Consumers, Estate Agents and Redress Bill [HL]

House of Commons

Session 2006 - 07
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Consumers, Estate Agents and Redress Bill [HL]

Consumers, Estate Agents and Redress Bill [HL]
Part 2 — Complaints handling and redress schemes
26

Standards for handling complaints
43
Standards for handling complaints
(1)
A regulator may make regulations prescribing standards for the handling by
its regulated providers of consumer complaints made to them.
(2)
The regulations may prescribe standards in relation to all consumer
5
complaints, or consumer complaints of a kind specified in the regulations.
(3)
In particular, the regulations may specify a kind of consumer complaint by
reference to the subject-matter of a complaint, or the description of person
making a complaint.
(4)
Regulations under this section may be made only with the consent of the
10
Secretary of State.
(5)
A regulator must make arrangements for securing that regulations made by it
under this section are available to the public, by whatever means it considers
appropriate.
(6)
This section does not apply to the Water Services Regulation Authority.
15
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Requirements for making regulations under section 43
(1)
Before making regulations under section 43 a regulator must—
(a)
arrange for such research as it considers appropriate with a view to
discovering the views of a representative sample of persons likely to be
affected, and consider the results,
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(b)
publish a notice of its proposals (a “proposals notice”) in such manner
as the regulator considers appropriate for bringing it to the attention of
those likely to be affected by the proposals,
(c)
consider any representations duly made, and
(d)
consult persons or bodies appearing to it to be representative of persons
25
likely to be affected by the proposals.
(2)
The proposals notice must—
(a)
state that the regulator proposes to make regulations under section 43,
and set out the standards proposed,
(b)
give the reasons why the regulator proposes to prescribe those
30
standards,
(c)
explain how the standards will be enforced, and
(d)
specify a time (not being earlier than the end of the period of 30 days
beginning with the day on which the notice is published) before which
representations may be made.
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45
Information with respect to compliance with complaints handling standards
(1)
This section applies where standards are prescribed by a regulator by
regulations under section 43 in relation to its regulated providers (or some of
them).
(2)
The Council must publish such statistical information as it considers
40
appropriate relating to the levels of compliance with the standards which those
regulated providers have achieved.

Consumers, Estate Agents and Redress Bill [HL]
Part 2 — Complaints handling and redress schemes
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(3)
That information must be published in such form and manner, and with such
frequency, as the Council thinks appropriate.
(4)
Schedule 5 makes further provision with respect to information about
compliance with complaints handling standards.
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Supply of information to consumers
5
(1)
A regulator may make regulations requiring each of its regulated providers in
relation to which standards are prescribed under section 43 to give to the
provider’s relevant consumers such information as may be specified or
described in the regulations about—
(a)
the standards, and
10
(b)
the levels of compliance with those standards achieved by the provider.
(2)
Regulations under this section may include provision specifying the form and
manner in which, and the frequency with which, information is to be given.
Requirements relating to redress schemes
47
Membership of redress scheme
15
(1)
The Secretary of State may by order require regulated providers to be members
of a redress scheme which is—
(a)
approved by their relevant regulator in accordance with section 49, or
(b)
administered by the Secretary of State (or a person appointed by the
Secretary of State) and designated by the Secretary of State as an
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appropriate redress scheme in relation to them.
(2)
The order may provide that the requirement applies only in relation to
consumer complaints of a kind specified in the order.
(3)
In particular, the order may specify a kind of consumer complaint by reference
to the subject-matter of a complaint, or the description of person making a
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complaint.
(4)
Before making an order under this section the Secretary of State must consult—
(a)
each relevant regulator (in relation to regulated providers to which the
order will apply), and
(b)
other persons appearing to the Secretary of State to be representative of
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persons who have an interest in the matter.
(5)
An order under this section which applies to a water undertaker or sewerage
undertaker for an area which is wholly or mainly in Wales may be made only
with the consent of the Welsh Ministers.
(6)
The Secretary of State may not make an order under this section unless
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satisfied, in relation to each regulated provider to which the order will apply,
that—
(a)
there is at least one qualifying redress scheme which the provider is
eligible to join and membership of which will satisfy the requirement
imposed by the order, or
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(b)
there will be such a scheme when the order comes into force.
(7)
The Secretary of State may not designate a scheme in relation to regulated
providers under subsection (1)(b) unless the Secretary of State is satisfied that

