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Mr. Harry Barnes (North-East Derbyshire): I am interested in the amendment because I am interested in cases in which courts make decisions that adversely affect those who believe that their rights were established by Land Registry entries that were correct. In some cases, however, the decisions of a court are perverse. Such decisions may require a land registrar to alter the recorded material and that may not be in the interests of the purchaser of the property. That is because courts sometimes make decisions in which they say what is being purchased is not what is described in the deeds, but what was seen by the purchaser. There may be a distinction between the two.

I cited such a case in Committee, but I appreciate that there is much in the Bill to ensure that the evidence provided by the Land Registry will usually hold sway with the courts. The law will be tightened up by the Bill. Its provision for indemnity for errors committed by the Land Registry are important, but knock-on consequences may arise as a result of decisions made by the courts. The Bill might reduce the effect of those consequences, and I am interested in any provision that means that someone adversely affected by a court decision receives indemnity. I am not sure that the amendment would deal with the cases that interest me, but I wish to flag up my concerns.

4.30 pm

Mr. Wills: The amendment would impose on the registrar a liability to pay indemnity when the court exercised its powers under clause 46 and the person in question suffered loss as a result. I understand the concerns voiced by the hon. Member for Stone (Mr. Cash) and my hon. Friend the Member for North-East Derbyshire (Mr. Barnes), who want to ensure effective protection for those whose interests might, through no fault of their own, be adversely affected by use of the powers in clause 46. However, as I explained in Committee, there is a way to achieve that other than through invoking the registrar's indemnity powers. The litigation in question would be beyond the registrar's jurisdiction, so another, more appropriate method would be available.

Of course, as I said in Committee, if a person suffers loss outside of litigation through a mistake that falls within the scope of schedule 8—for example, if a

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restriction is mistakenly entered against the wrong title—indemnity will be payable. In the first circumstance to which the hon. Member for Stone referred, indemnity would be payable. The registry, not the courts, is involved in such matters, for which it should make payments and for which, in some cases at least, it may be responsible. However, the amendment deals with a completely different issue—when there is no mistake on the register and litigation is instigated by one of the parties.

Clause 46 empowers the court to require the registrar to enter a restriction. It is likely that that power will be used where an inhibition is currently entered in the register—for example, where the court grants a freezing injunction. The power to require a restriction to be entered may be exercised, even where an intending purchaser has protected himself or herself by making a priority search under clause 72. Under clause 46(3), the court may direct that an entry made under clause 46 shall have overriding priority. Under subsection (5), the court may make the exercise of its powers under subsection (3) subject to such terms and conditions as it thinks fit.

One of the most likely uses of that power is made clear in paragraph 6533 of the joint Law Commission and Land Registry report, "Land Registration for the 21st Century: A Conveyancing Revolution". Paragraph 6533 explains that the court would probably make an order under subsection (3) only if the applicant undertook to indemnify any person who suffered loss in consequence.

We consider subsection (5) sufficiently wide to enable the court to require such an undertaking, but discussion of the issue in Committee caused the Government to register the fact that the Civil Procedures Rules Committee would be invited to consider drawing the matter to the court's attention if there were doubt about the court's considering use of subsection (5).

In reality, the matter is akin to cases in which the court grants an interim injunction. In such cases, the court will invariably require the applicant to give an undertaking in damages, should he or she lose when the case comes to trial. In other words, it will be for the applicant for an order under clause 46(3) to provide the necessary indemnity, not the registrar. The Government consider that the preferable course, because the registrar has no interest in the matter. It is difficult to see why the taxpayer should pick up the tab for litigation over which the registrar has absolutely no control and from which the public derive no benefit.

In the light of my comments, I hope that the hon. Member for Stone will withdraw the amendment.

Mr. Cash: I welcome you to the Chair, Mr. Deputy Speaker, if I may.

I listened with care to the Minister and I am extremely interested in his concluding remarks, which seem to acknowledge that the issue is not all that simple and that the circumstances to which I referred could arise. I am happy to withdraw the amendment, with this qualification: if things go wrong—we cannot read a crystal ball or be certain of how the provision will work in practice—and matters do not proceed quite as the Minister and his advisers hope, the problem will be rectified.

