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30 Oct 2002 : Column 958—continued

Mr. Djanogly : In his interesting speech, my right hon. Friend mentioned the cultural differences between America and the United Kingdom on the question of bankruptcy, an issue that was discussed at some length during deliberations on the Bill. One implication of the personal insolvency provision is that the insolvency period will be cut from three years to a maximum of 12 months, which has caused great concern to many of my hon. Friends and practitioners in the insolvency world. People are saying that we may move towards an American system—if you cannot pay your bills, why not just go bust and do the same thing afterwards? It would be interesting to hear my right hon. Friend's comments.

Mr. Forth: My hon. Friend puts his finger on an important matter, which I intended to deal with later in my remarks, but I shall do so now. Of course the time scale is relevant, in both a general sense and a specific sense. The word Xformer" is important. We could get into some difficulty—I refer to my hon. Friend's remarks about time scales—about the exact point at which the spouse becomes Xformer." My right hon. Friend the Member for East Yorkshire may be able to help us.

When we get into the territory of nisis and absolutes, it is possible that considerable confusion could arise from the amendment as regards the exact impact of the timing of the divorce and the point at which it takes effect within the time scale that is envisaged. In one sense, it does not matter whether we are speaking of one year or three, but in another sense it does. If we are talking about longer time scales, the impact of the divorce and the legal impact of nisis and absolutes must be taken into account.

Mr. Knight: My interest is rather in the scope of the Lords amendment. My hon. Friend the Member for Huntingdon (Mr. Djanogly) touched on the widening provision of amendment No. 167. The question that the House must ask, and which I hope my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) will address, is whether the widening goes far enough or too far. The problem that we have had for too long under English law is the stigma associated with bankruptcy, which, as my hon. Friend the Member for Huntingdon properly said, does not apply in America.

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Not many people know that early in his career, the very successful and popular worldwide entertainer, Dean Martin, was made a bankrupt.

Mr. Deputy Speaker: Order. Not many people may know that, and I am not sure that at this stage the House wants to hear it.

Mr. Forth: I shall not break into song, although I am a bit of a fan of Dean Martin myself. The serious point is that the more we probe the amendment, the more troublesome it begins to appear.

The Minister for Employment Relations, Industry and the Regions (Alan Johnson): You call that probing?

Mr. Forth: I have probed gently so far; wait till I really get going. The difficulty that we are getting into, which I hope the Under-Secretary will deal with in detail and at some length, is the subtle interplay between the mechanisms of the divorce in the case of the former spouse referred to in the amendment, and the bankruptcy proceedings.

Mr. McWalter: Will the right hon. Gentleman note that the reference is to a dwelling house, which must be comprised in the bankrupt's estate? We are discussing one way in which people can be protected from the seizure of their home. That is all.

Mr. Forth: I am grateful to the hon. Gentleman for seeking to simplify matters for me. I am a simple man, as he knows. I can see that he is trying to come down to my level, to help me to understand the provisions, but I am still struggling with the interplay, which I am sure exists, between the estate, the period of bankruptcy and the legal moment of bankruptcy. We are attempting to relate that to another variable, the concept of the former spouse. I am sure that even the hon. Gentleman would agree that there are circumstances in which those factors could come into conflict. The legalities involved in the bankruptcy process, the estate and the process of divorce could come into conflict. That might not make the provision unworkable—that would be going too far—but could complicate it.

9.15 pm

In my view, as the original wording was straightforward and easily understandable, it was also easily implementable. My fear about the amendment is that it would introduce considerable additional complications. I therefore wonder whether their lordships gave sufficient thought to it. After all, we are here to ask such questions. Indeed, they demonstrate the great value of the two-Chamber parliamentary system. Their lordships, to whom we defer in so many ways, have, in their wisdom, proposed the amendment. Our humble role as laymen—I exclude my right hon. Friend the Member for East Yorkshire, who is an expert—is to cast our eye over each provision and say, XHold on a minute: is this too clever, does it go too far and would it work in practice?" In this case, we must consider whether the provision would simply be—if my right hon. Friend will forgive me—a lawyers' charter.