Consumers, Estate Agents and Redress Bill [HL]
Part 2 — Complaints handling and redress schemes
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the scheme is one which could be approved by their relevant regulator in
accordance with section 49.
(8)
The Secretary of State may establish or administer a scheme for the purposes
of subsection (1)(b), or provide financial assistance to a person who establishes
or administers such a scheme; and such a scheme may provide for fees to be
5
payable by members of the scheme.
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Membership of redress schemes: supplementary
(1)
In this Part—
“qualifying redress scheme” means a redress scheme within paragraph (a)
or (b) of section 47(1);
10
“redress scheme” means a scheme under which consumer complaints
may be made to, and investigated and determined by, an independent
person (“the independent person”);
“scheme administrator”, in relation to a redress scheme, means the person
who administers the scheme,
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and references to approval of a redress scheme are to approval of the scheme
for the purposes of section 47(1)(a).
(2)
In the definition of “redress scheme”, “independent”, in relation to a consumer
complaint, means independent of—
(a)
the regulated provider against whom the complaint is made, and
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(b)
the regulator who is the relevant regulator in relation to the regulated
provider.
(3)
Nothing in this Part prevents a qualifying redress scheme providing—
(a)
for membership to be open to persons who are not subject to any duty
to belong to a qualifying redress scheme;
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(b)
for the investigation and determination of complaints other than those
in relation to which such a duty applies, made against members who
have voluntarily accepted the jurisdiction of the scheme over such
complaints.
(4)
For the purposes of the law relating to defamation, proceedings under a
30
qualifying redress scheme (in relation to a consumer complaint and a regulated
provider to which an order under section 47 applies) are to be treated in the
same way as proceedings before a court.
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Approval of redress schemes
(1)
In deciding whether to approve a redress scheme, a regulator must have
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regard to—
(a)
the provisions of the scheme;
(b)
the manner in which the scheme will be operated (so far as that can be
judged from the facts known to the regulator);
(c)
the interests of relevant consumers (in relation to the regulator’s
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regulated providers);
(d)
such principles as—
(i)
in the opinion of the regulator constitute generally accepted
principles of best practice in relation to schemes for providing
redress to consumers, and
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(ii)
it is reasonable to regard as applicable to the scheme.

Consumers, Estate Agents and Redress Bill [HL]
Part 2 — Complaints handling and redress schemes
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(2)
In considering the interests of relevant consumers under subsection (1)(c), the
regulator must in particular have regard to the number of other redress
schemes applying to its regulated providers which are (or are likely to become)
qualifying redress schemes.
(3)
A regulator must not approve a redress scheme unless—
5
(a)
membership of the scheme is open to all the regulator’s regulated
providers, and those regulated providers may not be expelled from
membership of the scheme,
(b)
if, at the time the approval is given, any of the regulator’s regulated
providers are required under section 47 to be a member of a redress
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scheme (or would be so required but for the fact that an order which has
been made under that section is not yet in force), the scheme covers all
the consumer complaints to which the requirement applies,
(c)
the independent person may require regulated providers to provide
complainants with the types of redress listed in subsection (6) (whether
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or not other types of redress are available), and
(d)
the regulator considers that the scheme makes satisfactory provision
about the matters listed in subsection (7).
(4)
Subsection (3)(a) does not prevent the Gas and Electricity Markets Authority
approving—
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(a)
a scheme which is open to all regulated gas providers, but not regulated
electricity providers,
(b)
a scheme which is open to all regulated electricity providers, but not
regulated gas providers,

