Compensation Bill [HL]

I am glad that the noble Lord, Lord Hunt, mentioned the name of the town because it saves me having to pronounce it. I understand that it is on the Costa del Sol in Spain. The noble Lord, Lord Goodhart, is right to point out that it is Fuengirola. I have also looked at the comments of Mr Andy Wigmore of the Claims Standards Council. I shall address this issue in three ways. As the noble Lord, Lord Goodhart, indicated, there are circumstances where a claims management company operating offshore but providing services to consumers in England and Wales would come within the jurisdiction of English law and our courts. The company could be prosecuted under this legislation and requires the service provider to submit themselves to the jurisdiction of the English courts, either voluntarily—which may or may not happen—or by the process of extradition. The Committee knows well that for extradition to apply, a similar offence must be in place in the other country. Therefore, the offences under Clauses 5 and 9 would fulfil the requirement for England and Wales, but the same acts may not be similarly punishable under the laws of the country from which extradition is requested. I recognise the limitations and I admit that there are limits to what we can do on some of these issues. However, there are two further critical aspects to enable us to deal effectively with these matters. The first is the vital importance of providing information to the consumer and the requirements that we might place on the legal practices involved in this in terms of those they deal with. Consumers must be made aware of the new regulation. This may be by a process of kitemarking, but we have yet to determine that. However, I am absolutely certain that consumers must be given every confidence in the procedure. Part of that is ensuring that they understand by one means or another who is reputable and who is not. That may be done by naming and shaming, by publishing lists or by issuing kitemarks. That is a critical point because consumers are protected only as far as they are provided with information. That also applies to the legal firms involved in the process. I could not agree more with the noble Lord, Lord Hunt, that we shall need to look at this area with great care. We must do all we can to ensure that those operating offshore disreputably cannot do so. I turn now to the European Union and the services directive. The noble Lord will know that the directive is currently being redrafted. It is worth making the point that during the initial drafting we asked for private international law to be carved out of the directive so that we could deal with the questions of reciprocity and other cross-border concerns. Moreover, as the noble Lord, Lord Goodhart, pointed out, that would apply in both directions. For example, if a scaffolding company from another country working here injured a passer-by, at present the claim would be made in the British courts, but using the law of the home country of the scaffolding company. The basis of the services directive process is the country of origin. We think that we can do better than that. During our presidency I spent many months negotiating a definition of the term ““cross-border”” in order to ensure that the ability to make small claims is more readily available to individuals across the European Union in simple and practical ways, and I am keen to continue with that work. I propose to discuss this with colleagues in the Department of Trade and Industry, the lead department in the area. However, Mr Robert Madeleine, who is in charge of the EU competitiveness and internal market directorate, will be able to provide me with practical advice on our approach to the new draft of the service directive. The Government are committed to making it easier and better, throughout civil law, for us mutually to regulate across the EU and deal practically with issues of concern to our citizens. I have not addressed issues relating to the Isle of Man or the Channel Islands because I do not have enough information to do so effectively. If I may, I shall write specifically to the noble Lord, Lord Hunt, on what can be done in those areas. However, I hope that on the basis of what I have said he will feel that we have the measure of the issues and can take various actions to address the problem in a different way.