§ 7.45 p.m.
§ Lord Dormand of Easington
My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
§ Moved, That the House do now resolve itself into Committee.—(Lord Dormand of Easington.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The DEPUTY CHAIRMAN OF COMMITTEES (Lord Grantchester) in the Chair.]
§ Clause 1 [Implied term about quality]:
§ Lord Beaumont of Whitley moved the amendment:
§ Clause 1
Page 2, line 9, at end insert
(2D) (a) For the purposes of paragraph (e) in subsection (2B) there is an implied term that the seller shall provide spare parts and after sales services at reasonable cost in such circumstances as are stated in an offer, description or advertisement by the seller on behalf of the manufacturer or on his own behalf and for such period stated to be the goods' normal life span or, in the absence of such a statement, for a reasonable period of time.
§ (b) With regard to goods having a normal expected life span in excess of 12 months, the Secretary of State after such consultation with such interested parties as he thinks proper—
- (i) shall, by order, require the seller on his own behalf or on behalf of the manufacturer, in relation to any stated class of goods, to supply to prospective buyers information stating the normal expected life span of the goods under reasonable conditions of use; and
- (ii) may make such regulations as appear to him to be necessary or desirable for any purposes connected with the preceding section.").
§ The noble Lord said: The Bill is welcome but it could be strengthened and clarified. The amendment highlights a particular aspect which has not received much attention; namely, the significance of the inclusion of the term "durability" as a factor determining whether certain goods are of a satisfactory quality. I am a long-standing martyr to the inability of our parliamentary procedure to cater for amending non-government Bills. I should make it quite clear at the start that I shall not be pressing the amendment. However, I wish to probe the reactions of the Government.
In Clause 1, the Bill proposes an amendment to Section 14 of the Sale of Goods Act 1979 so that there is an express reference to "durability", which would be one of the aspects of the quality of goods determining whether they are of satisfactory quality when sold. That is very welcome. A major review of relevant case law concluded that there is a lack of clarity in current legislation and suggested that an obligation that goods should be durable could represent,
an important advance for consumers".
A report of the Law Commission in 1987 argued that such a change would make it easier for consumers to establish breach of contract. The National Consumer Council also voiced support.
§ It has been said that no actual change in the practical application of the law is intended by the inclusion of such words and that the intention of the reform is mere clarification. However, the Department of Trade and Industry made the point that the greater visibility provided by reference to durability should give customers more leverage and may make the courts more sympathetic to claims by buyers.
§ The inclusion of the term "durability" is especially important because of widespread public concern at the environmental impact of our throw-away culture. Each year over 6 million kitchen appliances, 3 million vacuum cleaners, 2 million cars and a vast tonnage of furniture and floor coverings are discarded. A report by the New Economics Foundation (which has the only major research programme in the UK on the topic) points out that there is a considerable environmental impact both from the waste and from the production of replacement items.
§ Discussion of durability in the context of environmental sustainability is particularly timely because the Government are shortly to publish their national waste strategy. In their strategy report on sustainable development published earlier this year they recognised that effective waste minimisation was not just a question of reducing unwanted outputs from the manufacturing process but that it also involved producing longer lasting products. Premature obsolescence represents financial waste as much as environmental waste. It affects consumer satisfaction and thus social welfare.
§ Many people believe that consumer durables such as household appliances, furniture and housewares do not last as long as they should, or indeed as long as they used to in the past. Whether or not that is true, there is certainly room for improvement. Whether the Bill has much impact on the lifespan of goods will depend critically upon how key terms such as "durability" and "a reasonable person" are interpreted. For example, should a mid-range washing machine, with average use, last for seven years or for 17 years? Do reasonable people keep their possessions for as long as possible or are they inclined to discard them as fashions change? As the Bill stands, the crucial responsibility of defining terms will be left to the courts. Should not Parliament give the courts some guidance? I hope that the Minister will enlighten us as to how the Government would wish key terms such as "durability" and "reasonable" to be understood rather than leaving interpretation solely to the courts.
Durability is to be one of the aspects of quality determining whether goods are of satisfactory quality. It is thus a key term. According to the New Economics Foundation, durability may be defined as,
the ability of a product to perform its required function over a lengthy period under normal conditions of use without excessive expenditure on maintenance and repair".