and, in the case of such a scheme, subsection (3)(b) applies as if the reference to
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the regulator’s regulated providers were to the regulated gas providers or, as
the case may be, regulated electricity providers.
(5)
For this purpose—
“regulated electricity provider” means a person holding a licence under
section 6(1)(c) or (d) of the Electricity Act 1989 (c. 29);
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“regulated gas provider” means a person holding a licence under section
7(2) or 7A(1) of the Gas Act 1986 (c. 44).
(6)
The types of redress mentioned in subsection (3)(c) are—
(a)
providing an apology or explanation,
(b)
paying compensation, and
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(c)
taking such other action in the interests of the complainant as the
independent person may specify.
(7)
The matters mentioned in subsection (3)(d) are—
(a)
the matters about which complaints may be made (which may include
non-compliance with a code of practice or other document);
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(b)
the independent person’s duties and powers in relation to the
investigation and determination of complaints (which may include
power to decide not to investigate or determine a complaint);
(c)
the enforcement of any requirement to provide redress imposed on a
regulated provider in accordance with the scheme;
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(d)
the provision of information by the independent person to the
regulator and to persons within subsection (8);
(e)
the provision of information by the independent person—

Consumers, Estate Agents and Redress Bill [HL]
Part 2 — Complaints handling and redress schemes
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(i)
to the Office of Fair Trading, for the purposes of any public
consumer advice scheme supported by it, and
(ii)
to persons who operate a public consumer advice scheme
supported by the Office of Fair Trading, for the purposes of that
scheme;
5
(f)
the acceptance and handling of complaints transferred from redress
schemes which have their approval withdrawn under section 51.
(8)
The persons within this subsection are—
(a)
any other body having regulatory functions in relation to the regulated
providers to which the scheme applies;
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(b)
persons exercising functions under other redress schemes which apply
to the regulator’s regulated providers;
(c)
the Council;
(d)
the Secretary of State.
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Approval of redress schemes: supplementary
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(1)
An application for approval of a redress scheme must be made in such manner,
and accompanied by such information, as the regulator to which the
application is made may determine.
(2)
Section 51 applies if the regulator is minded to refuse an application for
approval.
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(3)
The scheme administrator of a redress scheme approved by a regulator must
notify the regulator of any change to the scheme before the end of the period
of 14 days beginning with the day on which the change is made.
(4)
A regulator may, in accordance with section 51, withdraw its approval of a
redress scheme, and may do so generally or in relation to consumer complaints
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of a description specified by the regulator.
(5)
In particular, a regulator may withdraw its approval in relation to consumer
complaints made on or after a date specified by the regulator.
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Procedure for refusing or withdrawing approval
(1)
Before refusing or withdrawing its approval of a redress scheme, the regulator
30
must give the scheme administrator a notice—
(a)
stating that the regulator proposes to refuse or withdraw its approval,
(b)
giving the reasons for the proposed refusal or withdrawal, and
(c)
specifying a time (not being earlier than the end of the period of 30 days
beginning with the day on which the notice is given to the scheme
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administrator) before which representations about the proposed
refusal or withdrawal may be made.
(2)
The regulator must give notice to the scheme administrator of—
(a)
the regulator’s decision on a proposal to refuse or withdraw approval,
and
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(b)
the reasons for its decision.
(3)
In the case of a decision to withdraw approval, the regulator must also give
notice of its decision and the reasons for it to the Secretary of State.

