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Mr. Ground : Suppose the agent makes such an oral statement based on a statement made to him by another agent, which is the way estate agents learn of such matters. Would the agent be protected by the due diligence defence
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in the Bill? If not, it would be a matter of concern if an agent relying on what another agent told him were guilty of a criminal offence.Mr. French : My hon. and learned Friend makes an interesting point. I do not see why the information provided by another agent should necessarily be relied on to a greater extent than information provided by anyone else.
Mr. Ground : That is so, if the other agent was involved in a sale. My hon. Friend implies, perfectly understandably, that the other agent has an opportunity to have direct knowledge of the price at which the sale was concluded. That is covered by the provision that the second agent--that is, the agent now engaged in the sale--could show that it was reasonable in all circumstances to have relied on the information that he was given.
Ms. Harriet Harman (Peckham) : On a point of order, Madam Deputy Speaker. Are you aware whether a Health Minister will come to the House today to make a statement on the alarming developments in Watford general hospital? According to reports in today's newspapers--which have been confirmed by my office--because of the new internal market, Watford general hospital is looking to its balance sheet instead of to the interests of its patients. It has entered into a queue-jumping arrangement whereby patients in GP practices will jump the queue while the remaining 90 per cent. will be left further down the waiting list.
Madam Deputy Speaker (Miss Betty Boothroyd) : Order. The hon. Lady is making a speech after raising a point of order. Mr. Speaker has not been informed that a Minister plans to make a statement today.
Mr. Jeremy Corbyn (Islington, North) : Further to that point of order, Madam Deputy Speaker. You will be aware that the House will not sit on Monday and that there is chaos and crisis throughout the health service as market forces take over. If a Minister came to you now, or some time this morning, to seek to make a statement at some time today, would it be possible to interrupt our business so that this serious matter could at least be raised before the short weekend break that we are about to have?
Madam Deputy Speaker : As the hon. Gentleman and the House knows, when the Government seek to make a statement, Mr. Speaker is informed and the Minister then makes a statement either at 11 o'clock or, occasionally, much later just before the end of our proceedings. At the moment, no information has been given to Mr. Speaker that a statement is to be made.
Mr. Brian Sedgemore (Hackney, South and Shoreditch) : Further to that point of order, Madam Deputy Speaker. I should like to help you. The problem that we face on this side of the House is that, as you know, there has been one calamity after another in the health service this week. Despite several requests for statements, we have only had one. If it could be brought to the notice of the Leader of the House that we urgently need a comprehensive statement on what is happening, that would help to clear up these endless points of order that are being raised every day of the week.
Mr. Nigel Griffiths (Edinburgh, South) : On a point of order, Madam Deputy Speaker.
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Madam Deputy Speaker : Does it relate to the previous point of order?
Mr. Griffiths : Yes, Madam Deputy Speaker. Is it possible, in view of the record length of waiting lists and the current developments, to have a statement later today? If so, the Labour party is willing to make time for it in terms of the important Bills before us.
Mr. Ray Powell (Ogmore) : On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker : Is it related to the previous point of order?
Mr. Powell : No, Madam Deputy Speaker ; it is a different point of order.
Madam Deputy Speaker : If it is a different point of order, I shall deal with the two points of order that have been made.
The hon. Gentlemen will know that Ministers are in place on the Treasury Bench and I am sure that the matter raised will be noted in the appropriate places. I shall now deal with the hon. Member's point of order, which is different.
Mr. Powell : My point of order is related, in so far as it has many consequences for the whole country. I am surprised to hear you say, Madam Deputy Speaker, that no Minister has told Mr. Speaker or yourself, as the Chairperson of today's proceedings, that there will be a statement about the outcome of yesterday's local election. Surely we should now be told the date of the general election. Madam Deputy Speaker : The occupant of the Chair would also like to know the date of the general election, but it is not a point of order for the Chair.
Mr. John Marshall : On a point of order, Madam Deputy Speaker. Earlier this week, an advertisement appeared in various newspaperrs describing a pupil in my constituency as being in a school for six hours a day in a freezing room where the walls were crumbling. That advertisement is inaccurate.
Madam Deputy Speaker : Order. The hon. Gentleman is very articulate. Will he put the point of order so that I can deal with it?
Hon Members : He has lost his voice.
