Question proposed, That the clause stand part of the Bill.

With this it will be convenient to consider the following:

Government amendments 97 to 100.

Clauses 289 and 290 stand part.

Government amendment 101.

Clauses 291 and 292 stand part.

That schedule 23 be the Twenty-third schedule to the Bill.

Clause 293 stand part.

Government amendments 102 to 105.

Clause 294 stand part.

Government amendment 106.

Clause 295 stand part.

Government amendment 107.

Clause 296 to 300 stand part.

Government amendment 112.

That schedule 24 be the Twenty-fourth schedule to the Bill.

Clause 301 stand part.

Clauses 288 to 292 and schedule 23 cover the accreditation process for ADR providers, which ensures that standards are high and providers perform well. Clause 288 covers the application process and application requirements, including fees, must be published.

Clause 289 covers the outcome of those applications. Applicants will be accredited only if they satisfy the accreditation criteria, which I will explain in the context of clause 292. The Secretary of State can reject, limit or impose conditions on an accreditation, and the applicant must be told why.

Government amendments 97, 98 and 99 clarify that, in extending a limited accreditation at a later date, the Secretary of State can impose new conditions or alter existing ones. Government amendment 100 provides that conditions can be imposed to make an ADR provider responsible for the acts of a third party carrying out ADR on its behalf.

Clause 290 sets out how non-compliant ADR providers can be suspended, or their accreditation limited or revoked. It contains safeguards, including the right for ADR providers to make representations before these sanctions are imposed. Clause 291 allows the Secretary of State to charge accredited ADR providers for the cost of their ongoing accreditation.

Government amendment 101 corrects a drafting error regarding those fee provisions. Clause 292 and schedule 23 specify the accreditation criteria. These encompass standards relating to accessibility, expertise, fairness, independence, impartiality and transparency. Clause 292 allows the criteria to be kept under review and, if necessary, modified.

Clause 293 empowers the Secretary of State to issue enforcement notices to ADR providers who operate without accreditation or violate key obligations. Non-compliance with that notice can be enforced as if it were a court order. The clause contains safeguards, including giving the ADR provider an opportunity to make representations before an enforcement notice is issued.

Clause 294 allows the Secretary of State to make regulations requiring ADR providers and others to provide information about ADR to the Secretary of State or publish it for consumer awareness. The clause limits the purposes for which the Secretary of State can require provision of information. Government amendments 102 to 105 ensure that those limits will apply if the Secretary of State’s functions are conferred on another person under clause 298.

Clause 295 allows the Secretary of State to direct ADR providers and regulators to provide information. This allows the provision of specific information from a person when circumstances require it.

Government amendment 106 removes a definition of data protection legislation that is not needed as it is defined elsewhere. Clause 296 allows the Secretary of State to publish or disclose information they hold in relation to this chapter, subject to data protection.

Government amendment 107 is a drafting improvement to recognise that clause 296 contains several disclosure powers. Clause 297 defines terms used in clauses 294 to 296.

Clause 298 allows regulations to confer functions on persons other than the Secretary of State. This might, for instance, be used to confer accreditation functions on a regulator within the sphere of its regulatory activities.

Clause 299 requires traders, when responding to a consumer contract complaint, to inform consumers about any ADR or dispute resolution arrangements in which that trader is required to participate. Clause 300 and schedule 24 revoke the EU-derived ADR regulations of 2015 and amend other legislation.

Government amendment 112 is a drafting amendment to ensure there is an accurate description of the content of paragraph 11 of schedule 5 to the Consumer Rights Act 2015. Clause 301 makes transitional arrangements, including to ensure that chapter 4 does not apply to ADR already in progress when it comes into force.

I hope that hon. Members will support Government amendments 97 to 107 and Government amendment 112. I commend the clauses and schedules to the Committee.

As the Minister outlines, clause 288 sets out how persons or companies wishing to become accredited as ADR providers should apply for accreditation under chapter 4. Specifically, the clause sets out how a person wishing to be accredited must apply to the Secretary of State.

I want to raise a concern with the Minister about some of the details that are lacking in the Bill and, from what I could see, the Bill’s supporting documentation; he may want to direct me to other documentation that we have missed. My question concerns subsection (4), which states:

“The Secretary of State may determine the procedure to be followed in relation to an application for accreditation.”

Subsection (5) then lists some criteria, but the procedure is still very open. If a consumer wants to know how people or organisations are accredited, the Bill does not provide clarity. That gives rise to concerns about what scrutiny will be possible if the procedure is not, for example, set out in detailed regulations. I would therefore be grateful if the Minister could explain what further detail there is.

