Telecommunications Bill (Hansard, 10 April 1984)

HL Deb 10 April 1984 vol 450 cc1038-48 1038

§ The Lord Advocate (Lord Mackay of Clashfern)
My Lords, I beg to move that the Commons Amendments to certain of the Lords Amendments and Commons Amendments in lieu of a Lords Amendment be now considered.

§ Moved. That the Commons Amendments to certain of the Lords Amendments and Commons Amendments in lieu of a Lords Amendment be now considered.—(Lord Mackay of Clashfern.)

§ On Question, Motion agreed to.

§ COMMONS AMENDMENTS

TO CERTAIN OF THE

LORDS AMENDMENTS AND

COMMONS AMENDMENTS IN

LIEU OF A LORDS AMENDMENT

§ References to the Bill are to Bill (96)]

§ [The Commons amendments are printed in italics]

§ LORDS AMENDMENT

§ 1 Page 19, line 40, leave out from "is" to "may" in line 41 and insert "contravening or has contravened and is likely again to contravene any of the conditions of his licence, the Director" The Commons agreed to the above amendment with the following amendment:

§ 2 Line 3, leave out "the Director".

§ Lord Mackay of Clashfern
My Lords, as your Lordships may be aware, another place has disagreed 1039 with the amendment which is listed as Amendment No. 3 to Clause 18 made in your Lordships' House on Report. As your Lordships will recall, the Government were opposed to that amendment at that time for reasons which I sought to give then. My noble friend Lord Morris clearly appreciated some of the difficulties which might be caused by the amendment since he moved further amendments at Third Reading in your Lordships' House.
Amendment No. 2, which is an amendment to Amendment No. 1, is consequential to the amendments which are in issue as a result of that decision of the other place.
I believe it will be for the convenience of your Lordships if I were to try to explain not only Amendment No. 2, which has just been referred to, but also Amendments Nos. 3 to 11, as part of the explanation.

§ LORDS AMENDMENT

§ 3 Page 22, line 35, at end insert—

§ (5A) Where a final order has been made or a provisional order has been confirmed, any contravention of a condition of the licence to which it applies, which occurred prior to that order taking effect and which would have been in breach of the duty owed by virtue of subsection (5) above had that order then been in force, shall be actionable with the prior consent in writing of the Director at the suit or instance of any person who has suffered loss or damage as a result of that contravention.

§ (5B) In any proceedings brought against any person in pursuance of subsection (5A) above, it shall be a defence for him to prove that he took all such reasonable steps and exercised all due diligence to avoid contravening the condition of the licence in question.

§ The Commons disagreed to the above amendment but proposed the following amendments in lieu thereof:

§ 4Page 19, line 30, leave out "(3)" and insert "(2)".

§ 5Page 19, line35, leave out from "condition" to end of line 38.

§ 6Page 19, line 39, leave out "(3)" and insert "(5)".

§ 7Page 19, line 40, after "Director", insert "(a)".

§ 8Page 19, line 41, leave out "may" and insert ", and

§ (b) that it is requisite that a provisonal order be made, the Director shall (instead of taking steps towards the making of a final order)".

§ 9Page 20, leave out lines 1 and 2 and insert—

§ "(3) In determining for the purposes of subsection (2)(b) above whether it is requisite that a provisional order be made, the Director shall have regard, in particular, to the extent to which any person is likely to sustain loss or damage in consequence of anything which, in contravention of the relevant condition, is likely to be done, or omitted to be done, before a final order may be made.".

§ 10Page 20, line 9, leave out "The duty imposed by subsection b(1) or" and insert "The duties imposed by subsections (1) to ".

§ 11Page 20, line 24, leave out from "at" to "is" in line 25 and insert "such time, being the earliest practicable time, as".

§ As I indicated at the time that my noble friend Lord Morris moved his amendments on Third Reading, which he withdrew, these amendments would have gone some way towards meeting some of the difficulties which I had raised at Report, but not all. I expressed the view that the fundamental difficulty was not really capable of being dealt with at that stage. My noble friend Lord Morris agreed to withdraw his amendments on the understanding that the Government would consider the matter further.

§ The Government have given the matter most careful consideration and for reasons which I shall 1040 elaborate shortly we have proposed certain amendments to Clause 16 which we hope will be acceptable to your Lordships in place of Amendment No. 3.

