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Business of the House

3.31 pm

The President of the Council and Leader of the House of Commons (Mr. Robin Cook): With permission, Mr. Speaker, I should like to make a short statement about the business for Wednesday 13 February. The first item of business will now be a motion to approve the fifth report of the Committee on Standards and Privileges. It will be followed by a debate on the appointment of the Parliamentary Commissioner for Standards, and by the remaining stages of the British Overseas Territories Bill [Lords.]

Mr. Eric Forth (Bromley and Chislehurst): I thank the Leader of the House for his announcement. I am sure that the House is pleased that the report of the Committee on Standards and Privileges is being dealt with promptly: that must be in the interests of all concerned. I also think it appropriate for us to deal with the question of the new Commissioner for Standards as promptly and expeditiously as possible.

Mr. Cook: I am grateful for the right hon. Gentleman's support. My statement has been issued on the first sitting day after the report's publication, and I think it is in everyone's interest for us to move promptly and to be seen to do so.

Mr. Andrew Stunell (Hazel Grove): May I add the support of the Liberal Democrats? We think it right for progress to be made quickly, and we welcome the statement.

Mr. Cook: I am grateful for the hon. Gentleman's support.

Mr. Simon Thomas (Ceredigion): I welcome the opportunity to debate these matters on Wednesday. Will the

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Leader of the House confirm that we shall also have an opportunity, when debating the behaviour of the former Minister for Europe, to discuss his dealings with the Romanian-British action group, the result of which so far appears to be the loss of 6,000 jobs in this country's steel industry and the donation of £125,000 to the Labour party?

Mr. Cook: I cannot see any possible connection between the purchase of a steel company in Romania and the loss of jobs in the steel industry in Wales.

I appointed the ambassador who drafted that letter. He is an excellent diplomat, and it was entirely right and proper of him to invite the Prime Minister of Britain to congratulate the Romanian Government on their decision. We should understand that, for the Romanian Government, that step towards breaking up a centrally planned economy was major and historic, and very important if Romania is to succeed as a member of the European Union.

Mr. Andrew Robathan (Blaby): Given the Prime Minister's statements of unswerving support before the general election last year, will the Leader of the House arrange for him to be present at the debate on the report of the Standards and Privileges Committee so that he too can judge whether his actions and statements were wise?

Mr. Cook: I am sure that that point will be made ad tedium during Wednesday's debate, and that plenty of my colleagues will be here to defend the Prime Minister.

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Orders of the Day

Land Registration Bill

As amended in the Standing Committee, considered.

New Clause 1

Electronic settlement

'The registrar may take such steps as he thinks fit for the purpose of securing the provision of a system of electronic settlement in relation to transactions involving registration.'.—[Mr. Wills.]

Brought up, and read the First time.

Motion made, and Question proposed, That the clause be read a Second time.—[Mr. Wills.]

Mr. Speaker: With this it will be convenient to discuss the following: Government new clause 2—Incidental powers: companies.

Government amendments Nos. 1 to 6.

3.33 pm

Mr. William Cash (Stone): The Law Society and others have considered the new clauses and amendments. We understand why it is proposed that the registrar be given these powers. We have no objection to the Government's proposals.

Mr. Adrian Sanders (Torbay): The Liberal Democrats have no objection to the new clause either.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

Incidental powers: companies

(1) If the registrar considers it expedient to do so in connection with his functions under section 69(3)(a), 92(1), [Electronic settlement] or 104(1) or paragraph 10 of Schedule 5, he may—
(a) form, or participate in the formation of, a company, or
(b) purchase, or invest in, a company.
(2) In this section—
"company" means a company within the meaning of the Companies Act 1985;
"invest" means invest in any way (whether by acquiring assets, securities or rights or otherwise).
(3) This section is without prejudice to any powers of the registrar exercisable otherwise than by virtue of this section.'.—[Mr. Wills.]

Brought up, read the First and Second time, and added to the Bill.

Clause 69

Historical information

Amendment made: No. 1, in page 25, line 10, at end insert—

'(3) The registrar may—

(a) arrange for the provision of information about the history of registered titles, and

(b) authorise anyone who has the function of providing information under paragraph (a) to have access on such terms as the registrar thinks fit to any relevant information kept by him.'.—[Mr. Wills.]