Mr. Redwood: I usually agree with my right hon. Friend, but I wonder whether he has misread the

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situation. There could be a hard case that is not covered in the original words, which deal merely with the bankrupt's home. We should remember that these issues are governed by the beginning of new section 283A to the Insolvency Act 1986, which deals with the bankrupt's home ceasing to form part of the estate. I read the amendment as a helpful one that tries to explain that there could be hard cases if properties relating to the bankrupt's spouse or a former spouse are not excluded. I understand his asking where that should stop, how far back it would be possible to go and what would happen if one had several former Xspice" or spouses, or whatever the plural might be. It is reasonable to ask whether such provision could become unnecessarily complicated or lax, but I hope that he will consider the possibility that a hard case might arise that the amendment would take care of, but the rather odd alternative drafting might not.

Mr. Forth: I am grateful to my right hon. Friend, who is of course right. Will he not concede, however, that when we are trying to deal with one hard case, we often introduce at least as many difficulties, problems or even harder cases?

We touched earlier on the possibility of serial ex-spouses. I am not sure whether the amendment deals satisfactorily with that possibility. It refers to

but what about the plural? With which former spouse does the provision deal? Is it the most recent spouse, the first one or all of them? The amendment allows reference to only one former spouse. Again, I accept that I am treading on delicate legal territory, but I wonder whether such provision is sufficient and whether the scope is adequate to deal with those issues, quite apart from problems of timing.

Mr. Knight: My concerns are different from those of my right hon. Friend. He seems to be anxious that the amendment is too loosely drafted and could encourage too many claimants. My concern is that, if there is any criticism to be made, it is that the amendment is too tightly drawn. What about the dependent relative of the bankrupt? The amendment contains no provision in that regard.

May I say en passant that, in view of your earlier ruling, Mr. Deputy Speaker, I doubt whether you will be receiving a Christmas card from the Dean Martin Appreciation Society?

Mr. Forth: May I suggest that the society might like to send a card to you, Mr. Deputy Speaker, in order to bring you round? A CD might help as well, perhaps including XMemories are Made of This" or something similar. I shall not pursue the matter any further.

I recognise that my right hon. Friend is trying to be helpful, but we need to focus and should not be drawn into seeking ways of over-complicating a matter that is already somewhat over-complicated. I am beginning to wonder whether the amendment is entirely appropriate. It strikes me that, even though it is a well-meaning attempt—their lordships could not have a motive that was anything other than well meaning—to solve one set of problems, we might be in danger of creating even more.

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Mr. Djanogly: I appreciate that my right hon. Friend has already opined on polygamy, but I wonder whether he has considered legitimacy, which is often a problem in wills?

Mr. Forth: I do not know whether that is a problem with the provision that we are considering. It would be if we incorporated the suggestions that my right hon. Friend the Member for East Yorkshire made a moment ago. However, I suspect that the wording is sufficiently tight to obviate the problem because we are considering Xthe spouse" or Xformer spouse".

There is a problem with the former spouse; the serial ex presents a difficulty. However, the problem of definition is not that suggested by my hon. Friend the Member for Huntingdon (Mr. Djanogly) because a spouse is a spouse is a spouse.

I hope that we shall not unearth another problem; that would be too much. However, would a marriage conducted in another legal jurisdiction cause difficulties in the definition of Xspouse"? I am happy to say that I was married in New Mexico, and it was a wonderful experience. I do not know whether there would be any difficulty in recognising the marriage in our United Kingdom jurisdiction. Perhaps my right hon. Friend the Member for East Yorkshire can help me.

The simple use of the word Xspouse" is either legally sufficiently watertight to obviate any definition problems or in danger of introducing further difficulties.

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