I do not imagine anyone would much quarrel with that. Products differ, of course, and my amendment takes account of that. It does not apply to products which would not normally be expected to last under a year. It covers goods traditionally described as consumer durables and excludes other items such as food. What is
in doubt is the level of durability which is anticipated by the Bill. Most electrical appliances could last and function for 15 years. There is no technological obstacle. Indeed the major report on product durability by the OECD pointed out that manufacturers freely accept that, "from a technical point of view there is no question mat longer lived appliances could be made".
§ In arriving at their definition of durability, account should be taken by the courts of the fact that the design life of many goods is currently substantially below the known technical potential.
One apparent problem is that the lifespan of products depends not only on how they are manufactured but on intensity of use, how they are treated by users and the quality of any servicing and repair. Even so, the Law Commission in its report maintained that the courts should still be able to decide whether the criterion had been broken, as the durability of goods,
is essentially a question of their original condition on delivery".
In practice it should not be too difficult to determine whether products have been designed for an appropriate level of durability as manufacturers plan products to have a certain design life. However, my amendment would make this information more visible.
§ The Bill also refers to a standard of quality acceptable to a reasonable person. Expectations vary as to how long consumer durables should last and different opinions are held on whether products are worth repairing. A New Scientist survey a few years ago found that half the discarded appliances at civic amenity sites still functioned or could be repaired at minimal cost. I have no doubt that even in your Lordships' House there are people who have discarded broken durables which could have been repaired partly because it was impossible to get spare parts. That is one of the matters the amendment deals with.
§ What are "reasonable people"? Do reasonable people have high expectations or are they the kind of people who accept the market conditions which, according to manufacturers, force them to sacrifice durability in order to keep prices down and remain competitive? It would clearly be unreasonable to expect products to remain in their original condition throughout their lifespan. A degree of cosmetic deterioration and occasional repair should be expected, but currently the lifespan of goods often falls below reasonable expectations. I am sure that that is the experience of Members of your Lordships' House.
§ Whether people are considered reasonable depends to a degree on the social context of their behaviour; in other words, on society's expectations. But what kind of society does the legislation assume? Are manufacturers to be expected to meet traditional expectations of durability, or the lower standards of the "throwaway" society? I would propose that the former is a reasonable expectation. In a world which is now committed, as is our country, to the achievement of sustainable growth in the future and sustainable life and production, I am sure that the former must be insisted on.
§ While I support the Bill, it could be strengthened to the benefit not only of consumers and the environment but also of the many businesses committed to improve 963 product quality. My amendment to the Bill requires information to be provided for consumers about the normal expected lifespan of products. Ultimately, in determining if goods are of satisfactory quality, the courts will have to determine how long specific types of consumer durables, given normal use, should be expected to last. I believe that Parliament should provide some guidance to our intention.
§ The idea of requiring producers to disclose the design life of their products is not original. It was tentatively proposed by the National Consumer Council several years ago. The proposal does not prescribe specific periods for particular products; it is concerned with providing information to customers, not forcing manufacturers to make products of a certain type. It allows for a range of products of different grades with different lifespans. By increasing information to potential buyers it would improve the efficiency of the market. Access to this information is important. It is only as consumers become more aware of the lifespan of products that they will be more inclined to buy products which are designed to last longer.
§ A National Consumer Council survey found that 40 per cent. of consumers felt that current information on durability and reliability was fairly poor or very poor and 80 per cent. considered the provision of such information to be essential or very important. Explicit references to the expected life of products in manufacturers' promotional material are, possibly not surprisingly, rare and purchases of consumer durables consequently have to be made primarily on the basis of price, features and style rather than durability.
§ Lastly, my amendment places a legal obligation on the seller or supplier of goods to maintain stocks of spare parts and to provide servicing facilities during the product's normal lifespan. A frequent cause of complaint by consumers is that products cannot be repaired because spare parts are no longer available. While many manufacturers take a responsible approach, all too often products are thrown away because parts are not available. The current voluntary arrangements do not appear to be effective. For example, the periods specified in the codes of practice drawn up by trade associations are sometimes shorter than the design life of products.
§ The performance of manufacturers varies. Some, unfortunately, are well informed about their products' performance only as long as they are under guarantee and the requirement to stock parts will encourage them to take a longer term interest. It thus fits well with the concept of extended producer responsibility which the Government support. The requirement to stock spare parts need not cause undue hardship to small retailers, a fear sometimes expressed, as it should ultimately be the responsibility of manufacturers to store the parts. Retailers would only be obliged to supply them within a reasonable period.
§ As long as there is free trade, the problem of tracing and dealing with irresponsible overseas manufacturers has to be faced. Product liability legislation raises the same problem. Retailers should not excuse overseas 964 manufacturers from the requirement to provide information, and reputable suppliers would produce it for them.
