Enterprise Bill (Hansard, 16 July 2002)

§ Lord Sharman
moved Amendment No. 30: Page 4, line 5, at end insert— () In pursuance of its function under subsection (1) above the OFT shall work with every local weights and measures authority in Great Britain to—

(a) ensure the delivery of coordinated, consistent enforcement,

(b) improve consumer protection, and

(c) develop more competitive markets."

The noble Lord said: The amendment would ensure that the OFT worked closely with local authorities in promoting good practice. We touched on that in earlier amendments tabled by the noble Lord, Lord Hunt of Wirral. Promoting good consumer practice will be a function of the OFT. The purpose of the amendment is to get an assurance from the Minister that the OFT will continue to work closely with local weights and measures authorities in exercising this power and to describe how the relationship will work in practice.
1188 The OFT currently works closely with all local weights and measures authorities in the enforcement of a range of consumer protection legislation. LACORS, which is the co-ordinating body for a range of regulatory services including trading standards, helps to facilitate that relationship. The Local Government Association and LACORS would like to ensure that the current good working relationship will continue under the new legislation.
They believe that it is essential to ensure that effective co-ordination arrangements are formalised through the use of formal memorandums and concordats between the OFT, general enforcers, designated enforcers and appropriate self-regulatory bodies. It will be important to ensure that mechanisms are available to resolve any potential conflicts if more than one enforcement body wishes to take proceedings.
I can only endorse what the noble Lord, Lord Hunt, said on an earlier amendment. We must have good, consistent application of the standards across the country. I beg to move.

§ Lord Sainsbury of Turville
I can give the noble Lord the reassurance that he wants. The amendment would widen the OFT's functions to ensure that it worked closely with local authorities in promoting good practice. This is not the place in the Bill for this amendment, as this clause is solely about codes of practice. Nor do I think that the amendment is strictly necessary to legislate to give the OFT a coordinating role.
The OFT already has a role in co-ordinating enforcement—for example, stop now orders, unfair contract terms and developing a consumer regulation website. A lot of work is going on in the DTI to modernise trading standards services.
We have worked with the trading standards profession, the OFT and LACORS on a new national performance framework for the service, which came into effect in April this year. It sets out priorities and standards for service, including on enforcement, and aims to ensure more co-ordinated consistent delivery. The framework will be developed year on year and we shall measure its effectiveness. In particular, we want to see a more consistent approach to enforcement.
The modernisation fund for improving consumer protection at local level is in its second year. Some of the funding has been used by trading standards for joined-up enforcement projects. We are now seeing the results of the first year's projects. There are some good examples of much more joined-up working among local authorities. For example, the website for consumer, complaints— www.consumercomplaints.org.uk—a new series of good practice guides and a toolkit for protecting vulnerable consumers are all being made available across England, Scotland and Wales with support from the modernisation fund.
That shows that by supporting trading standards authorities and enabling them to work together a lot of expertise and experience can come together without 1189 the need for legislation. I assure the noble Lord that the DIE will continue to work with the TSI, LACORS, NWML and the OFT on the development of the framework. With that reassurance, I hope that the noble Lord will withdraw the amendment.

§ Lord Sharman
I am grateful to the noble Lord for his detailed and full response to my proposals. I am pretty satisfied and on that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to. Clause 9 agreed to.
Clause 10 [Part 2 of the 1973 Act]:

§ Lord Hunt of Wirral
moved Amendment No. 31: Page 4, line 12, leave out subsections (1) to (4) and insert— The functions of the Consumer Protection Advisory Committee are transferred to the OFT. The noble Lord said: I should like to hear from the Minister why the Government decided to jettison the Consumer Protection Advisory Committee and the procedure for it. I understand that it had fallen into disuse and had not been used since 1983. That was mainly because the cumbersome procedure under the original provisions was felt to be too lengthy to have proper effect. Orders were made under the provisions. Clause 10 continues those orders that still exist. It may be of interest to the Committee to know how and why the Government reached their decision to abolish the Consumer Protection Advisory Committee. I beg to move.

§ Lord Sainsbury of Turville
This amendment would retain the elements of Part 2 of the Fair Trading Act 1973 which we are seeking to repeal in Clause 10.
Part 2 was designed to deal with novel unfair trading practices as they emerged. It allowed the Secretary of State, by way of secondary legislation, to prohibit or modify unfair, but not illegal, trade practices that harmed the economic interests of consumers. The Secretary of State would have made these orders on the advice of the DGFT and a then newly-created Consumer Protection Advisory Committee. The truth is that Part 2 has barely been used; only three orders have been made under it. The two that are still in force and in everyday use by trading standards officers would be retained under Clause 10, together with the enforcement provisions for them.
The Consumer Protection Advisory Committee, upon whose report the order-making power in Part 2 is dependent, has not existed in practice since 1983, having lost its quorum in 1982. The order-making power itself was found to be rigid and the process took too long. Specifically, it proved very difficult to satisfy the legal tests in Part 2, in particular the test of attributing a specific consumer economic detriment to practices that were clearly undesirable.
The possibility of reforming Part 2 to make it easier to use has been considered at length. However, it has proved extremely difficult to identify the circumstances in which a revived Part 2 might be used 1190 in the future, and consultation on the issue failed to generate any enthusiasm from consultees for the provisions. In any case, this Bill significantly strengthens the enforcement of consumer protection, and we therefore see no need to keep on the statute book these provisions in Part 2.
In view of the history of the matter and the fact that the provisions have not proved successful, the case for removing them from the statute book seems unarguable. I therefore hope that the noble Lord, Lord Hunt, will withdraw the amendment.

§ Lord Hunt of Wirral
I am very grateful to the Minister for that explanation. I have pleasure in begging leave to withdraw the amendment, Amendment, by leave, withdrawn Clause 10 agreed to.

§ Lord Sharman
moved Amendment No. 32: Page 4, line 37, leave out "that any feature, or combination of features of" and insert "alleging that any agreements between undertakings, decisions by associations of undertakings or concerted practices in The noble Lord said: In moving Amendment No. 32 I shall also speak to Amendment No. 34.
These are very straightforward and simple amendments designed to ensure consistency in wording, so that the wording in this Bill is the same as that in Article 81 of the Chapter 1 prohibition in the Competition Act 1998 and the EU treaty. The amendments would ensure that there was consistency in wording both within 1JK law and in relation to the law of other EU member states. We see this as a particularly important issue. I beg to move.

§ Lord Kingsland
We have three amendments in this group: Amendments Nos. 33,34 and 53. The approach taken in these amendments is similar to that so clearly outlined by the noble Lord, Lord Sharman.
Amendments Nos. 33 and 34 apply to subsection (1) of Clause 11, on super-complaints to the OFT. Amendment No. 33 replaces the expression, any feature, or combination of features, of", with the expression, any agreements between undertakings, decisions by associations of undertakings or concerted practices in". Amendment No. 34 replaces the expression, or appears to be significantly harming the interests of consumers", with the expression, prevents, restricts or distorts competition". Two purposes lie behind these amendments. The first is the one explained by the noble Lord, Lord Sharman—to make this part of the Bill consistent with the Part 1 and Part 2 offences under the Competition Act 1998 and with Article 81 of the European Community treaty. As I understand it, the philosophy behind the 1998 Act was to bring our domestic competition law into line with European Community competition law. In my submission, if Clause 11(1) is passed unamended, it will mark a serious derogation 1191 from that approach. I believe that that was a very sensible approach: to simplify in so far as possible the competition rules facing British enterprise.
If the clause stands in its current form, it will have the opposite effect. Not only will it not repeat the 1998 tests, it will also introduce a new test—the test of, significantly harming the interests of consumers". What does this test mean? Where is the jurisprudence that tells us what effect it will have on our enterprises and on our competitive markets? I suggest to the Minister that this question is especially important in the light of the overall approach of Clause 11, which is to give a privileged status to certain classes of consumer interest to bring complaints against individual companies. Not only are these classes of consumer interest to have a Rolls-Royce route to bringing those complaints, but they are also going to have a specific set of new rules to apply when making those complaints.
If we are to have super-complaints, let them be based on exactly the same jurisprudence as that which relates to complaints in general under our competition law.

§ Lord Sainsbury of Turville
These amendments seek to narrow the definition of a super-complaint by placing the emphasis on conduct connected to breaches of Chapter 1 of the Competition Act 1998 and Article 81 of the EC treaty rather than broader problems in the market that may harm the interests of consumers. Amendment No. 34 also seeks to narrow the definition of a super-complaint by turning it into a preliminary to a particular type of competition investigation rather than a look at the broader problems in the market that may harm the interests of consumers.
Our intention, of course, is to ensure that consumers receive better protection by enabling consumer bodies to complain on their behalf about—this is the key point—any market failure that causes significant harm to consumers and to be guaranteed a response from the OFT within 90 days. In order to do this, we need a broad definition of the circumstances in which a super-complaint can be made, rather than limiting the focus of the procedure to the potential investigation of anticompetitive agreements.
Anyone who wants to complain about basic infringements of the Competition Act can already do so. Super-complaints should not be limited to being a preliminary to a particular type of competition investigation; they should be an open-ended vehicle for the OFT to launch investigations under any of its consumer and competition powers. Additionally, these amendments would make it very difficult for consumer bodies to submit super-complaints. As third parties, they are very unlikely to know much about the agreements that firms have entered into between themselves.
We are thinking of complaints such as the current one in relation to the uncompetitiveness of and lack of clarity in private dental charges. We want to tackle 1192 these more general market failures, and much of what we are trying to achieve would be lost by narrowing down the provision. I therefore hope that, with that explanation, noble Lords will withdraw or not press their amendments.