§ Before dealing with the amendments in detail I should perhaps mention that, because of the compara-tive complexity of the alterations we propose, the Government have made available to your Lordships in the Printed Paper Office two documents; one, labelled A, is the text of Clause 16 as your Lordships sent it to another place and the second, labelled B, is the text of Clause 16 incorporating the Government's amendments agreed to by another place.

§ As I have indicated, the Government disagree and the Commons have disagreed with your Lordships' Amendment No. 3. It adds two subsections (5A) and (5B) to Clause 18. These would provide that when a final order has been made or where a provisional order has been confirmed any person who has suffered loss or damage as the result of any contravention of the licence condition to which the order refers should have the right to sue for damages in respect of any contravention of the condition which took place before the order was made.

§ This is a radical change from the Bill as approved by another place originally. In another place provision was made for the right to obtain damages to commence only when a final order had been made or a provisional order confirmed. This means that an operator became exposed to a liability to pay damages only when the director had taken formal steps to specify that a condition had been breached and that specific steps had to be taken to cease the contravention.

§ The procedures leading up to the making of a final order or to the confirmation of a provisional order involve delay while the operator is given the opportunity to object to the proposed final order or to the terms of a provisional order.

§ The Government accept that this delay is undesirable and agree that damages should be payable earlier. Another place has now agreed with the amendment which your Lordships made whereby damages become available as soon as a provisional order is made. Amendment No. 3 goes further and proposes that the right to damages should go right back to the time when the licence condition was first breached. The only limitation on the ability to claim damages is the requirement that before anyone can go to the court he must first obtain the consent of the director—which is as Amendment No. 3 stands. The Government are convinced that this amendment would do serious damage not only to telecommunications operators, both large and small, but also to those who depend upon telecommunications. It would also do significant harm to the regulatory arrangements which have been worked out so carefully both in this House and in another place.

§ The main reason why Amendment No. 3 is objectionable is because it introduces retrospection. If it remained in the Bill, it would bring about circumstances where an operator would be exposed to unlimited damages in respect of courses of action which appeared to be entirely acceptable at the time 1041 they were taken. This problem arises because licence conditions will not be precise rules; they will set out broad guidelines. For example, licences for public telecommunications operators will contain an obligation not to engage in undue preferences or undue discrimination. This is not a precise obligation and its interpretation will be a matter of judgment by the director. The director could decide in the circumstances of 1984 that a particular course of conduct did not amount to undue discrimination. But, as circumstances changed, a judgment might also alter, so that in 1988 he might want to make an order requiring an operator to cease a practice which he, the director, had accepted in 1984.

§ If he acted in this way, Amendment No. 3 would cause damages to be payable by the operator in respect of the practice in question over the entire period between 1984 and 1988 even though the director had initially accepted the practice in question. Moreover, the damages would be subject to no particular limit. The result would be very great uncertainty for operators who would not be able to obtain any reliable guidance from the director on the meaning of their licence conditions and so would find it very difficult to take many commercial decisions. This uncertainty would obviously harm British Telecom. Its position would be impossible if each of its 19 million customers had the potential opportunity to claim damages without limit in respect of past actions which they had been told at the time complied with the licence conditions. The position of small operators such as radio telephone or message-handling companies would be no better. They, like British Telecom, would have licence conditions; but they have very limited resources, and actions for damages could virtually drive them into liquidation.

§ The amendment would also do serious harm to the enforcement provisions in the Bill. As the Bill was drafted, the licence conditions are enforced by the director and if he discovers a breach he must normally make an order requiring the operator to take specific steps to comply with his licence conditions. If the operator fails to take those steps at once, he is exposed to actions for damages and to court injunctions or interdicts. The director has a duty to act and, of course, to act quickly. This will produce swift remedies. If, however, his action gave others the right to sue for damages in respect of the period before he makes his order, the director, before he makes any order, will have to take account of the potential impact of those damages on the operator concerned. This would seriously delay decision taking, to the detriment of customers. Moreover, if the damages looked like seriously damaging the operator's ability to provide services, the director would be inhibited by Clause 3(1)(b) from making any order at all. The result would then be that licence conditions would go unenforced, which is the opposite of what my noble friend had in mind in proposing this amendment.