Mr. Marshall : Those who talk about the health service should show compassion for someone who has lost his voice.
Madam Deputy Speaker : Order. This is turning into a debate, and I am not about to allow that.
Mr. French : May I pick up the point that my hon. and learned Friend the Member for Feltham and Heston (Mr. Ground) made before the interruptions? If the agent involved in the second sale obtained his information from an agent involved in the first sale, the agent involved in the second sale could rely on clause 2(2) if he could show that it was reasonable in all the circumstances that he should have relied on the information that he was given. If he obtains that information from an agent involved in an earlier sale, prima facie he could say that it was reasonable for him to rely on it. However, if the information given by
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the first agent turned out to be wrong or inaccurate, the first agent would then be caught by the provisions of the Bill. It is perfectly clear from clause 1(1) that the provision applies when "a false or misleading statement about a prescribed matter is made in the course of an estate agency business".It does not say that that misleading statement must necessarily be made before a translation is concluded. The misleading statement could be made after a sale or during a second sale, so that the first agent would then become liable if he had passed inaccurate information deliberately or misleadingly to the second agent. The Bill does not seek to undermine an agent's duty to a seller. After all, an agent's prime responsibility is to do his best for the seller by whom he is engaged. It is his task to present the property in the best light possible and the Bill does not seek to inhibit him from fulfilling that task. It simply sets reasonable standards by which that task must be fulfilled and the agent must exercise his judgment to give correct, accurate and true descriptions, which are not misleading.
However, the doctrine of caveat emptor still applies. The Bill does not interfere with that. As my hon. and learned Friend the Member for Feltham and Heston said, the agent who commits an offence under the Bill is liable to a fine, but that does not provide the ground for action for damages by the imprudent purchaser. If, for example, the Greenwich tube line is destined to go under a property, or the channel tunnel is destined to go through the garden of a property, it is for the purchaser, with the help of his solicitor and the local authority search procedure, to discover those pertinent facts relating to the property's future. There is no obligation for the agent to know that that state of affairs prevails. If the agent knows, there may be an obligation on him to divulge that information, but there is no obligation on him to establish whether the property is liable to any such development. Equally, it is up to the purchaser, with the help of his surveyor, to discover whether the foundations of the property are shifting. The agent is under no obligation to discover such information, particularly if there are no grounds for suspecting that anything is wrong.
Equally, it is for the purchaser to discover whether the garden of a property floods every year, unless the agent describing the property refers to "a well-drained garden". The agent would then be making a statement without revealing another fact that substantially qualifies what he has said. Providing that the agent does not refer to a well-drained garden, he would not be caught under the Act and it remains for the purchaser, if he suspects that the land on which the property is located is liable to flooding, to establish whether that should affect the price that he pays for the property or his decision to buy it.
Some people have argued that the Bill is a bit of a killjoy, as it will finish off all those amusing estate agents' descriptions, exemplified traditionally, but rather untypically, by the late Roy Brooks. I doubt whether the Bill will have that effect, because the standard applied to the descriptions is what a reasonable man would understand by the words that are put before him. A false or misleading statement has to be about a prescribed matter, which under clause 1(5)(d) is any matter relating to land. Clearly, that leaves the estate agent with the freedom to refer to the nature of the seller of the property. That is how Roy Brooks made his reputation.
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Some examples of Roy Brooks' advertisements are published in a little booklet called, "Mud Straw and Insults", which is a collection of his property advertisements. This one appeared in July 1970 under the heading"Tory Party agent going into fruit and veg"--
after yesterday's results, there may be more examples of that-- "Less neurotic than Party members--even a wilting cabbage." It goes on to talk about the "forced sacrifice" of a much-loved Fulham home.
Other estate agents have tried their hand at that, but never quite reached the standard of Roy Brooks. That sort of fun at the expense of the profession or character of the seller remains entirely in order. I have another example :
"Chartered accountant and surgeon's young liberal daughter off to a Phoenician isle sacrifice period corner cottage in fash Camden Town."
The only risk he would now take is that the cottage must be period and it must be a corner cottage. I will not go into whether Camden Town is "fash" these days.
