HL Deb 21 October 1980 vol 413 cc1892-901

7 After Clause 18, insert the following new clause:

"Amendment of Prescription and Limitation (Scotland) Act 1973.

. In the Prescription and Limitation (Scotland) Act 1973—

(a) after section 19 there shall be inserted the following section—

"Power of Court to override time-limits etc.

19A.—(1) Where a person would be entitled, but for any of the provisions of section 17 (as read with sections 18 and 19) of this Act, to bring an action, the court may, if it seems to it equitable to do so, allow him to bring the action notwithstanding that provision.

(2) The provisions of subsection (1) above shall have effect not only as regards rights of action accruing after the commencement of this section but also as regards those, in respect of which a final judgment has not been pronounced, accruing before such commencement.

(3) In subsection (2) above, the expression "final judgment" means an interlocutor of a court of first instance which, by itself, or taken along with previous interlocutors, disposes of the subject matter of a cause notwithstanding that judgment may not have been pronounced on every question raised or that the expenses found due may not have been modified, taxed or decerned for; but the expression does not include an interlocutor dismissing a cause by reason only of a provision mentioned in subsection (1) above".;

(b) in section 21(1) (transitional provisions), for the words "section 25(3)" there shall be substituted the words "sections 19A(2) and 25(3)";

(c) in section 22(6) (certain actions not to be tried by jury), for the words "or 19(1)" there shall he substituted the words ", 19(1) or 19A"; and

(d) in section 25(3) (effect as regards proceedings already brought), at the beginning there shall be inserted the words "Subject to section 19A(2) of this Act".".

Lord MACKAY of CLASHFERN

My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 7.

Moved, That the House doth agree with the Commons in the said amendment.—(Lord Mackay of Clashfern.)

As an amendment to Commons Amendment No. 7:

Line 23, leave out from ("for" to end of line 26.

Lord FRASER of TULLYBELTON

My Lords, I beg to move Amendment No. 7A, as an amendment to Commons Amendment No. 7. This clause, as it stands at present, contains a very clear example of retrospective legislation, and I put down my amendment to try to remove the retrospective element in the legislation. I do not suppose that the casual reader, if there is one here, would have spotted the fact that it is retrospective, because the clause is somewhat obscure. It is not surprising, because it forms part of a group of legislation, an earlier example of which on exactly the same subject was described by the late Lord Reid as being, an Act which has a strong claim to the distinction of being the worst drafted Act on the Statute Book. He said that because it was so obscure. That tendency is being carried on in this clause.

May I try to explain the point of my amendment? The general rule in Scotland, and also in England, is that actions of damages for personal injuries must be raised within three years after the date when the injuries were sustained. That means that if you have an accident in the street or in a factory on 1st January 1976, you must raise your action within three years after that, and before 1st January 1979. That works perfectly well as regards ordinary accidents, but it has never worked satisfactorily in the case of industrial diseases which you may not know anything about until the three years have expired.

A particular example which has caused most trouble is pneumoconiosis, but there are probably other industrial diseases where the same problem arises. Because of that, legislation has attempted in the past to make an exception in favour of diseases to the general effect that, if a person who is suffering from a disease has not realised that he has it, then the three years will run from the time when he realises that he has it. That is putting it very colloquially and very inaccurately. Legislation to that effect was passed both in Scotland and in England. That exception has not worked well either, and it was really that exception that was stigmatised by Lord Reid in the words that I quoted earlier.

There have been quite a number of cases where an action has been thrown out by the courts as being out of time, because it has not come within the terms of the Act, although people have felt that it imposed rather a hardship on the plaintiff. There was one example of that very kind of thing, in an action that reached this House last year. It was a case called McIntyre, with which I am sure the noble and learned Lord the Lord Advocate will be thoroughly familiar. That was a case of industrial disease and it was thrown out, because it did not come within the exception in what is now Clause 18. In these circumstances, this new Clause 19A has been introduced into this Bill for Scotland. It corresponds broadly to a very similar provision in the English Act. As your Lordships see at 19A the first subsection provides that the court may allow a person to bring an action out of time if it seems to it—that is, to the court—equitable to do so. In other words, Parliament has really given up trying and it says that if the court thinks it is fair you can bring the action out of time because legislation cannot deal with this. I do not commend it as an example of good legislation, but I am not concerned with that at the moment. I assume it is going to be acceptable to the House.