§ Lord Kingsland
Perhaps the Minister can help me. He said that significantly harming the interests of consumers is a broad test. In what way? In what circumstances would significantly harming the interests of consumers provide a remedy to a super-complainer which the European Community test would not?

§ Lord Sainsbury of Turville
The amendments involve in particular the Competition Act and Article 81 of the European Community treaty. The amendments make it clear that this matter involves agreements that restrict competition. This requirement is much wider than agreements to restrict competition; it is about market failures. That is significantly wider than the matter to which the amendments draw attention. That involves the difference between the phrase, feature, or combination of features", and the phrase, alleging that any agreements between undertakings, decisions by associations of undertakings or concerted practices". That clearly significantly narrows down the provisions.

§ Lord Kingsland
I am most grateful to the Minister. Is he saying that significantly harming the interests of consumers is the sum of the law in the 1998 Competition Act plus the new measures that the Bill puts in place to deal with the general failure of markets to operate properly, which will be investigated by the Competition Commission?

§ Lord Sainsbury of Turville
Yes. Lord Kingsland: I am most grateful.

§ Lord Sharman
I shall reflect on the Minister's explanation and may return to the matter at a later stage. In the interim, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Hunt of Wirral
moved Amendment No. 35: Page 4, line 40, leave out "90" and insert "30 The noble Lord said: Here we present the Minister with a choice. We are pleased to see in Clause 11(2) a fixed period within which the OFT has to respond; that is very welcome. However, the period of 90 days is too long. We give the Minister the option of reducing that period to 60 days, in Amendment No. 36, or to 30 days, in Amendment No. 35.
The background to this matter is that there will be companies that—and perhaps some small businesspeople who—would have to contend with the 1193 threat of action or investigation. Such business entities should not have to contend with the sword of Damocles hanging over them for such a lengthy period. Companies should be told quickly whether the matter will or will not be pursued. I believe that a period shorter than 90 days would be more appropriate. I look forward to the Minister's response. I beg to move.

§ Lord Brennan
There are two points to be made about the amendment. First, the shorter the period, the more likely it is that the affected commercial enterprise will seek judicial review of the OFT for not taking long enough. Secondly, the longer the period, provided that it is within reason, the more the public interest is served by balancing the interests of the commercial enterprise with those of the consumer. Ninety days is a reasonable compromise.

§ Lord Sainsbury of Turville
I am thankful for that helpful intervention.
The OFT is required by the Bill to produce a full and reasoned response to super-complaints and so must be given the time it needs in which to do that. There is a possibility that the quality of the response could be weakened if it does not have enough time properly to analyse the evidence submitted by the super-complainant. With the complexity of the issues involved, the process will necessarily be time consuming and it is important that the OFT should have enough time in which to give a substantive answer.
Having considered the issues, we believe that 90 days is the right time period for OFT in these cases, striking a good balance between speed and quality. It should be remembered that this is a maximum time period and that we would expect the OFT to respond as soon as it is practicable to do so within that period. Super-complainants will be expected to submit a reasoned case in accordance with the OFT's guidance. That will require a serious commitment of resources by the complainant. It would not be appropriate, therefore, for the OFT to give an ill-thought-out answer because it had to rush to meet the deadline. We feel that that helps nobody. If the time period is too short, the OFT is likely to be putting forward more complaints for additional investigation to ensure that it can make a properly informed decision about what further action is needed. If there is a case to answer, business will also need time to format a response.
We are confident that 90 days is the right maximum time period but acknowledge that we are at only the beginning of this new super-complaint process. If experience shows us that super-complaints can be dealt with properly in less than 90 days, we have ensured that the Secretary of State can shorten the statutory timescale by using the powers under subsection (4). Equally, if we find that 90 days is insufficient, the time period could be lengthened. Subsection (4) allows us to keep our options open, which is a sensible precaution. The OFT will do everything that it can to keep the period as short as possible.
1194 In view of those arguments, I hope that the noble Lord will withdraw the amendment.

§ Lord Hunt of Wirral
I am grateful to the Minister for his response and to the noble Lord, Lord Brennan, for his contribution. I am greatly reassured by what the Minister said: by his stress on the maximum period, by his reference to subsection (4) and the discretion that it would give the Secretary of State, and by the fact that he hopes that the OFT will respond well within the timescale where it is reasonably possible for it to do so. In the light of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Hodgson of Astley Abbotts
moved Amendment No. 37: Page 5, line 3, at end insert "and how long such action will take The noble Lord said: This amendment follows on the idea of a crisp timetable applied to the civil complaints section. Clause 11(2)(b) concerns the case where the OFT decides that it should take action, and the action that it proposes to take. The clause does not impose any form of timetable in relation to the implementation of that.
I am not sure that the wording that I have chosen is as solicitous as I should like. However, the purpose of the amendment is to try to ensure that the notice given to a firm not only explains the decision and the action which it is proposed to take in consequence, but that it should also give timetables for remedial action and other events that might flow therefrom. I beg to move.

§ Lord Sainsbury of Turville
As with other complaints, there are a number of different actions that the OFT might decide to undertake in response to a super-complaint under either its competition or its consumer powers. Eventual outcomes could, for example, include an immediate market investigation reference to the Competition Commission, enforcement action, the publication of a report recommending changes in laws and regulations or the suggestion of the use of codes of practice as a self-regulatory solution.
In some cases, further investigation and consultation may be required before the OFT can decide on which eventual outcome, if any, is appropriate. With so many options, it is clear that the time-scale for completing them will vary. In some cases, there is a fixed timeline; for example, shortly after a market investigation reference is made, the Competition Commission will be required to publish a detailed administrative timetable setting out how long it expects each phase of that particular inquiry to take, subject in all cases to an absolute statutory maximum of two years but with the expectation that most investigations will not take anything like as long. However, it may not always be possible to set a deadline from the beginning. Therefore, we prefer to leave it to the discretion of the OFT to give a timetable if it considers that to be appropriate.
1195 As a back-stop, judicial review can he used if a business believes that the OFT has acted unreasonably by pursuing an investigation for an unreasonable length of time; for example, after receiving sufficient information to make a decision. We realise that unnecessary delay is damaging for industry and, indeed, for the consumer. But in these circumstances, subject to the back-stop of judicial review, we believe that the situation must be kept reasonably open. In the light of those arguments, I hope that the noble Lord will withdraw his amendment.

§ Lord Hodgson of Astley Abbotts
I am grateful to the Minister for that response. The sword of Damocles comes into one's mind here. When one talks about a back-stop of two years, that means that a business could be waiting for a very long time. When we come to other amendments, I shall want to raise an issue concerning a company of which I was a director and which became the subject of an investigation. Managing a business while under investigation is extraordinarily difficult. Morale slumps and one's better people tend to leave. If there is a case to be answered, that is fine. But it is important that if there is no case to be answered, the firm should be let free.
I accept that it is almost impossible to build into legislation what I was seeking to achieve. The situation is not as satisfactory as it should be. However, in the light of the Minister's assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Sharman
moved Amendment No. 38: Page 5, line 3, at end insert— () Where the OFT has decided to take no action in response to the complaint and an undertaking has incurred costs as a result of that complaint, the consumer body which made the complaint shall bear the costs of that undertaking. The noble Lord said: This amendment and Amendment No. 39 in the name of the noble Lords, Lord Kingsland and Lord Hunt of Wirral, seek to address the issue of what remedy a company or a business which is the subject of a super-complaint has in the event that no action is taken by the OFT as a result of that complaint. Any investigation arising from a super-complaint will, in my opinion, inevitably create cost and resource burdens on the business. The noble Lord has just spoken about the problems of running a business while it is subject to a complaint.
Therefore, the purpose of the amendment is to provide a route whereby that business can recover some of its cost. That should ensure that the rights of a company are protected and that vexatious complainants are deterred from bringing unjustified complaints. I beg to move.

§ Lord Kingsland
As the noble Lord, Lord Sharman, indicated, Amendment No. 39 tabled by us is in similar terms. I support the comments of the noble Lord. Under Clause 11 it will not be impecunious bodies which will bring complaints but designated consumer bodies, frequently with substantial sums of money at 1196 their disposal; perhaps larger sums than the target of their complaint. Therefore, it seems only fair that, if at the end of the day the complaint proves irresponsible at worst or even ill-considered or naive at best, they should pay at least part of the cost incurred by the target company as a result of the complaint being brought in the first place.
As the noble Lord is well aware from his experience in the department, some of the complaints brought against enterprises have colossal cost implications in terms of human and capital resources and, as my noble friend pointed out in a different context, are capable of taking a long time. Even if at the end of the day the OFT decides to take no further action, such complaints can have serious consequences for the profitability of companies.
We do not use such words as "must" or "insist" in the amendments, but suggest that on the application of the undertaking the OFT may make the order. The discretion is there for the OFT to consider each case on its merits. If it reasonably concludes that the claim is unmeritorious, it can always say no. We seek on the face of the Bill the power for the OFT to make the awards in appropriate circumstances.

