Business, Innovation and SkillsSupplementary written evidence submitted by the Department for Business, Innovation and Skills

MEMORANDUM ON THE DRAFT CONSUMER RIGHTS BILL DELEGATED POWERS

Introduction

1. This note identifies the provisions for delegated legislation in the Draft Consumer Rights Bill, in order of appearance in the Draft Bill (schedules are addressed in order of the clauses giving effect to them).

2. In respect of each power sought the note sets out:

The context and purpose of the power.

The Government’s justification for seeking the power.

The extent to which the power is novel, or draws on precedents.

The justification for the procedure proposed for the power sought.

3. The Department for Business, Innovation and Skills has considered the use of powers in the Draft Bill as set out below and is satisfied that they are necessary and justified.

Background

4. The provisions in this Draft Bill fall into three themes. These are:

Consumer Contracts for Goods, Digital Content and Services.

Unfair Terms in trader-to-consumer contracts and notices.

Miscellaneous and General—including Investigatory Powers etc, Amendment of the Weights and Measures (Packaged Goods) Regulations 2006, Enterprise Act 2002: enhanced consumer measures and other enforcement, and Private Actions in Competition Law.

5. This note deals with the provisions for delegated legislation in each of these policy themes in turn.

Part 1—Consumer Contracts for Goods, Digital Content and Services

6. The clauses on Consumer Contracts for Goods, Digital Content and Services have the following purposes:

To set out the rights a consumer has when, under a contract, a trader either:

supplies goods (Chapter 2); or

provides digital content which is paid for with money or with a facility that was originally purchased with money (such as virtual currency), or which is associated with any paid-for goods, digital content or services (eg free software given away with a paid-for magazine) (Chapter 3); or

provides services (Chapter 4).

To set out the statutory remedies to which the consumer is entitled if these rights are breached.

To prevent a trader from limiting or excluding liability for breaches of the above rights, in most cases—or, for services, to prevent the trader from limiting liability to less than the price paid or other consideration given by the consumer.

Power 1

Application of statutory rights and remedies to additional contracts for digital content—Clause 35(3)

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Affirmative Resolution Procedure

Context and purpose

7. Part 1 Chapter 3 sets out the scope of consumer rights and remedies in relation to contracts where a trader provides digital content to a consumer. Digital content is defined in clause 2 (Chapter 1) as “data which are produced and supplied in digital form” and covers products such as software, apps and e-books. As with all the rights in Part 1 of the Draft Bill, there has to be a contract for the rights to apply. For there to be a contract, one of the requirements under the law of England and Wales is for each party to give something of value to the other. Clause 35 provides that Part 1 Chapter 3 (with the exception of clause 481) applies only if the consumer pays a price to the trader and therefore would exclude contracts where consumers give something else of value in exchange for the digital content. In the digital content market there is a model whereby consumers may give something else of value in exchange for digital content—for example their personal data.

8. The reason contracts where the consumer gives something else of value are excluded is because the Government is not convinced that there is sufficient consumer detriment caused by these types of contract. To include them may therefore mean unnecessary regulation. The power in Clause 35(3) allows the Secretary of State to provide by order that Chapter 3 can apply to other contracts for the provision of digital content if the Secretary of State is satisfied that it is appropriate to do so, because of significant detriment caused to consumers under contracts of the kind to which the order relates. It provides that such an order can in particular amend the Draft Bill. The power is subject to affirmative resolution of Parliament.

Justification

9. The digital content market is developing rapidly and at some future date the consumer detriment caused by contracts for where a trader provides digital content which would be currently out of scope may be such that the rights provided for in Chapter 3 should apply. The power can only be used where the Secretary of State is satisfied that there is significant consumer detriment caused by the contracts concerned.

Precedent

10. There is no exact precedent for this power.

Procedure Justification

11. The power is subject to an affirmative resolution of Parliament. This power could be used to amend primary legislation to extend regulation and therefore the Government considers the affirmative resolution procedure provides the appropriate level of parliamentary scrutiny.