Subsection (2) provides that that provision will apply to accidents which happen in the future and also to any claim in respect of an accident in the past if a final judgment has not yet been pronounced upon the claim. That is to say, if there were an accident giving rise to a claim which happened, say, a year or two years ago and there is an action on foot now but no final judgment has been given, then the court can use its dispensing power under subsection (1). I do not object to that in principle.

One then comes to subsection (3) which starts fairly innocently by defining what is meant by a final judgment, and it quotes a well established definition: that it means a judgment which disposes of the whole action. There is nothing very difficult about that. Then come the words at the very end of subsection (3) which I wish to delete. They are the last four lines: but the expression"— that is, the expression "final judgment"— does not include an interlocutor dismissing a cause by reason only of a provision mentioned in subsection (1) above". This means a final judgment shall not include a judgment dismissing the cause for being out of time. So although an action has been tried in the court, appealed to the Inner House of the Court of Session, appealed to your Lordships' House and finally dismissed for being out of time, it is not going to be reckoned as having been really dismissed and the action can now be revived by virtue of this provision, despite having been dismissed in reality.

That seems to me to be a particularly gross example of retrospective legislation. If an action has been thoroughly tried in the courts and the defenders have won, that should be the end of the matter. It is quite true that it may be thought to be a hardship on particular parties. I suppose that when the law is changed on this kind of subject hard cases do arise just at the change-over, but surely one cannot take note of them to the extent of allowing a case to be reopened when it has been properly disposed of and a final judgment given.

I have no doubt that there are rather extenuating circumstances which may be pleaded for showing why this provision should be allowed to go through, but I say at the moment that it raises a matter of quite important principle. It is for that reason that I beg to move the amendment which stands in my name.

7.34 p.m.

Lord McCLUSKEY

My Lords, I hope that this House will not support the amendment moved by the noble and learned Lord, Lord Fraser of Tullybelton. As he himself has made clear, the new Section 19A which is to go into the 1973 Act in effect is intended to bring the law of Scotland into line with the law obtaining in England since 1975. Nobody suggests that there is any sound reason why in this matter—the right to sue for damages for personal injuries—the law should be substantially different in the two jurisdictions. The new clause is rather simpler than the equivalent English section, Section 2D of the Limitation Act 1939, introduced into that Act by the 1975 Act. In one respect the Scottish draftsman has followed the traditional Scottish practice of not writing unnecessary guidelines for judges, and I hope that that principle will be supported because it seems to me to be a good one and is in accordance with the evidence of the Scottish judges to the Renton Committee.

I accept what the noble and learned Lord, Lord Fraser of Tullybelton, has said, that the clause is retrospective. He has pointed out the words which introduce the element of retrospection. I agree also that it is entirely right that this House should be very cautious about approving any retrospective provisions. They need to be very specially justified before they are approved. When the noble and learned Lord was supporting his amendment he said that if a case has been thoroughly tried that should be the end of the matter. The whole point is that the case is not thoroughly tried. The case does not get to trial on the true merits. It is the pursuer, the injured workman who is stopped from pursuing his claim on its merits because it is barred by being out of time, so the true merits do not necessarily fall to be determined by the court.

What prejudice arises if one enacts this retrospective legislation? The prejudice is perfectly easily definable. It is prejudice which is financial and it is prejudice which is likely to be suffered in 100 per cent. of the cases by those insurance companies which have employers' liability insurance arrangements with employers. I accept that such insurance companies may find themselves suffering financial loss, but in insurance terms it will be relatively trivial and they will be able to recover the loss by a fractional adjustment of premiums from most of the same employers. The prejudice to the injured workman if he cannot pursue his claim is relatively catastrophic. It is quite unfair that because the legislature did not move in time; namely, in 1975, a few Scottish workmen since then should suffer this catastrophic loss. On grounds of justice I believe that the balance is strongly in favour of the new provision, albeit it is retrospective.