With respect to the question of indemnities in general and the remarks of the hon. Member for North-East Derbyshire (Mr. Barnes), I simply say that what he referred to is not directly relevant to clause 46, but he is

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right to be concerned that titles and matters that go on the register lead to serious problems from time to time. Courts are not infallible, nor is the Land Registry. The greatest possible care must be taken to ensure that the most important aspect—not the creation of the law, but the right solutions for the public at large—is delivered in respect of contention over, for example, a boundary dispute or a title's validity.

Bearing in mind all those matters, it is right to withdraw the amendment in the light of what the Minister said, but subject to the reservations that I expressed as to the manner in which the Bill may apply. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified.]

Motion made, and Question proposed, That the Bill be now read the Third time.—[Jim Fitzpatrick.]

4.36 pm

Mr. Wills: I, too, welcome you to the Chair, Mr. Deputy Speaker. I thank the members of the two Committees who examined the Bill, which is unusual in a number of ways. First, it is the product of an extensive programme of work undertaken jointly by the Law Commission and Her Majesty's Land Registry. Both here and in another place, the result has been widely welcomed as an admirable balance between looking back and looking forward. Secondly, it provides a re-examination of the legislation from first principles—a task for which the Law Commission is particularly suited and one that the draft Bill achieved with particular distinction. I have already paid tribute to the achievement of Charles Harpum, the former law commissioner responsible for the report, and to the distinguished parliamentary counsel who worked with him, and I happily do so again. We are extremely grateful for their work on the Bill.

It is unusual, if not unprecedented, for a Department to collaborate with the Law Commission on a report, but the way in which the Bill benefits from the Land Registry's unparalleled knowledge of the operation of land registration and its aim of improving the registry's service to its customers shows how successful such collaboration can be. Much credit for that must go to the solicitor to Her Majesty's Land Registry, Chris West. Mr. West is shortly to retire and his work on the Bill represents the crowning of a long and distinguished career of public service. I want to put on record the Government's appreciation of that.

The Law Commission believes that the Bill represents its single largest law reform achievement since its establishment in 1965. It follows, therefore, that the Bill is the most substantial to be considered on Second Reading by a Committee. I certainly felt that the debate in Committee was particularly helpful and constructive, and it showed the effectiveness of the special procedure for such Bills.

The Bill represents a thorough spring cleaning of the existing legislation, almost all of which dates from 1925 or half a century before. We examined in Committee how necessary simplification and clarification has been achieved and tested the scope for further change. We also spent much time looking into the future.

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Above all, the Bill is radical and forward thinking. It sets out a framework for electronic conveyancing and so opens the way for the benefits that that will bring to the still excessively protracted and painful business of buying and selling property.

The hon. Member for Torbay (Mr. Sanders) asked a question about which I shall now reassure him. In the first instance, the Land Registry will assess what has happened, but substantial disputes will be decided by the civil or criminal courts.

A great deal remains to be done to put flesh on the skeleton. In addressing concerns expressed by the hon. Member for Stone (Mr. Cash), I make it absolutely clear that the Land Registry will seek to strike a balance in devising arrangements for ensuring proper authorisation by clients where conveyancers are to sign electronically on their behalf. I understand the concerns that have been raised on many occasions during the Bill's passage through the House. The arrangements will be the subject of detailed consultation on the basis of practical proposals, and they will be piloted. We shall thus seek to meet the real concerns that the hon. Gentleman has raised, and I believe that we shall do so.

The helpful and constructive approach taken in the debate highlighted some of the areas where the profession and customers have concerns. Above all, there is a need for a system that can be short yet meet high requirements for reliability and security. The Land Registry is well aware that in planning the next stages it must work with everyone involved in the property market. That will be essential if the ultimate solution is to meet all the needs of the various groups that will benefit. The task will be a considerable challenge to the Land Registry, and the Government will do all we can to help meet it fully.

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