Consumer Credit Bill

moved Amendment No. 2:"Page 14, line 16, at end insert—" ““(   )   Regulations may make provision indicating the circumstances in which the relationship between the creditor and debtor may be regarded as unfair.”” The noble Baroness said: In moving the amendment, I shall also speak to Amendments Nos. 3 and 4. They amend Clause 19, which relates to unfair relationships between creditors and debtors. They are different from my other amendment to Clause 19, which I shall move separately, because this little group of three amendments relates to the definition of an unfair relationship, whereas Amendment No. 5 involves an important and vital duty of the creditor towards the debtor. Amendment No. 2 empowers the Secretary of State to make regulations specifying that this or that practice is automatically to be deemed unfair. As drafted, the clause is, as the Minister conceded in Committee, deliberately unspecific in order to leave it to the court to decide whether the creditor had been unfair. Your Lordships may recall a notice that used to appear on London buses:"““Small dogs may be carried at the discretion of the conductor””." The question was always, how small is a small dog? The answer always was acknowledged to be whatever size the conductor said. How long is a piece of string? I entirely agree with the objective of being as unspecific as possible because it is impossible to define every unfair practice, and because a list of malpractices in the Bill might infer that whatever is not expressly prohibited is permitted. The ingenuity of bad lenders in dreaming up new schemes or scams is so extensive that we cannot allow matters to be set in legislative concrete. On the other hand, if there is a practice which is clearly unfair or undesirable, there is no reason why the Secretary of State should not say so in a regulation approved by Parliament to protect debtors, and to avoid the necessity of them having to go to court for protection. We have to bear in mind that the debtor is almost inevitably in a weaker position, and because of that, and possibly through ignorance of his rights, he may simply find himself liable for a debt that he should not be intimidated from contesting. With vast swathes of legislation going back over centuries, not only has the law been interpreted by judges, but the same judges have made rulings on the facts. In almost every case, the judge has to decide whether he believes one side or the other, or whose version of the facts is correct. Therefore, I have no objection to decisions left to the court about whether the terms are unfair in a particular case. But one of the objectives of the Bill should be to prevent cases coming to court in the first place. That would be achieved if, in the case of some scheme involving a serious malpractice, the Secretary of State could cut it off at the root without waiting for the outcome of some drawn-out piece of litigation, or for it to continue for too long simply because there is no debtor with the resources to contest it. I emphasise that the amendment does not detract in any way from the flexibility desired by the Government regarding the interpretation of unfairness. It simply enables the Secretary of State to say so when something manifestly is unfair. The noble Lord, Lord Razzall, has indicated his support for the amendment, and I am very grateful to him. Perhaps that alone will persuade the Minister that this constructive provision has wide support. Amendment No. 3 simply requires that the terms on which a creditor seeks to rely be written in plain intelligible language—intelligible, that is, to the debtor, and not necessarily to a member of the Chancery Bar. It will still be up to the court to decide whether the language of the agreement is clear and intelligible. Leaving aside the fact that the terms applying to many credit card and store cards are often printed in microscopic typefaces, the least standard that should apply should be that those terms be readily understandable by the debtor. In legislation governing credit terms—for example, hire purchase—the law stipulates that certain provisions must be printed no less legibly than the rest of the document. There is no point in printing legibly if they are also legal gobbledegook. Amendment No. 3 does not add any burden or give any problem to any lender who is acting with integrity. Amendment No. 4 has a corollary which entails the alteration of the burden of proof. It is right and proper that if a term of a credit agreement has been expressed in clear, intelligible language, the ordinary rule should apply—if you sign something, you are bound by it. Voltaire once said:"““God is always on the side of the big battalions””." This group of amendments is designed to prevent some of the excellent provisions of the Bill becoming the subject of endless legislation in cases where the creditors enjoy an economic advantage of deeper pockets and more resources than the individual debtors. I beg to move.