A third example describes a flat in Richmond hill as the "Strange habitat of a Roedean headgirl and parachutist". I believe that I am right in saying that the only Member of Parliament who is a former head girl of Roedean is the Minister for Overseas Development, my right hon. Friend the Member for Wallasy (Mrs. Chalker). You are nodding, Madam Deputy Speaker--possibly to indicate that you also held that honourable position.
Madam Deputy Speaker : No. What the hon. Gentleman said was absolutely correct.
Mr. French : I am sure that it would have been entirely appropriate for you to have held that position, Madam Deputy Speaker ; none the less, it was held by my right hon. Friend the Member for Wallasey. Descriptions included in the presentation of property details which do not relate to the land itself can be as wild as they wish, because they are not covered by the provisions of the Bill.
The Bill is not designed to make estate agents terrified to put words on paper or to open their mouths. It is designed essentially to catch those who misdescribe property in a reckless way. I suspect that, in practice, it will catch those who regularly do it recklessly and carelessly. Regular practitioners of wild and inaccurate statements will be caught under the Bill before very long. Of course, some will continue to sail close to the wind, and that is hardly surprising, but so long as the persistent offenders are caught, the interests of the consumer will be well served.
The Bill has been introduced in the interests of people making a major purchase such as a house, commercial property, office building or factory. If we compare the simplicity of the Bill with the enormous superstructure of primary and secondary legislation that has been built up around the Financial Services Act to govern the marketing of financial products, its merits become obvious. It has not been necessary to go into the enormous complexities which some people considered desirable in financial services legislation. We are achieving by the simple provisions of the Bill a similar result in respect of the marketing something of great value. I very much endorse the Bill and wish it a smooth passage through the House and the other place.
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11.17 amMiss Emma Nicholson (Torridge and Devon, West) : I am pleased to be able to support such an excellent Bill. It is timely and extremely relevant to my constituency and other rural areas.
I congratulate my hon. Friend the Member for Coventry, South-West (Mr. Butcher) and join other hon. Members in saying how sad we are that he has been ill. He was right to work on the Bill in the aftermath of having been the Minister with responsibility for consumer affairs. We are all glad that he is recovering rapidly and I understand with pleasure and happiness that he is due to return to the House next week.
I also congratulate my hon. Friend the Member for Wyre Forest (Mr. Coombs), who says that he is the foster father of this excellent legislation. I see from looking further down the Order Paper that he is also in loco parentis for the London City Ballet. Alas, I will have gone to Devon before he goes a pointe after what I hope will be a very light lunch that is correctly described on the menu, as are all the offerings from the many restaurants in the House of Commons. I look forward to reading next Tuesday how my hon. Friend the Member for Wyre Forest pirouettes and arabesques round the important matter of the London City Ballet. Will he please incorporate my support, implicitly or explicitly, when he is talking about the excellence of London City Ballet? I was fortunate enough a few years ago to see the ballet perform in front of the royal family in Denmark. Its members are outstanding masters of excellence for the United Kingdom in the field of artistic endeavour. I shall be sorry to miss what I know will be a fine performance and I am sad, too, that I will not be in the audience to hear my hon. Friend speak on the subject.
I also join my hon. Friend the Member for Wyre Forest and others in congratulating the Consumers Association in particular--although other organisations have been mentioned--on its splendid continuing efforts. I have long supported and worked alongside the association, and this is another example of its work on behalf of the consumer. I saw Lady Wilcox, its chairman, last night and also last week and I am glad to support her work and that of her association and its
director-general.
This Bill is about offering the consumer a fair deal and it is timely because of its introduction, in the best traditions, of fair dealing to descriptions of property, which are a cause of growing anxiety for consumers, who want accuracy of description of everything offered to them.
The Bill seeks to identify and strengthen among estate agents the fine marketing line between hyperbole and pessimism which was recently identified for me when I was seeking to move nearer my place of work, the House of Commons. I looked at a small property in south London, which the agent described to me as an elegant jewel of early Georgian architecture. Luckily I invested in a surveyor's report. The surveyor's blunt words to me were, "This house was gerry-built in the 18th century. I cannot think how it is still standing. If you buy it, be careful where you place a picture : the wall may fall down as the nail goes in." There was a delightful difference between hyperbole and pessimism--a difference well known in marketing terms to politicians here.
