Homes Bill

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Mr. Mullin: As it happens, I could have guessed most of the answers that I have received, because they largely concern matters of common sense.

One must bear in mind throughout this discussion that the schedule, like the enforcement clause that we have just discussed, is lifted almost entirely from the Property Misdescriptions Act 1991, which was introduced by the previous Government. The same questions might therefore have been asked of that Act, although I doubt whether they were.

The hon. Member for East Worthing and Shoreham asked about the circumstances in which paragraph 4(1), which will enable withdrawal of a fixed penalty notice, will be used. It will be used, for example, if a mistake has been made. Has it occurred to the hon. Gentleman that people sometimes make mistakes? Not everybody corrects their mistakes, of course, but trading standards officers do. He asked whether paragraph 6(4), which enables the seizing of documents, would in such circumstances leave the sale in limbo. In fact, the vendor would not be prejudiced by seizure because copy documents can be made and he could retain his own copy.

The hon. Gentleman asked what safeguards exist in terms of the reasonableness of trading standards officers' behaviour. The short answer to that is the British legal system. He asked who is to notify a person whose documents have been seized. That is the estate agent's job, because he has a contractual relationship with the vendor and is therefore liable. The hon. Gentleman also asked what constitutes a reasonable hour for the exercising of an officer's power. Here he is returning to his ``something of the night'' argument, in which he imagines trading standards officers exercising their powers in a gestapo-like fashion at 4 o'clock in the morning. That might happen in west Sussex, but it certainly does not in Sunderland. His guess as to what constitutes a reasonable hour is as good as mine, but I imagine that the English courts might have something to say if officers started bashing down doors at 4 o'clock in the morning. I rest my case.

Mr. Loughton: I am glad that the answers were so simple and such a matter of common sense that the Minister still needed to read the notes that were thrust under his nose. That shows that the answers were not obvious. Indeed, they give rise to further questions.

Of course a sale will not be interrupted, because only copy documents are required—there will not just be one seller's pack. However, the weights and measures officer will, presumably, have taken action either because something in the seller's pack is incorrect, or because something has not been included in it. Could the sale process be restarted for the vendor, seamlessly and straight away? Could it be restarted with the same firm of estate agents, which would then be required simply to insert the missing document or correct the erroneous one? Given the basis of employee or employer responsibility and liability, could the sale continue with the same estate agent even though an employee of that estate agency was the subject of a criminal investigation? There is a potential conflict of interest. If the sale cannot be restarted with the same estate agent, how easily can it be transferred to an alternative firm?

For the Minister yet again to dismiss my question in a complacent manner is most unsatisfactory. He tells us that the estate agent is contractually obliged to communicate to the vendor that a sale has been interrupted or suspended—whatever terminology he chooses to accept. Where in the contract is it clearly stated that the estate agent has a contractual duty to inform the vendor of any seizure of documents, any interruption or potential interruption of the sale through the actions of weights and measures officers? We, as laymen, want the answers, but so do technical experts and practitioners in the field. It is not a matter of common sense. There are many details still to be provided. The Minister—solo—did not know the answers. We should approach the questions with rather more seriousness than he has shown.

Mr. Mullin: I dealt with all the points head on. The notes that I was struggling to read were my own. They were to remind me of the clauses to which the hon. Gentleman had drawn my attention. He asked whether the sale could continue. Yes, it could, although it is possible that the vendor might have lost confidence in the estate agent if there had been a raid that resulted in documents being taken away. The cause of the raid might have been a complaint from the vendor, which would make it highly likely that he would want to go elsewhere. That is a matter for the vendor to decide.

The hon. Gentleman asked about the estate agent's duty to inform the vendor in the event that he is investigated. The estate agent has a duty to market the property. He has a duty towards the vendor from the moment an agreement is reached. A contract does not have to written down in black and white, although there will be terms and conditions that are standard to the profession. The estate agent will be expected to perform his duty to the best of his ability. If he keeps quiet about some relevant consideration, such as the fact that he is, in some way, under investigation, he will be in breach of that duty.

Question put and agreed to.

Schedule 1 agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11

Offences by bodies corporate etc.