§ Finally, I should point out that Amendment No. 3 has introduced the idea of people having to obtain the consent of the director before they can go to court to sue for damages. This arrangement was an effort by my noble friend to restrict those to whom this remedy would be available and to limit some of the retrospection and damage that the amendment would 1042 otherwise cause. But it seems wholly wrong for the director, an appointed official, to be able, as it were, to stand in the doorway of the court and to say which citizen can and which citizen cannot obtain the protection of the court. My noble friend recognised that in the amendments which he moved in this matter at Third Reading.

§ For these reasons, I propose that your Lordships should not insist on the said Amendment No. 3 but should agree to the Amendments No. 2 and Nos. 4 to 11 made by another place in lieu of Amendment No. 3.

§ We think that actions for damages should be limited to losses and damage sustained after the director makes his orders but we recognise entirely the two main concerns that lay behind the amendment itself. First, there was concern that the director might be slow in making an order; and, second that serious damage or injustice could be done to customers or to other operators if contraventions of licence conditions went without remedy for any length of time. In recognition of these problems, the Government have proposed, and another place has agreed to, eight amendments to Clause 16 and an amendment to your Lordships' Amendment No. 1—which is the amendment I am speaking to at the moment—with the aim of speeding up the director's decisions on whether or not to make orders, and of recognising the damage that breaches of licence conditions can cause.

§ May I say what these amendments do? First, Amendments Nos. 5, 7 and 8 reduce the director's discretion about whether to make a final order or a provisional order. Final orders take effect only after consultation procedures have been carried out, and these take a minimum of 28 days or more. This delay can cause damage. On the other hand, provisional orders can take effect at once. Under the amendments agreed in another place, the director will be under a duty to make a provisional order and not to wait for the final order-making procedures to take effect whenever he thinks it requisite that a provisional order should be made.

§ The second change is introduced by Amendment No. 9. It gives the director a new duty, when he is considering whether it is requisite to make a provisional order, to have particular regard to the extent to which any person is likely to suffer damage or loss if a contravention of the relevant licence condition continues while the final order-making procedures are followed. That is precisely the concern that my noble friend had in mind in moving his amendment. What we have sought to do is to meet that concern in this particular way by imposing on the director a duty to have regard to this particular aspect in exercising his powers.

§ The result of Amendments Nos. 5,7,8 and 9 is that subsections (2) and (3) of Clause 16 will place the director under a duty to make a provisional order if he thinks it requisite to do so; and, when he is considering whether it is requisite, to have particular regard to whether anyone is suffering loss or damage. The third change is introduced by Amendment No. 11. This deletes the reference to a provisional order taking effect at the end of a period and substitutes a require-ment that a provisional order shall take effect at the earliest practicable time. In practice, when the director 1043 makes an order he has to serve the order on the operator concerned, and the operator concerned has to read it and take steps to obey it. This will inevitably take some time. If, for example, a new price list has to be printed this could genuinely take several days to accomplish; but if the order requires an anti-competitive tender to be withdrawn this could be accomplished almost immediately.

§ What the amendment does is to ensure that in all circumstances a provisional order or a final order can take effect at the earliest practicable time. Amendments Nos. 4, 6 and 10 are purely technical and reflect the fact that subsections (1) to (4) inclusive now impose duties, and that matters which were formerly dealt with in subsections (1) and (3) are now dealt with in subsection (2). Amendment No. 2 to your Lordships' Amendment No. 1 is also purely technical and is consequential upon Amendments Nos. 5, 7 and 8. I beg to move that your Lordships agree to Amendment No. 2 to your Lordships' Amendment No. 1.

§ Moved, That this House doth agree with the Commons in their Amendment No. 2 to the Lords Amendment No. 1. —(Lord Mackay of Clashfern.)

