§ Clause 1, page 1, line 10, after ("apply") insert ("as amended by subsection (5) of this section").
§
Page 2, line 6, at end insert—
("(5) In section 4(1) of the principal Act there shall be inserted the words' Provided that if the Court is satisfied in any action that a sum less than the amount by which one-half of the hire-purchase price exceeds the total of the sums paid and the sums due in respect of the hire-purchase price immediately before the termination would be equal to the loss sustained by the owner in consequence of the termination of the agreement by the hirer, the court may make an order for the payment of that sum in lieu of that amount.'")
§ LORD DRUMALBYNMy Lords, Amendment No. 2 is a paving Amendment for Amendment No. 3, and also for Nos. 62, 123, 124, 133, 134, 139 and 145, which go together. In another place 824 there was a great deal of discussion, as there had been in your Lordships' House, of what the hirer's liability should be if the agreement were terminated before it had run its full length. As in your Lordships' House, the Government maintained that the existing provisions of Sections 4 and 5 of the 1938 Act were a practical measure of consumer protection which we were not prepared to diminish, and in this respect the Bill has not been amended. There was, however, one aspect of this matter to which several of your Lordships drew attention. This was the possibility of an anomaly under the 1938 Act as it stands. A hirer who recognises in the early stages of his hire that he cannot go through with the agreement becomes liable to make his payments up to one-half of the hire-purchase price if he terminates the agreement in accordance with Section 4(1). The argument is that he might get off more cheaply if, instead of terminating, he defaulted and left the initiative to the finance house.
In Committee in another place an Amendment was passed which, with the subsequent drafting changes, is now Amendment No. 3. It adds a proviso to Section 4(1) of the 1938 Act, empowering the court, in a case where the hirer has terminated the agreement in the early stages, nevertheless to assess his liability at less than the amount necessary to make his payments up to one-half of the hire-purchase price. This provides the hirer in the position I have mentioned with a remedy. I am bound to say that we do not think that it is a provision likely to be often invoked; but it is an added measure of consumer protection and, as it were, a long-stop for the hirer. Amendments Nos. 62, 123, 124, 133 and 134 incorporate this new provision in the Act of 1938 as it is extended to Scotland. Amendment No. 139 makes a consequential Amendment to Section 5(c) of the 1938 Act and Amendment No. 145 amends the Schedule to the Act to take account of Clause 1(5). I beg to move that this House doth agree with the Commons in the said Amendments.
§ Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Drumalbyn.)
§ On Question, Motion agreed to.