The providers will have quite a significant role in dealing with disputes. As I have said previously, we have heard about the Government’s research into consumers’ experiences, and the quality of ADR providers will be in part determined by the quality of the process by which they are accredited. That is why this issue is important. I would be grateful for the Minister’s response, because a lot could be left to the Secretary of State’s discretion. The Minister might become the Secretary of State—we do not know, although obviously that would be a great thing for the Minister—but we have to make legislation that is future proof for future regimes, so that people can have confidence in it.

If further detail on the procedure is to be published, when might that happen? Will it be after the Bill has attained Royal Assent, which, according to the impact assessment, may not happen until 2025? If further guidance is needed on what people need to do to be accredited, that will cause further delays. Are we potentially talking about 2026 before ADR providers are in place? That feels like quite a long way away.

The ADR provisions are important for increasing consumer protection, and we welcome them. However, this key part of how we ensure the quality of that provision, which would deal with the issues of confidence I referred to in my previous remarks, should be more clearly addressed. If necessary, more detail should be in the Bill itself.

Clause 289 deals with how the Secretary of State would determine applications for accreditation or for the extension of an accreditation, but does not provide us with detail about how those decisions will be made. That relates to the same points I raised in relation to clause 288, and the Minister may therefore want to address it directly.

Amendment 97 makes it clear that new accreditation conditions imposed when extending an accreditation are not limited to any particular part of the extended accreditation. We support the amendment.

Amendments 98 and 99 are drafting amendments to clarify which accreditation conditions can be varied or removed by the Secretary of State when extending an accreditation. I would be grateful to discover whether any of the changes that might be made for ADR providers will be published so that they are on the public record. I do not know whether there will be a public record of ADR providers, so perhaps the Minister will also clarify that. If there is to be a public list, where will it be? That point relates to other issues, such as how people will be aware of those who might be able to provide the service.

Government amendment 100 will make it clear

“that accreditation conditions can be worded so as to make an accredited ADR provider directly responsible for things done by another ADR provider who carries out ADR under special ADR arrangements made by the accredited provider under its accreditation. This could enable regulatory action under clause 290 or 293 to be taken against the accredited ADR provider in relation to acts of the other ADR provider.”

This is important. It is a common-sense amendment, and it will extend protections for consumers.

Clause 290 will enable the Secretary of State by notice to revoke, suspend or limit an accreditation, or impose further conditions on a previously accredited ADR provider. Will the Minister clarify how that might come about? I should say that ADR providers could apply to have their accreditation revoked, and there are grounds on which the Secretary of State could apply specified sanctions. How will the changes come about? How will the information need to be received to meet a condition under subsection (3), listing contraventions? Might one route be through a consumer complaints system on the ADR process? How will that work?

Perhaps I missed it, but I am not clear about when a consumer with concerns might challenge an ADR provider’s service or whether that is a route through which such matters might come to the notice of the Secretary of State in order to revoke, suspend or limit an accreditation or impose further conditions. Will the Minister clarify how the system is joined up from the perspective of the consumer and how the process will be managed? That would be extremely helpful. Otherwise, we welcome the clause as a necessary element of the new ADR provisions and as necessary to ensure that any ADR providers not fulfilling their duties to protect consumers can be stopped from acting as such a provider.

Clause 291 sets out how the fees that accredited ADR providers will be required to pay to the Secretary of State will be determined. We recognise the need for the clause, and the potential need for ADR providers to pay periodic fees to maintain their accreditation and commitment to remaining accredited. However, I would welcome further explanation from the Minister because we are not clear about the amount to be paid in fees, the frequency of the fees or their purpose—where they will go. That is not clearly set out in the Bill or in the accompanying paperwork. Will the Minister clarify whether some of these issues will come back in secondary legislation or whether we can identify the answers to those questions in other parts of the supporting paperwork?

I think the legislation might suggest that the fees cover the costs of the functions under the chapter, but it is important for legislative scrutiny that we have clarity on that. Small businesses might be involved, and we want clarity and fairness in the process.

Amendment 101, which we support, will correct a mistake in clause 291. We support clause 292. Schedule 23 sets out the criteria for an ADR provider to become accredited, including the provision of information to consumers, the independence and impartiality of the provider, and so on. We welcome the schedule in ensuring that there are important and clear criteria for people acting as ADR providers.

Could the Minister clarify criterion 3 in schedule 23, which is about expertise? I am probing that because the criterion is that

“The ADR provider has sufficient expertise for carrying out ADR”.

There is an important question about how that will be determined, measured and judged. Is it qualification-based? Is it experience-based? Who will make the decision? Are there any professional bodies to be involved?

In discussions about similar issues in other legislation—indeed I have debated them with the Minister and his predecessors, one of whom, the hon. Member for Sutton and Cheam, is sitting next to him—it has been clearer who was involved, how the process would work and how decisions would be made. If professional bodies are involved, for example, that can give greater confidence.

