WORK OF RESTRICTIVE PRACTICES COURT (Hansard, 7 May 1958)

§ LORD LUCAS OF CHILWORTH
My Lords, I beg to ask the first Question which stands in my name on the Order Paper.

§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)
My Lords, as your Lordships may be aware, the Restrictive Practices Court sat in open court for the first time on April 22. The Judges of the Court had for some months sat periodically in Chambers for the determination of procedural questions. The Court fixed dates for the hearing of three cases during the Michaelmas Term—namely, cases concerning the agreements of the Chemists' Federation, the Cotton Yarn Spinners' Association and the Cotton Yarn Doublers' Association.
It will be realised that these are the first cases to be brought before the Court and that they are heavy and important cases. It has therefore been necessary to examine a very large number of documents, and the accounts and costings of dozens of firms, and to have them available for the Court. These first cases will 24 probably take as much as three weeks each. It is therefore not surprising that they have taken nearly eighteen months to get ready for hearing, when one compares that with the time needed for preparing a normally heavy commercial case.
I understand that, in pursuance of directions given by the Board of Trade during the last thirteen months to the Registrar of Restrictive Trading Agreements about the order in which agreements are to be referred to the Court, the Registrar has notified the parties to over 70 agreements that he proposes to refer them to the Court. Notices of reference have been issued in 46 cases. Of the 70 agreements I have mentioned, 23—that is, 33 per cent.—have been abandoned, either by determination or by removal of all the restrictive provisions and, the Registrar has been informed that the parties to certain other agreements are taking steps to abandon them.

§ LORD LUCAS OF CHILWORTH
My Lords, may I thank the noble and learned Viscount for his full, if somewhat doleful, reply? May I ask him three further questions? Should I be right in assuming, in the light of what he has said, that it may be well towards the end of 1960 before the cases on the third list, which has just been published by the Board of Trade, appear before the Court? The second question I should like to ask is this: is the noble and learned Viscount aware that the Registrar's request to the Court, that in order to expedite the hearing of these cases it should resolve itself into two divisions, was refused? Could he acquaint the House whether something could be done in that direction? Thirdly, would the noble and learned Viscount be kind enough to amplify what he said about the position of those agreements which he has just said have been abandoned? Would he agree with me that the interpretation of the Restrictive Trade Practices Act is that a registered agreement brought by the Registrar before the Court is ipso facto against the public interest? These agreements which the noble and learned Viscount mentioned—

SEVERAL NOBLE LORDS
Order!

§ LORD LUCAS OF CHILWORTH
I beg your Lordships' pardon?

§ THE EARL OF SWINTON
My Lords, "Order" was said.

§ LORD LUCAS OF CHILWORTH
My Lords, I am asking the noble and learned Viscount a series of questions, as I think I am entitled to do. Would the noble and learned Viscount agree with me that the Court have taken a different view from that of Parliament and that, while the present interpretation still stands, all these cases can come before the Court again and be reacted, making confusion worse confounded?

§ THE LORD CHANCELLOR
My Lords, before I try to answer that most capable piece of cross-examination, I should like to say that the "dole" referred to by the noble Lord at the outset of his questions is inherent in my own personality and is not related to the subject matter of my Answer. With regard to the noble Lord's first question, his conclusion is certainly not accepted by Her Majesty's Government either on logical or on arithmetical grounds. May I deal first with the logical approach? The noble Lord seems to assume that there will always be an interval of eighteen months between the giving of a direction by the Board of Trade and the hearing by the Court. This will certainly not be the case. Some cases will be heavier and longer than others, and some may be quite short. Moreover, as my original Answer emphasises, the current cases are the first to be subjected to this novel procedure. Inevitably their preparation and their handling in the initial stages by the Court raised a number of teething troubles, which have contributed in some degree to the delay, apart from the intrinsic weight of the cases themselves. It is likely that by the time the Court has heard a number of cases, certain principles of law and practice will have been formulated, which will mean greater expedition in the later cases.
Now I come to the arithmetical approach. The noble Lord, Lord Lucas of Chilworth, is a year out in his arithmetic. On the basis—which I do not accept—that the interval between direction and hearing is bound to be about eighteen months, the period would expire at the end of 1959, not 1960.
May I now deal with the second point, about the Court's sitting in one division in the first cases. I am aware that the Court has intimated that it did not wish, 26 at any rate to begin with to sit in two divisions. The President stated that they felt that it would be better for them to sit together for the first few cases in order to get a common approach to the new procedure. That decision, of course, is one for the Court, but in the circumstances, it seems to me an entirely sensible one, bearing in mind the novelty of the constitution of the Court, its jurisdiction and its procedure. The noble Lord will have noted that the President stated that it was in accordance with precedent on the first sitting of new courts. It is understood that the Court will split up into two, or even three, divisions fairly soon. I hope that that answer will reassure the noble Lord to some extent.
With regard to his third question, again this is a matter for the Court, but I think it would be useful if I put the position on record, so that the noble Lord can study it and then ask me further questions, if he should so desire. Section 20 (5) of the Act of 1956 provides that the powers of the Court, to declare restrictions contrary to the public interest, and to restrain the enforcement of an agreement or the making of any other agreement to the like effect, are not to be affected by the determination of the agreement after the commencement of the proceedings. The noble Lord, Lord Lucas of Chilworth, referred to the Order made by the Court in the matter of the Corrugated Paper Makers Agreement, where the Registrar applied for an injunction to restrain the respondents from entering into any similar restrictions to those contained in the agreement which had been withdrawn.
I would ask the noble Lord to note these two points. Counsel for the respondents said that he would give an undertaking not to give effect to, or to purport to enforce, the agreement, and not to make any other agreement (whether with the same parties or with other parties) to the like effect. The President of the Court, Mr. Justice Devlin, said this: … upon that undertaking the Court would in this case and I stress those words— make no order. Apart from the fact that this decision may be regarded as special in the circumstances of the case, it is, I think, too soon in the life of the Court to assume that it is adopting one course of practice 27 rather than another. It is quite fair to argue, as the noble Lord did—I do not complain at all—that unless the Court does declare the restrictions contrary to the public interest, and does grant the type of injunction envisaged, there may be a danger that the trader may decide later on to operate his agreement once again, and that might involve its being brought before the Court a second time. But, my Lords, I should say, in view of the guarded terms of the learned Judge's pronouncement, that it is too soon to conclude that this result will inevitably follow the decision of the Court in the Corrugated Paper case.
Returning to the noble Lord's allegation of "dole" on my part, I would say this. Your Lordships will remember that in our protracted debates, in which the noble Lord, Lord Lucas of Chilworth, took such a distinguished part, I expressed the hope that before the matter got to Court a number of agreements would fall by the way. If we can keep up the percentage of one-third of these restrictive agreements falling by the way before they come to Court at all, I think we may say that the Act is doing fairly well.

§ THE EARL OF SWINTON
My Lords, may I ask the noble Earl the Leader of the House whether I should be in order in moving that this debate be adjourned?

§ LORD LUCAS OF CHILWORTH
My Lords, I should like to thank the noble and learned Viscount for his reply, which will give a great deal of satisfaction in various quarters. I will take advantage of his offer and perhaps return to this matter at a later date, when more experience has been gained.