Power 2

Exclusion of Specified Services from Provisions of Chapter 4- Clause 50(4)

Powers Conferred on: Secretary of State

Power Exercised by: Order

Parliamentary Procedure: Negative Procedure

Context and purpose

12. Part 1 Chapter 4 sets out the scope of consumer rights and remedies in relation to contracts where a trader agrees to provide a service to a consumer. The power in clause 50(4) enables the Secretary of State to provide by order that one or more of this Chapter’s provisions do not apply to specified services.

13. Currently, the rights in relation to provision of services for all types of contract (eg business to business and business to consumer) are set out in Part II of the Supply of Goods and Services Act 1982 (sections 12–16). Section 12 of this Act provides a power for the Secretary of State to exclude services from the scope of sections 13–15, which set out implied terms in contracts for the supply of services. This power has been used 3 times to exclude from the scope of section 13 (the implied term to take reasonable care and skill): the services of an advocate in a court or tribunal and the services rendered to a company by a director of the company2; the services rendered to a building by a director of that building society and the services rendered to a provident society by any member of the committee of management3 and finally services rendered by an arbitrator (including an umpire).4 This power in the 1982 Act and the power in the Draft Bill are subject to the negative resolution procedure.

Justification

14. The scope of the Draft Bill should be consistent where appropriate with the scope of the 1982 Act as it applies to services. Whilst specific services could be excluded on the face of the Draft Bill, a power such as that available in the 1982 Act is more appropriate to avoid lengthy and potentially technical exclusions on the face of the Draft Bill. Furthermore, the power is necessary because the scope of the services sector is very wide and may develop in ways unanticipated, giving rise to the need for more specific regulation or indeed less regulation for particular types of service, which may be inconsistent with or make redundant the provisions of this Chapter in relation to particular services.

Precedent

15. As explained above, section 12 of the Supply of Goods and Services Act provides a power for the Secretary of State to exclude services from sections 13–15 of that Act, which set out implied terms in contracts for the supply of services. This power has been used 3 times to exclude certain services from the scope of section 13 (the implied term to take reasonable care and skill). The power in the Draft Bill draws on the power in section 12 of the Supply of Goods and Services Act as a precedent.

Procedure Justification

16. The power is subject to the negative resolution procedure. The negative resolution procedure is considered appropriate because this is a power to remove regulation for specific types of service.

Part 2—Unfair Terms

17. The clauses on Unfair Terms have the following purposes:

To consolidate the law on unfair terms in consumer contracts currently found in two separate pieces of legislation: the Unfair Terms in Consumer Contracts Regulations 1999 (which implement the Unfair Terms Directive 1993) and the Unfair Contract Terms Act 1977.

To provide that terms in consumer contracts and consumer notices will only be binding if they are fair (as defined by the “fairness test”).

To clarify a number of provisions, most notably the exemption from assessment of terms which are transparent and prominent, and which relate to the essential bargain of the contract (that is to the subject matter or the amount of the price).

To provide that a list of regulators (including the Competition and Markets Authority (“CMA”) and the Financial Conduct Authority) will be able to take action to enforce the Part.

Power 3

Power to Amend Schedule 2—The List of Terms Which May be Unfair—Clause 66(3)

Power Conferred on: Secretary of State

Power Exercised by: Order

Parliamentary Procedure: Negative Procedure

Context and purpose

18. Part 1 of Schedule 2 contains an indicative and non-exhaustive list of terms of consumer contracts that may be regarded as unfair. Part 2 of that Schedule limits the scope of Part 1. Both Parts of the Schedule are, in the main, copied out from the Unfair Terms Directive 1993. Together, they are a form of guidance for the courts when applying the fairness test in clause 65 of the Draft Bill, as they provide examples of some terms which may be unfair.

19. Clause 66 of the Draft Bill gives effect to that Schedule, and clause 66(3) gives the Secretary of State the power by order to add, modify or remove entries in Part 1 and Part 2 of the Schedule. The purpose of this power is to enable the Secretary of State to make appropriate modifications in order to, for example, keep the list up to date, reflecting prevalent examples of unfair terms as new practices and sectors in the market develop. It may also be found necessary to amend the list with the experience of application in practice.

Justification

20. The objectives of enabling the law on unfair terms to keep pace with market developments in consumer contracts and preventing it from becoming outdated, could not be achieved by a provision on the face of the Draft Bill.