That question seems to be left open, and it is important that we address open questions now, rather than letting them fall through and then playing catch-up at the end of the passage of the legislation, or when it is being implemented and it is suddenly missing a point on which quality assurance can be assured. If the criterion is not clear, we could end up with a process that actually lets through those who may not have the expertise. That would then compound the issues that consumers are facing, which we identified earlier. I would be grateful for the Minister’s response on that.

Clause 293, regarding enforcement orders, includes provisions enabling the Secretary of State to give an enforcement notice to an ADR provider for listed contraventions under this chapter.

We welcome the clause as part of the process of managing the ADR system. However, I want to come back to a point on subsection (2), which requires the Secretary of State to

“give the provider a reasonable opportunity to make representations”.

That is of course necessary, but, as with other areas of the Bill, we would raise the issue of timelines, just to give some confidence that it will not result in an opportunity for providers to take an extended amount of time to drag out a process, making it harder for consumers who may be involved in that process. We want the enforcement regime to be as robust as possible, and I would welcome the Minister’s further clarification—and indeed information on his expectations—on that point.

Clause 294 introduces provisions allowing the Secretary of State to make further regulations that would require ADR providers to provide relevant information either to the Secretary of State or to consumers. Perhaps the Minister might clarify that, because it would be helpful to understand the instances in which he might see—or foresee—that power being used. If the regulations would require further relevant information to be provided to either the Secretary of State or consumers, would that be in relation to a follow-up to a process by which the provider had been accredited, or to something else? We would be grateful for some clarification on how clause 294 might be intended to be used.

We support amendments 102 to 105. On clause 295, we support the direction that the Secretary of State could give requiring the provision of information, and we support amendment 106.

Clause 296 introduces a provision for the Secretary of State to publish or disclose information for the purpose of informing consumers. We welcome the clause, but I ask the Minister to provide further examples of cases in which it would be used. In what circumstances or contexts might there be information that was not published for the purpose of informing consumers? Will he clarify whether the clause seeks to enable the Secretary of State to publish or disclose information more generally under the purposes of the Bill? What information would be published? Would an example be where further information has been requested and is provided by ADR providers? It would be helpful to understand more about what consumers can expect to be made public under the Bill.

We support amendment 107, which is a technical amendment.

Clause 297 introduces definitions that provide clarity and consistency in the language used. We welcome the clause.

Clause 298 introduces provisions enabling the Secretary of State to make further regulations to confer functions on another person for the purposes of this part. Those functions include approving fees, approving applications for accreditation, revoking or suspending accreditations and so on. Will the Minister expand on who he considers to come under the umbrella of this clause? Would it be professional bodies? What would he be delegating, which is effectively what this sounds like? There is some suggestion that a regulator or some other person who has expertise could have the function. It is important to know what is intended—whether, for example, Government officials will still be involved, how they will be accountable and so on. I would be grateful for the Minister’s clarification.

Clause 299 deals with the duty of a trader to notify the consumer of ADR arrangements. That is very important: it comes back to the point about how consumers will know about their rights and others’ obligations under the Bill. Under the clause, when the trader informs the consumer of the outcome of their own consideration of a complaint process, the trader would be obliged to inform the consumer about any ADR or other complaint resolution arrangements that are available to the consumer and in which the trader is required to participate. The obligation is intended to ensure that if the consumer is dissatisfied with the outcome of the complaint, they are made aware of those arrangements.

Will the Minister clarify what the expectations are of how, and how prominently, a consumer should be made aware? A parallel, though not a direct one, is where there is a complaint about a story in the media: the apology from a paper may not be anywhere near the same size as, or in the same location as, the original article. Likewise, where it may not be in a trader’s interest for a consumer to take up the available mechanisms, the trader may technically make the consumer aware, but in small print. Can the Minister provide some clarity on expectations about how the trader should be obliged to inform the consumer about ADR? For example, it should not be hidden or tucked away in a corner of a website.

We welcome the clause, as it ensures that consumers will be fully informed of their rights in relation to ADR resolution practices, but we need clarity on expectations and on the prominence with which that information should be shared by traders.

Clause 300 introduces schedule 24, which will make some consequential changes to other legislation, amending the Consumer Rights Act 2015 and revoking the EU-derived alternative dispute resolution for consumer disputes.

Government amendment 112 is a drafting amendment, and clause 301 is a technical clause. We support them both.

The hon. Member for Feltham and Heston has raised a number of points for me to respond to. As an overarching point, we are moving from a voluntary to a mandatory system of ADR regulation, so we should not look at it as if we were starting from scratch. We are improving an existing system, which should give us some assurance that this is an improvement, not a step back from improving standards in this area.