The special provision to which the noble and learned Lord has drawn attention in the new subsection (3) is quite unusual. I believe that it is necessary to secure justice perhaps in only one case, but there may be more than one, and the noble and learned Lord himself was a party to the decision in the case of McIntyre which was decided in this noble House last November. I think that that was a case where the court was inclined to be sympathetic towards the claim that was put forward without espressing a final view, because that claim was not tried, but felt that because of this lack in the Scottish law the claim could not be proceeded with. I believe that one ought to recognise the justice of that end of any other case which is like it. There must be very few, and when the Government come to speak to this matter, I hope that they will be able to support me on that and justify, as I hope we can, retrospection in this particular instance.

Lord MACKAY of CLASHFERN

My Lords, the situation so far as the Government are concerned is that when this clause was originally prepared by way of help to a Member of the Opposition who proposed it, we did not intend it to cover the very matters which the noble and learned Lord, Lord Fraser of Tullybelton, now wants to take out. But this was a point about the clause which did not satisfy the honourable Member in another place who moved it and he put to us the point which I am now seeking to put to your Lordships.

As the noble and learned Lord, Lord Fraser of Tullybelton, has said, it is true that to grant this discretion is a form of retrospection because the time limit will have expired. There is no need for the discretion unless the time limit has expired. Granting the court a discretion after the expiry of the time limit is to that extent retrospective, but I must say, with all respect, that I do not see any greater retrospection in that basic provision of the clause than I do in allowing the court, in its discretion, to overrule or to displace the effect of the decision.

Let me take McIntyre's case. Mr. McIntyre pursued the case with vigour and eventually found himself in your Lordships' House. The decision in Mr. McIntyre's case was that the time limit had expired—nothing more than that. If Mr. McIntyre had been very well advised, who knows? He might have found that out without coming to your Lordships' House. He might have found it out by staying absolutely at home. Supposing that a person in Mr. McIntyre's position takes the trouble—as I think the noble and learned Lord would agree, it was not a particularly easy point which agitated the House in Mr. McIntyre's case—and decides that he wants to find out just what the situation is and persists right up to your Lordships' House, should he be penalised for persistence, whereas a man in exactly the same position as Mr. McIntyre, who stays at home, does not bother your Lordships and says your Lordships know what to do, can have the discretion exercised in his favour, while poor Mr. McIntyre cannot?

In my submission—and this is the argument that persuaded me—that would not be just. There is no reason to discriminate against somebody who has come to the court. The order of the court is a dismissal, which is not the sort of order which one expects to be absolutely final as between the parties, in the sense that absolvitor would be. I agree that for practical purposes apart from a clause like this it would be in fact, but in my submission if we are going to do justice and to be equitable in this matter it would be wrong to distinguish between these two cases. Retrospection I grant, but retrospection is in the whole clause and not in that particular case.

The other point that I should make is that this is all intended as a fairly interim solution. I think no one is satisfied with the basic structure underneath this, as the noble and learned Lord has said. The Scottish Law Commission are examining this matter and they have put out a memorandum for consultation. I hope that in the not too far distant future basic proposals for reforming the law in this area will come forward. Therefore, this is in the nature of an interim solution with this bad structure to cope with. We have tried to modify its worst evils by a discretion.

The other point I should like to make is that so far as I can judge there would be very few cases affected by this. The total number of reported cases in which time bar has played a part since 1960, I think, is only 13, and in the last 10 years I think there have only been four. Presumably most people affected by the time bar have elected to stay at home and not go to the court. So the total number of cases affected is extremely small and I respectfully suggest to your Lordships that it would be equitable and charitable to grant the court a discretion—which is all it is—to consider these matters. The court will no doubt take account of all the circumstances in deciding whether to exercise its discretion.

I hope that, in the light of these extenuating circumstances, the noble and learned Lord will feel able to withdraw the amendment.