§ Lord Brennan
At Second Reading I welcomed Clause 11 as a particularly important protection for consumers because it introduced a speedy and efficient system of dealing with major consumer complaints. I little thought that there would be attached to it what I might generously describe as a primitive framework bespoken by the two amendments; namely, a framework in which the least ability by the designated organisation would be assumed, a litigious context would be inferred and costs would become a weapon between the consumers' organisation and the affected commercial party. I invite the Committee to do away with such considerations.
Surely, the more appropriate way to interpret this important clause is that only those organisations which are designated can complain. They will be designated by reason of the Secretary of State concluding that they represent the interests of consumers, as in subsection (6), and meet such criteria as the department shall from time to time determine. I imagine that the criteria will invoke concepts of responsibility, cost-effectiveness and the like. The structure intends a competent basis for complaint.
In order to allow that competence to mature, I suspect into more effective action, subsection (7) allows the Office of Fair Trading to issue guidance on a mandatory basis as to how complaints are to be constructed and reasoned and, in addition, such further guidance as may be appropriate. I regard that as an intent to provide the speedy and efficient structure which I believe Clause 6 produces.
I suggest that in those circumstances it is entirely wrong to treat this as a litigious context in which the winner gets his costs and the loser has to pay. That is not the intent of the Act. The protection for industry and commerce is given by designation, the mandatory 1197 publication of the method of reasoned argument and further instruction where required. That is entirely adequate protection. I have no doubt that industry and commerce will seek to influence the Government to ensure that it is comprehensive.
The last thing the clause should produce is fear by designated organisations that if they dare to take on the high and mighty of industry and commerce they will eventually suffer in costs, and woe betide that members of such organisation meet their doom because they cannot meet those costs. The ultimate safeguard is for the Secretary of State to remove the designation of any organisation that seeks to abuse the privileged position on behalf of consumers that the designation provides.

§ Lord Phillips of Sudbury
Lest it be thought that liberality is dead on the Liberal Democrat Benches, I should like to endorse the remarks just made by the noble Lord. If these amendments were accepted, I believe that the proposal would prove to be a torpedo under the waterline of Clause 11. That is especially so as regards Amendment No. 38, which, unlike Amendment No. 39, gives no discretion on the issue of costs.
Similarly, the costs are not clearly defined in the amendments. They could be the costs to the undertaking commercially, not the legal costs. If that were the case, the commercial losses consequent on such a complaint could amount to an enormous sum of money. Frankly, knowing a little about the Consumers' Association and the National Consumer Council, I believe that this would absolutely deter any complaint being made. The bigger the quarry, so to speak, the more the costs would be; and, yet, the more important the potential claim might be.
Although I understand the issue under discussion, I believe that this is a dangerous proposition. If Amendment No. 39 were to proceed, which, as I said, has the merit of being a discretionary remedy, it should at least be qualified by allowing an award of costs only in a case of frivolous or vexatious complaint; otherwise, one would be subject to a risk so high that, in my view, it would deter the realistic prospects of Clause 11 being utilised.

§ Lord Sainsbury of Turville
The amendments before the Committee seek to make consumer bodies bear all or part of the costs incurred by business where the OFT has decided that there is no case to answer. I am grateful to my noble friend Lord Brennan for putting this particular clause in the context of the whole Bill. The clause must be seen in that way, and consideration must be given to the way that super-complaints will be handled.
There is a concern that some consumer groups might make frivolous or vexatious super-complaints forcing businesses to devote considerable resources to defending themselves. However, there are inherent checks in place to ensure that such complaints are not submitted. Consumer bodies will have to meet certain criteria, on which we shall be consulting fully. They will have to demonstrate their ability to put together a 1198 reasoned case. These bodies will have to devote considerable resources to produce a well-reasoned case in accordance with the OFT's guidance. The cost of making a super-complaint will he a serious consideration. Therefore, taking into account all those factors, it is unlikely that that the making of a super-complaint will be entered into lightly.
We expect that there will also be an informal consultation before the OFT accepts the complaint. It is, therefore, highly unlikely that a frivolous super-complaint will be submitted. However, if it does happen, the OFT will not take further action beyond the initial consideration. In all super-complaint cases, the OFT will publish the reasons for what action, if any, it proposes to take. This cuts both ways, as it holds the OFT to account but also ensures that consumer groups submit decent super-complaints. Clearly, they will not want bad publicity and subsequent damage to their reputation.
The process does not impose new burdens. The super-complaint process will consider only whether further action is justified. The process involves no sanctions or judgments of its own. Super-complaints are simply a new route into the OFT system— an initial fast-tracking to ensure that complaints about market failure that harm consumers are given consideration within a fixed period of time. The options that the OFT has for follow-up action to super-complaints are the same as for any other complaint. It is therefore right that they should all follow the same procedure in terms of costs. It should be noted that parties do not get their costs back when other complaints are submitted to the OFT and when investigations are carried out that result in no action being taken. It is therefore both an unnecessary additional burden and unfair to have this condition attached to complaints via the super-complaints procedure.
We do not want inadvertently to discourage consumer groups from making super-complaints with cost threats. As previously stated, the OFT guidance on the presentation of a reasoned complaint should prevent groups from making frivolous super-complaints anyway—and the OFT can throw out a frivolous complaint quickly without imposing cost burdens on the markets concerned.
Quite simply, we have already taken the point that we do not want to see frivolous complaints made which put burdens on industry. But we have taken care of that by carefully structuring the route by which super-complaints are heard. In that way we can make certain that there is no need for the kind of action proposed in the amendments. In view of that reassurance I invite the noble Lord to withdraw his amendment.

§ Lord Kingsland
Before the noble Lord sits down, perhaps I may ask two questions arising out of what he has just said.
First, he mentioned guidance. I suspect he is referring to subsection 7(a) of Clause 11 which states that the OFT, must issue guidance as to the presentation by the complainant of a reasoned case for the complaint". 1199 We are soon to rise for the summer adjournment and will probably come back for Report stage relatively early in October. Will the Minister contemplate the prospect of producing, on Report, draft guidance under subsection (a) so that your Lordships can consider it? That may help those of us who have been party to tabling Amendment No. 39 to look afresh at the issue in the light of the comments the Minister makes.
My second question concerns the relationship between super-complaints and ordinary complaints. It is a point the Minister partially addressed in his response to the amendment. Are super-complaints to have some special status in the great spectrum of complaints that come in to the OFT? The Minister was at pains to say that they ought to be treated no differently from ordinary complaints in terms of cost. If that is so, what distinguishes a super-complaint from an ordinary complaint? Can an ordinary complainant be confident that his complaint will not drop down the queue because a super-complaint has arrived on a similar, though not necessarily exact, issue? Is the Minister contemplating any internal guidance for the OFT on the relationship between super-complaints and ordinary complaints?
If super-complaints are to have priority, is that fair to ordinary complainants? I may be wrong, but I do not believe those issues are addressed on the face of the Bill. They may be issues the noble Lord is contemplating dealing with in guidance. However, I should like to hear his views before we take the matter any further.

§ Lord Sainsbury of Turville
We will be happy to give noble Lords a draft before Report stage of what the guidance will cover. That is an important consideration in this matter.
The reason for super-complaints is to encourage bodies to put together a case which would be difficult for single consumers to put together, and therefore to make a real status of it. But the OFT will still give proper consideration to complaints from the public. The OFT has an administrative target of replying to general correspondence within 10 days. But that depends on the complexity of the issues raised and it may take longer for the OFT to provide a substantive response to some issues. But consumers are unlikely to put forward the kind of case, in the kind of detail, that we would expect in super-complaints. So it is not a case of super-complaints driving out others, but of giving the reassurance that they will be answered within a particular timeframe. The provision is there to encourage bodies to put forward complaints which an individual consumer would find difficult.

§ Lord Kingsland
In Clause 11(2) there is an obligation on the OFT when it receives a super-complaint to publish a response within 90 days. That is clearly on the face of the Bill. My question concerns what happens next. Having got that response, does the 1200 super-complaint join its place in the queue, or does it leapfrog other complaints, capturing the attention of the OFT at a much earlier stage?
Clearly, the OFT will be under constant pressure. It will have to—to use that ghastly but extremely useful American word—prioritise the demands on its resources. Once the 90 days are up, will the super-complaint simply take its place in the queue or will there be further leapfrogging?
I share with the Minister one of the reasons behind my question. A company may have a competitor which wants to make a complaint against it for legitimate or illegitimate means. If it suspects that a super-complainant can jump the queue, it might seek to hitch its star on to the super-complainant bandwagon either by directly approaching the consumer body concerned or by having someone connected with it masquerade as a consumer and directly approach the consumer body.
I am not saying that that will happen, but I am trying to speculate on what might happen. I suggest to the Minister that this would be an illegitimate use of the super-complaint procedure. As I understand it, the procedure is designed for the consumer who, unlike another competitor, does not have the resources or the skills at his disposal to make complaints in the way that a commercial body can.
I apologise for making more of this amendment than of some of the others. I know that the Minister attaches great importance to it. I suspect that he will be determined to drive it through this Chamber whatever any noble Lords say. If that is true, I think that the Minister owes it to us to make sure that it achieves precisely the objectives that he wishes to achieve and that it cannot be abused in any way.

