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4.27 pm
Mr. Nick Harvey (North Devon): I, too, welcome the legislation, which defines new powers for arbitrators and parties to arbitration.
There is no doubt that new provisions are required to provide a more effective management procedure and to give the courts a supporting rather than an interfering role. The Bill modernises the existing processes of arbitration, and also provides a viable and attractive alternative to litigation as a means of resolving disputes. In many ways it is an admirable and much-needed Bill, relying as it does on three main principles--the provision of an impartial tribunal to resolve disputes, the giving of greater freedom to parties in regard to how they resolve those disputes, and the confining of judicial interference to the bare minimum.
Moreover, as both the Minister and the hon. Member for Makerfield (Mr. McCartney) pointed out, the implications of the Bill are commendable. The role of London as an eminent centre for international commercial arbitration is particularly important. The Bill can only exemplify the quality of our legislative framework and serve the interests of parties both at home and abroad when they enter into arbitration.
Having said that, I wish to make one observation about the Bill on which I hope that the Minister may be able to reassure me. The explanatory memorandum states that the Bill seeks to introduce certain changes in the law to confront the existing complex nature of the legislation and to make it fair. I agree that the Bill has more clarity than before and is logical in its language, and I echo the Minister's commendation of the draftsmanship.
There is one particular difficulty that I would like to look at before the measure becomes law. The Bill sets out mandatory, as well as non-mandatory, provisions for the parties involved to take on board and to consider before entering into arbitration. So long as mandatory provisions are recognised, users of arbitration can, as the Minister said, put forward their own provisions and proposals. My point is that members of the general public or representatives of small businesses entering into arbitration may not be fully aware of the option open to them of proposing some arrangements on their own part. They may not realise the extent to which they are entitled to propose their own ground rules. The outcome of this may be that they will rely very much more on the mandatory provisions, which might have the effect of giving arbitrators more power than ever before.
For those who do not understand the complex nature of the provisions, there is no protection against the immense power that the arbitrators will have. I would like to see some warning or information given to the parties that they have the option of employing their own provisions before they simply resort to taking on the mandatory provisions.
The Department of Trade and Industry has said that people ought to read the Arbitration Bill, or Act as it will become, before entering into arbitration, and that if they do not do so, it is their look-out. I wonder whether we would normally expect members of the public or small firms to have read through statutes and to have understood an Act of Parliament. If we are talking about large companies with legal departments, it is not a problem. But the Government should indicate how they intend to publicise the fact that individuals and small firms have this opportunity for discussion, and what guidance the Government will give to people on how to make use of it. For example, a great deal of information and help is given in guidance to those using small claims courts, and I wonder whether it would be possible for something comparable to be done for the provisions in the Bill.
Mr. John M. Taylor:
I should like to thank, in reverse order, the speakers who contributed to this debate. I thank the hon. Member for North Devon (Mr. Harvey) for his thoughtful contributions and his support. I shall certainly
The hon. Member for Makerfield asked me about a number of matters concerning industrial tribunals. Without wishing to trespass on your job, Mr. Deputy Speaker, it occurs to me that this legislation is not about industrial tribunals at all. Since the hon. Gentleman was gracious enough to say that there was another channel of communication between us--that of correspondence--I invite him to write to me on the matter that he raised, and I shall do my best to furnish him with pertinent replies.
The hon. Member for Makerfield also asked me when we intended to enact the Bill. We will enact the Bill as soon as possible and we are working to a commencement date of January 1997. We must give sufficient warning of the changes to users and to the arbitration community. However, we certainly pledge ourselves to that date.
Mr. Ian McCartney:
Will that date be placed on the face of the Bill or is it just a personal commitment?
Mr. Taylor:
I must rest with best endeavours because the Bill is perfectly clear about the date of operation. Clause 108 states:
I had better cover myself by saying that there will be best endeavours towards the date I mentioned. However, one never knows; things happen when taking legislation as far as Royal Assent. We are working to a target commencement date of January 1997.
Mr. Michael Stephen (Shoreham):
I had a case in which my constituents suffered financial loss as a result of misconduct by an arbitrator. I appreciate that that is very rare, but it did occur in my constituents' case. I had great difficulty extracting from the Chartered Institute of Arbitrators information about whether the arbitrator was insured. I eventually found out that he was not insured and that the institute had no rules requiring arbitrators to be insured. Will my hon. Friend consider legislating to require arbitrators to be insured so that they can satisfy any claim for damages against them in respect of misconduct?
I also discovered that the Chartered Institute of Arbitrators seems to be answerable to nobody. Will my hon. Friend consider to whom it is answerable? And if it is answerable to nobody, will he consider legislating to make it answerable to somebody?
Mr. Taylor:
That is an interesting experience. I should like to reflect on the subject of answerability and insurance. My hon. Friend will know that before I went straight I used to practise one of the learned professions. Insurance was essential in order to practise, and mighty expensive it could be from time to time. I have a certain personal affinity for that subject. I will reflect on it and let my hon. Friend know my further thoughts in due course.
The hon. Member for Makerfield mentioned read-across or interference between certain of the provisions of this Bill and some construction legislation that will be brought before the House next week, if I heard my right hon. Friend the Leader of the House correctly during Business Question Time. No doubt the hon. Gentleman and others will look at that matter then, although I believe that the previous anxieties are now considerably allayed.
I should say that neither we nor anyone else is trying to force arbitration on a reluctant industry, be it the construction industry or any other sector. Arbitration is a consensual process and it must be chosen freely by the parties. As to the point on clause 69(2)--
Mr. Ian McCartney:
On clause 69, I am not sure that the Minister has dealt adequately with Lord Justice Saville's argument about cross-reference between the Housing Grants, Construction and Regeneration Bill and this Bill. I asked the Minister clear and specific questions. First, I asked whether he had knowledge of or had been made aware of Lord Justice Saville's letter to the relevant Departments. Secondly, I asked whether he had considered it and what response he had given to Lord Justice Saville. The Minister's reply was nicely put, as is the way of lawyers, but it did not adequately cover the questions I asked him. I need to know precisely whether Lord Justice Saville's point has been met, rejected or partially rejected. The point that he raises merits serious consideration as he is one of the leading experts in this area of legislation.
Mr. Taylor:
The hon. Gentleman has already told me that he would be happy for me to pursue certain of these matters in correspondence. I shall take advantage of that. He also knows that there is a Committee stage to the Bill--when, no doubt, all those matters will be examined very carefully. My understanding on these matters, which I offer to the House in good faith, from the last instruction that I took before coming to the House today, is that anxieties about some form of read-across or interference between the two Bills have now been considerably allayed. The hon. Gentleman can take comfort from the fact that there will be a Committee stage to this Bill before very long, and he has the actuality of the other Bill next week.
"(1) The provisions of this Act come into force on such day as the Secretary of State may appoint by order made by statutory instrument, and different days may be appointed for different purposes.
(2) An order under subsection (1) may contain such transitional provisions as appear to the Secretary of State to be appropriate."
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