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Lord Goodhart: I am most grateful to the Minister for her reply to both amendments. Obviously, I want to hear further from the Law Society on Amendment No. 77 before deciding whether to bring it back again. For the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Buscombe moved Amendment No. 79:
- Page 33, line 8, leave out "written authority of his principal" and insert "authority of his principal conferred by deed"
The noble Baroness said: An electronic document under Clause 91(5) is treated as a deed for the purposes of any enactment. Under the general law an agent can only make a deed if authorised to do so by deed. The amendment avoids a doubt about whether subsection (6) is sufficient to treat an electronic document made by an agent as authorised to take effect as a deed.
It could be argued that the amendment is not necessary because the electronic document is not actually a deed; it is only treated as one. However, the amendment saves having to be certain about a not entirely straightforward point. I beg to move.
Baroness Scotland of Asthal: The Government believe that the amendment is not necessary. Perhaps I may explain to the noble Baroness why. Amendment No. 79 relates to the authentication of electronic documents by agents, as outlined by the noble Baroness. But it seeks to upgrade the deeming provision in subsection (6) of Clause 91. It would provide that where an electronic document permitted by Clause 91 is authenticated by an individual as an agent, the agent's authentication is to be regarded for the purposes of any enactment as having been carried out under the authority of his principal conferred by deed. As drafted, subsection (6) deems only written authority. It therefore operates at a lower level of formality.
The reason that this lower level is more appropriate is that the electronic document under Clause 91 is not a deed; it is only to be regarded as a deed for the purposes of any enactment. That is provided for by subsection (5) of Clause 91. The common law rule that an agent can only execute a deed if he or she is authorised to do so by deed is therefore not applicable. All that is required to facilitate electronic conveyancing in this respect is therefore an assumption that the document was executed under a written authority. I hope that on the basis of that explanation the noble Baroness feels able to withdraw Amendment No. 79.
Baroness Buscombe: I thank the Minister for her response. I think that I understood it. I am not sure that I entirely agree with it. On that basis I would prefer to read what she has said in Hansard. For the time being, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness moved Amendment No. 80:
- Page 34, line 13, at end insert "including documents relating to the conduct of electronic land auctioneering"
The noble Earl said: In moving Amendment No. 80 I shall speak also to Amendment No. 81. In addition, I declare an interest as a surveyor and a Fellow of the Royal Institution of Chartered Surveyors. In the briefing that we received on the Bill and in the letter that the noble Baroness kindly wrote to me, it is said that the Land Registry wants to introduce a world-class, up-to-date and modern system. We are all in favour of that. However, I detect a slight lacuna in the Bill; it omits electronic online auctions of land. That
system will become increasingly used in the future but I cannot find anything in the Bill that deals with it. That is the purport of Amendment No. 80.I raised this point at Second Reading and received a kind letter from the Minister. That allayed my fears somewhat; nevertheless I felt that it was worth tabling the amendment. It is also a matter of concern to the RICS property auction group. It has approached the Lord Chancellor's Department for clarification of the impact of the law on this particular sector of the property market. Currently, English law allows online auctioneering until the stage of exchange of contracts. That action must still be done in the traditional area of the auction room. The RICS and others are keen to develop electronic auctioneering to its fullest potential and has established guidance for its members on the best practice in undertaking such transactions. Amendment No. 81 refers to the rules concerning this measure and states that no rules should be brought in without the RICS and, indeed, the Law Society being consulted by the Lord Chancellor in order to develop the best practice.
Having listened with care to our discussion on Clause 91, and indeed the rest of the Bill, it occurs to me that it is time that I beat another drum. It is rather an old drum; nevertheless, it is a tune that is growing increasingly loud.
Given the responsibility that there will be on agents--I do not use the word "agents" as did the noble Baroness in relation to Clause 91, but "estate agents"--they will have huge responsibilities and access to a great deal more information than now. They will be dealing with matters which traditionally have been handed straight to solicitors. If I am instructed to sell a property now I immediately advise the owner to start getting his documents in order and contact the solicitor. The more that that is done online, the quicker the process will be and the more the agents will able to do for themselves without bringing in solicitors. But the agents are not licensed and it terrifies me that some of my fellow agents will have this power and responsibility. I therefore hope that the Government will give urgent consideration to implementing the licensing of estate agents. As the noble Baroness will know, provision is already made for that under the 1979 Act. Given the added responsibilities that agents will have, particularly with regard to online auctioneering, I hope that we, too, can be licensed. That would add a good deal to our credibility and ease some of the concerns of those who will be using our services. I beg to move.
5.30 p.m.
