HL Deb 29 January 1987 vol 483 cc1518-38

House again in Committee.

Clause 31 [Power of customs officer to detain goods]:

Lord Gallacher moved Amendment No. 87: Page 27, line 44, leave out ("forty-eight hours") and insert ("seven days").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 88.

We have had considerable representations made to us on this side of the Committee about the wording of the Bill in Clause 31(1) and (3). The view which has been expressed to us is that the proposal that suspect goods can be stopped at the port of entry for 48 hours is an insufficient time for enforcement officers properly to assess whether the goods in question comply with the safety provisions. It is pointed out to us that the fact that the Bill now extends this provision to goods which are not specifically covered by safety regulations means that it is all the more important that enforcement officers are given at least a reasonable opportunity to ascertain whether goods are safe. This needs to be done by testing them in laboratories which are in private ownership and are not open at weekends.

It is also important that enforcement officers are not prevented from exercising their powers over dangerous imports that are arriving at weekends. It is of further importance that the period of 48 hours should be extended. The view is that at least 72 hours are necessary, being the minimum appropriate time in which enforcement officers can perform their duty.

The Treaty of Rome permits restrictions on the importation of goods where such restrictions are justified in the interests of safety. This it is felt is an important argument in support of the amendments we are proposing. The Association of County Councils supports the views I have expressed and has suggested that the period during which customs may hold goods for this purpose should be extended to seven days, which includes five working days.

The Association of Metropolitan Authorities is of a similar mind and has pointed out to us that on Third Reading in another place when the Consumer Safety (Amendment) Bill was being considered the Government tabled and carried an amendment to reduce the detention period from 72 hours to 48 hours. The Association of Metropolitan Authorities was opposed to that move and similarly is concerned to see that 48 hours has been placed in this Bill because it regards it as being an insufficient time for the discharge of its functions.

We are suggesting that the period of 48 hours should be extended to seven days and in Amendment No. 88 we are suggesting that the phrase "working day" be defined as meaning, any day other than Saturday, Sunday or a Public Holiday". It seems to us that what we are asking is reasonable and I should like to feel that the Government will make a constructive response to both amendments. I beg to move.

Lord Monson

As the noble Lord is speaking to Amendment No. 88 as well as to Amendment No. 87, let me point out what appears to be a technical defect in Amendment No. 88. The amendment reads: In this section 'working day' means any day"— and so on. In Clause 31, to which the amendment refers, the phrase "working day" appears nowhere, nor will it appear anywhere, even if Amendment No. 87 is agreed to. The word "day" will appear but not the phrase "working day". I do not believe you can have a subsection referring to a "working day" if that term does not appear earlier in the section.

Lord Lucas of Chilworth

I am grateful to the noble Lord, Lord Gallacher, for explaining the reason for putting down this amendment. In fact I believe it to be misconceived and I may take some little time to explain why. The Committee will remember that this issue was debated at some length during the passage of the Consumer Safety (Amendment) Bill last year. We initially thought that 24 hours was sufficient for this limited purpose. We were then persuaded by very strong arguments from the National Consumer Council and local authority associations that up to 48 hours may be necessary to deal with awkward cases.

The amendment would increase the length of time during which goods may be detained at ports without cause to suspect that they are unsafe and without compensation in the event that they are subsequently found to be safe from two to seven days. That is a considerable increase, and it seems to me to be an unreasonable and unnecessary one.

In considering what limits should be imposed on this potentially sweeping power, it is important to look at the purpose of the detention provision. That provision is quite limited and it is in addition to the very much wider powers of enforcement authorities to seize or suspend goods suspected of being unsafe for up to six months. The customs detention provision is not intended to be sufficient to enable enforcement authorities to subject goods to detailed scientific tests or to detailed examinations but merely to allow them to make preliminary inquiries about imports, to arrive on the scene and, if appropriate, to exercise their powers to seize or suspend the goods. To allow goods to be detained for a longer period would in our view put the Bill at risk of challenge from the European Community under Article 30 of the Treaty of Rome.

Precisely where the line can be drawn between what might and might not be acceptable to the European Court, given that any measures to impede trade on the grounds of health and safety, as permitted under Article 36 of the Treaty, must be strictly proportionate to the health and safety risk in question, is not easy to establish. Everything will depend on the facts of a particular case. It is therefore the views of the European Court and not those of the Commission which matter in this regard.

It is our view, based on experience of past Community intervention, and given the existence of the other powers available to enforcement officers under this Bill, that an extension of this provision to seven days could well be successfully challenged in our courts on the basis of non-compliance with Article 30 of the Treaty of Rome.

I repeat that the period of 48 hours is there so that an immediate halt can be made to goods moving into the marketplace in order to allow a preliminary view to be made. If that preliminary view suggests that further attention is necessary—the technical examination to which the noble Lord has referred—there are provisions to enable that to take place. We believe that the extension which the amendment seeks is neither practicable nor reasonable and, as I said, it could well be in contravention of our obligations under the Treaty.

Lord Gallacher

I thank the noble Lord for that reply. My first response is that there appears to be a reliance upon what the European Court might say about a longer period of detention under Article 36. On the other hand, one is conscious of the fact that the Commission of the European Communities, in its desire to protect consumers of the Community effectively, has set up machinery whereby unsafe goods are notified by member states through the Commission so that in effect the Community states are all protected by a prior system of notification. Whether that system of notification can be safely triggered on the basis of the kind of inspection to which the Minister has referred—that is, taking place within a period of 48 hours—is a moot point. I should like to consider that in relation to his further reference to Article 30.

The noble Lord did not give me any reason to suppose that if we had been more modest in our amendment—that is to say if we had proposed 72 hours rather than seven days—it might have found favour with him. That, too, will be reflected upon in the light of what we read in the Official Report. We may return to the question on Report, having fully considered what has been said this evening. If we do so return then, we shall take account of the criticism legitimately made by the noble Lord, Lord Monson, on the drafting and the use of the words "working day". I give my assurance that that will not be repeated; and I now beg leave to withdraw the amendment.