Precedent

21. There is no exact precedent for this power in unfair terms legislation.

Procedure Justification

22. Although this power would enable primary legislation to be amended, the negative procedure is considered appropriate for this power on the basis that the list itself is merely a form of guidance for the courts when applying the fairness test in clause 65; it is a non-exhaustive list of terms which may be unfair and should be assessed for fairness. It is therefore considered that the negative procedure gives the right level of parliamentary scrutiny.

Power 4

Advice and Information Regarding Unfair Terms- Schedule 3, Paragraph 7(5)

Conferred on: The CMA

Exercised by: Guidance

Parliamentary Procedure: None

Context and purpose

23. Paragraph 7(5) of Schedule 6 to the Draft Bill confers a power on the CMA to arrange the publication of advice and information about the unfair terms provisions, which would take the form of guidance.

Justification

24. This power will enable the CMA to provide advice and information to traders and consumers about the practical application of the unfair terms provisions in the Draft Bill. As the CMA has a duty (at Schedule 3, paragraph 7) to arrange for the publication of details of applications it makes for injunctions, and injunctions and undertakings made under Schedule 3, the Government considers that the CMA may be best placed to produce advice and information.

25. The Government considers this advice and information would meet its objectives of improving understanding and application of the provisions.

Precedent

26. Similar guidance is already issued under Regulation 15(3) of the Unfair Terms in Consumer Contracts Regulations 1999.

Procedure justification

27. The Government considers that the duty to prepare and publish advice and information need not be subject to any Parliamentary procedure, as the advice and information will relate back to the unfair terms provisions of the Draft Bill which will be debated during the passage of the Draft Bill.

Power 5

Power to Amend the List of Enforcers of the Law on Unfair Terms—Schedule 3, Paragraph 8

Power Conferred on: Secretary of State

Power Exercised by: Order

Parliamentary Procedure: Negative Procedure

Context and purpose

28. Schedule 3 confers functions on the CMA and other regulators in relation to the enforcement of Part 2 of the Draft Bill. Paragraph 8 of Schedule 3 includes a list of regulators that can enforce Part 2. It provides that the Secretary of State may by order amend the list to add, modify or remove an entry. An order may amend the list to add a body that is not a public authority only if the Secretary of State considers that the body represents the interests of consumers. An order may make consequential amendments to Schedule 3, including with the effect that any of its provisions apply differently or do not apply to the body added.

29. Paragraph 8 also provides that the Secretary of State must publish other criteria to be applied by the Secretary of State in deciding whether to add an entry to, or remove an entry from, the list.

30. The purpose of this power is to enable the Secretary of State to keep the list of regulators up to date, over the course of time and as the market develops, and to reflect any changes in the regulatory landscape as necessary.

Justification

31. The objective of ensuring that the regulators tasked with enforcing the law on unfair terms in consumer contracts remain appropriate in light of market developments and regulatory changes, could not be achieved by a provision on the face of the Draft Bill. The effectiveness of the Draft Bill’s provisions on unfair terms depends on appropriate enforcement.

Precedent

32. There is no exact precedent for this power in unfair terms legislation. However, Section 213(3) of the Enterprise Act 2002 contains a power, under the negative procedure, enabling the Secretary of State to provide that any body or person is a designated enforcer for the purposes of Part 8 of that Act (Enforcement of Certain Consumer Legislation) if certain conditions are met, for example that the Secretary of State thinks the person or body has as one of its purposes the protection of the collective interests of consumers.

Procedure Justification

33. The negative procedure is considered appropriate because, it is considered that, amendment of the list of regulators is an administrative and procedural matter, not a substantive issue; as such the negative procedure allows for the appropriate level of parliamentary scrutiny. As explained above, the power contains a safeguard, in that it only allows an addition of a body that is not a public authority if the Secretary of State considers that the body represents the interests of consumers.

Part 3—Miscellaneous and General

Investigatory powers etc

Power 6

Investigatory powers etc.—Schedule 5, paragraph 13

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Affirmative where the order changes primary legislation, otherwise negative

Context and purpose

34. This Schedule (which is given effect by clause 79) makes provision for the investigatory powers of consumer law enforcers. It aims to modernise existing consumer law investigatory powers by consolidating them into a single generic set, thereby removing the often unclear, inconsistent and overlapping investigatory powers currently found in over sixty different pieces of legislation.