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I know how strongly London Members must feel about the NALGO advertisement and I strongly support the view advanced by my hon. Friend the Member for Hendon, South (Mr. Marshall). I was even more concerned than he about the advertisement showing the baby said to have needed an incubator, but it could not have one because the hospital lacked one. Conservative Members will have seen in yesterday's papers the righteous indignation of the mother, who said that her baby had not needed an incubator and that she had been told that the photographic sessions were the prize for entering a photographic competition. She had not been told that her baby, the misleading statements about it and the hospital where it was born would be used wrongly to promote Labour party policies.Fair dealing? I believe not. And the consumer, in the form of the electorate, will reward the Opposition in kind at the general election. Many votes were pocketed by the Opposition last night without fair dealing and under the influence of these massively inaccurate descriptions by NALGO.
Mr. Hugh Dykes (Harrow, East) : Are not those advertisements just part and parcel of Labour's cynical scaremongering about the health service in general, whereby it deliberately strikes fear into the hearts and minds of people?
Madam Deputy Speaker : Order. That has nothing whatever to do with fair dealing.
Miss Nicholson : What I am saying, Madam Deputy Speaker, relates to a misdescription of a hospital--but I bow to the Chair's ruling--
Madam Deputy Speaker : Order. The intervention bore no relation to Third Reading, so I am asking the hon. Lady to return to Third Reading.
Miss Nicholson : Thank you, Madam Deputy Speaker ; I will do so. Under the leadership of the Consumers Association the individual is seeking ever more accurate descriptions right across the board, not just from estate agents. That is part of a growing trend supported and encouraged by the Government--providing accurate information about everything for consumers. I hope that we shall convert the Opposition to accurate description of most matters, although a complete conversion will be difficult.
Welsh slate was mentioned earlier, but the hon. Member who mentioned it has left the Chamber so I shall not have the chance to convert him to the idea that Devon slate would have been better in any case. Those of us who keep a close eye on accurate descriptions welcome the growing trend, promoted by the Government, of making such descriptions as accurate as possible. Last year, for instance, there was a case of contaminated animal feedstuff which highlighted the need for accurate labelling so that farmers knew what they were buying from their suppliers. It also highlighted the fact that under European legislation it is perfectly possible for a farmer to believe that he is buying maize pellets when he is actually being sold maize replacer pellets--meaning things in the pellets that the farmer cannot identify. At the other end of the line is the consumer whom the farmer seeks to serve, and the farmer in turn needs to have an accurate description of the product and of the animal feedstuff that he buys.
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I was interested to learn about orange juice labelling, which the Ministry of Agriculture, Fisheries and Food recently investigated. It appears that even unsweetened juices can contain 5 per cent. sugar. For all those reasons it is critical that consumers have accurate information.The phrase "chocolate flavour" can mean that no chocolate need ever have gone near the piece of merchandise labelled as such. These matters are all relevant to this Bill because they show that the Government are seeking all the time to strengthen and improve the accuracy of consumers' knowledge. That is why the Government are so right to support this Bill.
I am astonished that estate agents' descriptions have thus far escaped the provisions of the law and do not come under the Trade Descriptions Act 1968. We should all realise, however, that fair dealing does not form part of European legislation. I am especially aware of that because of the draft directive on computer software, on which a common position has been adopted which, on the face of it, is well in line with our Copyright, Design and Patents Act 1988 ; but as that Act works within the idea of fair dealing, the directive may have implications for our legislation that we would not want. I have conducted a lengthy correspondence and had meetings with Ministers in the Department of Trade and Industry on this subject.
It is critical, especially with property, that accuracy should be sought right down the line. The absolute minimum regulations which the Bill offers should be adopted without delay. On Second Reading, my hon. Friend the Minister said :
"Some people would advocate a more draconian and detailed regime".--[ Official Report, 1 March 1991 ; Vol. 186, c. 1253.] Opposition Members have suggested that. The Minister has guaranteed that if the Bill proves insufficient, he and his colleagues will be prepared to consider further legislation.
I hope that we shall not have to go too far. I hope that best practice and professional codes of practice will prevail, as they do in other professions. It will be a great pity if we have to go into such fine detail that estate agents feel inhibited from trying to sell property. We rest on their excellent services and it is crucial that they work as far as possible to their own best practice as a profession.