§ If the Government are sympathetic in principle to the amendment—and I do not see how they cannot be sympathetic in principle—but regard the Bill as the wrong vehicle, they are invited to draft another Bill in consultation with the relevant organisations and introduce it at the earliest opportunity, in a form which allows this Chamber, if it sees fit, to amend it rather than going through this forced procedure of having to withdraw perfectly good amendments which would improve the Bill. I beg to move.
§ 8 p.m.
§ Lord Dormand of Easington
I have some sympathy with what the noble Lord, Lord Beaumont, seeks to achieve with the amendment, but I am not entirely convinced by some of the arguments which he produced in his speech.
During the debates on the Bill we have heard much about the need to remove old-fashioned phrases such as "merchantable quality", but essentially the Bill is intended to update and clarify the law rather than to change it. It does not break new ground.
It is arguable that the nature of goods has changed so much since the original Sale of Goods Act was passed in 1893 that we should adopt a more radical approach which reflects those changes. I have given the noble Lord's amendment careful consideration from that point of view.
There is no doubt that a major change in the past 100 years has been the increasing availability of manufactured goods which work mechanically with little or no further intervention on the part of the owner. Such goods—television sets, washing machines, computers, lawn mowers and motor cars—require regular servicing and a reliable supply of spare parts on a scale inconceivable to our ancestors. It is relevant that such goods often evolve very quickly, and spares suitable for one year's model may be useless for next year's.
There is an argument, therefore, that those changes should be reflected in the Bill before us, and that there should be a requirement in statute that spares should be made available for mechanical goods with a limited life span. However, I am not convinced that the noble Lord's amendment would achieve its purpose of increasing consumer protection in this area, and it could lay significant new burdens upon business.
Let us consider the amendment more closely. It is linked with the provision that in considering whether goods are of satisfactory quality one of the aspects to be taken into account should be durability. In a sense it can be regarded as spelling out what that aspect should mean. It would give the consumer a specific right in damages if spare parts were not available within either the period specified by the seller or a period which was "reasonable".
However, there are dangers in that. Under the Bill as at present drafted the consumer's right to durable goods is, so to speak, a right at large: its interpretation in any 965 given circumstances would be a matter for a court in the light of those circumstances. The amendment would modify that. It should not affect the consumer's general right to durable goods. However, it may affect the assessment of the durability of goods by equating the expected life of those goods with the period specified by the seller. There would also be a strong implication that the consumer was not entitled to expect provision of spare parts or after sales service beyond any period specified by the seller.
So far from increasing the consumer's rights this could restrict them. Let us consider what is likely to happen in practice. The seller specifies the life span of a number of years. As I have already suggested, there would be a strong implication that this defined the goods' durability. But goods do not last a uniform length of time.
Let us take a television set with an average, or in the words of the amendment "normal", life span of five years. This means that some will fail before the end of that period. If the seller has specified five years in his sales offer the buyer will be entitled to spare parts and after sales service. However, some will last longer and their buyers will have no such entitlement. That could mean a reduction, not an increase, in consumer protection if in the absence of the specified life span the durability of the television set would probably be assessed at, say, 10 years.
The noble Lord may answer that competition will ensure that sellers specify more than the average life of their goods and that competition on durability will tend to lengthen the specified life. However, that would mean sellers deliberately specifying life spans which were longer than the "normal" life span. That could prove extremely burdensome, since in law these long life spans would continue to be treated as normal and sellers would be liable to meet the requirement for an artificial length of time.
Alternatively, the situation could go the other way. There would be a temptation for manufacturers to specify the shortest period that they thought that they could get away with. Some sellers might specify very short periods and maintain their competitive advantage by cutting prices to reflect the savings they could expect on after sales service. Neither of those developments would be in the long-term interests of the consumer.
The Act is concerned with quality of goods among other things. I would not wish to see practices encouraged whereby satisfactory quality of goods could be compromised by the possibility that provision of spare parts for a limited period was all that was required to ensure that the goods were durable.
There is a further danger. The amendment could lead to uncertainty in the area of durability. For example, a seller may consider that his statement of the specified life of goods equates to durability, whereas a court may on looking at the circumstances of a particular case take a different view. Neither the seller nor the consumer would benefit from that uncertainty.
There is another difficulty. The amendment would place a considerable burden on the seller. It is the seller who would be liable under the Act. The buyer normally has no contract with the manufacturer. But it is the 966 manufacturer who will need to provide the spare parts and after sales service. The seller would therefore be giving an undertaking on a matter over which he had no control.
