to allow your Lordships more time to consider the matter. This Amendment is made necessary by Amendment No. 1 to which your Lordships have just agreed. When I explained that Amendment, I referred to the first category of cases where a copy already required under the 1938 Act is handed over at the time of signature. That is a circumstance which is not applicable in cooling-off cases because, as your Lordships know, that copy must be sent through the post. The effect of this Amendment is, therefore, that sub-paragraph (i) of the two subsections introduced by Amendment No. 1 does not apply to cooling-off cases. The hirer or buyer will in these cases receive one copy from the salesman and later receive through the post the copy which is also required under the 1938 Act. I beg to move.

Amendment moved— Page 5, line 14, at end insert the said words.—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, the next four Amendments are consequential; they are drafting. I move.

Amendments moved—

Page 5, line 18, leave out ("(d)") and insert ("(e)")

Page 5, line 19, leave out ("(e)") and insert ("(f)")

Page 5, line 33, leave out ("(c)") and insert ("(d)")

Page 5, line 34, leave out ("(d)") and insert ("(e)").—(Lord Drumalbvn.)

On Question, Amendments agreed to.

Clause 21 [Extension of principal Act to Scotland]:

LORD DRUMALBYN

My Lords, Amendments 12 to 22 represent the application to Scotland of the Amendments we have been considering.

Amendments moved—

Clause 21, page 21, line 19, after ("3(1)") insert ("(2), (3)")

Schedule 2, page 35, line 39, leave out ("(d)") and insert ("(e)")

Schedule 2, page 35, line 47, leave out ("(d)") and insert ("(c)")

Schedule 2, page 35, line 48, leave out ("and (c)") and insert ("to (d)")

Schedule 2,page 38, line 24, at end insert ("and

(e) either—
  1. (i) the agreement is signed by or on behalf of all other parties immediately before or immediately after it is signed by the hirer, and the copy referred to in paragraph (d) of this subsection is there and then delivered to him, or
  2. (ii) if, in a case not falling within the foregoing sub-paragraph, the relevant document (that is to say, the document which, on being signed as mentioned in paragraph (a) of this subsection, became the agreement) was presented, and not sent, to the hirer for his signature, then immediately after he signed the relevant 356 document there was delivered to him a copy of that document in the form in which it then was, or
  3. (iii) if the relevant document was sent to the hirer for his signature, then at the time when it was sent there was also sent to him a copy of that document in the form in which it then was.")

Schedule 2, page 35, line 28, leave out ("or (d)") and insert ("(d) or (e)")

Schedule 2, page 35, line 47, leave out ("(d)") and insert ("(e)")

page 39, line 39, at end insert ("and

(d) either—
  1. (i) the agreement is signed by or on behalf of all other parties immediately before or immediately after it is signed by the buyer, and the copy referred to in paragraph (c) of this subsection is there and then delivered to him, or
  2. (ii) if, in a case not falling within the foregoing sub-paragraph, the relevant document (that is to say, the document which, on being signed as mentioned in paragraph (a) of this subsection, became the agreement) was presented, and not sent, to the buyer for his signature, then immediately after he signed the relevant document there was delivered to him a copy of that document in the form in which it then was, or
  3. (iii) if the relevant document was sent to the buyer for his signature, then at the time when it was sent there was also sent to him a copy of that document in the form in which it then was.")

Schedule 2, page 35, line 42, leave out ("or (c)") and insert ("(c) or (d)")

page 40, line 1, leave out ("(d)") and insert ("(e)")

Schedule 2, page 35, line 2, leave out ("(and (c)") and insert ("(to (d)").—(Lord Drumalbyn.)

On Question, Amendments agreed to.

LORD DRUMALBYN

My Lords, I do not wish to detain your Lordships for more than a few moments, for I have only a few words to say. This Bill was welcomed on Second Reading from all parts of the House. Its purpose is to improve and extend the protection which the law gives to people who acquire goods on hire-purchase and credit-sale terms. At the same time, there is no wish to prejudice the legitimate rights of other parties to these transactions and, as noble Lords have stressed, there should be no greater interference with normal trading practice than is strictly necessary. The various suggestions which have been put forward during Committee and Report stages were all, I think, aimed at improv- ing the Bill as a means of achieving this general purpose. As your Lordships know, I have on a number of points undertaken that the Government will seek to amend the Bill in another place since time has not permitted the introduction of the necessary Amendments in your Lordships' House.

