I move:
That leave be granted to introduce a Bill entitled an Act to provide for third party rights in relation to enforcement and performance of contracts; to provide for orderly consequences of discharge of a contract due to frustration; and to provide for related matters.
At the outset, I should give great credit to the Law Reform Commission report on the reform of contract law, which has been quite an inspiration. If anyone reads the text of my Bill next to the text of the commission's Bill, they will see quite how much of an inspiration it was. When I told people I was going to bring forward a Bill on contract law, many people quite simply laughed and said it would not set the world on fire. The reality is that the issue itself is quite important but it particularly highlights and is an example of many other problems we face in this Chamber in many different ways. It highlights the gap between what we say and what we actually do. The issue of privity of contract and the need to reform contract law in many ways was first identified by the Law Reform Commission in 2008 and absolutely nothing has been done in that intervening time to amend it. In 2018, James McDermott, writing about the issue, said the time was ripe for legislative reform. That was 2018. Again, here we have an issue that is very simply to fix, and I will come to the simple fix in a minute, and we just seem incapable of delivering any sort of meaningful reform. We have clear reform here. We have clear ideas and an excellent Law Reform Commission report. The neighbouring jurisdiction introduced these same reforms in 2019. New Zealand brought in the same reforms in 2017. Again, we do not have to reinvent the wheel. It is deeply frustrating the pace at which it takes to make very simple and straightforward reforms in this place and it can be deeply infuriating. It is an important issue.
Before I move on to why the issue is important, I will give one other example of how this is emblematic of problems. We have made some of these reforms but in a very ad hoc, piecemeal and tokenistic way. My Bill deals with two things, namely, privity of contract and frustration of contract. Section 21 of the Consumer Insurance Contracts Act 2019 issued reform of privity in relation to consumer insurance contracts. Again, we are doing it in this piecemeal, ad hoc, making it up as we go kind of way when there are very simple straightforward things. I know I am talking about something that can seem quite removed, but it is emblematic of a wider malaise we need to be talking about. However, this is an important issue.
There are two aspects. One is privity of contract, and the other is frustration of contract. Privity of contract is about who can benefit from the contract and from protections in that contract. When we have subcontractors and vast complicated legal and financial arrangements, the person who often needs the protection of the contract to hold someone to account is often left without any benefit or protection of that contract. It creates legal uncertainty. It creates challenges and barriers to the access to justice. It prevents people vindicating their own rights. The legislative change I am proposing here is really simple. It is very straightforward and is operating effectively in the UK and in New Zealand. It is exactly what the Law Reform Commission report looked for in 2008. It is absolutely essential if we are to ensure access to justice and give people the power to vindicate their own rights.
The second part of the Bill relates to frustration of contract. When a contract is frustrated, what happens next and with the orderly unwinding of that contract? The legislation I have used as an inspiration when writing this was from the United Kingdom which was passed, I believe, in 1942. Here we are, where our neighbours have introduced in 1942 very simple, straightforward reforms ensuring legal certainty and we are carrying on. It remains deeply frustrating to me that we seem to fail to learn these simple, quick and easy lessons. Here we have these two things put together neatly in one Bill. I ask the Government to really look at this and take it on itself because these are very simple, straightforward things and it should not take so long.
