Homes Bill

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Mr. Waterson: I want to raise a separate issue, which did not fit naturally into an amendment. It relates to clause 6(1), which, I understand, is a free-standing and separate defence where a person has

    exercised all due diligence to avoid the commission of the offence.

that is, the failure to produce the seller's pack. The Minister will, no doubt, have been told by his advisers that ``due diligence'' is a phrase that appears many times in legislation and court decisions. In layman's terms, I want to tease out of the Minister what a seller would need to have done, short of procuring a seller's pack, to avoid prosecution under subsection (1). There is a little help, but not much, to be gathered from other parts of the law. I am primarily a shipping lawyer and, although there is a great deal about ``due diligence'' in shipping law, it is not of any direct help in this instance. Perhaps the most interesting case is Jervis v. Tomkinson in 1905, in which it was held that

    A covenant to do a thing ``with all due and reasonable diligence and despatch'' is not excused from performance if it can be done; even though the jury find that it cannot be done by any reasonable application of labour, diligence, skill, money, or other means.

That decision, couched though it may be in slightly obscure legal language, suggests that a person cannot simply escape on the basis of a defence of due diligence if he or she has taken all reasonable steps to do whatever is required. I do not know what that was in the above case, but it is obviously not related to the situation that we are discussing. If it were still possible to do what was required and the person did not, even by an unreasonable application of labour, diligence, skill, money or other means, he or she could fall foul of the legislation.

There is another definition in, as it happens, a shipping case of 1960: Riverstone Meat Co. Ltd. v. Lancashire Shipping Co. Ltd. Lord Justice Willmer held that

    An obligation to exercise due diligence is to my mind indistinguishable from an obligation to exercise reasonable care.

To my lawyer's mind, those two requirements seem rather contradictory. There is certainly enough there to require some dispelling of the potential confusion. Unless the Minister says the opposite, I think that this is meant to be a wholly free-standing defence, quite separate from those that we have been discussing. It would be helpful to know what the Minister's advisers suggest would amount to due diligence, which would get someone off the hook.

Mr. Raynsford: The hon. Gentleman has asked a perfectly fair and valid question about clause 6(1), which is the defence of due diligence. After responding to that question, I will say a few words on the human rights issue that he raised at the end of his comments on the amendments. As he sought leave to withdraw the amendment, I did not have an opportunity to respond. I hope that it will be in order to do so now.

The obvious example of due diligence, which we have already discussed, is the case in which it proves impossible to put together all the documents for the seller's pack, because the warranties—which exercised us earlier—never turn up. Despite the seller repeatedly being asked and reminded to search his or her chest of drawers, cellar or wherever old documents are kept to try to find the warranties, they are never secured. There might be a claim that the seller's pack has been offered with a note in it saying that the warranties or guarantees will follow, but they never arrived, and that is a breach of the law. In such a case, it would be entirely proper for the estate agent to be able to show that he or she had done all that was reasonably possible to obtain that information, but had not been able to do so. He could show that he has systems in place that normally prevent him from falling in breach of the law, for example, to avoid early marketing, before a seller's pack is put together and to ensure that where the information is not obtained by a certain time, a pack may be issued but with procedures for chasing up the information later. In my view, such evidence is an obvious example of the due diligence likely to be covered by these circumstances.

I must tell the hon. Member for Eastbourne that I am not an expert in shipping law and I do not want to begin to address the questions about which even he seemed unsure, which arose from the cases that he quoted. However, I suspect—this is a hesitant comment—that some of those provisions relate to obligations that clearly had a very serious impact on the safety of people travelling on ships. It is probable that higher standards would reasonably be expected where human life was at risk than in simple compliance with the provisions of this legislation. I do not want to pursue that any further, but the defence seems reasonable in the context of what we are discussing, where it is a matter of ensuring compliance with procedures but where human life is not immediately at risk.

Mr. Waterson: I do not want to pursue the Minister too far down that avenue as the question of human life is neither here nor there in the shipping law analogy. It is probably my fault for not having been sufficiently succinct. I was trying to make the point that I have found from my researches that the test of ``all due diligence'' is quite a high test in law. It is significantly higher than taking ``all reasonable care'', for example. A layman might underestimate its importance. I do not expect the Minister to deal with this on the hoof, as it requires careful thought and careful advice from those who know about these things. I should be happy if he undertook to write to the Committee on that subject.

5 pm

Mr. Raynsford: The hon. Gentleman may be reassured to know that the phraseology is not unique to this type of legislation as the Property Misdescriptions Act 1991, which is probably the closest parallel, has exactly the same defence. There is therefore a good precedent in legislation that was introduced by the previous Conservative Government. I hope that he will accept that this is a reasonable basis for proceeding. I shall look into this further and if any concerns arise, I will write to him. I hope that he will accept that this is an appropriate defence that is also commensurate with the level of responsibility defined in the Bill.

On human rights, he asked whether buyers could feel that their human rights were violated by a refusal to let them have a seller's pack in certain cases. That was one of the reasons for including the provisions in subsection (3). Without them, it would be much easier for a malicious, disgruntled or simply obsessive potential buyer to use the Human Rights Act 1998 as a basis for frequent, and in some cases entirely malicious, challenges. Therefore, I hope that he will accept that while Human Rights Act considerations apply—I made it clear that we would be careful to avoid actions that might be seen to restrict the rights of sellers—we do not want the legislation to be abused by buyers pursuing malicious claims for which no defence is prescribed in the Bill.

Mr. Don Foster: A thought occurred to me as the Minister was speaking. What is the situation with regard to estate agents providing information in the packs that they currently make available? Presumably without legislation of the type the Minister describes, they could find themselves in difficulty under the Human Rights Act.