Lord Bruce of Donington
My Lords, I am grateful to the noble and learned Lord for having threaded his way through the somewhat tortuous passages that have been occasioned by reason of the deliberations in another place. Aside from all other issues, the other place having accepted some 300 of your Lordships' amendments to the Bill, thereby underlining the importance of the revising capacity of this Chamber, it would be very churlish indeed to deny the elected House the effect of the amendments now proposed.
Continuing to act in the revisory sense, may I draw the attention of the noble and learned Lord the Lord Advocate to Amendment No. 8 and ask him to relate it to the test at line 41? The noble and learned Lord will then find, I think, that the deletion of the word "may" leaves this particular part of the Bill not making sense. I invite his consideration to the deletion of the word "he" in front of "may": otherwise the sentence does not make any sense at all. This is a very minor and I presume technical amendment which does not affect the sense of the thing. Indeed, I observe on the printed hand-out with which the noble and learned Lord has been kind enough to provide us that the amendment to the amendment I have suggested as being technical has already been put into effect. However, I would like to hear the observations of the noble and learned Lord on that because, in my view—and he may or may not agree with me—Amendment No. 8, page 19, line 41, which proposes to leave out "may", ought to read "leave out 'he may' ".
Clause 18 of the Bill is heavily dependent on this clause because Clause 16 deals with the validity of the licence and the enforcement of the licence. The noble and learned Lord will be aware that he made some subsequent amendments to Clause 18 to which the other place has been good enough to agree. Therefore, would the noble and learned Lord confirm the remarks he made at column 377 of the House of Lords Hansard for 29th March, which set out the position in 1044 regard to industrial disputes and deals with the question of damage being caused deliberately to the actual person affected? Will he confirm that that assurance is not in any way affected by the amendments that have now been made to Clause 16?

§ 3.25 p.m.

Lord Morris
My Lords, I am extremely grateful to Her Majesty's Government, and congratulate them on the considerable skill which they and their staff have brought to bear in tabling this amendment. It was a very difficult matter to handle in such a few days. I think they have met with considerable skill the sincerely held concern expressed in your Lordships' House. Personally I am most grateful for the fact that they came to my rescue.
As I see it, the amendment preferred in another place achieves what was set out to be achieved by this House by very different means, and has dealt with the danger of retrospective action as explained by the noble and learned Lord the Lord Advocate. The director will, of course, have a specific duty to act by issuing a provisional order when he believes the licence condition is being breached, and he will be able to act quickly, which was another fear expressed in your Lordships' House. The director must take account of any loss or damage that a person may suffer through breach of the licence conditions. This is a duty. It is also a great improvement. The claimant will not have to prove the damage he actually suffered; he need only demonstrate that damages are likely to be suffered, which is a strengthening of the position of the director general of British Telecommunications.
Before I become too salutary in praise of my noble friend there are two particular points I should like to raise. My noble and learned friend suggested there was a substitution for a discretion by placing a duty by means of these amendments, but it is very important to remember that that duty only flows after it appears to the director that a contravention has actually taken place. The question I should like to ask my noble and learned friend, if he sees fit to answer it, is this: should the unlikely event happen where it appears to any reasonable man that a contravention has occurred, but for some reason known only to the Director General of Telecommunications it does not appear so to him, what recourse does the complainant have? My noble and learned friend knows that a writ of mandamus is a difficult and strong test to win in the courts, or to prove to the courts. I should like guidance on that matter.
My other point is this: my noble and learned friend the Lord Advocate earlier suggested that Amendment No. 82 would not work in the way that we had hoped, because it would be impossible to frame the licence conditions sufficiently precisely to prevent retrospective action when the director has to exercise his discretion. I believe the new and preferred wording of Clause 18 does not alleviate the responsibility of my right honourable friend the Secretary of State of seeking to frame the conditions sufficiently precisely to enable the director to act under the new enforcement powers of Clause 18.
I hope that when this House has the opportunity to debate the major licences of British Telecommunications, we shall find that, paying due 1045 regard to the dominant position of British Telecommunications in the market, the anti-competitive practices proscribed in this Bill are matched by the licences. It is of the greatest importance that we constantly remind ourselves that these licences are in effect a form of subsidiary legislation or, to put it another way, they should be bound half-calf and set on the same shelves as Private Bills and statutory instruments over which Parliament has no means of emendation, but only means of scrutiny. It is critically important that this should be borne in mind at all times. I remain confident that Her Majesty's Government will undoubtedly see the practical political wisdom of considering with great care what your Lordships' House has to say and, indeed, what another place has to say when we come to consider these major telecommunications operator licences.
I thank my noble and learned friend once again for doing what he has done. I am delighted and most grateful.