35. Paragraph 11 and the table in paragraph 12 of Schedule 5 set out the legislation that can be enforced using the Draft Bill’s new generic set of investigatory powers. The existing investigatory powers contained in the legislation listed within these paragraphs will either be repealed or curtailed so that they are no longer available to the enforcers listed in Schedule 5 paragraphs 2 to 6, who will instead use the new powers contained within Schedule 5.

36. Paragraph 13(1)(a) of Schedule 5 gives the Secretary of State the power to amend by order paragraph 11 or the table in paragraph 12 by adding, modifying or removing any entry in it. In consequence of utilising this power, paragraph 13(1)(b) confers a power on the Secretary of State to amend, repeal or revoke any other legislation (including the Draft Bill) whenever passed or made.

37. The power under paragraph 13(1)(b) includes a power, where relevant, to amend Acts of the Scottish Parliament, Acts or Measures of the National Assembly for Wales, and Northern Ireland legislation (under sub-paragraph 13(8)).

Justification

38. The effectiveness of Schedule 5 in delivering a single generic set of investigatory powers and a transparent enforcement framework depends on it being flexible enough to accommodate future changes in legislation. Its status would be gradually eroded over time if it were unable to accept new legislation or remove that which had been repealed or revoked. Furthermore, additional existing legislation with investigatory powers might also be suitable to be brought within Schedule 5 but are not at this time listed because they were outside the scope of the consultation exercise for this part of the Draft Bill, which only covered legislation for which the Department is responsible.

39. Schedule 5 will also fail to deliver on its aim of producing a clearer and more transparent enforcement framework if any existing investigatory powers (whether they be in primary or secondary legislation) cannot be repealed, revoked or amended once legislation has been brought within its scope.

40. For these reasons it is necessary to confer a power to amend paragraph 11 or the table in paragraph 12 of Schedule 5 as well as a power to amend any other legislation in consequence of such amendments being made to Schedule 5. Additionally, paragraphs 13(2)—(3) of Schedule 5 restrict the use of these powers by providing that the safeguards on the use of a power of entry or associated power under Schedule 5 that replaces those powers being repealed must be greater than the safeguards that existed before.

Precedent

41. Section 210(9) of the Enterprise Act 2002 contains a power enabling the Secretary of State to amend a list of legislation by the negative procedure, so that protections for consumers under that Act apply to consumers covered by appropriate (EU) legislation as it is introduced.

Procedure Justification

42. Given the constraints imposed on the exercise of this power described above, the negative procedure is considered to give the appropriate level of scrutiny when the power is used to amend secondary legislation. However where the power is used to amend primary legislation (which is defined in Schedule 5 to include Acts of Parliament and Acts, measures or legislation of the devolved administrations) the affirmative procedure allows for appropriate parliamentary scrutiny.

Power 7

Advice and Information regarding investigatory powers—Schedule 6, paragraph 10

Conferred on: The CMA

Exercised by: Guidance

Parliamentary procedure: None

Context and purpose

43. Paragraph 10 of Schedule 6 to the Draft Bill inserts a new s.229(1A) into the Enterprise Act 2002 (c.40). This new section confers a duty on the CMA to prepare and publish advice and information with a view to explaining to those likely to be affected by them the provisions of Schedule 5 to this Draft Bill, so far as they relate to the exercise of enforcement functions for certain identified purposes. The advice and information will also indicate how the CMA expects such provisions to operate.

Justification

44. This duty will help in achieving consistent application of the provisions and minimising confusion or the possible disagreements between enforcers and business that can arise with any new legislation.

45. As the CMA will be exercising many of the investigatory powers in Schedule 5, the Government considers the CMA would be best placed to produce the advice and information, in order for this advice and information to meet its objectives of improving understanding and application of the provisions.

Precedent

46. Similar guidance is already issued under s.229(1) Enterprise Act 2002.

Procedure justification

47. The Government considers that the duty to prepare and publish advice and information need not be subject to any Parliamentary procedure, as the advice and information will relate back to the provision of the Draft Bill (Schedule 5) which will be debated during the passage of the Draft Bill.

