INSOLVENT DEBTORS RELIEF BILL. (Hansard, 20 May 1819)

§ Lord Althorp,
in calling the attention of the House to his intended measure for the Relief of Insolvent Debtors in England, observed, that the unanimity with which the committee appointed to investigate the subject, had agreed to the principles of the bill which it was his intention to propose, relieved his mind, in a great measure, from the embarrassment he should otherwise feel, in bringing forward so important a question. He was bound to apologize, however, for introducing the bill before the report of the committee was printed. His motive in doing so was, the necessity impressed upon his mind of originating the bill without farther delay, at so late a period of the session, in order that it might be printed as soon as possible, with a view to a full discussion of it in the future stages after the report had made its appearance. For this reason he should now enter more into detail than would be proper under other circumstances in so early a stage. It was unnecessary for him to explain to the House, that the old law of debtor and creditor gave to the creditor a power of inflicting unlimited imprisonment on an insolvent. The principle on which it went was this—that the debtor was able to pay, and therefore ought to be confined until he had paid. But, beside the falsehood of the principle itself, the consequences proved most injurious both to the debtor and the creditor in many instances. On the one hand, unfortunate persons who had not the means of paying were kept in confinement, while, on the other, many persons who could pay remained in prison, and set their creditors at defiance. The first measure of relief to the severity of such a system was that entitled the Lords' acts. The principle of this measure was, to entitle the debtor to his discharge on surrendering his property, except it was objected to by any one of his creditors: and in order to secure him against malicious detention, the objecting creditor was obliged to pay him what was called his groats, a sum which was afterwards increased to sixpence. Notwithstanding this regulation great inconvenience was experienced. The gaols be- 588 came so crowded, that recourse was had to temporary insolvent acts, which were also objectionable in many respect. They were objectionable as ex post facto laws; they were also objectionable, from the inequality of their operation. Tile debtor, who was confined but a few months, was liberated under their provisions, as well as the debtor who was confined for as many years. The consequence was, that whenever an insolvent act was expected, the gaols became crowded with debtors who were anxious to take advantage of it, in many instances, to defraud their creditors. Under these circumstances, it was found necessary to enact a permanent law, which was first brought forward in 1813. The principle of this law was, that not the body, but the property of the debtor should be considered as the satisfaction to which the creditor was intitled. Such a principal was obviously the best for both parties, and in order to carry it into effect a new court was established. Every one approved of the principle, but the bill contained defects in its particular enactments, which led to great abuses. Two attempts were made to remove those defects, but the whole of the four acts that were passed upon the subject had proved inadequate. Among the principal defects, was that of conducting the examination of accounts in open court. It was clear that they could not be examined in such a place with that accuracy which was desirable, and many instances occurred, in which property was kept back instead of being given up to the creditors. Another defect was, that the debtor could choose his own time, after the lapse of three months, to demand his discharge, from whence it often happened, that the prisoner lived in the rules of the Fleet or King's-bench until he had spent all his property, and then applied for his release. He was aware that there were provisions in the present act to remedy these imperfections, but they were found to be insufficient. The third defect was, that the creditors had no power to compel the debtor to apply for his release before his property was entirely expended. These were the main objections to the law as it stood, but there were minor ones, into which he would not enter at present, as they must lead him more into detail than he was willing to enter until the bill came regularly before the House. To remedy these disadvantages, he should propose, in the first place, that an examination of 589 the accounts should fake place before they were examined in court, as was done under the bankrupt laws. For this purpose, it would be necessary to appoint three commissioners in the Insolvent debtors court, instead of one, and as the court was one from which there could be no appeal, such an addition to the number of the judges was the more reason-able. One of the commissioners should preside at the meeting of the creditors, and no creditor who did not prove his debt at that meeting, should have any claim upon the property. This, he thought, would lead to a bonâ fide division of the debtor's effects. To correct the second evil, he would propose that the debtor should be obliged to make his option whether he would take the benefit of the act within fourteen days after his arrest. If he did not do so within that time, he should be considered to have forfeited his claim to be released under it; but the creditor should still be enabled to apply to the court for the purpose of obliging the debtor to apply for his release, in order to come at his property. This provision was not intended to apply to persons confined on mesne process, as it was possible they might not have been arrested for just debts. There were other parts of the system which required improvement. Fees were established now in the Insolvent court, which the bill in contemplation was intended to abolish. He was aware that some objections might be made to such an arrangement, with a view to particular instances; but the best mode of proceeding he thought would be, to adopt the principle of abolition; and if there were any instances in which it might be proper to retain the practice of allowing fees, to make those instances exceptions to the general rule. What he had HOW said applied to the case of debtors confined in London; but in order to apply the bill to those confined in the country also, he would propose that the magistrates of the quarter sessions should appoint examiners to investigate the accounts, who should report to them in the same manner as the commissioners should report to the court in London. He certainly did not expect that any great objections could be made to the principle of the bill; it was possible that some might disapprove of the additional expense to which the appointment of three commissioners instead of one must lead; but when they considered that the object was 590 to relieve unfortunate debtors from oppression, and also to benefit creditors themselves, he trusted that the expense would not prove an insurmountable difficulty. As great abuses had taken place in consequence of the removal of debtors in the country, from the place at which their creditors resided, to a distance where they could not attend to oppose them, the bill contained a provision, enabling the court in London to select that part of the country for the examination of their accounts where most of the creditors resided. The power of removal should, for the reason already stated, be made not to depend on the debtor himself. Having so far detailed the nature of the measure, he should now move, "That leave be given to bring in a Bill for the Relief of Insolvent Debtors in England."