Baroness Buscombe: I rise briefly to support my noble friend Lord Caithness. To repeat what he had to say would be otiose, but it is important to him and to all of his profession that we understand the Government's intention in relation to the auctioneering of land.
Baroness Scotland of Asthal: I am grateful to the noble Earl, Lord Caithness, for returning to the topic of electronic auctioneering that he raised at Second
Reading. It provides the common theme for Amendments Nos. 80 and 81. At Second Reading I promised to write to the noble Earl about the topic and, as he indicated, I have done so. In my letter I explained that the full details of the actual electronic conveyancing systems and services that are to be used to carry out transactions have not yet been settled.The present position is that the Land Registry has built a model demonstrator of a potential electronic conveyancing system for consultation purposes. The current model was of course demonstrated on the committee corridor of the House last week. I am very sorry that for quite understandable reasons the noble Earl was not able to be with us. The current model is creative and effective and demonstrates how quickly and easily the system could be made to work. But the final system will be the product of detailed consultation with stakeholders in the professions, the IT industry and consumers over a period of years. Experience suggests that the only certainty is perhaps that the final system will be different from the model. We hope that the prototype will be the basis for creative discussion which will better hone the system in the long term.
The Bill provides the primary legal framework for the development of electronic conveyancing. It does not specify either the particular transactions that may, in due course, be carried out electronically or the method by which those transactions are to be carried out. Those details will be contained in secondary legislation and the network access agreements referred to in Schedule 5. However, auctions have special requirements and I quite understand why the noble Earl therefore raises them. In relation to sales of land, the most striking is perhaps that the contract is formed on the fall of the hammer rather than by exchange of written, signed documents. Fully electronic auctions will presumably require instantaneous electronic commitment by the successful bidder on the fall of the virtual hammer.
In traditional auctions the bidders are quite likely to be unknown to the seller and the auctioneer. Whether that will also be the case in electronic auctions remains to be seen. The pattern of an auction sale is therefore very different from that of a sale negotiated by private treaty. Electronic auctions in England and Wales are still in their infancy but electronic bidding over the Internet is growing in popularity. The noble Earl indicated as much in his earlier comments. At present, the creation of the sale contract still occurs in the real auction room. Electronic signatures seem to offer a way in which the small, but crucial, step to electronic auction contracts could be taken.
Auctions can be a very efficient way to sell property. We certainly do not wish to impede their operation by the creation of electronic conveyancing. Rather we will have to accommodate them within the systems to be created. We believe that the legal framework created by the Bill is sufficiently flexible to achieve this and we have therefore no reason to think that electronic auctions will need separate treatment in the Bill to fit within the new systems as they develop.
These systems will, of course, relate to contracts for the sale of registered land. In so far as auctions of unregistered land are concerned, the Land Registry's systems will not be appropriate. It may be the case that if it is necessary or desirable to make general legal provision for online auctions of land a different legislative vehicle may be required. I can assure the noble Earl that the Government are giving the matter detailed consideration. He may be interested to know that our officials will be meeting in early August with representatives of the Royal Institute of Chartered Surveyors to discuss the issues. I shall consider the amendment and the issue of online auctions generally between now and Report. I hope that on the basis of my reassurance the noble Earl will feel able to withdraw Amendment No. 80.
Amendment No. 81 is intended to ensure that appropriate representative organisations, including in particular the Law Society and the Royal Institute of Chartered Surveyors, are consulted by the Lord Chancellor before any land registration rules are made relating to online auctions. While I wholly agree with the sentiments underlying the proposed amendment, I do not think that it is necessary. First, as a matter of general policy electronic conveyancing will be developed in collaboration with the stakeholder organisations. Secondly, land registration rules, such as those to be made under Clause 94, are already subject to a requirement of consultation with the rule committee established under Clause 124. That committee includes representatives of the Law Society, the General Council of the Bar, the Council of Mortgage Lenders and the Council of Licensed Conveyancers. There is also provision for the Lord Chancellor to nominate additional members for specific purposes. We are very happy to do that. I can think of few more obvious uses of that power than to obtain expert representation from the Royal Institute of Chartered Surveyors in relation to any rules that may be made regarding online auctions. That is entirely sensible.
In relation to the noble Earl's final point, the licensing of agents is well outside the scope of the Bill, though I understand that the temptation to raise it was irresistible. We hear what the noble Earl says and we understand his concerns. The quality of service is a matter for network access agreements. That may meet some of the noble Earl's concerns. I can certainly reassure him that network access agreements will be entered into and then completed only by those who satisfy the Land Registry and others that they are competent and have the necessary skills to have that facility. As the noble Earl may know, the Land Registry has jealously guarded that in the past and I do not feel that it will change very quickly.
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