Mr. Raynsford: Exactly the same considerations that I have been describing apply at present. An estate agent might decline to provide particulars of a property to an individual on the instructions of the seller. It might be a specific instruction such as, ``Under no circumstances are you to ever to entertain a bid from my loathsome neighbour Mr. X''. It might be a more general but entirely legitimate instruction, which would not breach the anti-discrimination legislation, to exclude groups of people such as those who would be unlikely to maintain the garden. Exactly the same considerations would apply because the Human Rights Act is already in force. We are not introducing new concepts. We are trying to ensure that the provisions of the Bill are compatible both with the anti-discrimination legislation and the Human Rights Act. I hope that, on that basis, hon. Members will accept that this is a sensible clause that should stand part of the Bill.

Question put and agreed to.

Clause 6, as amended, ordered to stand part of the Bill.

Clause 7Contents of sellers' packs

Mr. Waterson: I beg to move amendment No. 43, in page 5, line 19, leave out `may' and insert `shall'.

The Chairman: With this it will be convenient to take the following amendments:No. 5, in page 5, line 44, at end insert

    `save that these shall not include local authority searches.'.

No. 19, in page 5, line 44, at end insert

    `or—( ) a valuation of the property.'.

No. 6, in, page 6, line 2, at end insert

    `save that these shall not include a survey report or home condition report.'.

No. 7, in page 6, line 2, at end insert

    `and the term ``characteristics'' shall include information about risk of flooding.'.

No. 20, in page 6, line 2, at end insert—

    `( ) an account of the suitability of the property for occupation by disabled persons.'.

No. 40, in page 6, line 3, after `the', insert

    `physical structure of the property.'

Mr. Waterson: Amendment No. 43 is very simple. I am not entirely clear why ``shall'' has not been used: the Minister cannot be in any doubt that the regulations will be issued in due course. It could be a drafting point and I am willing to listen to reason on that.

Amendment No. 5 would take out of the seller's pack reference to the local authority searches and linked amendment would take out reference to the home condition report. I shall return to those matters later and speak first to some of the amendments that are easier to deal with.

The reasoning behind amendment No. 7 on flooding is self-evident. In recent months, few hon. Members can fail to have received letters in their postbag about flooding—some cases more serious than others—as a result of sustained rain over a long period. Some time ago, the Minister made it clear that the Government, as well as producing new planning guidance—currently in draft form, but likely to be finalised soon—were considering using the Bill to address the flooding problem. I cannot lay my hands on the reference, but it appears in Hansard. The Conservatives regard that suggestion with favour. It underlines the inadvisability of insisting that the seller's pack contain a home condition report. We shall debate the format in detail when we reach clause 8 and I do not want to stray too far, but to what extent will it deal with flooding? Will the information be reliable? If there has been severe flooding over several months, will information be provided about how badly the condition of a particular property could be affected?

I return to amendments Nos. 5 and 19. Several organisations, including the Law Society and the Council of Mortgage Lenders, are concerned about the requirements stipulated in the amendments. Although the National Association of Estate Agents is broadly supportive of the reforms, it would surely accept that not every estate agent is signed up to the proposals. Strong views are held on the subject. We need look no further than the Second Reading speech of the hon. Member for Upminster, who warned against

    over-promoting the proposals as a panacea for the problems inherent in the system of moving home.

On the basis of his nearly 30 years of experience as a conveyancer and member of the Law Society, he believed that the problem was caused

    not by the conveyancing process, but by the nature of our housing economy.

The hon. Gentleman was also critical of attempts, not least those of the Minister, to compare our system with that of other countries. In fairness, the Minister would accept that it is difficult to draw close parallels when markets, habits and occupation levels are different.

The hon. Member for Upminster made the telling point that:

    As a result of the high proportion of home ownership—

as we know it is 69 per cent. in this country—

    and the low proportion of private rented accommodation in England and Wales, few people who have to move home can consider moving into temporary accommodation.

That, of course, is a solution found in other countries, not least in Scotland, where I believe there is a tradition of people moving into rented accommodation rather than endure the tremendous climactic event whereby everyone in a chain moves house on the same day. I seem to recall a rather good film on the subject; it was made many years ago, but remains true today.

The hon. Gentleman made a fair point—no doubt doing so sank his chances of serving on the Committee. He that the proposal will help those moving home, but only marginally and at a cost—financially and otherwise. He says, for example that:

    an unscrupulous seller might obtain a seller's pack and hawk it around.

He came up with other criticisms, pointing to the efforts of the Law Society and others over quite a long period to speed up the system.

It is important that we do not pretend that we are acting in a vacuum. Things are happening, things have been happening and things will continue to happen to speed up and make more efficient the system of conveyancing in this country. It is fair to say that the Law Society and estate agents have been at the forefront of that effort. Lots of things are changing, such as the development of the internet, and so on. It may be a while before the internet is fully effective, but searches and other activities will eventually become a matter of clicking a mouse.

The hon. Member for Upminster talked about the extension of communications technology, saying that

    local and land registry searches will be available at the touch of a computer keyboard—

but adding—

    I think we can ignore them as a factor leading to delay and uncertainty, although they are relevant to the question of cost and who is to bear it.—[Official Report, 8 January 2001; Vol. 360, c. 787-88.]

He pointed that it has always been possible to make a personal search, it just costs extra money. If there is a great hurry, it is always possible to pay for your solicitor to send someone down to the local council office and make a personal search, even in the age of the internet. The hon. Gentleman mentioned serious reservations about the front-loading of costs, extra costs, the need for further surveys, and so on. He also, rather interestingly, talked about the problems of criminal sanctions. What a shame the Committee does not have the benefit of his advice.

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