Consumers, Estate Agents and Redress Bill [HL]
Part 3 — Amendment of the Estate Agents Act 1979
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(4)
The scheme administrator must give a copy of the notice under subsection (2)
to each member of the scheme.
(5)
If the regulator decides to withdraw approval, the withdrawal has effect in
accordance with, and from the date specified in, the notice under subsection
(2).
5
(6)
Where a redress scheme designated under section 47(1)(b) is administered by
a person appointed by the Secretary of State, this section (other than subsection
(3)) applies in relation to a revocation by the Secretary of State of that person’s
appointment as it applies in relation to a withdrawal by a regulator of the
approval of a redress scheme.
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Enforcement
52
Enforcement of requirements imposed under Part 2
(1)
In section 28 of the Gas Act 1986 (c. 44) (orders for securing compliance), in
subsection (8), in the definition of “relevant requirement”, after “that Act)” (as
inserted by paragraph 1 of Schedule 2) insert “, or section 43, 46 or 47 of that
15
Act (complaints).”
(2)
In section 25 of the Electricity Act 1989 (c. 29) (orders for securing compliance),
in subsection (8), in the definition of “relevant requirement”, after “that Act)”
(as inserted by paragraph 2 of Schedule 2) insert “, or section 43, 46 or 47 of that
Act (complaints).”
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(3)
A requirement imposed under section 47 on a water undertaker, sewerage
undertaker or licensed water supplier is enforceable by the Water Services
Regulation Authority under section 18 of the Water Industry Act 1991 (c. 56)
(orders for securing compliance).
(4)
In section 22 of the Postal Services Act 2000 (c. 26) (final orders), in the
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definition of “relevant requirement” in subsection (5) (as substituted by
paragraph 3(2) of Schedule 2 and amended by Schedule 5), after paragraph (b)
insert “, or
(c)
an obligation imposed under section 43, 46 or 47 of that Act
(complaints).”
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Part 3
Amendment of the Estate Agents Act 1979
Estate agents’ duties
53
Membership of redress schemes
(1)
Schedule 6 (which amends the Estate Agents Act 1979 (c. 38) to make provision
35
for redress schemes dealing with complaints about estate agents) has effect.
(2)
In section 3(1) of the Estate Agents Act 1979 (grounds for making prohibition
orders), after paragraph (c) insert—
“(ca)
has engaged in estate agency work in relation to residential property in
breach of the duty imposed by an order under section 23A(1) below;
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or”.

Consumers, Estate Agents and Redress Bill [HL]
Part 3 — Amendment of the Estate Agents Act 1979
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(3)
Sections 172 to 174 of the Housing Act 2004 (c. 34) (redress schemes dealing
with complaints about the activities of estate agents in relation to home
information packs) are omitted.
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Duty to keep records
(1)
After section 21 of the Estate Agents Act 1979 (c. 38) (transactions in which an
5
estate agent has a personal interest) insert—
“21A
Duty to keep permanent records
(1)
A person engaged in estate agency work shall—
(a)
keep records for the purposes of this section (“the permanent
records”); and
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(b)
ensure that anything required by subsection (3) to be included
in the permanent records is kept for a period of at least six years
beginning with the day on which it is included.
(2)
In the case of a person engaged in estate agency work in the course of
employment the duties under subsection (1) are duties of the employer
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(and not the employee).
(3)
A person engaged in estate agency work shall ensure that a record of
any information or event to which this subsection applies is included in
the permanent records kept by that person or his employer (as the case
may be).
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(4)
Subsection (3) applies to—
(a)
information the person concerned is required to give by section
18(1) or (3) and any prescribed information relating to the
giving of that information;
(b)
information the person concerned is required to disclose by
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section 21(1) or (2) and any prescribed information relating to
the disclosure of that information;
(c)
any offer of a prescribed description received by the person
concerned and any prescribed information relating to the
making of the offer;
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(d)
any action of a prescribed description taken by the person
concerned in relation to such an offer and any prescribed
information relating to that action; and
(e)
any other information or event of a prescribed description.
(5)
If the person concerned is acting in the course of employment, it is also
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the duty of the employer to ensure that the record of the information or
event is included in the permanent records; but the employer is not to
be regarded as having breached his duty if he shows that he took such
steps as were reasonably practicable to ensure that the duty under
subsection (3) was complied with by his employees.
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(6)
The Secretary of State may by regulations make provision as to—
(a)
the manner in which the permanent records are to be kept;
(b)
the place or places at which they are to be kept.
(7)
In this section “prescribed” means prescribed by regulations made by
the Secretary of State.
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