§ Mr. Alderman Waithman
agreed with the noble lord, that the present was not the time to enter into any discussion, but as much misconception had gone abroad with respect to the views of the petitioners, he wished to state, that no indisposition was shown, cither by the petitioners, or by any of the witnesses, to the adoption of some measure for the relief of unfortunate debtors. He concurred with the noble lord in general as to the remedy with which he proposed to meet the evils of the present system, but wished to reserve to himself the right of discussing some of the points when the bill came properly before the House.

The Chancellor of the Exchequer
said, that this question was of so much importance to the interests of the country, and to the cause of justice and humanity, that he should be the last man to oppose the measure because a little more expense might be incurred by it. He should think it his duty, when the bill was introduced to consider what would be the most economical arrangement. He could safely assert, that with the exception of the question regarding the poor-laws, his mind-had been more embarrassed upon this subject than on any other. The bill originally brought forward in the other House, by lord Redesdale, had almost totally failed; it had been productive of the most lavish waste of property on the part of the debtor, and of great hardship towards the creditor. After complimenting the zeal with which the noble lord had entered into the subject, and the success with which he appeared to have encountered its difficulties, he pledged himself to afford 591 every assistance in his power to render the bill as perfect as possible.

§ Mr. Hurst
also complimented the noble lord on his exertions, and expressed his entire approbation of every part of the bill. The object being one which had frequently occupied his mind, and the disadvantages of the present system having frequently come under his observation, he was the more anxious to afford every assistance in his power towards the completion of a measure so beneficial to the public.

§ Mr. D. W. Harvey
thought that a favourable opportunity now presented itself to his majesty's ministers, to correct the general administration of the law with respect to bankruptcy and insolvency. A great expense might also be avoided. There were at present fourteen lists of bankrupt commissioners, costing the country 35.000l. a-year. Now if, instead of these, three judges of insolvency were appointed, with a salary of 3,000l. a-year each, a great saving would be effected, and the property of bankrupts and insolvents would be divided with greater promptitude and advantage.

§ Mr. W. Courtenay
could not agree with the hon. member, that such an alteration as he proposed would be attended with any advantage. On the contrary, he thought it would create a complicated and expensive system, which would be intolerable. He did not think that the increase of commissioners, as suggested by the noble lord who proposed the bill, would be attended with advantageous re-suits. He would admit that the introduction of some auxiliaries to the present commissioner might prove advantageous.

§ Sir John Newport
hoped that the bill proposed to be introduced would be extended to Ireland. The evils of the present system had been deeply felt in that island.

Mr. Leslie Foxier
had no doubt but that the laws of Ireland could be assimilated with those of England in this respect, and that the provisions of this measure could be extended. He entirely agreed in the defects of the bill which at present existed, and the melancholy effect it had upon Ireland.