Amendment, by leave, withdrawn. [Amendment No. 88 not moved.]

Clause 31 agreed to.

Clauses 32 and 33 agreed to.

Clause 34 [Compensation for seizure and detention]:

Baroness Nicol had given notice of her intention to move Amendment No. 89: Page 29, line 25, at end insert ("and (c) it is shown that the officer did not have reasonable grounds for exercising the power.").

The noble Baroness said: This amendment was spoken to in our discussion on Part II of the Bill on the last Committee day. I simply want to say that our discussion then was rather shortened because it was late at night and we were hurrying through. We were not entirely pleased with the answers we received then and I wish to inform the Committee that we are likely to come back to this at the next stage of the Bill.

[Amendment No. 89 not moved.]

Clause 34 agreed to.

Clauses 35 to 37 agreed to.

Clause 38 [Restrictions on disclosure of information]:

On Question, Whether Clause 38 shall stand part of the Bill?

Baroness Nicol

I have a question to put to the Minister which has been suggested to us by the Chief Officer of the Trading Standards Department of Cambridgeshire. It refers to the fact that this clause seems to preclude the giving of public warnings in relation to unsafe goods. It is a very long and complicated clause. This aspect of it has just been drawn to our attention; otherwise we should have put forward a probing amendment earlier about this. I give notice to the Minister that we should like an answer to this question. He may not be able to answer it tonight and of course we shall quite understand that. However, the trading standards officer for Cambridgeshire says: It is my view that I should be able to offer warnings in a public safety issue, at the same time as pursuing inquiries into a criminal offence. Public safety advice is not a matter which is included in Clause 38(1)". We should welcome an answer from the noble Lord on that, if not tonight, at a later stage.

Lord Beaverbrook

This is a complicated clause. As to whether trading standards officers are prevented from notifying problems or warning the public about unsafe goods, the answer is basically no. However, I should like to consider the matter further and perhaps respond to the noble Baroness in writing.

Clause 38 agreed to.

Clause 39 [Defence of due diligence]:

[Amendment No. 90 not moved.]

Clause 39 agreed to.

Clauses 40 and 41 agreed to.

Clause 42 [Reports etc.]:

8.30 p.m.

On Question, Whether Clause 42 shall stand part of the Bill?

Lord Williams of Elvel

I raise again a point which was raised on a number of occasions in your Lordships' House on Second Reading and which was raised once or twice in Committee. Clause 42 lays the onus on the Secretary of State to lay a report before each House of Parliament, but in doing so he has obviously to call for reports from the various enforcement authorities and this lays yet another burden on the enforcement authorities.

There is a general point here which we made on Second Reading as to whether finance will be available to enforcement authorities to meet their obligations under the whole of this Bill, if it is passed. I raise this matter on Clause 42 stand part because throughout the whole Bill there are a number of obligations placed on the enforcement authorities but in the Financial Memorandum there is no provision at all for extra public expenditure. It seems to me that there is a case, to which we shall come back when time permits, for ensuring that those enforcement authorities on which obligations are laid should be properly funded by the central authority.

Lord Brougham and Vaux

May I come in here as the noble Lord has raised a subject which I raised in Committee at col. 916 of the Official Report for 20th January? I shall not waste the time of your Lordships' Committee by going through it again, but if the Minister will take note of what I said then in relation to what the noble Lord, Lord Williams, has said, perhaps we can return to the subject at the next stage.

Lord Lucas of Chilworth

I am quite happy to hear from the noble Lord, Lord Williams, and indeed from my noble friend Lord Brougham and Vaux, that they both have some concern in this matter. At this time there is little I can do other than draw to the attention of the Committee, and in particular the two noble Lords, what I said in relation to the point that the noble Lord, Lord Graham of Edmonton, and the noble Baroness, Lady Nicol, raised in an earlier discussion on resources available to the enforcement services.

Members of the Committee should take on board the fact that similar provisions to the provision which is embodied here about a report are contained in Section 8(2) of the Consumer Safety Act 1978. The Committee may recall that the Secretary of State submitted a report to Parliament in October 1986. We do not believe that any further provisions are needed because those that are already in that Act appear to be working well, and I do not believe that this obligation raises any greater burden than the obligation now upon the enforcement services in relation to the Consumer Safety Act. If the noble Lord, Lord Williams, or my noble friend Lord Brougham and Vaux wish to raise the matter at a later stage, we shall of course respond. But I thought it might be helpful if I gave a preliminary view of our feelings in this matter.

Lord Brougham and Vaux

My noble friend referred to the Consumer Safety Act 1978. On my reading of Schedule 5 to this Bill, that whole Act is being repealed.

Lord Williams of Elvel

I am grateful to the Minister for his reply and for the intervention of the noble Lord, Lord Brougham and Vaux. I am very surprised that the Minister should quote in evidence an Act passed by a previous government under a previous administration with a different attitude towards local authority finance. If it were the case that the present Government were going to adopt the attitude of the previous Labour Government to local authority finance, I should be quite happy that he quotes in evidence the Act that we passed. But the fact is that the present Government have shown a pretty stingy attitude towards local authority expenditure and I am surprised again that the noble Lord seeks to pin in some way the responsibility on us for what is after all government policy.

Clause 42 agreed to.

Clauses 43 and 44 agreed to.

Clause 45 [Interpretation.]:

Lord Airedale moved Amendment No. 91:

Page 35, line 8. at end insert— (""Community obligation" means a legal obligation arising from the United Kingdom's membership of the European Communities;

The noble Lord said: I think that "Community obligation" is a widely understood expression, but it probably needs definition according to the rules which govern these things. I beg to move.