There are a few matters on which I should like to say a word to-day. One matter which was much discussed at an earlier stage was the mechanism by which the cooling-off provisions are to operate. As I indicated on Report stage, we intend to review its provisions in the light of everything that has been said to see how they can be improved. But, before your Lordships part company with the Bill, it may be helpful if I try to sum up. There is no divergence of view about the objective: the right to cancel shall be brought clearly to the hirer's attention; the right shall be simple to invoke; everything possible shall be done to avoid giving the salesman an opening for somehow talking the hirer out of exercising the right.

In the light of the discussions in your Lordships' House, there are several points that we shall look at. First, there are the arrangements to bring the existence of the right, and the means of exercising it, to the hirer's attention. These will particularly need to be looked at again now that a copy of the document is going to be left with the hirer immediately, in advance of the copy through the post. Secondly, there is the whole matter of the return of the goods. There is general agreement that the customer should not have any obligation to send them back. But I think the provision which safeguards him if he prefers to do so is at present too narrow. Noble Lords have emphasised that the customer may be anxious to be rid of the goods as quickly as possible, and we must make sure that he can do so. Another point is that the customer should in any case not be saddled with responsibility for the goods for an unreasonable time. I think the way to deal with this is probably, as I said at an earlier stage, to put a limit on the length of time for which his responsibility to take reasonable care of the goods shall run. We shall consider these points and others which have been mentioned, and I hope that we will then be able to frame Amendments which will improve these provisions.

Next, I should like to mention the question of ensuring the legibility of hire-purchase agreements. The noble and learned Lord, Lord McNair, moved an Amendment in precise terms on this. I said that I accepted the principle. I suggested that this was a matter which might best be handled by giving power to the Board of Trade to make regulations. I was asked whether I could move an Amendment at the Third Reading, and I indicated doubt but said I would see whether it could be done. I did, however, give the noble Lord, Lord McNair, a definite assurance, which he accepted, that if this were not possible the Government would introduce an Amendment in another place. I just want to say now that it was not possible to frame the Amendment in the short time available since the Report stage, and to confirm what I said about the Government's intention.

When this Bill was last before your Lordships' House the question was again raised whether the county courts should be given jurisdiction over all actions arising on agreements to which the principal Act will apply. This is a matter on which I am in close consultation with my noble and learned friend the Lord Chancellor. As I have already told your Lordships, the effect of extending the principal Act to goods with a hire-purchase price of up to £2,000 will automatically be to give the county courts jurisdiction to entertain an action for the return of the goods where more than one-third of the hire-purchase price has been paid. It may well be that the county courts should also be able to deal with an action for the return of the goods where less than one-third has been paid.

The position is more doubtful with regard to claims for money only, for it may not be right to give the county court power to entertain claims far beyond its ordinary jurisdiction simply because they arise out of hire-purchase agreements to which the principal Act applies. As my noble and learned friend the Lord Chancellor indicated on the last occasion, this is a matter which must be considered against the whole background of the jurisdiction of the county court and the distribution of business between that court and the High Court. It has not been possible in the time available since the question was first raised to come to any definite conclusion, but I can assure your Lordships that the matter is receiving urgent consideration and will be dealt with when the Bill reaches another place.

My Lords, this brings me to the end of what I wish to say. There are other points we have undertaken to deal with. To recall just one, we intend to give a hirer who has failed to make a payment a right to a reminder and to 7 days in which to make good his omission. There are, of course, other matters to which we are giving further consideration, notably Part III of the Bill. I believe that the Bill has been improved and will be further improved as a result of the consideration in your Lordships' House. I wish only to express my personal gratitude to your Lordships for your assistance in enabling me to conduct this, the first Bill for which I have been responsible in your Lordships' House. I appreciate your courtesy and patience, and it only remains for me to move that this Bill do now pass.

Moved, That the Bill do now pass.—(Lord Drumalbyn.)

8.48 p.m.

LORD PEDDIE

My Lords, I would take this opportunity of expressing on behalf of this side of the House our appreciation of the courtesy shown to the House by the noble Lord, Lord Drumalbyn, during his handling of this Bill. We regret, of course, that acquiescence did not always accompany the courtesy he showed to us. We have now come to the end of an intensive examination of this Bill and, with the noble Lord opposite, I hope that a better Bill has been created out of the consideration given to it by this House. We have felt on many occasions that the Minister has been kept on a very tight rein and that speed of progress has been the dominant factor. This has given him very little area for the exercise of the discretion which we hoped we should have received, or indeed the practical application of his several acceptances of principle. I am glad to learn from the remarks he made a few moments ago that there are one or two points made by noble Lords on both sides which have been accepted.