Mr. Loughton: I beg to move amendment No. 46, in page 7, line 41, leave out subsection (1) and insert—

`( ) Any offence under this Part committed by a person in the course of his employment shall be treated as committed by his employer as well as by him, whether or not it was done with the employer's knowledge or approval, unless the employer shows that he took such steps as were reasonably practicable to prevent the employee from committing that act, or from doing in the course of his employment acts of that description.

( ) Any offence under this Part committed by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that person shall be treated as having been committed by that other person as well as by him.'.

The Chairman: With this it will be convenient to take Government amendments Nos. 57, 58, 59 and 60.

Mr. Loughton: Amendment No. 46 refers to clause 11, which is about offences by bodies corporate. The Government have tabled amendments on similar lines. It refers to a point that I made previously about corporate as opposed to employee liability, and it seeks to clarify the position of the relationship between the employee and employer as regards such offences.

We believe that the wording in the Bill, which we want replaced with that in the Government amendments, seems to place too heavy an onus on the employee as the responsible party. Our wording reflects the balance more appropriately. Only if the employee acted outside the course of his duty, as a rogue trader—a rogue estate agent—would he be likely to be first in the line of fire.

I commend the amendments because I believe that the new wording creates a better balance between the employer and employee. Will the Under-Secretary confirm whether the employee would be prosecuted if an offence were committed only if he acted outside his course of duty, as a rogue trader?

Mr. Mullin: Clause 11 deals with offences by corporate bodies. Subsections (1) and (2) provide that when an offence is committed due to the act or default of an employee of a business, or of an officer of the business, it will be possible to take out proceedings against the employee, the officer, the employer or indeed all of them depending on the circumstances of the case. For the purposes of the Bill, ``officer'' includes a director, manager, company secretary or similar. Subsections (4) and (5) set out similar provisions with regard to co-operatives and partnerships.

Amendment No. 46 is in two parts. The first would provide that, when an employee of a company was responsible for committing an offence, it should be presumed that both the employee and the company were guilty, unless the company could demonstrate that safeguards designed to prevent such offences from occurring were in place.

That limb of the amendment is unnecessary, because the employer will already be the responsible person as a consequence of clause 15(2). In effect, that means that the employer is responsible for actions taken by an employee. However, the defence in clause 6(1) would apply if the employer could show that the precautionary steps described in the amendment had been taken. The provisions of the Bill are modelled on similar provisions in the Estate Agents Act 1979, the Property Misdescriptions Act 1991 and most consumer protection legislation. That means that estate agents, trading standards officers and the courts are already familiar with the relevant concepts.

The second branch of the amendment would provide that when the offence was committed by someone acting as an agent for a person—but with that person's authority—the person would also be liable to be proceeded against. The Bill provides that the penalties for breaching those duties apply only to the person responsible for marketing the property in question. That may be the seller, someone acting as the seller's agent or both of them if, for example, the seller is engaged in marketing his or her own home as well as using the services of an estate agent.

Individuals who market their own homes without the services of an estate agent will be responsible for their own actions. In cases when a person acting as an estate agent is responsible for marketing, it will be up to the agent to ensure that the seller's pack obligations are complied with, as he will bear the consequences if they are not. If, therefore, an estate agent were deliberately to market a property with a defective pack because, say, the seller asked him to do so, the agent would be liable to any resultant proceedings under the enforcement provisions of the Bill. Those proceedings would not involve the seller who had put him up to committing the offence. To seek to do so would cut right across the concept of responsibility set out in clause 2. However, an individual might be guilty of an offence under other legislation, if it could be proved that he or she aided, abetted, counselled or procured a breach of the law.

Under our proposals, the duty on estate agents is clear. They are for the most part responsible professionals who will abide by the law and not risk losing their livelihood by colluding in breaches of it. I hope that my explanation has been helpful.

Government amendments Nos. 57, 58, 59 and 60 all make drafting changes intended to make the clause easier to understand. I therefore ask the hon. Gentleman to withdraw amendment No. 46 and to accept the Government amendments.

 

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Prepared 23 January 2001