Lord Lucas of Chilworth

Again I am grateful to the noble Lord, Lord Airedale, for the way in which he has put his amendment to the Committee this evening. It defines "Community obligation" in Clause 45. In this clause we have defined those words which need defining or interpreting for the purpose of the Bill. The phrase "Community obligation" is relevant to the defence in Clause 4(1)(a) that it shall be a defence for a producer of a defective product to show, that the defect is attributable to compliance with any requirement imposed by or under any enactment or with any Community obligation". There is no need in this Bill to define "Community obligation". The term is already defined for any Act of Parliament. It is defined by Schedule 1 to the European Communities Act 1972 and Schedule 1 to the Interpretation Act of 1978.

For the benefit of the Committee, perhaps I may quote this short definition. It reads: 'Community obligation' means any obligation created or arising by or under the Treaties whether an enforceable Community obligation or not". Therefore, I do not think there is any case for introducing a different definition for the purpose of this Bill. I hope that the noble Lord and other Members of the Committee will find that explanation satisfactory and that he will be persuaded not to press this amendment.

Lord Airedale

That sounds a very good answer and I am persuaded not to press the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 agreed to.

Clause 46 agreed to.

Clause 47 [Savings for certain privileges]

On Question, Whether Clause 47 shall stand part of the Bill?

Lord Williams of Elvel

This is perhaps a small point. We note in Clause 47 that there are savings for certain privileges, and privileges as defined are, barrister, advocate or solicitor of a record … or in Scotland a confidential communication made by or to him in that capacity". The problem is that there are other professions that have a confidential relationship with their client, and I am thinking particularly of the accountancy profession. I should be grateful, if the noble and learned Lord the Lord Advocate is to respond to this point, if he would consider whether or not some provision should be made for professions that are in possession of confidential—particularly commercially confidential—information. I refer particularly to Part III of the Bill which concerns commercial confidentiality. I should be grateful if he would let us know whether the Government have considered the possibility that other professions should be protected in the same way as the legal profession.

Lord Cameron of Lochbroom

I am grateful to the noble Lord opposite for having made clear the reason for his query. I think that it has always been recognised that in relation to legal proceedings there is a special privilege that attaches which does not attach in general to other communications between advisers. I believe that the best thing I can do this evening is to say that I shall take note of what the noble Lord has said. I am not persuaded that there is in fact any similarity in the matter of privilege between what is covered here and the privilege which may attach in commerical dealings between an accountant, for instance, and his client, when it comes to legal proceedings. I make that absolutely plain. However, I should like to consider the matter further since the noble Lord has raised it, and perhaps I may write to him.

Lord Williams of Elvel

I am grateful to the noble and learned Lord. I hope he accepts that I am speaking because of representations that have been made to me by certain accountants that, particularly under Part III on misleading price indications, auditors may get involved, may have confidential communications, if you like, and may be in a position in which lawyers would normally find themselves as a matter of practice.

Clause 47 agreed to.

Clause 48 [Minor and consequential amendments and repeals]:

8.45 p.m.

Earl De La Warr moved Amendment No. 92: Page 37, line 44, leave out ("Acts") and insert ("Act").

The noble Lord said: In moving Amendment No. 92 I hope I have the leave of the Committee to speak also to Amendments Nos. 93 and 108. Amendment No. 93 is the substantive amendment. These amendments are to be taken as probing amendments, at least this time round.

The Trade Descriptions Act 1972 requires that imported goods bearing a United Kingdom mark, name or anything likely to be taken as such should be marked with the country of origin. Clause 48(2)(a) repeals that Act. My amendment seeks to reverse that.

It is my profound belief that the present practice is regarded by many people when they are shopping as an important aid to the often difficult question of choice. Happily there are still many people who would rather buy British if they possibly can, and I insist that, coming as it does in a brand new consumer protection Bill, the repeal of the 1972 Act will be regarded as a retrograde step. In my opinion, that is the correct view.

We know that the decision by the Government to repeal this Act has been taken reluctantly following an adverse decision as regards the 1981 marking order in the European Court. What we do not know and what we would very much like to know is whether the Government are going to find a means of repairing the damage and, if so, how; for damage it is, not only to consumers but also to not a few British manufacturing companies. I instance in particular, although there are many others, the case of the Sheffield cutlers.

I must reiterate that I base my questions, as is proper in a consumer protection Bill, primarily on the need to protect consumers or shoppers. I shall therefore boldly venture one suggestion to my noble friend. It may be unavoidable that we should stop insisting on country of origin marking of goods manufactured or assembled in Community countries. But surely the requirement to mark can still apply in law to goods made in other countries, such as Taiwan.

I hope that by now my noble friend will have perceived that I am going short on criticism and long on a request for answers. I hope that the answers he will be able to give will be of help to the Committee. I beg to move.

Baroness Nicol

We have the greatest sympathy with the amendment moved by the noble Earl, not only because we feel that it is right that people should be able to buy British when they wish to do so, and not only because buying British usually means that one gets better quality. People also often wish to avoid buying from other countries for a variety of reasons. For example, there are many who would not wish to buy toys from Taiwan, where the safety record is not good. There are many who would not wish to buy goods from South Africa for reasons of which the Committee will be aware. There are many countries which, for a variety of reasons, fall on to the black list of many people who do not wish to support them. However, above all many people wish to buy British where they can. I think that opinion is widely held in this House.

I hope that there will be a sympathetic answer, although I do know there is a difficulty with Common Market legislation. However, I feel that we must find a way round that because we are now in a situation where, even if we accept the suggestion of the noble Lord that countries within the Common Market should be excluded from the need for labelling, there is nothing to stop someone, say, in West Germany from importing goods from an outside country, relabelling them and then selling those goods in this country. It would be impossible in those circumstances for the goods to be identified. I hope that the noble Lord the Minister will find a clever answer.

Baroness Elliot of Harwood

I should like to support what my noble friend Lord De La Warr has said. Years ago when I was chairman of the Consumer Council, this was one of the things which continually cropped up. People wanted to know the origin of goods which they were buying. In those days things were nearly always marked with the country of origin. That is information which everybody wants and it does seem to me unfortunate that we have to give that up now.