The Sale of Goods Act implies certain terms into the contract between the seller and the buyer. For example, the seller must have good title; the goods must be as described; and they must be of satisfactory quality. Durability is an aspect of satisfactory quality. But these are all matters which the seller can control. I hope that the Committee will agree that it would be quite wrong to make the seller responsible for a matter which he could not control.
Therefore, while I fully recognise the good intentions behind the amendment, I do not think that it would achieve its purpose and fear that it could work against the interests of consumers while placing a burden on sellers which it would be hard to justify and for which the consumer would have ultimately to pay. I therefore ask the Committee to reject the amendment.
The Minister of State, Department of Trade and Industry (Earl Ferrers)
This is, of course, a Private Member's Bill and it is the responsibility of the noble Lord, Lord Dormand of Easington. I intervene only because the noble Lord, Lord Beaumont of Whitley, prompted me to do so because he wanted to know the Government's view.
First, the Government are very glad that the noble Lord, Lord Beaumont, supports the Bill. The Government were surprised that he put down an amendment and spoke to it at not inconsiderable length—but I do not blame him for that —and then said that he had no intention of pressing it. Therefore, one wondered why he put down an amendment in the first place. The purpose was, of course, to extract information, which I shall come to.
Like the noble Lord, Lord Dormand of Easington, I am not entirely unsympathetic to the views which the noble Lord, Lord Beaumont, expressed. But I am bound to say that I doubt whether the amendment he proposed would achieve the objective which he seeks. Even if it did, I beg leave to doubt whether this is the right Bill in which to include those provisions.
Perhaps we can look at the origins of the Bill. It implements a report from the Law Commissions which was drawn up after careful consideration of the need for reform in this area. It received a wide measure of acceptance after extensive consultation. On that basis it has so far been given a fair wind both here and in another place. However, I do not believe that it would be right for the Committee now to seek to extend the scope of the Bill into areas over which there has been no public debate. The noble Lord, Lord Beaumont, assured us that he does not intend to do that.
As drafted, the noble Lord's amendment is flawed in that it is unlikely to have the effect that is intended. I can only agree with the noble Lord, Lord Dormand. The amendment would threaten a straitjacket of regulation over markets, many of which are rapidly evolving. It would in the process change the perspective of purchasers who would come to regard the period of availability of spares as the natural life of the product, 967 even though the true potential life might be—indeed, almost certainly would be—either more or less than that period but almost certainly not of that specific length. That would create an artificiality in the market which would be unlikely to be in the interests either of the producer or consumer.
I am bound to tell the noble Lord, Lord Beaumont, that the Government have a more fundamental difficulty with the amendment. It is one which the noble Lord, Lord Beaumont, may not share. The noble Lord, Lord Dormand, too, may not share it, although I hope he does. Our purpose is to reduce the burden of regulation on industry, not to increase it. Yet the potential effect of the noble Lord's amendment is highly prescriptive and could prove a serious constraint on the commercial freedom of suppliers to order their affairs in ways which enable them to meet the demands of the market and the efforts of their competitors.
I do not believe that there is a manifest mischief at present which needs to be dealt with. There is little evidence that the natural life of goods is being cut short by lack of spare parts. Indeed, any manufacturer who made a habit of cutting off the supply of spare parts before his goods had reached the end of their natural life would soon be out of business. In those circumstances, we do not see that there is a case for interfering with the normal workings of the market but a considerable case for not doing so.
§ Lord Beaumont of Whitley
I need hardly say that I am disappointed at the response of the Government. I am highly disappointed with the arguments put forward by the noble Lord, Lord Dormand, that manufacturers would specify too long or too short a period which would cause great disadvantages. It is just possible that manufacturers might find that to specify the correct amount of time was right and that it paid them to do so.
Spare parts are frequently not available during the natural life of the product. It is a great pity that they are not. The arguments which have been put forward are understandable in the circumstances of the Bill at present. However, I venture to forecast that in the necessary and inevitable move towards a sustainable economy in the near future—to which the Government are committed—a Bill containing those clauses will be introduced within, say, five years. I believe that that is an absolute certainty. The provision may not have been in the right place, but it could have received a rather more welcoming response. Under the circumstances, and for the reasons I have outlined, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 1 agreed to.
§ Remaining clauses and schedules agreed to.
§ House resumed: Bill reported without amendment; Report received.