Private Actions in Competition Law

48. Clause 82 and Schedule 7 contain the Draft Bill’s provisions on private actions in relation to competition law. Private actions are legal actions which do not solely involve or involve at all a competition authority such as the Office of Fair Trading (“OFT”) (whose duties are soon to be transferred to the CMA). The provisions have the following purposes:

To enable the Competition Appeal Tribunal (“CAT”) to hear a wider range of private actions. At present, the CAT may only hear “follow-on” private actions, these are actions for damages after a competition authority has found an infringement of competition law. The clauses will enable the CAT to also hear stand-alone private actions, ie where the competition authority has not investigated the matter.

To provide for opt-out collective actions and settlements. Collective actions are actions which involve more than one claimant seeking damages based on the same or similar underlying facts, ie resulting from a particular breach of competition law by a company. There is currently an “opt-in” regime under section 47B of Competition Act 1998, to allow both businesses and consumers collectively to bring actions to obtain redress for infringement of competition law. In contrast, “opt-out” collective actions involve all underlying claimants who fall within the definition of a represented class (for example, all those who bought product X between dates Y and Z) being bound by the outcome of the case unless they actively opted out of the action at a specified period. In addition, there is a provision to allow opt-out collective actions to be settled, the settlement would be binding on all the parties to the settlement. This provision requires the CAT to determine that the settlement terms are just and reasonable.

To enable the CMA (which will replace the OFT) to approve voluntary redress schemes so as to encourage alternative dispute resolution. These are schemes voluntarily put forward by a company which has been found to have infringed competition law. The schemes are designed to provide redress to those who suffered from the infringement, for example consumers who bought the relevant product. By enabling the CMA to approve the schemes, consumers and other affected parties may choose to receive compensation from the schemes, rather than bring separate legal actions.

Power 8

Unclaimed damages to be paid to a charity prescribed by order—Schedule 7, paragraph 6

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Negative Procedure

Context and purpose

49. This power relates to unclaimed damages in opt-out collective proceedings. In such proceedings, damages may be awarded. As this relates to opt-out proceedings, ie where parties automatically became part of the action as they did not actively opt-out, there may on occasion be unclaimed damages. This is because, parties may be unaware (despite publicity) of their entitlement to damages. In such case, the Government would like those damages to go to an appropriate charity. Paragraph 6 of Schedule 7 to the Draft Bill allows the unclaimed damages to go to a charity which is prescribed by order made by the Lord Chancellor under section 194(8) of the Legal Services Act 2007. At present, the sole body which is prescribed is the Access for Justice foundation, an organization which works to increase access to justice. In addition, sub-paragraph 6(6) of Schedule 7 to the Draft Bill contains a power for the Secretary of State to amend the provision of the Competition Act 1998 which (as amended by Schedule 7 to the Draft Bill) would provide that damages must go to a charity prescribed by the Lord Chancellor.

Justification

50. The Government considers that there is a need for flexibility as to which body constitutes an appropriate charity. This is because over time, it may be that other bodies are also appropriate or that the current prescribed body becomes inappropriate. Accordingly, the Government does not want to name the body in primary legislation. As the Lord Chancellor may decide not to prescribe other bodies under the Legal Services Act 2007 (which does not solely apply to opt-out collective proceedings), the Government considers it is necessary to provide for the flexibility to provide for other bodies for the purpose of unclaimed opt-out collective damages. Accordingly, there is a power to amend the provision which provides unclaimed damages may only go to a charity prescribed by the Lord Chancellor.

Precedent

51. Sub-paragraph 6(5) of Schedule 7 to the Draft Bill refers to the pre-existing power in section 194(8) of Legal Services Act 2007, which provides for the Lord Chancellor to prescribe a body. It does not modify that power.

52. Under sub-paragraph 6(6) of Schedule 7 to the Draft Bill, there is also a power to amend the provision that provides that the clause which requires unclaimed damages to go to a body prescribed by the Lord Chancellor may be amended by an order made by the Secretary of State. This has been included so as to avoid the need for primary legislation to modify this particular provision of the Draft Bill. The power is similar to that provided for in Section 194(8) of the Legal Services Act 2007.