The noble Baroness mentioned the European situation, and I realise the difficulty. On the other hand, there is the possibility of making arrangements which may not in any way offend the EC but which will make it perfectly clear that what the British public is buying is labelled as to country of origin. It is something which everyone wants to know, and apart from the patriotic angle of buying British (which I am sure most of us should like to do) I think it is important that we know where goods come from and do not find ourselves buying goods from countries of which we strongly disapprove. That could well happen.

I do hope that the Minister will consider this and see whether or not some arrangement can be made to safeguard consumers against buying goods from a country whose products they do not wish to buy.

Lord Lucas of Chilworth

I can readily understand the concern which has prompted these amendments, but I ask the Committee to accept that the repeal of the Trade Descriptions Act 1972 is necessary in order for the United Kingdom to comply with its Community obligations. I should also like to reassure the Committee that the Government are leaving no stone unturned in their efforts to identify further measures which might be introduced to mitigate the effect of that repeal.

The European Commission has formally challenged the legality of the Act under the Treaty of Rome and, were it not to be repealed, the matter would come before the European Court of Justice. We have most carefully studied an earlier judgment on similar legislation and this has led us reluctantly to conclude that we could not hope successfully to defend the Act in the Court of Justice and that no useful purpose would be served by attempting to do so. We are therefore currently consulting interested parties on the scope for successor arrangements, consistent with Community law, which might be introduced by order under the Trade Descriptions Act 1968 to coincide with the repeal of the 1972 Act.

Perhaps I may assure my noble friend Lord De La Warr that we are well aware of the cutlery industry's concerns, as we are of other industries' concerns, and we shall certainly be consulting them closely about the successor arrangements. Having said that, I should advise the Committee that our consultations with interested parties on the scope for the successor arrangements are already in hand in some areas.

I should also explain to the Committee that even if it is not possible to replace the 1972 Act with further measures—and I hope that it will be possible—there will be nothing to prevent manufacturers from marking their goods as "Made in Britain"—and indeed I hope they will do—which I am confident that most British manufacturers will wish to do. There is nothing wrong in that. There is nothing to prevent them from doing it. It will remain an offence under the Trade Descriptions Act 1968 to describe goods as made in this country if in fact they are made abroad.

In proposing the amendment to the Committee my noble friend suggested that one solution to meet the constraints of Community law would be to exempt goods made in the Community from the requirement for origin marking but to continue to require this for goods from outside the Community. The Government conducted consultations on the merits of such a solution in the case of the 1981 origin marking order which was revoked last year after an adverse judgment in the European Court. It was clear from the views expressed that to exempt Community goods would create a highly confusing situation for traders, consumers and enforcement officers.

The treaty requires that any such exemption would have to apply also to goods from outside the Community which enter the United Kingdom via another member state—exactly the point made by the noble Baroness. This would create the absurd situation whereby a shirt made in Taiwan—I shall stay with something rather anodyne if I may—would have to be origin marked if it arrived direct from Taiwan but not if it reached this country via a wholesaler in Antwerp.

The Committee will be interested to know that last year the French Government completely revoked some of their origin marking legislation dealing with textiles, after earlier simply exempting Community goods. I say in the friendliest of terms to our French partners that they are not perhaps generally reckoned to be backward in these matters. They concluded that the solution did not work and I have no doubt that the same would be the case in this country.

One can foresee the situation—and I stress this point to my noble friend Lady Elliot—that if we made it obligatory for goods to be marked "Made in Britain" or "Produced in Britain"—and I pick by chance, because I was talking about France, the French position—it might work adversely in the area of the fruit industry. Perhaps the French prefer French Delicious to British delicious apples. We run into a number of difficulties in making some of this marking obligatory. I hope that the United Kingdom manufacturer will be sufficiently proud of his product to so advertise the fact if it is in his interests, especially in export markets.

I have no clever answer. We continue to study the matter; we hope to find a solution and we shall work towards that. I conclude by saying that we are not blind to the point of view put forward by my noble friend, nor indeed to the points put forward by other noble Lords.

I hope that my noble friend will not condemn the United Kingdom to certain defeat in the European Court of Justice by persisting with his amendment. I am sufficiently optimistic from his earlier remarks that it is a probing amendment that he will not do so.

Lord Williams of Elvel

Yet again the Minister says that consultations are in progress and that in the course of time something will come out of them. May we please have an indication from the noble Lord—because this matter was raised at Second Reading and he gave, if I may say so, more or less the same reply then as he has given this evening—as to when his consultations will come to a conclusion and when he can bring before the House some indication to his noble friend that his problems have been met?

Lord Lucas of Chilworth

I do not know whether the noble Lord is trying to tease me this evening. He knows, because he has experience of these matters, that I cannot put a date on it. The consultations may take a long time, and I mean a long time; and I hope he is not going to ask me what I mean by "long". We usually have this in terms of "short".

It is not easy to find a solution. We have to ensure that, by virtue of an amendment of this nature or by virtue of our taking appropriate steps such as the Bill does in the repeal of that Act, we do not find ourselves in default over our obligations in the Community. We seek to find an alternative to that which we have generally regarded, if I may use the term, as protective. I hope we can. We have been consulting. We seek a number of avenues and we have then to study what our proposals might be in relation to our obligations. Again we have to consult in Europe. We would want to carry our EC partners with us, and that is one of the reasons why I described the position in France.

I have to say to the noble Lord that I am sorry, but I cannot give him an indication. I said at the outset that we regard this matter as important and urgent. With all the obligations that my officials in the department have, not least with regard to the Community, I have to say that we cannot pick and choose as to which receives highest priority. We try to treat all with a high priority.

9 p.m.