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Clause 91

Electronic dispositions: formalities

Mr. Cash: I beg to move amendment No. 9, in page 33, line 5, after "certified", insert—

'(ca) each electronic signature was made by, or with the authority of, the person whose signature it purports to be,'.

Mr. Speaker: With this it will be convenient to discuss amendment No. 12, line 13, leave out subsection (6) and insert—

'(6) A document to which this section applies is to be regarded for the purposes of any enactment as authenticated only if it was sent by the purported originator or with the authority of the purported originator.'.

Mr. Cash: We examined the clause's provisions in Committee, but the Law Society remains concerned that the Government have not yet given the right assurances.

A number of assurances have been given that as a matter of what is described as "practice" the Government would not pursue solicitors if matters went wrong—if an electronic signature was not made by or with the authority of the person whose signature it purported to be and the issue became highly contentious, which could easily happen. The Law Society would be extremely glad to hear an acknowledgment on the Floor of the House that, as a matter of law, the Government do not intend to create new rights of subrogation against solicitors and that they will not pursue them under existing arrangements.

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Michael Wills) indicated assent.

Mr. Cash: I am glad that the Minister nods. I am sure that he appreciates that this is an important question. We support the new arrangements because they will modernise the process of land registration, but the fact remains that we must ensure not only that the public have the advantages, but that unnecessary difficulties are not caused for the profession—solicitors and others in the conveyancing sector. They should not be unfairly and unreasonably pursued where the circumstances covered by my amendment arise.

Users of the conveyancing system—not only members of the public buying a home but commercial enterprises and inward investors buying factories and offices in England and Wales and the conveyancers acting for them—should not be left in any doubt about whether a forged or impersonated signature may be held to be binding. The law should make it clear that with electronic documents, as with paper ones, individuals, firms and companies are not liable where they have neither made nor authorised a signature.

The Law Society has made it clear that it would be unacceptable if solicitors had to carry the risk of their electronic signature keys being obtained and misused by third parties. The use of presumptions and statutory terms, and their contractual equivalents, should be ruled out by clear statutory language. The relying party should have to prove that a disputed signature was made by or with the authority of the purported signatory. The amendment would bring the law on paper documents into line with Australian legislation.

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The provision should apply generally to conveyancing documents, whether or not they purport to be executed by solicitors acting as agents. If technology is developed to eliminate the risk of a user being impersonated, relying parties will find their burden of proof easier to discharge, but currently available technology, including smart cards or biometric identifiers, is far from being able to achieve that objective. Relying parties therefore face real risks in accepting electronic signatures, which might be undetectable forgeries, but it would be wrong to allow them to solve the problem by transferring the risk to purported signatories.

Relying parties that are major institutions—for example, the Land Registry, other Government agencies or financial institutions—are far better placed than firms of solicitors to promote the development of technology to eliminate the risks. That is a further reason for ensuring that they continue to carry those risks. I hope that the Minister will be able to give me an assurance on the proposals.

Our system must be secure if we are to retain the confidence not only of the public in their house-buying processes but of commercial enterprises and inward investors buying factories and offices in England and Wales. Individuals, firms and companies should not be liable where authority was not given. The wording used in amendment No.12 is adapted from an Australian statute—section 15 of the Electronic Transactions Act 1999, entitled "Attribution of electronic communications".

For the purposes of electronic conveyancing, the process envisages that conveyancers will execute documents on behalf of their clients as agents. There is an absolute warranty of authority by the solicitor as agent. With a paper-based system, if the solicitor has doubts about the identity of his client or is unwilling to sign on his behalf, the solicitor simply ensures that the client signs the relevant documents himself. If there were to be a compulsory electronic system, the solicitor would not have that choice.

It would not necessarily be a problem if at the beginning of a transaction solicitors were able to identify clients on whose behalf they were not prepared to sign as agents, but if matters occurred pre-exchange that made the solicitor concerned or uneasy about signing on behalf of a client, that would cause problems for all the parties to an entire chain of transactions in domestic conveyancing and, where applicable, the commercial business of the commercial tenant.

The Minister has acknowledged that conveyancers must be able to work with the system or systems that are introduced. If a solicitor is not willing to execute on behalf of his client because he or she perceives the risk to be too great, the system simply will not operate as envisaged, or at all.

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