§ Lord Sainsbury of Turville
It clearly is important that this procedure is not abused by a company or other body which wishes to use it to make a complaint against a competitor as part of some kind of competitive battle. Only designated bodies can make these complaints. I very much doubt that designated bodies will take kindly to the idea of being used in this way by a particular company.
The case that must be made will be rather more complicated to make than in the normal circumstances. It is not an obvious route to get attention quickly. Of course if a designated body starts to abuse this process, it can be de-designated and cease to be a designated body. So one will not find bodies taking kindly to that idea.
It is fast track in the sense that there is a 90-day deadline for the complaint to be answered. After that, it simply goes into the system in the normal way. The Bill does not "prioritise" it in any way. So there is little chance of it being abused in the way that concerns the noble Lord. I hope that that reassures him on that point.

§ Lord Kingsland
I am grateful to the noble Lord for responding in the way that he has to all my questions.

§ Lord Sharman
I listened with great interest to what the Minister said and have taken considerable comfort from it. The draft guidance, which he has undertaken to give us before Report stage, will be particularly valuable and important to us in forming a view on whether to pursue the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Phillips of Sudbury
moved Amendment No. 40: Page 5, line 9, leave out "which appears to him The noble Lord said: I rise to move Amendment No. 40, in the names of my noble friends Lord Razzall and Lord Sharman. In the spirit of helpfulness, perhaps I may speak also to Amendment No. 46, which at present stands on its own, because it fits with Amendments Nos. 40, 41 and 45.
The object of Amendments Nos. 40 and 46 is to ensure that the designation process under Clause 11 is justifiable. I think that that principle underlies the amendments in this and the following group. Although the Consumers' Association states in its briefing that no new rights are created by the clause, that is not entirely the case. The 90-day rule will apply only to super-complainants and the whole procedure provided for by the clause will clearly give complaints made under it a special and privileged status.
It would be obnoxious to English legal tradition if the designated bodies were, in effect, ministerial favourites. I doubt that the Government intend by their drafting of Clause 11 to make that the case. I expect the Minister to say that anyone can apply for designated status and that all applications for such status will be treated impartially and equally, as long as they comply with subsection (6).
Subsection (6) states that designated bodies must, represent the interests of consumers … and"— here is the problem— meet such criteria as he"— the Secretary of State— may publish for the purposes of this section". Subsection (6) is drafted in permissive or discretionary language, stating: The Secretary of State may designate any body which appears to him … to meet such other criteria as he may publish". When taken with the Explanatory Notes, which state that any organisation applying for designated status will have to meet, any other criteria that the Secretary of State may specify", it is clear that the wording should be tightened to make it perfectly clear that if the Secretary of State does not act fairly on normal grounds, judicial review will be available to the applicant.
If we consider the language of subsection (7), it will be clear that I am not over-egging the importance of the word "may" rather than "must" in subsection (6). 1202 In subsection (7)(a), the words "must issue guidance" are intentionally used, while subsection (7)(b) states that the OFT, may issue other guidance". So the usual argument that revolves around the use of the word "may" and whether it means "must" is clearly resolved in the context of the clause against such an interpretation.
That is why the amendments are an attempt to depersonalise or desubjectivise, if I may put it that way, the language of subsection (6) in the manner proposed. That is their purpose. I beg to move.

§ Lord Kingsland
I have tabled two of the amendments in this group in a minor key. Amendment No. 41 concerns Clause 11(6) and would replace the expression, which appears to him", with the expression, where he is satisfied". Amendment No. 45 is a consequential amendment to subsection (6)(b). The amendment would insert what is, I submit, the normal statutory expression for those circumstances.

§ Lord Brennan
I hope that the Committee will forgive a moment of legal interpretation. We have here one extreme versus the other. The noble Lord, Lord Phillips of Sudbury, is concerned to protect the interests of consumer bodies. I realise that that is a matter of importance. On the other hand, the noble Lord, Lord Kingsland, is concerned to ensure that the industry or commercial entity can have a satisfactory test before designation is granted. There are dangers in both approaches.
The approach suggested by the noble Lord, Lord Kingsland, would produce a situation in which an affected commercial entity, realising that the Minister must be "satisfied", would, if the occasion required it, seek judicial review of whether he was properly satisfied, in designating the body that has brought a complaint. On the other hand, the noble Lord, Lord Phillips of Sudbury, is concerned to ensure that organisations that properly protect consumers' interests should not be barred by the Minister's decision. That concern could be met if we address subsection (6) with common sense. The phrase "which appears to him", if we are to interpret it properly and avoid idiosyncracy, must be taken as meaning, which reasonably appears to him". The Secretary of State cannot, therefore, designate or refuse to designate as he thinks fit. Any decision would be dictated by the conditions that the body must, represent the interests of consumers and, secondly, meet such other criteria as he may publish". The condition that the body must represent the interests of consumers is straightforward. I imagine that the other criterion will be directed at establishing 1203 the sufficiency of the organisation and whether it is properly organised and managed and whether it has means.

§ Lord Phillips of Sudbury
Subsection (6)(b), which sets out the second criterion to be satisfied, says that a body must meet, such other criteria as he may publish". Our concern is that the Secretary of State is not obliged by that to publish criteria. The noble Lord, Lord Brennan, may say that that is a far-fetched interpretation, but I refer him to the use of the words "must" and "may" in the subsequent subsection.

§ Lord Kingsland
In the interests of economy of movement by the noble Lord, Lord Brennan, I shall also pose a question. He can deal with both in one rise and fall.
Is it the noble Lord's view that, if the text remains as it is and the expression "which appears to him" remains the determining expression, the Secretary of State's decision will not be judicially reviewable under subsection (6)?

§ Lord Brennan
I shall rise and complete my response without, I hope, falling.
I start with the point raised by the noble Lord, Lord Kingsland. That which requires a Minister to be "satisfied" will be determined by the evidence available to him. That which "reasonably appears to him" is a lesser test, as I interpret it. That test favours the consumer organisation and disfavours the commercial entity.
Turning to the analysis of subsection (6) by the noble Lord, Lord Phillips, sub-paragraph (b) gives an option that the Minister may or may not issue criteria. So his primary obligation is to determine whether the organisation represents the interests of consumers. If that is met in respect of an organisation, I cannot imagine that the other criterion would be used to undermine that requirement. As I have said, it would be directed towards the structure of the organisation and its efficiency and ability to meet the purpose which will merit it being designated.
My main concern in rising to speak to these two amendments is to avoid on either side a further forum for lawyers to debate whether a consumer organisation could be properly designated or a commercial entity could properly protect itself. On a sensible reading of the clause as it stands at present, neither problem should arise.

§ Lord Sainsbury of Turville
My Lords, if everyone has now received their legal advice from my noble friend Lord Brennan, perhaps I may seek to move the debate forward on this issue. Before I do so, I think that it would be useful if I respond to Amendments Nos. 40, 41 and 45 and mention also Amendment No. 46, because it is relevant to this matter.
1204 The amendments seek to ensure that the Secretary of State will only appoint designated consumer bodies that meet the criteria to be published. There is a concern that the words, "which appears to him" are very subjective. We are resisting Amendment No. 40 only because we believe that it is unnecessary, not because there is a policy difference between us. Where there is an assessment against criteria the words, "which appears to him" are often used to make it clear that this is a matter of judgment and as such it is not possible to be completely objective.
I can assure noble Lords that the Secretary of State will only appoint designated consumer bodies that meet the criteria to be published. I should add that we will, of course, be consulting fully on the criteria and hope that all interested parties will contribute to the consultation process. Additionally, the bodies will be designated by order so that designation will be subject to the parliamentary process.
I turn now to Amendment No. 46. The amendment would make it a requirement for the Secretary of State to issue criteria which bodies would have to meet in order to be designated as super-complainers. It has always been the Government's intention to issue such criteria—indeed, it is being worked on at present—and I am therefore happy to accept the principle of the noble Lord's amendment and come back on Report with a government amendment that will deliver the same result.
With the reassurance that the criteria will be issued and with an explanation of why we have used the particular wording set out in the Bill, I hope that the concerns expressed by noble Lords on this point have now been met.

§ Lord Phillips of Sudbury
I am most grateful to the Minister for that response and for the concession made on Amendment No. 46. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ The Deputy Chairman of Committees (Lord Lyell)
Is it the wish of the noble Lord, Lord Hunt of Wirral, to move Amendment No. 42? I am sorry. I thought that the amendment had already been spoken to.