Earl De La Warr

I am extremely grateful to my noble friend for the trouble that he has taken to answer me as fully as he can. I am possibly a little more optimistic than the noble Lord, Lord Williams of Elvel, so I can now tell him that I shall be coming back at Report stage to find out how the Government are getting on. Believe me, I do not underestimate the difficulties.

My noble friend mentioned the Act of 1968. He has not mentioned something else which I understand was mentioned in correspondence from his department; namely some food regulations, expanded suitably. He made a point about the manufacturers in Britain wanting to have "Made in Britain". With the greatest respect, I think that is something of an irrelevance. However, he has told us that the Government are addressing themselves to that and will be inquiring again in three weeks time. In view of what he has not been able to tell us, perhaps I may leave him with a few thoughts.

One matter was touched upon almost completely by the noble Baroness, Lady Nicol. It is well known that in certain European countries—perhaps it is better not to mention names—companies are importing goods from Taiwan and other places in the Far East and re-exporting them, but they are marking them—perhaps I dare say it—"Made in Holland" or "Made in Germany", as the case may be. I do not want to impute anything too much in the way of bad faith, but I now see why some of our partners do not like this 1972 Act because they are constantly in breach of it. That was the point that the noble Baroness reached, but I do not think she mentioned the final sting. That may be something which my noble friend could consider during the next three weeks.

He may also like to think about Article 36 of the Treaty of Rome because it relates to it. That article is concerned with the protection of industrial property rights; therefore, by definition, it seeks the protection of those rights against unfair trading practices. I use the words "unfair trading practices" deliberately in view of the practices to which I have just referred.

I repeat my thanks to my noble friend for all that he has said so far. At Report stage I hope to hear the next thrilling instalment in this saga. With the leave of the Committee, I shall now withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendment No. 93 not moved.]

Lord Lucas of Chilworth

Before we leave Clause 48 I should like to respond positively to my noble friend Lord Brougham and Vaux. I am sorry that he is not in his place because he specifically asked about the repeal of the Consumer Safety Act 1978. We moved on rather quickly and I should have told him that, although the 1978 Act will be repealed, its provisions will continue in the Bill. In this regard the Bill is a consolidation measure. I think he should know that before he proceeds in the way that he indicated.

Lord Williams of Elvel

On the noble Lord's point, do I understand that the whole of the 1978 Act will be consolidated in this new Bill or only parts of it?

Lord Lucas of Chilworth

My understanding is that only parts will be consolidated.

Clause 48 agreed to.

Clause 49 agreed to.

Clause 50 [Short title, commencement and transitional provision]:

[Amendment No. 94 not moved.]

Clause 50 agreed to.

Schedule 1 [Limitation of Actions under Part I]:

Lord Morton of Shuna moved Amendment No. 95: Page 40, line 21, after ("knowledge") insert ("or should reasonably have had knowledge").

The noble Lord said: Now we come back to Part 1 in the directive which for some reason best known to those on the other side of the Committee was not dealt with with Part I. This concerns the provisions regarding limitation of actions, and it is unfortunate that the Committee is as crowded as it usually is when discussing something as abstruse as this, because in fact it causes much more difficulty than may be realised by those who are not lawyers.

My Amendment No. 95 is a fairly straightforward attempt to add, with such respect as I should properly have for the law of England and Wales, to the provisions in the schedule the words in the directive, or should reasonably have had knowledge".

The directive by Article 10 says: The limitation period shall begin from the day on which the plaintiff became aware or should reasonably have become aware". It is to bring in that "reasonably have had knowlege" that this amendment is proposed. Otherwise it does not appear to me that the provision as drafted, in spite of Clause 5(7), meets the requirements of Article 10 of the directive. I beg to move.

Lord Cameron of Lochbroom

The schedule is of course being considered at its proper time, as was explained at the outset of the Committee's discussions. Let me say that, while I appreciate the reasons why the noble Lord raises this matter, it is as well to see where the provision falls which his amendment seeks to amend. It is of course in Section 14 of the 1980 Act. As the noble Lord will be aware from his study of that Act, Section 14(3) reads as follows: For the purposes of this section a person's knowledge includes knowledge which he might reasonably have been expected to acquire". It then proceeds from there. That will remain unchanged. The effect of the present proposals in the schedule is to add something which will refer to knowledge and which will by reference take in the words: might reasonably have been expected to acquire". The view is, as I think the noble Lord will understand, that that is equivalent to what the directive is seeking to achieve. For that reason we take the view that the schedule as drafted is adequate.

Lord Morton of Shuna

I am obliged to the noble and learned Lord. It is always interesting for two Scots to be discussing possible amendments to English law.

I have the curious notion that it is easier to say what is required in one sentence. To say, had knowledge or should reasonably have had knowledge", conveys the idea rather more quickly than to wander from one section to another. As usual at this time of night, I have to say to the noble and learned Lord that I shall study what he said and I may well come back at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morton of Shuna moved Amendment No. 96: Page 41, line 1, leave out paragraph 6.

The noble Lord said: In one sense this is a probing amendment. One wonders at times—especially perhaps when one is told at this end of the kingdom how well the economy is doing but in Scotland one has rather a different picture—why the Department of Trade and Industry adopts a different attitude to England than to Scotland. What the department has done in this Bill is to give in the English part of the limitation provisions the discretion which exists in the Limitation Act to extend, for adequate reasons, the three-year limit.

When the Government were drafting the provisions in relation to Scotland they cut that out. Therefore, no discretion is given in Scotland to extend the three-year limit, although there is to be a discretion in England. If the Government can convince the Committee that there is reason to believe that they can get away with the discretion not being in contravention of Article 10 of the directive, I should be in favour of it. However, I would then ask why should it apply only to England and not to Scotland. In that sense it is a probing amendment. If the noble and learned Lord can convince me that it is proper to have this discretion, no doubt he will have to say that he will come forward with an amendment which will give that discretion to Scotland, too. I beg to move.

9.15 p.m.