Let us not think that there is anything odd about misdescription in this decade. Yesterday, I attended the Torrington May fair, which has been held since at least the 12th century and probably even earlier. The clerk of Torrington town council announces at three different points in the town that there is a free fair and that there will be free victuals. He ends by telling all those who are coming to sell victuals to the populace that their goods must be of proper quality and must be what they have described. Even in the 12th century, there was the problem of the over-enthusiastic seller and the willing buyer who may be sold a pup.
The Bill is especially important to the aim of accurate description because where one lives is not only the largest individual purchase that one will make in one's life--as an individual or perhaps as part of a company--but a vast psychological investment. It is unquantifiable. Ownership of a property--or a lease or contract if one rents a property--as Conservative Members know well, is utterly critical to human psychological health. That is why council house sales, which have been promoted by the Conservative party, have been so hugely successful. It is
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our recognition that "me" and "mine" mean so much more than "us" and "ours" in terms of self-confidence alone that has made us go further in terms of property ownership than any other political party has done. It is to the credit of the Conservative party that this country now has the highest-ever property ownership and that we are moving on to consider the private rented property market for the same reasons.The purchase of property is a huge psychological investment for an individual or for a family and it is the largest monetary investment that anyone will ever make. It is also an enormous investment in time. Purchasers who come to my constituency and to other parts of the south-west often have an idea of the life that they could lead in the country that may be unrealistic and which should not be fostered by over-enthusiastic national estate agents. I say at once that our local estate agents are fine examples of accuracy and excellence. Messrs. Gordon Vick, for example, was established several generations ago in Okehampton. If one looks in the window, one can see exactly what is on offer because properties are described accurately and carefully ; the descriptions are not misleading.
Other national estate agents talk in their initial write ups of "panoramic views" of "water meadows". The water meadows may turn out to be the local sewage disposal works. Estate agents talk about "a rural setting", which may be very different from what the consumer expects. It is not always easy to match the consumer's expectations. I had an angry letter from someone who had just moved into a village in my constituency because the estate agent had described the property as "a rural idyll" with "exquisite green views". No sooner had the person moved in than the farmer, quite rightly, ploughed up the green field and planted rape. The letter was full of righteous indignation because the person now had a bright yellow view. I was asked what I, as the local Member of Parliament, would do about it. Everyone who lived in the village knew that the farmer would plough up the field. I do not know whether the Bill would enable me to attach any blame on the estate agent. I have described the case merely to show that the perception of people who come from the city about what they will acquire in the countryside is often far removed from reality.
In my constituency at present, strong points are made about access. We have the Okehamption bypass and, a little further north, the north Devon link road. It is important that when people buy a country place, whether large or small, and are told that they have easy access to national and international communications, they are not sent to see a house that is by the side of a motorway. Gardens full of rocks and stones in rural areas are sometimes described by national estate agents as "having a beautiful rockery".
One of our greatest problems at present is radon gas. Hon. Members may know that radon gas is now said to be a health hazard and that the Department of the Environment has invested considerable money in telling people which houses have radon gas beneath them. Our view is different from that held in the late 19th century, when radon gas in Bavaria was promoted to British Victorians as a health benefit. People were encouraged to go to Bavaria, to go down a mine that had natural
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emissions of radon gas and to breath it in to enhance health. In today's world, radon gas is seen as a health hazard. A number of houses in my consituency are built on Dartmoor rock, which creates radon gas. One house is said to have the worst radon gas problem in the United Kingdom. It is the doctor's surgery in Chagford. I do not wish to introduce any indelicacy into the debate, but I must say that it is especially ironic that the room in which the radon gas is most prolific is the patients' wash room.I have a question for my hon. Friend the Minister. Under the Bill, will estate agents be required to indentify whether a house has radon gas beneath it? That is a marketing point that any good estate agent--good in terms of wanting to sell the property--would ignore. However, it is a consumer purchasing point which any buyer would badly want to know. That is a serious point, but it shows how critical it is to build accuracy into the estate agents' code of practice. I am sorry that it had to come to legislation, even modest legislation. I should have preferred estate agents to recognise and honour a code of professional standards.
I end on a lighthearted note. I referred to a house in Okehampton which has exceptionally high emissions of radon gas. A family lives there and members of three generations of that family have lived to 100.
I support the Bill and I thank the Minister for his keen acceptance of it.