§ Lord Hunt of Wirral
moved Amendment No. 42: Page 5, line 10, leave out paragraph (a) and insert— () that it is sufficiently representative of the legitimate interests of consumers, and The noble Lord said: I thought that I was to be deprived of my moment of glory. I have been riveted by the wise words of eminent Queen's Counsel—completely free of charge. Speaking as a solicitor, that is a first for me.
I wish to move Amendment No. 42 to confirm whether the Minister feels that he has exactly the right wording in Clause 11(6); namely, that: The Secretary of State may designate any body which appears to him … to represent the interests of consumers of any description". 1205 It might be a good moment to remind ourselves that it is the Director-General of Fair Trading and, under the Bill, the Office of Fair Trading, which will have the public duty to represent consumers. Certainly the current holder of the office of director-general sees this as one of his key roles and has made a number of important contributions on the subject.
Consideration of subsection (6) should start on the basis that specific organisations should not be granted preferential treatment under the law. All parties must have the right to have their cases heard and to be treated equally. That is why I would like the Minister to clarify when a consumer group will be regarded as having the standing to bring such a complaint.
At present it is difficult to identify which consumer organisations would he in a position to perform a balancing role in a manner that would facilitate the effective enforcement of competition laws. The existing wording is too broad and runs the risk that bodies which are not representative of consumers will be able to exercise a far-reaching power. There should he a requirement on the face of the Bill that a super-complaint may only be made where the Secretary of State is satisfied that the body in question is sufficiently representative of the legitimate interests of consumers.
The Minister's concessions and his promise to publish the criteria under subsection (6) and the guidance under subsection (7) are very welcome. However, I hope the Minister agrees that it is important in this primary legislation to get the wording exactly right and that we do need bodies which are "sufficiently representative of the legitimate interests of consumers".
It may be that the Minister has a draft list of the bodies that will be designated. It would greatly assist the Committee if he could share at least the terminology with us so that we can understand the number and nature of the organisations that are likely to be designated. Presumably he has given the matter some considerable thought. I beg to move.

§ Lord Sharman
Amendment No. 43 in this group seeks to clarify the issue of who may bring these super-complaints. It concerns those consumer bodies which also have trading arms or commercial interests. We would like clarification from the Minister that it would be inappropriate for such bodies to be able to bring super-complaints where the business against which the complaint is brought is in competition with their trading arm. That would be wholly inappropriate. It may well be that the Minister will tell the Committee that the guidance to which he referred earlier, and which will be published in draft before Report stage, will clarify this issue in its entirety. We believe that it is an important issue.

§ Lord Graham of Edmonton
I shall speak to Amendments Nos. 44, 47 and 48, which are grouped with Amendment No. 42.
I am grateful for the temperate language that has been used to skate around what can undoubtedly be a sensitive issue—that is, consumers versus business 1206 interests. Everyone is conscious that the consumer movement and the Consumer Association are impeccable in many ways, but in the context of the Bill the question needs to be asked whether in practice under the super-complaints procedure there is a danger of a lacuna appearing after the event. I hope that the Minister will look on this series of debates as providing him with an opportunity to tell the Committee not only that we have got it wrong but that we have said sufficient for him to think again.
I have concerns about the introduction of super-complaints on a statutory basis although it is an extension of current procedures. Consumer groups able to bring such complaints should not themselves have a commercial interest in the same area if the system is to be seen to be fair. That point was made by the noble Lord, Lord Sharman. If we are to avoid costs to business, the OFT must deal with such complaints judiciously and only on the basis of clear evidence of abuse. We question any extension of such complaints into the US-style class actions which could lead to excessive claims with resultant costs for consumers as a whole. I fear that the Government may already have embarked on such a path without further discussion on the introduction of damages for consumers under the law.
The Consumers Association is not a representative body but a private club or special interest group with its own commercial trading interests. 'That is perfectly fair. I was a member of the Consumers Association when it was established. I believe that we all support it. However, enforcement agencies should be independent, accountable to public authorities of one kind or another and riot at the same time the competitor of those against whom they are potential enforcers. Those are legitimate questions. As I indicated earlier, I have taken advice from the British Retail Consortium, which is associated with the All-Party Retail Industry Group.
I support Amendments Nos. 44, 47 and 48 which stand in my name. Amendment No. 44 proposes the following paragraph, is not itself a trading body or connected to a trading body which could itself be the object of a complaint". The Minister may say that he is not prepared to accept the amendment as I am trying to read too much into the situation. That may be correct.
Amendment No. 47 proposes the following paragraph, and is genuinely representative of the collective interests of consumers and exists solely for that purpose". Again, the Minister may tell us that that "ain't necessarily so".
Amendment No. 48 proposes the following paragraph: No body may be designated where that body, or any person or body connected with that body for the purposes of conducting a business, could itself be the object of a super-complaint". 1207 The Minister and his advisers who have consulted on the matter have their own sense of what is right. However, can the Minister assure me and many others that our sense that there may be an injustice here is unfounded?

§ Lord Sainsbury of Turville
I wish to speak to Amendments Nos. 42, 43, 44, 47 and 48. There are essentially two issues here. One is the request for reassurance that the designated bodies will be sufficiently representative of the legitimate interests of consumers. The second issue concerns how we deal with those bodies which have a trading arm. I shall deal with those two issues in turn.
As regards the designation of bodies, we have given a commitment to publish the relevant criteria. Only groups that request super-complaint status can be designated. The Secretary of State will publish the criteria against which possible candidates will be assessed. It is thought that the criteria will include requirements that bodies act independently and with integrity while being impartial. In addition, bodies will be expected to demonstrate that they represent and/or protect the interests of consumers and that they have the capability to put together reasoned super-complaints. We shall consult fully on the criteria. The Secretary of State will also issue guidance on the application procedure. The Secretary of State will be able to amend the list of designated super-complainants.
The second question concerns the anxiety about a conflict of interest if consumer bodies have the right to bring super-complaints in which they have a commercial interest, for example making a complaint against a business that is in competition with its trading arm or even being the object of a super-complaint itself. I should like to assure the Committee that the criteria will act as a safeguard against such an occurrence. It is intended that the designation of bodies with trading arms will include provisions to ensure that any potential conflicts of interest are properly dealt with. We believe that the fact that a body has a trading arm should not disqualify it from super-complainant status, provided that the trading arm does not control the body and that any profits made by the trading arm are used only to further the stated objectives of the consumer body. The overall purpose of such bodies should be the representation and/or protection of consumers, not the commercial activities of its trading arm.
Excluding bodies with trading arms would exclude many charities which often use commercial activities to fund their consumer representation or protection work. It is worth remembering that if designated bodies breach any of the criteria, the Secretary of State will be able to remove their designated status. As I said, we shall consult fully on the criteria and this will give all interested parties an opportunity to raise their concerns. They will be better able to do so once they have seen the criteria.
1208 It is therefore clear that we have recognised that a potential problem exists. The criteria will make it clear that we will have procedures in place which will deal with the question of whether the super-complainant bodies are able to represent the interests of consumers generally and the fact that there can be no conflict of interest when they have trading bodies. We do not want to rule out all bodies which have a trading arm because we believe that that will disqualify too many of the bodies we want to see acting in this way.
With those reassurances, I invite Members of the Committee to withdraw their amendment.

§ Lord Hunt of Wirral
I am grateful to the Minister for his reassurance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Sharman
moved Amendment No. 49: Page 5, line 12, at end insert— () The Secretary of State shall review the status of a designated consumer body not less than every 12 months to determine whether such a body is an appropriate body, under subsection (6)(a) and (b), to retain the right to raise super-complaints to the OFT. The noble Lord said: This is the final amendment in the group which deals with the designation of consumer bodies entitled to bring super-complaints. The Minister has already stated that where a designated body fails to maintain the appropriate status it will be de-designated; its right to bring such a complaint will be removed.
The objective of the amendment is to ensure that the status of so designated consumer bodies is reviewed on a regular basis. We have taken as an example every 12 months but that is not cast in stone. Consumer bodies may not be bringing complaints all the time but they may be changing their status or arrangements. We believe that it will be appropriate for the Secretary of State to conduct a regular review of those bodies. I beg to move.

§ Lord Kingsland
I have two amendments in the group. They point in the same direction as that tabled by the noble Lord, Lord Sharman, but journey a little further down the road. The intention of the amendments is to probe the Government's lack of power under Clause 11 to de-designate a body once designated. The noble Lord, Lord Sharman, has an elegant and kindly proposal in Amendment No. 49 and the Minister may feel that the Opposition Front Bench is being uncharacteristically harsh in its Amendments Nos. 50 and 51.
My concern here is not so much to take a "drop dead" approach, but to ensure that on the face of the Bill there is a clearly stated mechanism for reviewing 1209 the performance of a designated body, containing criteria for removing it from the list in appropriate circumstances.

§ Lord Brennan
Perhaps I may raise two points. The first relates to the period of 12 months which Amendments Nos. 49 and 51 seek to introduce. That, it seems to me, would be an unduly onerous requirement on properly designated bodies. They would be spending the last three months of each year meeting a bureaucratic requirement to confirm that whatever standards that are thought necessary are being met.
Much more important, however, is Amendment No. 50, which has within it an implicit message which I fear is entirely wrong. It assumes that upon the making of a complaint the OFT must come to a conclusion which involves action or no action. But surely that does not pre-empt the OFT, on the receipt of a complaint, in addressing that complaint to the affected commercial entity with a view to its accepting the substance of the complaint or coming to some satisfactory arrangement that does not require the OFT to take action. Clause 50 as presently drafted would pre-empt that short-term effective compromise solution, which I hope is implicit in these procedures.

§ Lord Borrie
My noble friend Lord Brennan has made a very apt comment. The idea—

§ Lord Kingsland
I thank the noble Lord for giving way, as he always does. I think I made it clear that this is intended to be a probing amendment to tease out the requirement for some provision on the face of the Bill for de-designation. I entirely accept that it is at the harsh end of the scale and is not something that I myself should necessarily want to see on the face of the Bill.

