Mr. Martyn Jones (Clywd, South-West) : This is crucial to the idea of the consumer guarantee mentioned by the hon. Member for Waveney (Mr. Porter). The problem with the Sale of Goods Act is that rejection is the immediate remedy. In the case of a product that is not repairable, which the Minister mentioned, there is only action at law for repair. If a consumer guarantee were enshrined in law, the product would carry a guarantee for replacement or a refund within a statutory period. That would provide a right for consumers that they do not currently enjoy under the Act. The Minister is missing the problem with the Act in dealing with a rogue product.
Mr. Forth : I am aware of the hon. Gentleman's interest in and knowledge of the matter. He and I discussed it recently, and no doubt will do so again, as I am sure I will also discuss it with my hon. Friend the Member for Waveney. I do not claim that the Act is perfect. The hon. Gentleman knows that for some time we have wanted to update it. Neither do I claim that all is perfect with guarantees. However, I am not yet convinced that the
Column 1290National Consumer Council proposal is workable or ideal. I hope that, between us, we can find the best way forward. I shall strive to do so, and I am sure that the hon. Gentleman will do so.
The Law Commissions' review of legislation governing the sale and supply of goods, published in 1987, made a number of recommendations that have been accepted by Government. The main recommendation is that the old requirement of merchantable quality should be replaced with an up-to-date term that recognises the aspects of
quality--something dear to the hon. Gentleman's heart--which are important for consumers as end-users of the goods in question. The new Act will spell out that the relevant aspects in determining satisfactory quality include fitness for purpose, the appearance and finish of the goods, their freedom from minor as well as major defects, their safety and their durability. The Government have announced their intention to introduce legislation to implement those changes, which will clarify and strengthen consumers' rights. Some have argued that consumers' rights should go further. The hon. Gentleman and my hon. Friend both said as much. The argument is that the right to reject and to obtain a refund should be a long-term one and should not necessarily expire after a reasonable time. They also argue that latent defects may come to light only afer some time in use. My hon. Friend referred to the famous--some would say notorious--Bernstein case of the motor car that broke down after a limited period.
The House should be aware that the Law Commissions gave very careful consideration to all the arguments when they considered this issue, but they recommended against creating a long-term right of rejection. They argued that such a right would create major commercial uncertainties and be extremely unfair to sellers. Consumers who bought a defective product would, in effect, get free use of it until the defect appeared. The seller would then be obliged to take back a used product and to refund the purchase price in full. Suppliers would be obliged to hedge against the commercial uncertainties of such a regime and the unwelcome implications for consumer prices. I should want to avoid that, and so, I suspect, would other hon. Members.
My hon. Friend welcomed the National Consumer Council's recommendations on consumer guarantees. He urged me not just to consider them, but more or less to adopt them. I have already given them careful consideration, and there is much in them that I want to think about positively. I agree that guarantees should state their terms clearly and in plain English and I could support legislation that would make such guarantees legally enforceable. I fully endorse the view that any guarantee must be additional to existing statutory protection.
But I do not accept that it is necessary to lay down detailed terms or procedures which would attach to specific products covered by consumer guarantees. To do that would be needlessly bureaucratic and would constrain rather than encourage competition on the terms of individual guarantees, and it may result in some manufacturers withdrawing existing guarantees which offer different terms, which could have the effect of leaving consumers less protected than before.
The Sale of Goods Act provides the consumer with a clear right of action against the supplier, who is normally a retailer. The NCC proposals would involve the manufacturer, who is not normally a party to the contract.
Column 1291There is a risk that that would result in confusion in some disputes, which might undermine the consumer's rights against the retailer under the Sale of Goods Act.
I would welcome measures that would promote greater transparency of information about guarantees and wider and more open competition in their terms, but the NCC proposals would need more development along those lines before they would attract Government support. My hon. Friend raised the issue of legal redress in consumer disputes and the problems associated with seeking that redress in some circumstances. Earlier this year, the Lord Chancellor announced, in response to the civil justice review, the introduction of a programme of reforms, designed to improve access to justice by speeding up, simplifying and reducing the cost of civil proceedings. The Courts and Legal Services Bill permits the Lord Chancellor to replace the present system of jurisdiction with more flexible criteria for allocating business between the High Court and the county courts. This will enable more cases of higher value to be handled and tried in the county courts. Procedural changes, such as a requirement for early exchange of information, the introduction of new pre-trial rules covering more informative pleadings, interrogatories and admission of facts, and the creation of a new system of court control could and should also assist smaller plaintiffs to pursue claims more effectively.
A further development arising out of the civil justice review is the raising of the upper limit for small claims proceedings from £500 to £1,000. I appreciate that that may not be relevant in the case that my hon. Friend cited, but it will be a substantial increase in the facility given to consumers to benefit from the simplified proceedings.
My hon. Friend referred to the problems that his constituents had with the purchase of a motor vehicle. The code of practice for the motor industry is an important supplement to the general law covering the sale of motor cars and it is a good example of self-regulation by the responsible sector of an industry. It provides consumers not only with minimum standards in the sale, repair and
Column 1292servicing of motor cars, but also with a mechanism for resolving disputes that does not entail having to go to court.
The code has the support of the Director General of Fair Trading, who also has a role in monitoring it and keeping it under review. Any proposals for changing the code are a matter betweeen the director general and the trade associations concerned, and any complaint about a member failing to abide by the code should be directed to the trade association and also to the Office of Fair Trading.
A code of practice is not intended to be a substitute for legislation, and it does not act as such. Nor is it designed to be enforced in the same way as legislation is, but codes of practice have distinct advantages over statutes. Because they are voluntary, they represent a genuine desire on the part of the traders concerned to go beyond the letter of the law in their dealings with consumers. Codes are also more flexible than statutes and can be interpreted more liberally and modified more readily. Furthermore, codes such as the motor code provide consumers with valuable alternative facilities for resolving disputes, which may be quicker, cheaper and less intimidating than going to court, particularly in the case of larger claims.
I have tried to answer most of the points raised by my hon. Friend. I have also tried to deal with some of the matters that have been considered by others, including the hon. Member for Clwyd, South-West. I hope that my hon. Friend the Member for Great Yarmouth, who has been listening, has been persuaded that the Government are aware of the concern shared by many hon. Members in this most important area. We shall always look positively at suggestions that may come forward in the shape of legislation or in any other form. But, above all, our concern is to ensure that we combine what is effective and practical while resisting what may be bureaucratic. In striking that balance, we shall provide the best and most effective protection for the consumer.
Question put and agreed to.
Adjourned accordingly at seventeen minutes to One o'clock.
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