Lord Cameron of Lochbroom

The noble Lord started with an irrelevancy and proceeded to deal with a matter that is not, of course, strictly before the Committee tonight with regard to the discretion in Scotland. However, I take the serious point that he made. He asked me why this discretion is given in England. Article 10 of the directive, which deals with the matter of limitation, provides that, The laws of Member States regulating suspension or interruption of the limitation period shall not be affected by this Directive". This permits, in respect of the law in England, the discretion which is already provided, as the noble Lord recognises, in the limitation Act to continue to affect actions arising out of Part I of the Act.

I have to say that the text "suspension or interruption" has been used in similar contexts in other international instruments. It is apparent that it has been interpreted in a commonsense way to cover all the cases in which the limitation period in exceptional cases might be suspended and so extended under domestic law. I give one example which is that found in the Maritime Conventions Act 1911, in particular in Section 8.

For that reason, the view has been taken that Article 10 does not prevent the existing law—so far as concerns suspension or interruption of the limitation period, which, of course, applies to actions for personal injury—from applying to actions for such injury arising under Part I of the Bill. However, the noble Lord opposite pointed out what at first sight would appear to be a distinction that is drawn in Part II of this schedule. We shall be dealing with that shortly. I can say to the noble Lord opposite that I am very sensible of that matter and indeed there is a somewhat similar discretion already operative in Scotland in relation to personal injuries actions.

While not wishing to anticipate what I may say if the noble Lord opposite moves amendments directed to that part, there are aspects of it that we would wish to consider in the light of those amendments together with the more general matter which arises in relation to the point he has made on this amendment. I hope that, in view of the explanation that I have tendered, the noble Lord will feel that there is ground for using the present discretion, which is granted to courts in England and Wales (and, I suspect, probably Northern Ireland, though I only suspect it) to extend the operation. I accept, of course, that Northern Ireland would have to be brought in by way of order. That discretion would be covered by the article in the directive. Perhaps with that explanation, the noble Lord opposite may feel able to withdraw his amendment.

Lord Morton of Shuna

Certainly on that undertaking and awaiting eagerly an explanation as to why in the second part of the schedule there is no reference to Section 19A of the Prescription and Limitation (Scotland) Act—which no doubt we shall have in a few minutes—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morton of Shuna moved Amendment No. 97:

Page 41, line 23, leave out paragraph 8 and insert— ("8. In section 7(2) after the words "not being" there shall be inserted the words "a liability to which section 22A of this Act applies or" ").

The noble Lord said: It may be for the convenience of the Committee if I deal with Amendment Nos. 97, 98 and perhaps 99 in the one group.

The amendment has sought to take up what is dealt with in Part I of the Bill, and in the directive. That is, "a liability". The schedule is framed in a way which speaks of an obligation in a kind of lay sense. It could perhaps be argued that an obligation is the mirror image of a liability, but that is not strictly the same. If one wanted to be strictly accurate in dealing with the directive in Part I, one should deal with a liability because a liability can be different from an obligation, and it is a liability with which the directive (and therefore Part I of this Bill) deals and not an obligation. Therefore the prescription and limitation provisions should deal with liabilities rather than obligations. It is for that purpose that I have endeavoured to draft these amendments. I beg to move.

Lord Cameron of Lochbroom

I think the noble Lord recognises from what he said that there is no real distinction to be drawn between the "liability" and "obligation".

I should point out to the Committee that this part of Schedule 1 deals with amendment of the Prescription and Limitation (Scotland) Act 1973. That Act—Part I in particular—deals with prescription and limitation in respect of prescription of rights and obligations. It does not provide for the prescription of liabilities.

It is fair to point out to the noble Lord the list of obligations set out in paragraph 1(d) of Schedule I of the 1973 Act, which refers to: any obligation arising from liability (whether arising from any enactment or from any rule of law) to make reparation". For that reason it seems to the Government that this matter is properly described as an obligation arising by virtue of the liability that attaches in Part I of the Act where damage is caused wholly or partly by a defect in the product. I cannot therefore accept the amendment. The noble Lord may like to consider what I have said, and withdraw the amendment.

Lord Morton of Shuna

I will of course (without any promise that I will not come back) withdraw Amendment No. 97.

Amendment, by leave, withdrawn.

[Amendment No. 98 not moved.]

Lord Morton of Shuna moved Amendment No. 99:

Page 41, leave out from beginning of line 40 to end of line 3 on page 42 and insert— ("(2) Section 9 of this Act shall apply in relation to the meaning of "relevant claim" as if the person liable under section 2 of the 1987 Act were the debtor and the person entitled to reparation were the creditor.").

The noble Lord said: I wish to take the opportunity of raising a point that I should have raised earlier on the question of a relevant claim. A relevant claim is defined in Section 9 of the 1973 Act as including certain steps in the bankruptcy provisions. I am asking whether the Government are satisfied that this is a relevant claim in the meaning of the directive. Article 11 states, unless the injured person has in the meantime instituted proceedings".

If one lodges a claim in a bankruptcy, in no sense that I understand does one institute proceedings. I take the opportunity of the amendment to inquire whether the Government are satisfied that they have covered the question of a person putting in a claim in a bankruptcy. I beg to move.

Lord Cameron of Lochbroom

I am grateful to the noble Lord and I apologise to him because I had meant to cover that point, as he spoke to this amendment with the previous one. The view is that reference in the directive to "instituting proceedings" would allow a provision to be made for the interruption of prescription by the making of a claim in "appropriate proceedings" and even in bankruptcy. However, it is doubtful whether the execution of dilgence, which is also referred to in Section 9(1) of the 1973 Act, could be described as "instituting proceedings", and it has not been included in the definition of "relevant claim" for the purpose of the Bill.

However, consideration of that matter as a result of the noble Lord's amendment has drawn attention to the possible need to incorporate something similar to Section 9(3) of the 1973 Act, which defines when a claim may be said to be made in arbitration proceedings. If that is found to be necessary, an appropriate amendment will be brought forward on Report. I am grateful to the noble Lord for having brought this matter forward.

