Enterprise Bill [HL] — House of Lords, 2015-11-25
Topic: Mixed Topics
David Edward Lea (Labour, Centre-left): My Lords, I congratulate the noble Lord, Lord Flight, on this further rear-guard action in his retreat towards Dunkirk with Amendments 61 and 62. He has now reached the sand dunes and is within sight of Dover, so I hope he can find a small boat on which to embark It is worth reminding noble Lords how many stages it has taken us to get to where we are with this whole question. The noble Baroness, Lady Noakes, and I were on the Special Bill Committee that followed the Law Commission’s report in the summer of last year. We did not report unanimously on the final outcome of the committee because she and I were in a minority—although not registered by votes—in saying that the Law Commission procedure, which means that if a matter is "controversial" it would not be taken forward in Parliament by a Special Bill Committee, translated into the fact that Lloyd’s of London had a veto over what Parliament could do in this case. I found that quite extraordinary. It is the first time that I have encountered such a procedure in a democracy and I hope that it is the last Happily, a year on, we are doing, in broad terms, what the Law Commission recommended in the first place. We should be dealing with the unadorned principle and with nothing else. I am not sure how far emails, which I have not seen, from the Law Commission saying what someone in the Law Commission thinks is part of parliamentary procedure. As far as I am concerned, the Law Commission procedure concluded a year ago. So I do not see how Law Commission emails are evidence, any more than a QC’s opinion. I echo the noble Baroness, Lady Noakes, on that matter Amendment 61 bears all the hallmarks of an attempt to introduce what the noble Earl, Lord Kinnoull, called "grit" into the system. This bit of grit is being introduced by the same constituency in the suggested provision, opening up a sort of litigation. I quote what the noble Earl said on 2 November. He said that a particular clause that he objected to could lead to more, "disputed claims, leading in turn to … a lot of aggravation for the insurers concerned—in other words, grit in the machinery. That would naturally be less attractive to capital. Many factors decide where you want to deploy your capital as an insurance group, but I put it to the Minister that one wants to try to ensure that we do not have grit in the London machine, because any redirection of capital elsewhere would be damaging to the London markets".—[Official Report, 2/11/15; col. GC 305.] This has been the leitmotif of one particular part of the insurance market, of which Lloyd’s is, I think, 20%. It is the tail wagging the dog, as we all know. I was very sceptical when I saw the suggestion that we need to further accommodate the special pleading of Lloyd’s of London in its campaign against having late payments covered by the law of the United Kingdom, as they are elsewhere in the world On this point about the collapse of London, far from being against the interests of our competitiveness, the truth is totally to the contrary. I will also quote what I think everyone in the House will think is a reasonably pertinent piece of evidence given by the Law Commission—by Mr Hertzell—a year ago. He quoted from a publication called Commercial Risk Europe, which quoted, "a risk manager of a global company operating in 28 countries and employing 9,000 people". This person, "said of insurance generally, bearing in mind that his purchasing programmes are all around the world: ‘I agree that most claims are paid on time. The London market is a different story’" This person had a global perspective. He continued: "‘Claims can be harder to deal with in London as you come up against 20 lawyers’" We have not had 20 tonight, but we have had one or two "‘The system is not working and a lot of European companies will not go to London any more because if there is a claim you are in deep trouble’" That is straight from the horse’s mouth on this preposterous supposition that following what is the normal legal process around the world of dealing with late payment will destroy the competitiveness of the London market. That special pleading patently must be rejected by any independent observer Amendment 62 seems to shift the balance in favour of an insurer, against the background that we have read in many pieces of evidence given to the Bill Committee that one year is a short period before the claim is settled. Three years is given as an average for some large claims. Perhaps the Minister has more research to bring to bear on this subject. However, I wonder why this issue is being put forward by Lloyd’s of London. That is a gift horse one might certainly look in the mouth. I think that—