11.40 am
Mr. Patrick Ground (Feltham and Heston) : I accept that it is desirable to improve the accuracy of estate agents' descriptions, but I have some unease about elements of the Bill. If its prime motivation is to prevent people from wasting time and money viewing properties in which they would have no interest, it is a pity that there is no provision enabling courts to make compensation payments in such cases. There are many examples in criminal law where similar compensation can be given. That would be a good way of ensuring that people who suffer are given redress.
I am concerned that the Bill makes it a criminal offence for an estate agent to make an inaccurate statement even though it may be a misprint, typing error or arithmetical miscalculation. The aim of the Bill should be to prevent people from suffering as a result of misdescription, not to punish every human error that may be made. If compensation is not available in the criminal courts, perhaps we should consider providing for a civil remedy.
Many references have been made to the similarities between trades descriptions for the sale of goods and the sale of land. However, there are major differences between the sale of goods and the sale of land. A fundamental difference, which is not generally appreciated, is that, in the sale of property, there is no implied term of the suitability of that land for any use. The purchaser must take precautions to protect himself by relying on his own observations and the advice of his surveyor and his lawyer.
In some cases, the agent selling the property is not aware of its defects-- even if they are defects of which the owner of the property perhaps ought to be aware. Under the Bill as drafted, an innocent agent may be caught, even though it is not reasonable to expect him to be aware of the facts.
I refer to a case in which I appeared at the Bar. A farm, which had been taken over by the Ministry of Defence during the war, was subsequently derequisitioned,
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advertised and let to an enthusiastic young farmer, who took it on an agricultural tenancy and soon started to plough up the land. In the first few days, he hit a number of metallic objects, but this did not deter him. After a week, a great many of them had been discovered and he reported the matter to the police. The farm was rapidly shut down. The Ministry of Defence reappeared and hundreds of unexploded bombs were found within ploughing depth or just below it. Understandably, the farmer thought that he had legal redress and he sued the landlord and the Ministry of Defence. He had no remedy, however, because there was no implied term that the land was suitable for agriculture. It is a fundamental basis of the law on the sale and leasing of property that such terms are not included. Parliament should perhaps consider that at some stage, but as long as that is the law, there are dangers of saddling an agent with liability for statements about property when he has no knowledge of its defects. In the case of the farm with unexploded bombs, it is difficult to see how the agent could have described the farm without committing an offence--of omission, at least--which would have fallen four square within the scope of the Bill.The Bill states that an estate agent will not be caught if he shows that it was reasonable in all the circumstances for him to have relied on the information, having regard to the steps that he took, and those which might reasonably have been taken, for the purposes of verifying the information and to whether he had any reason to disbelieve the information. That gives the estate agent a difficult area of inquiry. With hindsight, people might be able to imagine all sorts of things that the estate agent in the case of the farm ought to have done to satisfy himself that the land had been satisfactorily cleared by the Ministry of Defence after its use as a bombing range during the war.
That is an example--perhaps an extreme example--of the hidden unknown risks in respect of which estate agents could be rendered liable under the Bill.
Mr. John Marshall : My hon. and learned Friend is referring to an interesting case. Can he tell the House whether, when the farm was put up for letting or sale, the estate agent knew that it had been a Ministry of Defence bombing range and whether he included that information in the particulars of sale?
Mr. Ground : I am afraid that it was a long time ago, and I would not wish to attempt to say exactly what particulars were given. I simply cannot remember. I am merely using the case to show that the Bill could create considerable problems for an agent letting land even if it had been given a certificate of clearance after its use as a bombing range.
Mr. French : In my hon. and learned Friend's example, what would he have expected the agent to include in his details that would have rendered the omission of the possibility of the bombs a material factor?
Mr. Ground : I simply do not know. That is a matter of speculation and I am not an estate agent, although I have done much work involving estate agents and surveyors. I fear that, if the agent in question had made any innocent representations about the quality of the land for farming without knowing of the existence of the unexploded bombs, he would have been caught by the Bill.
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Under clause 1(5)(b), almost any statement made about the farming potential of the land would have been misleading. Clause 1(5)(b) states :"a statement is misleading (although not false) if what a reasonable person may be expected to infer from it, or from any omission from it, is false."