Lord Morton of Shuna

I thank the noble and learned Lord for his answers. In those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 100 not moved.]

Lord Morton of Shuna moved Amendment No. 101: Page 42, line 14, leave out from second ("the") to end of line 21 and insert ("pursuer in the action became or on which in the opinion of the Court it would have been reasonably practicable for him in all the circumstances to become aware of all the following facts:

  1. (i)that the damage or injuries were sufficiently serious to justify his bringing an action of damages on the assumption that the person against whom the action was brought did not dispute liability and was able to satisfy a decree;
  2. (ii)that there was a defect in the product;
  3. (iii)that the damage or injuries were attributable in whole or in part to that defect;
  4. (iv)that the defender was a person liable under section 2 of the 1987 Act.").

The Deputy Chairman of Committees (Lord Airedale)

If the Committee were to agree to Amendment No. 101, I could not call Amendment No. 102.

Lord Morton of Shuna

I heard what was said about Amendment No. 102. I shall have to think about that. In speaking to Amendment No. 101, I shall speak to the almost identical amendment, Amendment No. 104. The purpose of Amendments Nos. 101 and 104 is to try to tie back the requirements of knowledge contained in the Prescription and Limitation (Scotland) Act 1973 with the requirements of the directive in what I hope, with all due diffidence, is perhaps happier language than occurs in the Bill as presently drafted.

It would be unfortunate, in what has always been for lawyers most difficult and case-producing legislation, to start using different words and phrases when, after 14 years, we are beginning to understand what is meant by the words in the 1973 Act. If one introduces new words, one introduces a new 10-year period of litigation for the courts to tell us what they mean and why different words are used in different sections of the same Bill.

I shall mention Amendment No. 102. The purpose of that amendment was merely to comply with the directive because the directive says that the three necessary items that one must be aware of in Article 10 are the damage, the defect and the identity of the producer. It is therefore necessary to say somewhere that the potential pursuer must he aware that there is a defect in the product. I beg to move.

Lord Cameron of Lochbroom

It is always difficult, particularly in the light of the Deputy Chairman's ruling, to decide whether to dangle the carrot now or later. Were the noble Lord in due course to move Amendments Nos. 102 and 105, I would have little difficulty in accepting them. On Amendment No. 101, I recognise that he has raised two important points. The first concerns the test of a claimant's constructive knowledge. The amendments follow a test set out in the 1973 Act, as amended. To explain the Government's thinking, I have to say that what is set out there is in somewhat different terms from Article 10 of the directive, which refers merely to the date on which the plaintiff should reasonably have become aware, and so on. As drafted, the schedule was considered to be safer in giving effect to the directive, in that it followed the wording of Article 10 rather than attempting to gloss its meaning by adopting the test which was in the 1973 Act.

The second point, a similar one, arises with regard to the description of the damages of which the pursuer has to be aware or reasonably aware. Again the amendment of the noble Lord follows an approach in the existing legislation, whereas Article 10 of the directive simply refers to knowledge of the damage without reference to the significance of it. Again in these circumstances it was considered that it would be safer in giving effect to the directive to follow closely the wording of Article 10 rather than glossing its meaning by importing a qualitative test of the damage.

Nevertheless, I am persuaded by what the noble Lord said that we should give further consideration on this matter. As a result, if it is thought that it would be both possible and preferable to bring forward amendments, appropriate amendments would be brought forward at a later stage.

I should perhaps say to the noble Lord that his second amendment, Amendment No. 104, is defective. At present a claimant in a fatal accident, whether an executor or a dependent relative, has three years from the date of death or from the date of his actual or imputed knowledge, whichever is the later, in which to commence proceedings. This amendment would have the effect of preventing the three-year period running from the date of death of the injured person. I suspect that that was not the intention of the amendment but unfortunately, as printed, that is the consequence of it.

Having explained what I would wish to do if the Committee were so minded. I invite the noble Lord to withdraw his amendments at this stage to allow further consideration.

9.30 p.m.

Lord Morton of Shuna

I am much obliged to the noble and learned Lord. Perhaps in relation to Amendment No. 104 it would have been preferable if those advising him had looked at the corrected amendment. The original amendment had a misprint—no doubt due to my very bad writing—which referred to line 34. On the Marshalled List it is line 36. The date of death of the injured person remains. It is the later of the two dates. I believe that the noble and learned Lord has been wrongly instructed. I spotted that error earlier.

Lord Cameron of Lochbroom

I merely say mea maxima culpa.

Lord Morton of Shuna

Having scored that very small point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees

My earlier reference to Amendment No. 102 was to point out that it is an amendment to line 18 and had Amendment No. 101 been agreed to there would not have been a line 18 to be amended. Amendment No. 102 remains available to be debated.

Lord Morton of Shuna moved Amendment No. 102:

Page 42, line 18, at end insert— ("(aa) that there was a defect in a product;")

The noble Lord said: The noble Lord the Deputy Chairman is perfectly right. Amendment No. 101 contains the words in sub-paragraph (ii). They are now being sought to be put in under paragraph (aa) in the amendment. In view of the unusual but pleasurable response that I received from the noble and learned Lord, all I have to do is move this amendment. I am also speaking to Amendment No. 105.

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 103:

Page 42, line 25, at end insert— (5) For the purpose of this section, knowledge that any liability which was enforceable under section 2 of the 1987 Act was or was not as a matter of law actionable is irrelevant.")

The noble Lord said: In speaking to this amendment, I shall speak to Amendment No. 106 as well. By Section 22(3) of the Prescription and Limitation (Scotland) Act, this clause, or something along the same sense, is put into Sections 17 and 18 of that Act. It is a necessary clause on the basis of the legal theory that ignorance of the law is no excuse. It would appear to have been omitted inadvertently from the new provisions 22B and 22C. It is in an endeavour to put that right that these amendments are put forward. I beg to move.