Procedure justification

53. Whilst this is a power to amend primary legislation, given its extremely limited application to a single provision of primary legislation (as amended by the Draft Bill), the negative procedure is considered to give sufficient parliamentary scrutiny. This is essentially a technical provision, designed to afford some flexibility to the Secretary of State in respect of damages in respect of a limited type of action (opt-out collective actions).

Power 9

Approval of Voluntary Redress Schemes—Schedule 7, Paragraph 12

Power Conferred on: Secretary of State

Power Exercised by: Regulations (Plus Approval of Guidance by the Secretary of State)

Parliamentary Procedure: Negative Procedure

Context and purpose

54. The purpose of the power, under sub-paragraph 12(5) of Schedule 7 to the Draft Bill, is to enable the Secretary of State to set out in secondary legislation, the detail of procedural matters relating to the CMA’s power to approve voluntary redress schemes. The purpose of the schemes is to enable businesses to provide voluntary redress to those (eg consumers) who have been affected by an infringement by the business of competition law. This should encourage affected parties to receive compensation more quickly than if they commenced legal action. The involvement of the CMA is designed to provide confidence to the affected parties that the scheme has been developed in accordance with appropriate procedures.

55. In addition, there is a requirement for the CMA to issue guidance about the approval of voluntary redress schemes. Such guidance must be approved by the Secretary of State, under sub-paragraph 12(7) of Schedule 7 to the Draft Bill, before it is published.

Justification

56. The Draft Bill sets out the key aspects of the approval process for redress schemes, for example that approval is discretionary and the CMA may not take into account the amount of compensation offered. The Government considers it is appropriate for more detailed procedural requirements to be set out in secondary legislation. This will also afford the Secretary of State the flexibility to amend procedural requirements without needing primary legislation to make amendments for such.

57. It is considered that legal practitioners and businesses will benefit from CMA guidance about the voluntary redress scheme approval process. As the CMA will be exercising a discretionary power in approving redress schemes, the Government considers the CMA should be responsible for producing the guidance about its process. However, the Government considers it is necessary for the Secretary of State to approve the guidance so as to ensure the guidance properly fulfils the policy aim.

Precedent

58. The power to make rules in secondary legislation about procedural matters concerning competition law can be found in Section 51 of the Competition Act 1998. Accordingly, providing for a power to make procedural provisions for a particular aspect of competition law (approval of voluntary redress schemes) draws upon this precedent.

59. Section 31D of the Competition Act 1998 provides for guidance to be made by the OFT (the body which will be replaced by the CMA) in respect of a competition matter, and for the guidance to be subject to approval by the Secretary of State.

Procedure justification

60. The Government considers the negative procedure is justified in respect of setting out details about procedural aspects of the approval process. This draws on the precedent in Section 51 of the Competition Act 1998.

61. The Government considers no parliamentary procedure is necessary for approving guidance issued by the CMA given that it will only be guidance, with the details of procedural requirements set out in primary and secondary legislation. As above, the Government considers it is necessary for the Secretary of State to approve the guidance so as to ensure the guidance properly fulfils the policy aim. This draws on the precedent in section 31D of the Competition Act 1998.

Power 10

Power to Make CAT Rules—Schedule 7, Paragraphs 20, 30, 31, 32, 33, 34, 35 and 36

Power Conferred on: Secretary of State

Power Exercised by: Statutory Instrument (Following Consultation)

Parliamentary Procedure: Negative Procedure

Context and purpose

62. The purpose of these provisions is to enable the Secretary of State to make rules in secondary legislation about various procedural aspects of the operation of the CAT. These include ensuring that rules can be made about the following procedural matters:

the approval of collective settlements (paragraph 20)

rejecting claims (paragraph 30)

fast-track claims procedure, collective proceedings and collective settlements (paragraph 31)

cost orders in where a party is represented on a pro-bono (ie free) basis (paragraph 32)

the staying or sist of proceedings (paragraph 33)

injunctions (paragraph 34)

the appropriate legal jurisdiction for a collective action (paragraph 35)

the transfer of a case to a more appropriate court (paragraph 36)

Justification

63. The power is necessary to enable the CAT rules to be made to reflect various changes proposed to be introduced by the Draft Bill, for example collective settlements and so as to ensure appropriate rules are in place to govern CAT procedure.

Precedent

64. This power simply builds upon a pre-existing power in Section 15 of, and Schedule 4 to, the Enterprise Act 2002, which enables CAT rules to be made.