Almost anything that the agent said would have been false according to that provision. Therefore, there are real dangers which must be considered. I shall not oppose the Bill, but I merely draw attention to issues that need consideration. There is a danger of saddling an agent with a responsibility that is not borne by the owner of the property who will receive the full price for the sale or the full rent from the letting of the property.
Mr. Alan Williams : The main purport of the Bill is the descriptions that are given and what the estate agent says when selling, but it also provides the defence of due diligence. Anyone has the right to expect that a person selling something of such value would do that which it is diligent for a seller or a retailer--which is what an estate agent is--to do and the agent has a perfectly good defence as long as he has done all that is usually expected.
Mr. Ground : I accept what the right hon. Member for Swansea, West (Mr. Williams) says. If the agent knew that the land had been used as a bombing range during the war and he was a local agent, it is difficult to know what steps he would have been required to take under clause 2(2). What steps would reasonably have been expected to be taken to verify the information and to assess whether he had any reason to disbelieve that information? My example shows that there is a danger of saddling those marketing a property with a responsibility that is not borne by the owner of the property.
Mr. Anthony Coombs : I understand the principle behind what my hon. and learned Friend says, but in practice I do not think there will be a problem. Where there is a strict liability, the due diligence defence which relies on the idea of reasonableness--which will inevitably be considered from case to case--is the only way to deal with the problem. My hon. and learned Friend asked the rhetorical question, what steps should the agent have taken in the example that he gave? I should have thought that an agent marketing a property previously used by the Ministry of Defence as a bombing range might legitimately have inquired of the Ministry what certificate had been issued or what assurance could be given that the land was no longer active. Clearly, if the agent did not receive the reassurance that he required, he should mention that in his particulars ; not to do so would possibly give a misleading impression as to the land's agricultural viability.
Mr. Ground : I note what my hon. Friend says, but in this particular case a certificate was issued.
Mr. Coombs : So the agent had taken all reasonable steps.
Mr. Ground : That is all very well, but what further steps should he have taken under clause 1(5)(a) and (b)? Did the agent have any reason to disbelieve his information? That might be a difficult judgment to make in retrospect when hundreds of unexploded bombs are found. With hindsight, someone might suggest that further steps should have been taken. What my hon. Friend said does not entirely dispel the agent's worries.
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The example that I have given is extreme, but there are many properties with defects which are not understood or known by the agent or the owner. Further thought should be given to the scope of clause 1(5)(b), about what is misleading as the result of an omission, and also about the "due diligence" defence, so that people who are inherently innocent are not saddled with a criminal offence or that, at least, if they are they have an adequate defence against it. The requirements referred to in clause 1 about what will be the prescribed matters should be carefully considered in the light of differing liabilities imposed on the owners and on those marketing a property and the possible unfairness and injustices that might arise if matters are prescribed too widely, thus giving the property owners and those marketing the property wholly different responsibilities. I should like such issues to be further considered during the passage of the Bill.I am also concerned about oral statements, especially the danger of relying on such statements made by another estate agent. It is well known that estate agents rely heavily on oral statements which they obtain from other agents about a property transaction, about prices and about the conditions of sale. Much valuation work is carried out on the basis of such oral information. A number of years ago, the courts discovered that oral statements were an unsound basis on which to value a property when they were not supported by the documents relating to the sale.
Such oral evidence should strictly be, and commonly is, disregarded. The only admissible documents are those recording the sale transaction and, if necessary, they can be obtained by means of subpoena. Often, when material is subpoenaed, a different picture emerges of the transaction than that which emerged from the estate agent's oral recommendations and second-hand information. To put oral statements about value within the ambit of criminal prosecutions is to make a serious extension of the criminal law.
Considerable difficulties could arise if it were necessary for an agent to rely on the defence that he had received oral information from another agent who was involved in the transaction and that he therefore had reasonable cause to believe it. There would be considerable difficulty in establishing that such conversations took place in the case of a criminal allegation. Further consideration should be given to whether we must extend misdescription to oral statements and whether purchasers might not be better advised to have statements in writing about matters that seriously affect the values of the property.
Although there has been intense deliberation about these matters, the Bill spent only seven minutes in Standing Committee. Not all the points that I have raised today have been fully considered. Although I welcome the general purpose of the Bill, I am slightly uneasy about certain aspects of it, and I hope that those points will be considered in future.
12 noon
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