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Lord Lucas: My Lords, perhaps I may begin by explaining how this new subsection would work. Under the clause as it stands, there is a description of an adjudication under subsection (2)(c) which satisfies the scheme. It states,

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    "impose a duty on the adjudicator to act impartially".
As the Bill is written, if a contract were deficient in that aspect alone, that aspect alone of the scheme would be imported into the contract. As regards the amendment, if a contract is deficient in just that one aspect, the whole scheme is imported into the contract. We are saying that we do not believe that it would be satisfactory to try to mix and match bits of the contract with bits of the scheme and to pick out something which is deficient in the contract and substitute just that part of the scheme. As it emerges, the whole scheme will be an entity which ties in and works together. If one tries to bring parts of it into the contract for which there is no legal control, which is not necessarily related to the way in which the scheme is laid out, that is a recipe for confusion. We have always intended that the scheme as a whole should be imported if something was wrong with the contract rather than to include bits and pieces.

The noble Lord, Lord Williams of Elvel, asked about the ability of the adjudicator to range far and wide. That is something to which Amendment No. 189 addresses itself to a certain extent. Perhaps I may pre-judge that and turn to it. Amendment No. 189 would have the effect of restricting an adjudicator to consider material presented to him rather than letting him decide procedures. In reply to that, I say that we would not wish to restrict an adjudicator's ability to investigate cases without first considering the views of the whole industry. This is certainly a point that we shall look at, but in consultation with the industry rather than on our own initiative.

Lord Swinfen: My Lords, before my noble friend sits down, I point out that I was under the impression that the whole scheme would be imported into the contract if the contract had one part missing. What is the position if the original contract is drafted in such a way that it is in conflict with the balance of the rest of the scheme and not the part which is in there just to replace the missing part in the contract? One can have the original contract which is drafted in such a way that it conflicts with the scheme, which has to be imported as a whole. I realise that my noble friend would like the whole scheme imported rather than small pieces of it. I wonder whether there could be a conflict between the two. Perhaps my noble friend will give the matter consideration before Third Reading.

Lord Lucas: My Lords, yes, I shall do so.

On Question, amendment agreed to.

Baroness Hamwee moved Amendment No. 155:

Page 61, line 9, leave out subsection (4) and insert--
("(4) The Scheme may include--
(a) for England and Wales, such provisions of the Arbitration Act 1996 as appear to the Secretary of State to be appropriate, and
(b) for Scotland, so much of the law, practice and procedure relating to arbitration as appears to the Lord Advocate to be appropriate.").

The noble Baroness said: My Lords, the Minister referred to mixing and matching. My amendment is intended to seek to understand how much may be mixed and matched of the Arbitration Act for England and

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Wales and the law, practice and procedure of arbitration in Scotland. As Clause 106(4) is drafted, the scheme may apply the provisions of the Arbitration Act for England and Wales--similar provisions will apply to Scotland--with adaptations and modifications at the discretion of the Minister. Can the noble Lord, Lord Lucas, explain to your Lordships if it is intended that the existing provisions of the Arbitration Act can themselves be altered and then put into the mix of the scheme or if what is intended here is that the scheme may apply to some provisions but not others--that would clearly be sensible--of the Arbitration Act? The reason I am pursuing this matter is that it does not seem appropriate to give power to the Minister to start changing the provisions of the legislation, albeit for the purposes only of the scheme, but without bringing those changes before this House and another place. I beg to move.

Lord Howie of Troon: My Lords, is it convenient to the House if we discuss my Amendment No. 160 at this time? It stands alone in the groupings on the Marshalled List. I shall not pursue it unless the Minister agrees with me. I am asking that we consider two schemes, and not one. If the Minister agrees, then I shall continue, but if he does not, I shall wait my turn with the normal politeness that I always show. I shall babble on while the Minister makes up his mind. Does he find it acceptable? I am suggesting that we discuss Amendment No. 160 with Amendment No. 154, because they seem to have a kissing cousinship at least.

