HL Deb 24 January 1978 vol 388 cc308-11

4.14 p.m.


My Lords, apologise that my noble friend Lord Oram is not in his place. He had reason to believe that we would not finish this part of the proceedings so quickly, and this may account for the fact that my noble friend is not here. I do not know whether I am required to go on speaking to your Lordships until he arrives?


My Lords, would it not be better if we were to adjourn during pleasure for a few minutes?


My Lords, if that is the wish of your Lordships, I beg to move that the House do adjourn during pleasure until twenty minutes past four o'clock.

House adjourned during pleasure.

House resumed.

4.20 p.m.

Lord ORAM rose to move, That the draft Consumer Transactions (Restrictions on Statements) (Amendment) Order 1978, laid before the House on 17th January, be approved. The noble Lord said: First, I must apologise to your Lordships for not having kept pace with the rapid progress that was made on the previous matter, but I can assure your Lordships that this particular item of business which I now move will not take up much of your Lordships' time. I beg to move that the Consumer Transactions (Restrictions on Statements) (Amendment) Order 1978 be approved. I seek the approval of the House for this order which makes certain amendments to an order called the Consumer Transactions (Restrictions on Statements) Order 1976.

They are merely consequential amendments to that order, as a result of the passing of the Unfair Contract Terms Act 1977.

Broadly speaking, the purpose of the 1976 order is to prohibit people who sell goods from misleading their customers by means of notices displayed in the store which purport to avoid certain legal obligations and deprive a customer of his rights. For example, the goods supplied to him must be of merchantable quality, and a notice cannot be displayed such as, for instance, "no money refunded", in an attempt to avoid this obligation.

The 1976 order was made under Section 22 of the Fair Trading Act 1973. It implemented the first report of the Consumer Protection Advisory Committee. The Director General of Fair Trading had referred to that Committee certain undesirable practices by retailers, like the one I have described. A notice telling customers that no money would be refunded could have no legal effect by virtue of Section 55(4) of the 1893 Sale of Goods Act. The Committee recommended that this practice (as well as other similar practices also referred by the Director General) should be stopped. Hence the 1976 order which prohibited these practices. A similar prohibition was applied to similar notices affecting hire-purchase agreements which are covered by Section 12(3) of the Supply of Goods (Implied Terms) Act 1973.

I turn now to the actual terms in which the 1976 order is drafted. The basic prohibition is in Article 3(a)(i). It refers to a term which would be void by virtue of Section 55(4) of the 1893 Act or Section 12(3) of the 1973 Act. Reference is also made, in the definition of a consumer transaction in Article 2(1), to a consumer sale within Section 55(1) of the 1893 Act and to a consumer hire-purchase agreement within Section 12(6) of the 1973 Act.

When the Unfair Contract Terms Act 1977 was passed last October it implemented the recommendations of the Law Commissions concerning the control generally of contract terms which exclude or restrict liability. In enacting the new general controlling provisions the similar provisions already in the 1893 and 1973 Acts were combined with them. Thus all the provisions relating to the same subject-matter were brought within the one new Act. Accordingly, the relevant provisions of Section 55 of the 1893 Act and of Section 12 of the 1973 Act, were re-enacted in the 1977 Act and consequentially repealed by it. The re-enactment, which made no change of substance to the existing law, was achieved by mans of restating those provisions. This was done by Section 6 of the 1977 Act as regards the law for England and Wales and by Section 20 as regards the law applicable in Scotland.

In making the re-statement and the consequential repeal of the old provisions, the 1977 Act did not amend the 1976 order so as to secure that the references in it to the old provisions were to be construed as references to the corresponding new provisions of the Act. The present references in the 1976 order are to provisions which will be repealed on 1st February 1978; that is the date when the Unfair Contract Terms Act comes into force. Therefore, in order to ensure the continued effectiveness of the 1976 order, this present order is necessary. I assure your Lordships it does no more than to continue the effectiveness of the 1976 order.

Article 4 of the present order changes the definition of "consumer transaction", and Article 5 changes the references to void terms, both changes having been made necessary by the passing of the Unfair Contract Terms Act. I am sorry if this is all a little technical and confusing, but I assure your Lordships that the basis of it is quite a simple continuation of an order which your Lordships approved two years ago. I beg to move.

Moved, That the draft Consumer Transactions (Restrictions on Statements) (Amendment) Order 1978, laid before the House on 17th January, be approved.—(Lord Oram.)

4.27 p.m.


My Lords, the House is grateful to the noble Lord, Lord Oram, for explaining, in his usual clear and helpful way, this somewhat, as he called it, technical and complicated measure. Despite that, I must confess that one needs to do a bit of homework to get to the bottom of it. Nevertheless, I think I can confirm what the noble Lord has said, that in essence this order does not change the legal position, except in two small respects arising out of the passing of the Unfair Contract Terms Act at the end of the last Session. That Act, as the noble Lord said, comes into force very shortly, and it is therefore necessary for us to pass this order before the end of the month. I do not think any useful purpose would be served by my endeavouring to pursue the noble Lord on any of the points contained in the order. I would simply commend it to your Lordships and hope that we shall pass it right away.

On Question, Motion agreed to.