Procedure justification

65. These clauses simply extend the range of matters which the CAT rules can cover and the Parliamentary procedure remains that provided for in Section 15 of the Enterprise Act 2002. The Secretary of State must consult the President of the CAT and other persons he/she considers appropriate and thereafter make rules in a statutory instrument subject to the negative procedure.

General

Power 11

Clause 83: Transition or Transitory Provision and Savings and Consequential Amendments

Power conferred on: Secretary of State

Power exercised by: Order

Parliamentary procedure: Affirmative where the order changes primary legislation, otherwise negative

Context and purpose

66. Clause 83(2)(a) confers a power on the Secretary of State to make by order such transitional and transitory provisions and savings as he/she considers necessary or expedient in connection with the commencement of any provision made by the Draft Bill.

67. Clause 83(2)(b) confers a power on the Secretary of State by order to make such other provision amending, repealing, revoking or modifying any enactment as he/she considers necessary or expedient in consequence of any provision made by or under this Draft Bill.

68. The clause includes a power, where relevant, to amend Acts of the Scottish Parliament, Acts or Measures of the National Assembly for Wales, and Northern Ireland legislation.

Justification

69. The power in clause 83(2)(a) is required to enable the Secretary of State to ensure a smooth transition between legislative provisions, for example when transferring the investigatory powers of consumer law enforcers from the myriad of existing legislative provisions to the new generic set (under Schedule 5 to the Draft Bill).

70. The power in clause 83(2)(b) to make amendments is provided in order to ensure that any consequential amendment which has not yet been identified as being required or which are difficult to include within the Draft Bill may be made as necessary. This power is confined to amendments that are consequential on provisions in the Draft Bill.

71. Certain necessary consequential amendments have already been identified and are included, for example, in Schedules 1 and 4 to the Draft Bill under which existing legislation addressing various contract types is amended to exclude trader-to-consumer contracts covered by the Draft Bill, and in Schedule 6 to the Draft Bill which amends the Enterprise Act 2002 so as to introduce provisions relevant to enhanced consumer measures. There will, however, be other such amendments that become necessary following the passing of the Draft Bill, not least to amend, repeal or revoke the many existing investigatory powers provisions. The inclusion of such amendments within this Draft Bill would have been difficult given that many of these powers are contained in secondary legislation, and extremely limiting in terms of future amendments to Schedule 5 to the Draft Bill.

Precedent

72. There are numerous examples of a power in this form. A recent example would be the Enterprise and Regulatory Reform Act 2013 (sections 99 and 100) which makes provision for a power to make transitory provisions and consequential amendments where, amongst other things, a transfer of functions occurs.

Procedure justification

73. The Parliamentary procedure to be followed depends on the content of the order. If the order amends or repeals any provision of primary legislation (including an Act of the Scottish Parliament, a Measure or Act of the National Assembly for Wales or Northern Ireland legislation), it may not be made unless a draft has been laid before and approved by each House of Parliament, as is fitting for such a power. If the order does not amend or repeal primary legislation, the negative resolution procedure applies, which is considered appropriate given that such an order would be giving effect to the detailed consequences of organisational changes expressly provided for in primary legislation.

Power 12

Clause 85: Commencement

Powers Conferred on: Secretary of State

Power Exercised by: Order

Parliamentary Procedure: None

Context and purpose

74. Clause 85 lists the provisions which come into force on Royal Assent, and provides that all the other provisions come into force on whatever day the Secretary of State by order appoints.

Justification

75. The commencement power will enable the Secretary of State to commence the principal provisions of the Draft Bill at an appropriate time: taking into account, for example, the period of time between Royal Assent and the next common commencement date and whether this would provide sufficient time for businesses to prepare for the Draft Bill’s commencement.

Precedent

76. There are numerous examples of powers to make commencement orders for the substantive provisions of a Draft Bill, without a Parliamentary procedure applying. A recent example is the Groceries Code Adjudicator Act 2013 (section 25).

Procedure justification

77. The Government considers that the power to make commencement orders need not be subject to any Parliamentary procedure as the power sets the date of when the new provisions will come into force. The substance of the provisions will be considered during the passage through the passage of the Draft Bill.