Lord FRASER of TULLYBELTON

My Lords, I cannot say that I am wholly convinced by the arguments on either side; the noble and learned Lord, Lord McCluskey, seemed to say that it was a rich insurance company against a poor man and the noble and learned Lord the Lord Advocate said that there were very few cases. With great respect I do not consider either of those arguments to be very good for breaking the rule that there should not be retrospective legislation. However, having ventilated that, with the leave of the House I beg leave to withdraw the amendment.

Amendment to the amendment, by leave, withdrawn.

The Earl of SELKIRK moved Amendment No. 7B as an amendment to Commons Amendment No. 7. In line 24, after ("interlocutor") insert ("made on a date before this Act came into force").

The noble Earl said: My Lords, I am sure we are extremely grateful to the noble and learned Lord the Lord Advocate for explaining what this is all about. If anyone looked at the Hansard Reports of the other place they would see that there was no explanation. It was put in at the very end of the discussion and after the Minister in charge had said, No he said, Yes, tabled the amendment and did not explain why. I suppose this is about as good a case of the old saying "Hard cases make bad law" as one could possibly find.

I am going just a step further, but may I first say that this is of consequence to the insurance industry. The noble and learned Lord, Lord McCluskey, said that the insurance industry is very rich and the poor man is very poor. The insurance industry can cover anything, provided they know what they are covering. If we extend the insurance cover by legislation that is grossly unfair in principle. We might one day do it in a very big way which would have an extremely adverse effect on the insurance industry. I do not think one should forget that. Parliament is very much inclined to copy; what it has done one day, it will do another. We are opening up a closed case. We are opening up the finality of a decision at law, and in many respects finality is more important than justice. One of the great things about the law is that you get an answer and you know where you stand. I think this is being bridged here and it could be extended to all sorts of things: contracts of service, damage to property, and many other things it could be extended to if we once start adopting the principle that a decision at law is not final. Those are important points.

I do not want to damage the hard case, but I do want to restrict the damage which could be extended to it. As has been said here, the cases are very few and of course it has been explained that someone who has taken the case to law and failed should not be worse off than someone who has not done so. I have therefore suggested, particularly under the cover, that this is a temporary provision. Who can say that any law is temporary? Who can forecast when laws are going to be amended? Who can say for certainty that the recommendations of the Law Commission, which is now examining this whole question of prescription and limitation, will ever be observed or carried out? I am asking the Government to put a limitation—a limitation in time and to say that when this law comes into operation new cases cannot then be added to the claim under this clause for egalitarian treatment. That is all the Government want. There are one or two hard cases, of which the case of McIntyre is an example—and there may be a few others who will want to raise this, but new cases will not come into it. This is an attempt—and I suggest, with respect, quite a reasonable attempt—to allow the hard cases to be maintained but not allow the law to be unduly damaged. In those circumstances, I ask the noble and learned Lord to restrict the operation of the last sentence of this to cases which have already been in existence, and new cases can be brought under it. It is in those terms that I beg to move.

Lord MACKAY of CLASHFERN

My Lords, I think, in practical terms, the noble Earl's amendment would allow the cases that the noble and learned Lord, Lord Fraser, was speaking of. Once this discretion is in operation, then this part of the clause will have no effect at all, because if somebody is arguing about limitation then he will always add in his case as an alternative, just in case he fails on that, that the court should exercise its discretion. In other words he will say, "Assuming that I am time barred please exercise your discretion in my favour." So while I very much appreciate the help which the noble Earl has given us on this occasion, I do not think that this particular amendment is necessary to achieve the purpose, because once the Act comes into force as a practical matter a person who did not use the discretion at the right stage would simply be doubling the number of applications that he was making to the court. So I do not really think that can possibly happen. Therefore, I think the effect of the noble Earl's amendment is in fact already achieved in the clause—and of course I am very anxious, if possible, to avoid the clause having to be re-examined anywhere else. In the light of that explanation, I hope that the noble Earl will feel able to withdraw his amendment.

The Earl of SELKIRK

My Lords, the noble and learned Lord the Lord Advocate is saying in effect that no new case can be re-opened at a later date. In other words when this Act comes into force the effects of my amendment will come into natural operation. If that is the case—and of course I accept what he has said—I beg leave to withdraw the amendment.

Amendment to the amendment, by leave, withdrawn.