§ Lord Borrie
I am delighted to hear what the noble Lord has said. The idea of penalising the body because it has made more than one complaint which is not successful seems to be just one way of knocking on the head the whole process of super-complaints and designated bodies. It seems as though those who drafted Amendment No. 50 have had second thoughts halfway through. Instead of saying that the Secretary of State "shall" revoke the entitlement of the consumer body to make a complaint, the words used are, "shall consider revoking". So it does not get you anywhere at all. On the basis that this is entirely a probing amendment, I think that there is very little to be said for it.

§ Lord Sainsbury of Turville
I am glad that the noble Lord, Lord Kingsland, slightly withdrew his position on this. "Two strikes and you are out" is probably not the right approach to consumer organisations in this case.

§ Lord Kingsland
I apologise for intervening. I do not think it can be said that I "slightly" withdrew it. I think I made it absolutely clear that it was a probing amendment, and it was on that basis that I hoped the 1210 noble Lord would respond. I quite take the point that "two strikes and you are out" would be unacceptably harsh in these circumstances.

§ Lord Sainsbury of Turville
I take the point. Perhaps I may deal with the generality of the amendments. They would make it a requirement for the Secretary of State to review the status of designated super-complainants at least every 12 months, and to review the status of consumer bodies that make unsuccessful complaints.
Essentially, the amendments are unnecessary. There will already be proper safeguards in place to ensure that bodies designated as super-complainants act properly. We have already considered those. In order to be designated in the first place, bodies will have to meet criteria that the Secretary of State will publish, which will be fully consulted on. If a body at any time acts in such a way that it no longer meets the criteria, the Secretary of State will be able to revoke the designation. That will ensure that there is an ongoing review of the way in which the super-complaints procedure is working and will enable the Secretary of State to take quicker action in the event of a super-complainant breaching the criteria than might be the case if she had to wait for the next annual review.
Also, a legal requirement for an annual or more frequent review would introduce an unnecessary administrative burden on the Government and consumer bodies and would be extremely bureaucratic. We are clear that bodies that abuse and cease to meet the criteria will have their designation revoked. On that basis, I hope that noble Lords will be reassured and will not press their amendments.

§ Lord Kingsland
It may be the lateness of the hour, but I cannot put my finger on exactly where the power to revoke the designation is contained. It may well be there. Can the Minister point out where it is?

§ Lord Sainsbury of Turville
I believe that it would be an implied power to amend the order under the Interpretation Act. That would allow the Secretary of State to de-designate or revoke the designation.

§ Lord Kingsland
I am most grateful to the noble Lord for his explanation. I should like to hear that argument developed on the clause. Would it not be prudent in any case for the Minister to have an express power to de-designate? That would not undermine the philosophy of Clause 11, but would provide a highly desirable balance, in my submission. Perhaps the Minister would be good enough to consider that over the summer.

§ Lord Sainsbury of Turville
I should be happy to take that point away and consider it. If there is any doubt about the Secretary of State's powers to do that, we shall come back with amendments to take care of that point.

§ Lord Sharman
Having heard the Minister's response, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Sharman
Members of the Committee may not be aware that my noble friend Lord Phillips has been ill of late and has already exceeded his permitted stay in the House today. With regard to his notification that he wished to oppose the Question that Clause 11 stand part of the Bill, he has asked me to say that, having heard the Minister's response to a number of the amendments on the clause, he is now satisfied that the consumer bodies are to be designated objectively. He therefore withdraws his objection to the clause.
Clause 11 agreed to.
Clause 12 [The Competition Appeal Tribunal]:

§ Lord Kingsland
moved Amendment No. 54: Page 5, line 38, leave out "Secretary of State" and insert "Lord Chancellor The noble Lord said: The aim of Amendment No. 54 and the consequential Amendment No. 55 is to question whether it is appropriate for the Secretary of State for Trade and Industry to select the panel of tribunal members other than the chairmen. It is not clear what qualifications the Minister is expecting other members of the tribunal to have. However, it is undesirable that a tribunal which is intended to form a single unit, although with clearly more than one member sitting on it, should owe its legitimacy to two separate Secretaries of State. There will be the danger—not the certainty, but the danger—of a lack of coherence. I beg to move.

§ Lord Borrie
I am rather surprised by this amendment. I believe that it is most appropriate for the Lord Chancellor to appoint the president and the chairman because they are lawyers, whose legal qualification, from judge downwards, is specified in the schedule to the legislation on the composition of appeals tribunals. Conversely, one would not expect the other members to be lawyers. One would expect them to be businessmen or from other walks of life and to be representative in the manner of other tribunals such as employment tribunals. The chairmen of other tribunals are often very well qualified lawyers, whereas the other members are not.
It is much more appropriate that the Secretary of State—presumably the Secretary of State for Trade and Industry—should select the panel from which the other panel members are drawn. The Secretary of State has his or her hands on the world of business, commerce and consumer organisations. I see no difficulty in distinguishing the person who appoints the president and the chairman from the person who appoints the other members.

§ Lord Brennan
At Second Reading, I think that I was the only Member of your Lordships' House to speak about this clause on the constitution and functioning of the competition appeal tribunal. The emphasis with which I sought to endow it was flexibility and 1212 informality. The flexibility will come from a broad spread of expertise among those who constitute the tribunal. I entirely agree with my noble friend Lord Borrie on that point.
As I said at Second Reading, I think that the informality is essential to the successful functioning of this tribunal. It should not be converted into yet another arm of the High Court. Rather, it should be an adjunct to the competitive world in which problems are quickly analysed and efficiently solved. This combination of appointment of judicial chairmen by the Lord Chancellor and the expertise of members appointed by the Secretary of State is a happy compromise.

§ Lord Kingsland
I thank the noble Lord, Lord Brennan, for his intervention. As I understand it, the reason for having members of the tribunal in addition to lawyers is not the desirability of informality but the need for expertise in matters other than the law. As I understand it, the current trend in competition cases is towards much greater involvement in the complex economic analysis of markets than was the case 10 or 20 years ago. It is therefore highly desirable that professional economists play a bigger part in the jurisprudential process.
So I can quite see why it is desirable to have other experts. However, it does not necessarily follow that the process should be more informal. As the noble Lord, Lord Brennan, is well aware, the High Court can sometimes be extremely informal. In some circumstances, appearing before some judges can be more informal than appearing before the competition tribunal. Informality in itself is not a necessary ingredient or even a particularly desirable component.

§ Lord Brennan
I hope that the noble Lord was not assuming, when I used the word "informality", such a superficial understanding of the word as he implied. I meant to suggest—I hope that this was clear—that expertise by lay members who know what they are talking about will enable the entire tribunal, including the chairman, to reach a much more informal solution to a problem, which will properly emerge from their expertise rather than the chairman's legal experience.

§ Lord Kingsland
I do not know whether it will help the Minister if I respond for a second time to the noble Lord, Lord Brennan. I agree with the noble Lords, Lord Brennan and Lord Borrie, that this non-legal expertise is crucial to the success of the tribunal. My concern is about the way in which those other experts—economists and in certain circumstances others with professional skills—are appointed. My submission is that it would be far better to have one Minister appointing all members of the tribunal, but in circumstances in which non-lawyers form part of the tribunal, on the advice of the Secretary of State for Trade and Industry. There should be a joint approach to the selection of the whole tribunal, rather than the 1213 Lord Chancellor choosing the chairman and the Secretary of State choosing the other members in apparent total isolation.

§ Lord Borrie
Does the noble Lord agree that the Lord Chancellor's Department has tremendous knowledge of lawyers up and down the country and that details on all lawyers are kept on files there? Nowadays, those details are no doubt kept electronically for possible judicial or tribunal appointments. When it comes to economists, businessmen and the like, the Lord Chancellor does not have that available resource, whereas the Department of Trade and Industry may be expected to have it.

§ Lord Kingsland
The noble Lord is quite right; I entirely accept that. The Lord Chancellor could make his selection on the advice of the Secretary of State for Trade and Industry. That is my proposal.

§ Lord McIntosh of Haringey
I do not think that the lawyers need me. This debate has been carried virtually to its conclusion without ministerial intervention. We have come to the position that we all agree that we want lawyers to be the president and chairman and that we want people with relevant business experience—we will debate this in relation to Amendments Nos. 56 and 57—to form the ordinary members. The only issue left is whether the Lord Chancellor should appoint ordinary members on the advice of the Secretary of State. All that I can say is that that seems to be a quite unnecessary complication. I see no advantage in doing that the roundabout way when one can do it the direct way.

