Consumer Credit Bill

I did not participate in the Committee debates, so I am grateful to my hon. Friend the Member for Wantage (Mr. Vaizey) for clarifying the background. As I said, we are concerned about the lack of clarity with the unfairness test. Constituents are worried that, if the industry is not clear about the lending practices that are acceptable, it inevitably will be more cautious in its lending practices, to the detriment of the borrower. Without a thorough understanding of their chances of success in the courts, some consumers may be deterred from pursuing cases that, if unsuccessful, would only add to their financial difficulties, stress and problems. I am sure that hon. Members from all parties will have had that difficulty brought to their attention by constituents who have experienced it. It is not a sensible approach for either lenders or consumers to have to wait for case law to develop before they can be clear about the law’s parameters. Moreover, the vast majority of cases are likely to be of relatively low value, so will be litigated predominantly in the lower courts. They are likely to go largely unreported as a result. Even with the amendment under discussion, there remains the risk of inconsistency. When the Minister replies to the debate as a whole, I hope that he will tell us what assurances he can give the industry and consumers that the new test will not prove unfair in implementation. What safeguards will be put in place to ensure that courts give consistent rulings? That goes beyond ensuring that previous judgments are not set aside, and touches on the more important question of what the unfairness test comprises. Most pertinently, where will the burden of proof fall? Concern has been expressed by a wide range of interest groups—including lenders such as Barclays bank and the Association for Payment Clearing Services, and consumer representatives such as the Consumer Credit Association—about the reversal of what some perceive as the normal burden of proof and the introduction of the premise that all relationships might be deemed unfair unless proved otherwise. We are concerned that that might prompt many consumers to try their luck with a claim. Ironically, the consumers most likely to do that could well be those least able to afford to do so. That could be detrimental to them in the future.