I sympathise in the fact that the Bill itself carries many marks of haste in drafting. This House in presenting its Amendments has had its effect on the Bill. I am sure the House is aware, as this has not passed without comment on previous occasions, that there was no reference to this Bill in the Queen's Speech. While the Bill was certainly welcome, we feel that two of the most significant points in the Bill could have been dealt with twelve months ago when the Private Member's Bill was introduced. At least I shall indeed lay claim to personal satisfaction because the presentation of my Bill immediately following the Queen's Speech spurred the Government into speedy action.

There are a number of outstanding points, some of which the Minister has already dealt with, others which he has expressed his willingness to consider, and I am sure that is as much as we can hope for at this stage. Among them—and I do not think this was referred to—was the rebate scheme which my noble friend mentioned during the Committee stage, to allow for the predetermination of the rebate to which a hirer will be entitled in consequence of an earlier settlement. Reference has been made to the serving of the statutory notice following default by the hirer, particularly in circumstances where less than one-third of the hire-purchase price has been paid, and that is undoubtedly a matter deserving of consideration.

While I think we all welcomed the principle involved in Part III of the Bill, at the same time I believe there was a recognition that the machinery suggested for dealing with this particular question was somewhat cumbersome; and possibly the opportunity might present itself for dealing with this particular matter. I am pleased, too, to hear the indication that there is to be further urgent consideration of the problem arising out of the uplift to £2,000 which will mean that many hire-purchase cases which normally would have gone before the county courts will no doubt now have to go to the High Court, with consequential expense and possible delay. I am glad, indeed, that that matter, which I appreciate is one of considerable difficulty—as it must be—is being considered.

Naturally, my Lords, during the course of the discussion and in the criticisms expressed by noble Lords, a great deal of emphasis has been laid upon the bad practices, so far as hire-purchase is concerned. I would take this opportunity of saying that it would be wrong if this led to a belief that we on our part had a universal condemnation of hire-purchase. We certainly do not have that. Hire-purchase can and does offer useful service to the community, but I believe that it is in the interests of both hirer and owner if these transactions can be conducted on a basis that is equitable and conforms to good standards of business conduct. Anything which improves the relationship between the hirer and owner is to the good of both. I am sure that we have not heard the end of hire-purchase, and I hope that this Bill when it becomes an Act will make a substantial contribution towards improving the relationship between hirer and owner, and add to the service that hire-purchase renders to the community.

LORD CHORLEY

My Lords, may I, at the risk of bringing down the powers of wrath on my head, add just a few words to what my noble friend Lord Peddie has said about Part Ill of this Bill? We did not have a chance of discussing it at Report stage. I do not want to discuss it now in any detail, but these proposals for registration and licensing have been received with a good deal of feeling of perturbation by many lawyers who are interested in this sort of work. The suggestion made by my noble friend Lord Shepherd, on behalf of the finance companies, has in these same circles been regarded as a very interesting proposal. It is felt that it might well provide a stopgap during the time the Law Revision Committee set up by the noble and learned Lord on the Woolsack (or by his predecessor) is considering the whole problem of the legal rule under which a man who does not own property cannot transfer it to somebody else—which of course is the basis on which Part III of the Bill has been drafted. It is felt that there is an inroad into the general law here which is of a serious character, and that it may not work at all well.

As the noble Lord himself said, it is a complicated provision. If these arrangements proposed by the finance companies could, in fact, be worked over a few years, while the whole of this legal problem, which is one of the most important problems in the law, is being worked out on a new basis, this might be a matter of very great value. We have in the insurance world at least two cases where insurance companies have themselves operated schemes over quite a number of years, which has obviated the necessity for statutory intervention. I am thinking particularly of the case where, owing to the voidance of insurance policies, people who have been injured in motor-car accidents would not have been able to receive compensation, but are enabled to do so, under the scheme which is operated by the insurance companies. That scheme has worked perfectly well now for a substantial period of time, which suggests that this scheme might very well work equally well. If assurances could be obtaincd, I think there is a great deal to be said for looking at this matter very carefully, with a view to seeing whether, while the Law Revision Committee is producing its report, it would be possible to carry this matter through on that sort of basis.

On Question, Bill passed, and sent to the Commons.