§ Lord Kingsland
I am most grateful to the Minister for his response. I shall reflect on this debate and consider whether to return to the matter on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Hunt of Wirral
moved Amendment No. 56: Page 193, line 30, leave out "any other relevant law and practice" and insert "commercial competition economics or business experience The noble Lord said: I believe that the Minister got so carried away with enthusiasm in his previous speech that he sought to reply to amendments which I had not yet moved; namely, Amendments Nos. 56 and 57.
I simply want to reinforce the words of the noble Lord, Lord Brennan—I am anxious to cling on to his expertise—when he said that there should be a broad spread of expertise and that it was essential to have people, who know what they are talking about". 1214 Therefore, I hope very much that he will support Amendment No. 56, to which I am now speaking and which seeks to delete the rather superfluous words, any other relevant law and practice", and make clear that we are talking about commercial competition economics or business experience.
I am not sure whether the words, any other relevant law and practice", add very much. I hope that the Minister will accept that the words that I suggest, coming from a very inspired source, provide a far better description of the type of situation which the noble Lord, Lord Brennan, sought to bring about.
Perhaps I may also mention Amendment No. 57, to which Amendment No. 56 is linked. It concerns the importance of having business as well as competition expertise. It is possible that a great deal of thought has already been given by Ministers to the composition of the tribunal. However, I hope that the Minister will make some reassuring noises as to the calibre, expertise and experience of the people whom he and his colleagues have in mind. I beg to move.

§ Lord Borrie
I do not consider the amendment to be at all appropriate because I believe that chairmen should be lawyers. The other members should not be lawyers. This is an amendment to a schedule which deals with eligibility for appointment as a chairman. I believe that it should remain as it is—that is, having experience or knowledge, either of competition law and practice or any other relevant law and practice". I know that the noble Lord, Lord Hunt of Wirral, said that the final words seem to be redundant. However, I suggest that a requirement for expertise in competition law would be too narrow in that not many solicitors or barristers would claim to be experts in competition law and practice. However, if they are experienced in commercial law generally or something a little wider than that, then the pool from which to draw becomes a little wider, and no doubt they will develop their expertise in competition law as time goes by. I believe that it would be far too narrow if the requirement was only for experience in competition law and practice.

§ Lord Hodgson of Astley Abbotts
It seems to me that the point raised by the noble Lord, Lord Borrie, may or may not apply to Amendment No. 56. It does not apply to Amendment No. 57, which deals with membership of the service. Therefore, the amendment moved by my noble friend would ensure that the, appointed members must include members who have business as well as competition expertise". We have dealt with this issue several times today. I believe that it is important that there is practical experience within the competition service. If there is not, there is always a danger that this will become a theoretical as opposed to a practical exercise.

§ Lord McIntosh of Haringey
The noble Lord, Lord Borrie, has said it for me. So far as concerns Amendment No. 56, it is clear that the chairman of a tribunal appointed by the Lord Chancellor should be a lawyer. It is also clear—to me, at any rate—that the tribunal is acquiring new responsibilities, for example, for claims for damages and judicial review of decisions, and that requires the possibility of wider expertise than simply that in competition law.
So far as concerns Amendment No. 57, I am not against widening the range of skills of the appointed members, but I do not believe that it attacks the right target. A wide range of individuals could usefully contribute to the running of the service. A business person may be able to add value, as suggested by the amendment, but, despite what the noble Lord, Lord Borrie, said, a lawyer could be an ordinary member. It is a quasi-judicial body and we would not rule that out.
I believe that the answer to Amendment No. 57 is that we are very reluctant to limit in statute the scope of people who might be eligible to apply in response to an advertisement.

§ Lord Hunt of Wirral
The Minister has had an opportunity to clarify his vision of what the tribunal will be. That has been useful. The only issue to which I take exception is the seemingly rather inconsequential theme that lawyers cannot have business experience, or that business and lawyers do not seem to go together. I would hope that the Minister would know that there are some 55,000 lawyers involved in the business world, some of whom are exceedingly distinguished. We should not allow the myth that lawyers are isolated from business to run any further.

§ Lord McIntosh of Haringey
That is why I disagree with the noble Lord, Lord Borrie. The thought terrifies me, but I do not think that they should be excluded.

§ Lord Hunt of Wirral
I am grateful to the Minister. Perhaps I should point out that I did not say that it should be either of competition law and practice and then immediately to insert "commercial competition". I wanted the disjunctive "or" to remain. However, this has been an interesting opportunity to clarify the position, which the Minister has done. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Kingsland
moved Amendment No. 59: Page 197, line 2, after "anything" insert "reasonably necessary The noble Lord said: Amendment No. 59 refers to the procedure to be laid down for the running of the competition service. It addresses paragraph 10, which states: The Service has power to do anything which is calculated to facilitate, or is conducive or incidental to, the performance of its functions". We seek merely to add after "anything" the expression "reasonably necessary". I beg to move.

§ Lord McIntosh of Haringey
Am I right in assuming that the noble Lord, Lord Kingsland, will not move Amendment No. 60 concerning transparency, accountability and proportionality?

§ Lord Kingsland
Indeed, the noble Lord is right.

§ Lord McIntosh of Haringey
That will save time. I was about to say and cannot resist saying that all of the criteria are worthy but they do not happen simply because we put the words in the Bill.

§ Lord Kingsland
The Minister must be aware that I did not move the amendments simply because I did not want to give him the pleasure of saying that.

§ Lord McIntosh of Haringey
I am too fly for that. One always answers the questions one wants to answer, regardless of the questions asked. That is the basic principle of answering questions from the Dispatch Box.
The answer to Amendment No. 59 is simple. The noble Lord, Lord Kingsland, knows as well as I that there is a general requirement on the part of all public bodies to behave fairly. If the competition service, which is the subject of this schedule, were ever to be the subject of judicial review, the court could in an appropriate case also consider the issue of whether it acted proportionately. We do not need to make specific provision for that. Legislation would be twice as long if we did.

§ Lord Kingsland
I am not quite sure that that is so. I should be most interested to hear the Minister say something further on the issue. It is clear that the body must satisfy the classic Wednesbury rules; in other words, it cannot behave so unreasonably that no reasonable person could possibly behave in that way. It is also clear that, since 1998, it is subject to the principles of proportionality under the Human Rights Act. However, the test of "reasonably necessary" is, in my submission, a stronger test than that under either the Wednesbury rules or under the principle of proportionality. It requires the decision-maker to be objectively satisfied that the particular solution that he has chosen is the correct one.
1217 I expected the Minister to say that that is also implied in such clauses. If he responds by saying that expressly at the Dispatch Box, he will have entirely satisfied the objective that I seek.

§ Lord McIntosh of Haringey
I shall be delighted to do so. I believe that we are talking about paragraph 10 of Schedule 3. The provision that the competition service "may regulate its own procedure" is required to provide the service with the power that it needs to organise its own affairs. This is a standard provision. The Competition Commission has the same power in effect under Schedule 7(5) to the Competition Act 1998.
In particular, in reference to paragraph 10, the service needs to have the power to do, anything which is calculated to facilitate, or is conducive or incidental to, the performance of its functions". This is another standard provision. I should add that, again, the Competition Commission has the same power under paragraph 8 of Schedule 7 to the 1998 Act.

§ Lord Kingsland
I think that the Minister has given me my assurance. However, I shall go away and study Hansard tomorrow in the hope that I shall be entirely satisfied. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Hunt of Wirral
moved Amendment No. 61:
Page 7, leave out lines 4 and 5 and insert— () No statutory instrument shall be made under subsection (4) unless laid in draft before, and approved by a resolution of, each House of Parliament. The noble Lord said: In debating the powers of the tribunal, I believe that we are all agreed that we are giving the competition appeal tribunal significant power. It is essential, therefore, that we should provide for parliamentary scrutiny of the rules. At present, under Clause 15(4): The power to make Tribunal rules is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament". I know that the Minister made reference to procedure earlier when dealing with another set of regulations, but I hope that he will accept that, rather than the negative procedure, the 'affirmative procedure is preferable in this case because we are talking about detailed tribunal rules of a tribunal that has significant power. Parliamentary scrutiny should be available. That is why I wish to provide for no statutory instrument to be made, unless laid in draft before, and approved by a resolution of, each House of Parliament", under the affirmative resolution procedure. I beg to move.

§ Lord McIntosh of Haringey
As always, the short answer is that the Delegated Powers and Regulatory 1218 Reform Committee thought that the negative procedure was appropriate. We always follow its recommendations. We do not like to have unnecessary parliamentary activity unless it is called for by the committee.
The longer answer is that we circulated a draft of the rules to Members last week. We are carrying out a consultation exercise. We are consulting the president of the tribunal, the Competition Commission, the OFT and anybody else in a position to offer informed contribution. The opportunity for parliamentary scrutiny actually arises now. If the Opposition want to query any of the rules circulated in draft they can bring that up on Report. I do not recommend that, but it may allay the fears of the noble Lord, Lord Hunt.

§ Lord Hunt of Wirral
I have not vet had the opportunity to scrutinise the draft rules. Perhaps the Minister will check as to whether or not I was included on the circulation list.

§ Lord McIntosh of Haringey
The copy I saw was addressed to the noble Baroness, Lady Miller. However, if a copy has not yet arrived, I shall see that one does so sharpish.

§ Lord Hunt of Wirral
As always, the Minister responded positively and constructively to the suggestion by delivering what I am sure all Members of the Committee would like to have; that is, an opportunity to scrutinise the rules we are debating. Therefore in acknowledging the Minister's positive contribution, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Hunt of Wirral
moved Amendment No. 62: Page 199, line 11, leave from "shall" to end of line 12 and insert "exclude The noble Lord said: This group of amendments relates to page 199 in Schedule 4 and "Decisions of the Tribunal". In paragraph 1(2) it says, In preparing the document the Tribunal"— I prefer to insert the word "exclude" but the paragraph states— shall have regard to the need for excluding, so far as is practicable". Amendments Nos. 63 to 65 leave out the words, "in its opinion", in each subparagraph (a) to (c) in subparagraph (2). The schedule provides that the Competition Appeal Tribunal may exclude information contrary to the public interest or confidential information. The problem is that the wording throughout the paragraph at present places a great deal of discretion in the hands of the Competition Appeal Tribunal in relation to the disclosure of sensitive business information. I hope that that explanation helps the Minister to deal with the amendments. I beg to move.

