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Madam Speaker: I have not been informed by a Minister that he wants to make a statement, but the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and others know their way around the House and will know how to pursue the matter.
Mr. Edward Garnier (Harborough): On a point of order, Madam Speaker. Before I make my point of order, I refer you to my relevant entry in the Register of Members' Interests.
Since the Bernie Ecclestone affair, in which the Labour party had to return the £1 million that he paid it not to ban tobacco advertising, the Government's policy on the ban has been somewhat confused. Irrespective of the merits of the Government's arguments in favour of a ban, is it in order for Ministers and their supporters to abuse the courts for making decisions that they find politically inconvenient? The Government are entitled to their opinion on tobacco advertising and smoking; I agree that smoking is a danger to health. They are also entitled to appeal the decision made on Friday to stay their ban on advertising. However, are they entitled to resort to abusing the courts? Secondly, have you had a request from the Secretary of State for permission to make a statement explaining why the Government felt it appropriate to make those remarks, as opposed to arguing their case on appeal?
Madam Speaker:
As the hon. and learned Gentleman understands, the Speaker has no jurisdiction over comments made outside the House. I have enough responsibilities for comments made in the House, let alone those made outside. In answer to the hon. and learned Gentleman's second question, I have to inform him that I have had no request for any Minister to make a statement.
Orders of the Day
Contracts (Rights of Third Parties) Bill [Lords]
Not amended in the Standing Committee, considered.
Brought up, and read the First time.
The Parliamentary Secretary, Lord Chancellor's Department (Mr. David Lock):
I beg to move, That the clause be read a Second time.
Madam Speaker:
With this it will be convenient to discuss Government amendment No. 1.
Mr. Lock:
The new clause deals with arbitration and will ensure that, where appropriate, the Arbitration Act 1996 applies to the enforcement of third-party rights under the Bill. No one disputes that that is the right policy, but the subject is technical and--I apologise to the House for introducing further amendments on such a subject at this late stage--concerns that were raised during the recess have made us examine the wording carefully.
I record my gratitude to those who raised the concerns and to the arbitration experts who helped us ensure that the drafting was right. Subsection (1) of the new clause will bring in the provisions of the Arbitration Act where the third party's right to enforce a substantive term in his favour is subject to a term providing for the submission of disputes to arbitration.
Subsection (1) will also ensure that when a third party whose right of enforcement is subject to the dispute being referred to arbitration seeks to enforce his right by litigation, the promisor--the other party to the contract--will be able to seek a stay of the proceedings under
section 9 of the Arbitration Act. The Bill as now drafted would not allow that course of action if the third party, whose right under the Bill is subject to arbitration, chose to litigate instead. The Government have decided that it would probably not be safe to rely on the court's using its inherent power to stay the proceedings brought by the third party.
Subsection (2) of the new clause is concerned with situations in which the "conditional benefit" approach will not apply--for example, where the contracting parties give the third party a right to arbitrate a dispute other than one concerning a right conferred on the third party under clause 1, such as a tort claim made by the promisor against the third party. We do not believe that such situations will occur often, but to require the third party to arbitrate where there is no other benefit to him would be to impose a pure burden on him, which would be contrary to the policy of the Bill. Subsection (2) therefore brings in the Arbitration Act only where the third party has chosen to exercise the right to arbitrate.
Amendment No. 1 would delete clause 7(4), which is being replaced by the new clause on arbitration.
Mr. John Burnett (Torridge and West Devon):
I am grateful to you for calling me, Madam Speaker, because this is the first opportunity that I have had publicly to welcome both the new Parliamentary Secretaries to the Lord Chancellor's Department, the hon. Members for Wyre Forest (Mr. Lock) and for Liverpool, Wavertree (Jane Kennedy), to their Front-Bench posts. I congratulate them on their appointments.
Promotion to the Lord Chancellor's Department seems to be the precursor of further preferment, so I wonder where both hon. Members will be in a year's time. I am especially delighted because I believe that the hon. Member for Wavertree has set a precedent, in that she is not a lawyer. I do not know whether she is the first non-lawyer ever to be a Minister in that Department, but if so the precedent is welcome, especially to me, because I am the only lawyer among the 26 new Liberal Democrat Members of Parliament. I shall draw the precedent to the attention of our new party leader.
I pay tribute to the Law Commission for its excellent work on the Bill. I am also grateful to the Parliamentary Secretary for his letter to me of 18 October and for advance notice of new clause 1. He will be aware that I raised several points on Second Reading that were dealt with by his predecessor, the hon. Member for Leicester, East (Mr. Vaz), in his letter to me of 12 July.
For reasons of certainty and to incorporate various other provisions--for example, guarantees of performance by third parties given by banks or insurance companies--most commercial organisations will continue to insist on written agreements with third parties, which are usually called collateral warranties or collateral agreements. I hope that the Parliamentary Secretary will make it clear when he responds that if there is a conflict between a written collateral warranty or agreement and the Bill--including the parties agreeing to contract out of the Bill--the provisions of the written agreement will prevail. I welcome the new clause, because it will go some way to meeting the problems that I envisaged on Second Reading and that were dealt with by the letter I received from the hon. Member for Leicester, East.
Mr. Nick Hawkins (Surrey Heath):
I join the hon. Member for Torridge and West Devon (Mr. Burnett)
'.--(1) Where--
(a) a right under section 1 to enforce a term ("the substantive term") is subject to a term providing for the submission of disputes to arbitration ("the arbitration agreement"), and
(b) the arbitration agreement is an agreement in writing for the purposes of Part I of the Arbitration Act 1996,
the third party shall be treated for the purposes of that Act as a party to the arbitration agreement as regards disputes between himself and the promisor relating to the enforcement of the substantive term by the third party.
(2) Where--
(a) a third party has a right under section 1 to enforce a term providing for one or more descriptions of dispute between the third party and the promisor to be submitted to arbitration ("the arbitration agreement"),
(b) the arbitration agreement is an agreement in writing for the purposes of Part I of the Arbitration Act 1996, and
(c) the third party does not fall to be treated under subsection (1) as a party to the arbitration agreement,
the third party shall, if he exercises the right, be treated for the purposes of that Act as a party to the arbitration agreement in relation to the matter with respect to which the right is exercised, and be treated as having been so immediately before the exercise of the right.'.--[Mr. Lock.]
3.35 pm
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