Lord Spens
My Lords, I should also like to thank Her Majesty's Government for this series of amendments. Admittedly, it took me quite a long time this morning before the availability of documents A and B, which I got only a few moments ago, to work out exactly what was meant, because the amendments relate to the original Bill before it was amended in your Lordships' House. I think Clause 16 has been amended at every stage in this House, including Third Reading, which meant that there was no up-to-date text of it to look at this morning. The amendments made by another place are quite excellent because they have now put on to the director a duty where previously it was only a possibility that he might issue a provisional order.
There is still the problem of speed. The noble and learned Lord the Lord Advocate mentioned that. To give an example of it, I read today in the Daily Telegraph that British Telecommunications is to stop issuing the final notice which threatens disconnection within seven days if the telephone bill has not been paid. I think I complained on Second Reading about the speed with which they issue a reminder over a holiday period like Christmas time. If they are now going to disconnect phones without final reminders, there may well be the possibility that when this law comes into operation there will be people who are suffering damage from having had their phones deliberately cut off. I am not saying that it will happen with the deliberate knowledge of the Board of British Telecom, but it could easily happen through manoeuvres a little further down the line. That means that someone could be suffering damage from the actual moment when the Bill comes into operation, and therefore speed is very important.
The other point has been made by the noble Lord, Lord Morris, and that concerns the conditions of the licence. We shall have to look at those very carefully to see whether the licence conditions are sufficiently wide to protect the interests of the smaller companies which may be involved as users or suppliers to the huge monopoly that British Telecom is going to be. Having said that, I should like again to thank the Front Bench for these amendments, which have improved the Bill immensely.

1046

§ Lord Campbell of Alloway
My Lords, may I very briefly ask my noble and learned friend the Lord Advocate whether he would agree that this duty, cast in its present form, is qualified in the sense that it does not arise until a conclusion has been reached as a matter of administrative discretion?

§ Lord Mackay of Clashfern
My Lords, I am extremely grateful to your Lordships who have welcomed the action taken by the Government and another place in this connection. I will now try to deal with the specific points that have been raised. First, as to the point made by the noble Lord, Lord Bruce of Donington, on Amendment No. 8, if I have understood correctly the way these amendments go together—that is a fairly important "if"— Amendment No. 1 on this paper affects the line to which the noble Lord, Lord Bruce, was referring. The result is that, if you take account of Amendment No. 1, already made as it were, and then go on to Amendment No. 8, the two together make correct sense. I know it is quite difficult to follow this and I would not ask the noble Lord to give an immediate answer, but that is my impression and also the impression that has been advised to me; and I hope that it is correct.
The second point raised by the noble Lord is a more important one: that is, he asked whether I could confirm that what I had said before regarding industrial action is still correct. My understanding of the position is that the amendments which were made by your Lordships in that part of the Bill have been entirely accepted in another place: they were discussed there and accepted. Therefore what I said, as I understand the Bill's provisions in that regard, still stands as it did when I said it originally.
My noble friend Lord Morris made very much the same point in his questions as did the noble Lord, Lord Campbell of Alloway: that the duty arises only when a particular state of mind has been reached by the director, and of course that is as it has to be. That makes it more difficult than otherwise it would be to enforce the duty; but I have no doubt that if it were established that the director's action in not coming to such a conclusion in his mind was utterly perverse, the court would be able to afford a remedy. Therefore I would answer my noble friend Lord Campbell of Alloway in the affirmative.
So far as the question of my noble friend Lord Morris is concerned, I believe the court would find a remedy but, as he pointed out, remedies of that kind are not easily obtained. One reason is that it is not easy to establish the basic state of facts that he is postulating, because one would hope that the Director would not act perversely but would act appropriately and that the duty would arise on a properly balanced appreciation of the facts.
So far as the point raised by the noble Lord, Lord Spens, is concerned, all I can do, I think, is to undertake to draw to the attention of British Telecom the remarks that he has made in this connection. With these answers, perhaps I may renew my Motion to your Lordships.

§ On Question, Motion agreed to.

1047

§ LORDS AMENDMENT

§ Lord Mackay of Clashfern
My Lords, I beg to move that this House do not insist on their Amendment No. 3 to which the Commons have disagreed and that the House do agree with the Commons in their Amendments Nos. 4 to 11 in lieu thereof.
[Printed earlier col. 1039.]
I have already spoken to these.