I admit to a certain dereliction of duty here, in the sense that I did not realise that there were to be separate schemes: one for England and Wales, and another for Scotland. Our debate in Committee did not make that clear. I absolve the Government from any blame in this matter, because if one looks closely at the Bill it implies that there are separate schemes produced by separate Ministers. We did not realise that at the time, and the Government did not feel inclined to remind us of it.

I received a letter from the Lord Advocate (the noble and learned Lord, Lord Mackay of Drumadoon), a man whom I do not know, although he seems to be a Member of this House. He may be a recent Member. He wrote me a kind and informative letter relating to matters I had raised at an earlier stage in relation to my native land and the Bill.

I was reading the noble and learned Lord's letter happily until I reached page 2, when I was drawn up short. He explained of course that his department (the Lord Advocate's Department) worked closely with the Secretary of State for Scotland, which did not surprise me because I think that the Secretary of State for Scotland is a man who would insist upon being worked closely with--if that is grammatical. The Lord Advocate went on to tell me that his officials have been in contact with representatives of the construction industry in Scotland,

    "in order to discuss the terms of the Bill and the proposals for a Scottish scheme".
That is direct. I am sure it is within the Bill's ambit, although no one reminded us of that. It was not thought to be appropriate, and we did not spot it. He continued:

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    "These discussions will assist in determining the nature of the Scottish scheme, and will in due course form part of the formal consultation exercise which I require to undertake before I make the scheme itself".

I could go on. There is an interesting paragraph which tells me about Scottish law, and matters of that nature, and things which will apply in Scotland and things which will not. The most important one is the fact that the Arbitration Bill will not apply in Scotland. Yet this "scheme" as we have called it so far, which is in fact a scheme for England and Wales, leans heavily on the Arbitration Bill and quotes from it extensively, without admitting it. The Arbitration Bill does not apply to Scotland, so what is the Scottish scheme to consist of? Will it spatchcock in bits of an Arbitration Bill which does not apply to Scotland? The Minister shakes his head, and I am glad to see that.

That brings me to a question which I must put to the Minister. We asked, I think in Committee, that this famous scheme be presented to the House in draft so that we could consider it, and even think about it, if the worst came to the worst. We may want to consider and think about the Scottish scheme. So is there any possibility that we may see a draft of the Scottish scheme before Third Reading so that we can consider it and possibly think of putting it down as a schedule to the Bill on Third Reading? I chuckle in a demonic way, but this is a serious matter.

If it is right that we should have a sight of the scheme for England and Wales, is it not right that the Scottish Office should lift its kilt just enough to let us have a look at the scheme for Scotland? Because it will be a different scheme. The Arbitration Bill does not apply, and there are all sorts of elements of Scottish law which do not apply. We should see the scheme in draft form before we go to the next stage of the Bill. I should have thought that round about Monday would be a good time.

8.45 p.m.

Lord Lucas: My Lords, I am pleased that the noble Baroness has recognised that it is legitimate for the Government to draw from arbitration law in the making of the two schemes for construction contracts. The Arbitration Act is, after all, the most up-to-date legislation on dispute resolution available.

Lord Williams of Elvel: My Lords, it is not an Act.

Lord Lucas: My Lords, it is a Bill. I do apologise. We believe that at least some of its provisions may be useful in one form or another when it comes to taking powers for the scheme. I believe this has been superseded by what was said by the noble Lord, Lord Howie, but, following full consultation on the scheme after Royal Assent, we should like to give the industry the fallback adjudication provisions which suit it best. It might prove difficult to do that if the relevant Minister were not empowered to make minor adaptations or modifications to arbitration law. That is as far as our English ambitions go.

The Scots may, as their view of their scheme develops--I am afraid that it will not have developed fully by Third Reading--feel that they need slightly

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greater powers. I am not in a position to say that yet. In short, we want to ensure that we have the powers to make schemes that work for the construction industry on both sides of the Border. That could be difficult if we were to accept the amendment. I hope that the noble Baroness will withdraw it, therefore.

Before I leave the Floor clear for the noble Baroness to do that, I should perhaps say that she produced an accurate sting in the tail when she asked why we do not have this back to look at it. Looking at it in that way, why do we not have the whole scheme back, subject to affirmative resolution? That is something that we are prepared to consider.

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