Lord Cameron of Lochbroom

I can assure the noble Lord opposite that the fact that this was not put in was not through inadvertence. At the time it was felt that is was unnecessary by reason that if liability would be enforceable under Section 2 of the 1987 Act as his amendment has it, then it must, almost by definition, be actionable and therefore it would be unnecessary to include that. Having said that, there is a problem which can arise; for instance, the question of whether or not the defect was of such a nature as to give rise to liability under Part I. I am bound to say that it would be proper that we should give further consideration to that question. It may be that at the end of the day something very akin to what is already in the 1973 Act as amended, may be brought forward. If such provision is required, I shall certainly come back to your Lordships on Report for that purpose. On that understanding, perhaps the noble Lord may feel able to withdraw this amendment.

Lord Morton of Shuna

I certainly intend to withdraw the amendment. However, before doing so, perhaps I can bring to the attention of the noble and learned Lord the difficulty that arises if there is the same provision in Sections 17 and 18 of the 1973 Act, but it is left out from Sections 22B and 22C. Are you not opening the way for somebody to say: "I have never even heard of the 1987 Act, therefore I did not know I had a right"? Then you might be in trouble. But, in the certain knowledge that the noble and learned Lord will consider that point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 104 not moved.]

Lord Morton of Shuna moved Amendment No. 105:

Page 42, line 37, at end insert— ("( ) that there was a defect in the product;").

On Question, amendment agreed to.

[Amendment No. 106 not moved.]

Lord Morton of Shuna moved Amendment No. 107: Page 43, line 9, leave out paragraph 11.

The noble Lord said: This amendment is really in the nature of a probing amendment. Why in Schedule 1, which is an attempt to bring the limitation provisions into line to comply with the directive, is it necessary to take out a section of the 1973 Act which says: The enactments specified in Part 2 of Schedule 4 to this Act shall have effect subject to the amendments specified in that Schedule being amendments consequential upon the provisions of this Part of this Act"? No doubt somebody has some reason for taking it out, but I fail to understand why it has to go. I confess I do not follow at all. Therefore, my amendment is to leave out this rather extraordinary provision. I beg to move.

Lord Cameron of Lochbroom

Perhaps I may say that my sympathies were with the noble Lord when I first saw this particular part of Schedule 1, but I am advised that it is necessary because it is a drafting device to ensure that the new Part II of the Prescription and Limitation (Scotland) Act 1973—whose provisions to which we have already referred in our discussion earlier—is inserted immediately before Part III of that Act, which seems to be a suitable place for it to be.

Paragraph 11 provides for the repeal of Section 23 of that Act, which is the last section in Part II, so as to make space for the new Part IIA, and the effect of Section 23 is retained. This unusual provision is drafted in this way because of the difficulty left by the manner in which the 1973 Act was amended by the Prescription and Limitation (Scotland) Act 1984. The 1984 Act inserted a new Section 23A at the beginning of Part III. However it was intended in this Bill to insert a new Part IIA after the end of Part II and before Part III; that is to say, between Section 23 and Section 23A. In these circumstances it would be difficult to provide appropriately for the numbering of the sections in the new Part IIA.

I trust that the noble Lord opposite is with me so far. In these circumstances it was considered by the parliamentary draftsman that the most appropriate way of giving effect to what was intended was to provide for the repeal of Section 23, because that was a purely formal provision which provided for the amendments and repeal of certain amendments. In so far as Section 23 repealed certain enactments it is spent. In so far as it affected consequential amendments it may be argued that it is also spent. However, there is no clear authority on the latter point, and it is the practice of the draftsman to assume that such a provision is not spent, and hence the saving of these amendments, "for the avoidance of doubt".

I trust that, with that somewhat lengthy and convoluted, but I hope on the whole reasonably acceptable, explanation the Committee are clear as to the need for paragraph 11 and are satisfied that the amendment, which would remove it, should not be accepted. I have to say that, like the noble Lord, I asked when this matter was first brought to my notice why we should do it this way. However, I am satisfied that, because of the peculiarity of the way in which the 1973 Act has been amended, and the juxtaposition of the various parts and sections of that Act as amended, it is unfortunately necessary to go about the process of amendment in the way that I have already outlined. I should also say that I have to commend the draftsmen upon their ingenuity in securing the end that was asked of them.

Lord Morton of Shuna

I also commend the ingenuity of the draftsmen. The last time they were faced with this situation, if my memory is right, was in some consequential amendment to the Financial Services Bill, as it then was. We had a section, so to speak, 23 zero. Why the draftsman has to work out a second way round the roundabout I do not quite understand. Whether one calls it 23 alpha or 23 zero, or whatever, there surely must be a clearer way of doing it.

I have heard the explanation. I am sure that there must be a simpler way sometimes of drafting some of our legislation. However, it was an interesting explanation, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Schedule 1, as amended, shall stand part of the Bill?

Lord Morton of Shuna

There is another small point testing the ingenuity of draftsmen. How do we have in paragraph 12 of Schedule 1 the insertion of a new sub-paragraph in paragraph 2 of Schedule 1 of the 1973 Act labelled "(gg)", when the draftsman was well aware that the noble and learned Lord opposite put in by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 Section 12(5), a paragraph (gg)? Should it not be (ggg) or something else?

Lord Cameron of Lochbroom

The noble Lord is, unfortunately, I have to say, correct. We must move from one horse to a second and, that being so, I shall take note of what the noble Lord has been kind enough to say and that will form the basis of an amendment at a later stage.

Schedule 1, as amended, agreed to.

Schedules 2 to 4 agreed to.

Schedule 5 [Repeals]:

[Amendment No. 108 not moved.]

Schedule 5 agreed to.

House resumed: Bill reported with amendments.

House adjourned at thirteen minutes before ten o'clock.