One of the hon. Lady’s principal points was about the criteria that we apply for accrediting an ADR provider. They have to be kept high-level, because there are a wide variety of different providers, so it would be wrong to be too specific about the criteria we apply. However, clause 292 and schedule 23 both set out the principles behind what accreditation will look like at every scheme level, including standards on accessibility, expertise, fairness, independence, impartiality and transparency. Clause 292 will allow the criteria to be kept under review and to be modified if necessary and appropriate. On the public record, yes, there will be a list of ADR providers.

I recognise what the Minister says about moving to a mandatory system and the improvements being made, which is why it is important that we do not leave gaps. However, I want to push him on my point about expertise.

I will come to that. Criterion 3 in schedule 23 clearly sets out that a provider will be required to have the relevant expertise. Has the hon. Lady read that criterion?

I have, and I quoted it to the Minister. What I asked him was how he will determine expertise, because in other legislation on ADR that we have debated, there has been some process. Have the providers been accredited? Is it based on experience? Do they have particular qualifications? Otherwise, expertise can be very subjective. That was the question I asked.

And that was the question I answered. In response to the hon. Lady’s points, I said that the criteria have to be kept high-level. It would be wrong to be too specific about how we judge “expertise”, because of the wide variety of different ADR providers. What we all need to do is trust the process, which the Secretary of State oversees, of trying to make sure that each provider has the relevant expertise in each scheme area. As I said, there are schemes already in place that we are now putting under the mandatory regime. Of course, expertise will be judged on a scheme-by-scheme basis, but it is difficult to set out exactly what expertise we will require in any particular scheme, other than that we would expect the person to have the relevant experience and expertise.

Of course I will trust the process, where I am sure that the process is a robust one. I do not think that we need to debate the issue much further, but it is not resolved, if I may say so. As I mentioned, I have been involved—it may have been with the Minister’s predecessor—with previous legislation relating to the ADR process. Anyone can say that they have expertise in something, but the important question is what their qualification is and how it is determined. I will look again at the issue, and I may follow up with the Minister in writing.

May I just remind members of the Committee that interventions should be pithy?

I am happy to continue the debate with the hon. Lady and to correspond with her on the matter.

There is a broader picture here, which I am trying to set out in my response to the hon. Lady. There will certainly be the public list of ADR providers that she referred to. Where people are most likely to find that list will be in dealing with a particular trader in a particular scheme, regarding the requirement set out in clause 299 for a trader responding to a consumer contract complaint to inform consumers about the ADR process. That is where we expect people to be most likely to find the ADR scheme available.

The hon. Lady asked how somebody can complain about ADR schemes. That ties in with a broader point about how we manage the whole process, and to other points that she made. People can, of course, complain directly to the Secretary of State if they are dissatisfied with an ADR provider. However, I think a complaint is more likely to come through other routes such as Citizens Advice, which is largely funded by the Government, through trading standards or through letters to Government Ministers from Members of this House; I often respond to such letters that raise concerns. That is how we build a picture of the efficacy or otherwise of a particular ADR scheme. We would expect that at that point, if there are a number of complaints about an ADR provider, the Secretary of State will intervene and use their capabilities under the Bill.

As the hon. Lady set out, the Bill provides for ADR providers to pay fees to cover the cost of processing applications and their ongoing accreditation. Under the existing accreditation regime, the Department for Business and Trade charges fees at a pro rata daily rate of £750. That is the context in which we expect fees to be set.

The hon. Lady asked what we will do about ADR providers who do not do the right thing and do not provide the proper service. Revocation is available to the Secretary of State. The accreditation criteria will ensure, among other things, that ADR providers meet standards of expertise, fairness and impartiality. If ADR providers do not meet those standards, their accreditation may be revoked or suspended, or additional conditions may be put in place to improve their performance. We have tackled the issue of sufficient expertise, on which we may agree to differ.

The hon. Lady raised clause 294, which allows the Secretary of State to make regulations requiring the provision of information about ADR. As clause 294 sets out, that can be for the benefit of consumers, but it can also be with regard to the operation of particular schemes. Again, that is a reason why the information might be requested. It might not be suitable for public consumption, or there could be other reasons, such as commercial sensitivity or data protection, why that information might not be published, but it can be published if the Secretary of State sees fit.

The hon. Lady referred to clause 298, which allows regulation to confer functions on persons other than the Secretary of State. That provision might be used, for instance, to confer accreditation functions on a regulator. It gives broad oversight of other areas of the ADR regime that are not directly covered by this legislation.

Question put and agreed to.

Clause 288 accordingly ordered to stand part of the Bill.