§ Moved, That this House doth not insist on their Amendment No. 3, and agrees to the Commons Amendments Nos. 4 to 11 in lieu thereof.—(Lord Mackay of Clashfern.)

§ On Question, Motion agreed to.

§ LORDS AMENDMENT

§ [Nos. 12 and 13]

§ After Clause 79, insert the following new clause: Information etc. to be marked on or to accompany apparatus.

§ .—(1) Where it appears to the Secretary of State expedient that any description of relevant apparatus should be marked with or accompanied by any information or instruction relating to the apparatus or its installation or use, the Secretary of State may by order—

(a) impose requirements for securing that relevant apparatus of that description is so marked or accompanied, and
(b) regulate or prohibit the supply of any such apparatus with respect to which the requirements are not complied with;

and the requirements may extend to the form and manner in which the information or instruction is given.

§ (2) An order under this section may, in the case of apparatus supplied in circumstances where the information or instruction required by the order would not be conveyed until after delivery, require the whole or part thereof to be also displayed near the apparatus.

§ (3) Where an order under this section is in force with respect to relevant apparatus of any description, any person who, in the course of any trade or business, supplies or offers to supply relevant apparatus of that description in contravention of the order shall, subject to section (Offences due to default of third person) below, be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

§ (4) For the purposes of this section a person exposing [27] relevant apparatus for supply or having such apparatus in his possession shall be deemed to offer to supply it.

§ (5) In this section and section (Information etc. to be given in advertisements) below—

(a) "relevant apparatus" means wireless telegraphy apparatus or apparatus designed or adapted for use in connection with wireless telegraphy apparatus; and
(b) "supply" shall be construed in accordance with section 9 of the Consumer Safety Act 1978."

§ The Commons agreed to the above amendment with the following amendment:

§ 13Line 27, at end insert "for supply".

§ Lord Mackay of Clashfern
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13 to your Lordships' Amendment No. 12. This amendment remedies an omission to subsection (4) of the new clause added to Part VI of the Bill by your Lordships, enabling the Secretary of State to require information to be marked on wireless telegraphy and related apparatus. The subsection is intended to make it clear that for the purposes of this section "offer to supply" includes exposing for supply or having in one's possession for supply apparatus to which the new clause applies.
The subsection as at present drafted, however, could be taken to mean that a person having apparatus in his possession for purposes other than supply is to be deemed to offer to supply it. The present amendment, 1048 therefore, adds the words "for supply" after "having in his possession" in subsection (4) to avoid this possibility and to make clear the true intent of the provision. It thereby also brings it into line with the wording of subsection (5) of Clause 28 of the Bill on which it is modelled. I beg to move.

§ Moved, That this House doth agree with the Commons in their Amendment No. 13 to the Lords Amendment No. 12.—(Lord Mackay of Clashfern.)

Lord Bruce of Donington
My Lords, we are grateful to the noble Lord for having corrected this particular amendment which we made. Your Lordships must indeed have been getting very tired at that time of night to have allowed this one to get away. It is quite clearly something we should have insisted on before we sent it to another place; but we are very grateful for the correction.

§ Lord Mackay of Clashfern
My Lords, I am sure that the tremendous amount of work which your Lordships did so successfully makes this a very minor omission.

§ Lord Orr-Ewing
My Lords, would my noble friend bear in mind that this amendment was passed at 4 a.m. this morning in another place and that that shows a sense of urgency and dedication to duty of all those concerned, well above any standards we normally set? Could the same expedition now be given to perhaps republishing the draft licence so that we could consider that with rather more time than we have had to consider these amendments? Perhaps we might even have the discussion paper on bands 1 and 3, which we are still waiting for.

§ Lord Mackay of Clashfern
My Lords, I am happy to draw my noble friend's remarks to the attention of my right honourable friend.

§ Lord Taylor of Gryfe
My Lords, I am not skilled in these matters parliamentary at all. Perhaps the noble and learned Lord could confirm that there were some 300 amendments passed to this Bill when it was before this House. Is this the final report from the other place on the total of the amendments passed?

§ Lord Mackay of Clashfern
My Lords, assuming that your Lordships agree with the Motion I am now moving, I think I can assure your Lordships that this is the final stage, except for Royal Assent.

§ On Question, Motion agreed to.