§ Lord McIntosh of Haringey
I take this group of amendments very seriously. The amendments would 1219 ensure that when a tribunal publishes its decision, having regard to the need for excluding anything which would in its opinion be contrary to the public interest or that significantly harms individuals or businesses, the tribunal must simply exclude such material without having any discretion or margin of appraisal.
The problem is that we need to strike a balance between the adequate protection of individual, business and public interests. This is a quasi-judicial tribunal, subject to what the lawyers say. The balance we have achieved between protecting individual interests and seeing that as far as possible the tribunal has its reasoning in public I believe to be right. To change it as these amendments propose would distort that balance against the transparency of justice.

§ Lord Hunt of Wirral
I agree that it is necessary to get the right balance. I should like to reflect therefore on what the Minister said. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, not moved.

§ Lord McIntosh of Haringey
moved Amendment No. 66: Page 199, line 30, after "costs" insert "or expenses The noble Lord said: In moving Amendment No. 66, I shall speak also to Amendments Nos. 67 to 83. These are technical and drafting amendments.
Amendments Nos. 66, 67 and 70 ensure that the correct terminology from Scots law for "costs", namely "expenses", is entered in all the appropriate places.
Amendments Nos. 68 and 69 ensure that, where the competition appeal tribunal has made an order for any monetary award to be paid to a consumer body for onwards distribution to the individuals concerned—we have debated the principle of the issue of consumer bodies—the body can subsequently enforce that order on behalf of the individuals.
The new versions of paragraphs 6 and 7 and the new paragraph 8, all of which are inserted by Amendment No. 71, are necessary in order take into account the amendments to Clauses 17 and 18 made by Amendments Nos. 86, 87, 94 and 95, which we can discuss at leisure at the next Committee sitting. The changes allow for the possibility of an order under the new Section 47B(5A) for the payment of damages awards to consumer bodies, and the possibility for a claim under the new Section 47A(1) for a sum of money other than damages. In all circumstances, as before, awards made to individuals in the course of consumer group claims can only be enforced by the relevant individual with the permission of the High Court or Court of Session. Any costs awarded against the consumer body can only be enforced against the body and not the individuals involved in the group claim.
1220 The new paragraph 8 explains what the word "damages" covers for the purpose of the whole schedule and avoids the need to make such an explanation each time "damages" are mentioned.
Amendment No. 72 enables the competition appeal tribunal rules to stipulate the time period in which damages claims can be brought. Again we can discuss that at leisure. The amendment makes it clear that, in the case of group consumer claims brought under Clause 18, the time period relates in the first instance to the individual claim rather than to the proceedings as a whole.
We envisage that the tribunal rules will specify a limitation period of two years from the date of a final decision after any appeals in a competition case. In the unusual case where the loss suffered by an individual claimant occurred after that date, the two-year period would run from the date of the loss. In the courts, claims of this kind would be subject to a limitation period of six years from the accrual of the cause of action; that is to say, the date of the damage or loss occurred. However, in the case of claims before the tribunal, such a period would be inappropriate. A claimant does not have any possibility of lodging a claim until the relevant decision has been taken by the OFT or the European Commission, and any appeals have been exhausted. It is therefore more appropriate for any time period to begin with the earliest point at which a claim can be brought. Two years is enough.
Amendment No. 74 clarifies the situations in which the competition appeal tribunal will be able to reject claims being made under Section 47A or 47B. It is obviously important that the tribunal rules should give it the power to reject any claims that have no reasonable grounds, or do not fulfil the criteria under which claims can be brought at an early stage. This redraft of paragraph 12 clarifies the grounds on which the tribunal will be able to reject claims for damages. It allows the tribunal to reject claims that do not meet the requirements for a consumer claim or where an individual involved in a group claim has not given his consent. The tribunal will still be able to reject any proceedings it considers vexatious.
Amendment No. 75 is consequential on the repeal of Section 56 of the Competition Act 1998.
Amendment No. 76 enables the competition appeal tribunal rules to make provisions for awarding costs against individuals that were incurred in an individual claim before that claim was subsumed into a consumer group claim.
Amendments Nos. 78 and 79 simplify the provisions that govern the interest payable on any sums awarded by the competition appeal tribunal.
Amendment No. 80 enables competition appeal tribunal rules to be made in relation to the withdrawal of individual claims included in proceedings brought under Section 47B.
Finally, Amendments Nos. 73, 77, 81, 82 and 83 are consequential amendments that are required as a result of the redrafting of Clause 17.
1221 I am sorry to rush through that, but the important point is that that my noble friend Lord Sainsbury wrote to everyone about these amendments in advance. The second point is that these are paving amendments for the substantive amendments which we are free to discuss, as I say, at our leisure on Thursday. I beg to move.
On Question, amendment agreed to.

§ Lord McIntosh of Haringey
moved Amendments Nos. 67 to 83: Page 199, line 32, leave out "or costs" and insert ", costs or expenses Page 200, line 1, leave out paragraph (b) and insert— (b) for the purpose of enforcing a decision to award damages, costs or expenses (other than a decision to which paragraph (c) applies), by the person to whom the sum concerned was awarded; and (c) for the purpose of enforcing a decision to award damages which is the subject of an order under section 47B(5A) of the 1998 Act, by the specified body concerned. Page 200, line 9, leave out paragraph (b) and insert— (b) for the purpose of enforcing a decision to award damages, costs or expenses (other than a decision to which paragraph (c) applies), by the person to whom the sum concerned was awarded; and (c) for the purpose of enforcing a decision to award damages which is the subject of an order under section 47B(5A) of the 1998 Act, by the specified body concerned. Page 200, line 16, leave out "or costs" and insert "costs or expenses Page 200, line 25, leave out paragraphs 6 and 7 and insert— 6 A decision of the Tribunal in proceedings under section 47B of the 1998 Act which—

(a) awards damages to an individual in respect of a claim made or continued on his behalf (but is not the subject of an order under section 47B(5A)); or

(b) awards costs or expenses to an individual in respect of proceedings in respect of a claim made under section 47A of that Act prior to its being continued on his behalf in the proceedings under section 47B,

may only be enforced by the individual concerned with the permission of the High Court or Court of Session. 7 An award of costs or expenses against a specified body in proceedings under section 47B of the 1998 Act may not be enforced against any individual on whose behalf a claim was made or continued in those proceedings. 8 In this Part of this Schedule any reference to damages includes a reference to any sum of money (other than costs or expenses) which may be awarded in respect of a claim made under section 47A of the 1998 Act or included in proceedings under section 47B of that Act. Page 201, line 6, at end insert— (3) Tribunal rules may make provision as to the time limits for making claims to which section 47A of the 1998 Act applies in proceedings under section 47A or 47B. Page 201, line 8, leave out "a claim for damages under section 47A" and insert "proceedings under section 47A or 47B Page 201, line 14, leave out paragraph 12 and insert— 12 Tribunal rules may provide for the Tribunal—

(a) to reject the whole of any proceedings under section 47B of the 1998 Act if it considers that the person bringing the proceedings is not entitled to do so or that the proceedings do not satisfy the requirements of section 4713(1);
1222
(b) to reject any claim which is included in proceedings under section 47B if it considers that— (i) the claim is not a consumer claim (within the meaning of section 47B(2)) which may be included in such proceedings; or

(ii) the individual concerned has not consented to its being made or continued on his behalf in such proceedings;

(c) to reject any claim made under section 47A of the 1998 Act or included in proceedings under section 47B of that Act if it considers that there are no reasonable grounds for making it."

Page 202, line 12, leave out from "in" to end of line 15 and insert "paragraph 1(2) Page 202, line 32, at end insert— (1A) Rules under sub-paragraph (1)(h) may provide, in relation to a claim made under section 47A of the 1998 Act which is continued on behalf of an individual in proceedings under section 47B of that Act, for costs or expenses to be awarded to or against that individual in respect of proceedings on that claim which took place before it was included in the proceedings under section 47B of that Act. (1B) Otherwise Tribunal rules may not provide for costs or expenses to be awarded to or against an individual on whose behalf a claim is made or continued in proceedings under section 47B of the 1998 Act. Page 203, line 9, leave out "or" and insert "and Page 203, line 18, leave out "damages or other Page 203, line 24, leave out sub-paragraph (3). Page 204, line 7, at end insert— (2) Tribunal rules may make, in relation to a claim Included in proceedings under section 47B of the 1998 Act, any provision which may be made under sub-paragraph (1) in relation to the whole proceedings. Page 204, line 30, leave out "for damages Page 204, line 40, leave out from "claim" to end of line 41 and insert "made in proceedings under section 47A of the 1998 Act Page 205, line 1, leave out from "provision" to "in" in line 2 and insert "in connection with the transfer of a claim to which section 47A of the 1998 Act applies On Question, amendments agreed to.

§ Lord Grocott
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.