LEAVE.—FIRST READING. (Hansard, 22 June 1858)

§ LORD JOHN RUSSELL
said, he now rose to ask leave to introduce a Bill to amend and consolidate the laws relating to Bankrupts and Insolvents, a subject that he need not remind the House had occupied the attention of so many eminent persons and great authorities in questions of bankruptcy jurisdiction and commerce. The matter had originated in a conference of some of the leading commercial men of this country, and at that meeting it was agreed that there should be a committee appointed consisting of delegates from various commercial bodies entirely connected with trade in various parts of the kingdom. This committee of delegates met, and after long deliberation, agreed upon the points which, as traders and commercial men, they wished to have inserted in a Bill upon this subject. They asked him (the noble Lord) to introduce it, and he promised to lay it before the House, that it might have the attention of the law officers 221 of the Crown and the Members of the House who might be best competent to secure the most effective legislation on the subject. The grievance of which these traders complained was one they had for some length of time felt very much. It was that the expense of the Courts of Bankruptcy were so great that about 30 per cent. of the realised assets was consumed in the expenses of these courts. There were three or four propositions on which the Bill was based. One was to put an end entirely to the distinction between bankruptcy and insolvency. It was proposed that hereafter there should be no separate Court of Bankruptcy or Court of Insolvency, but that the two courts should be consolidated and united, and that all persons who should be insolvents should be deemed to be bankrupts. In the second place, when persons who were insolvent or bankrupt came before the Court after adjudication, the property was to be placed in the hands of an official assignee; but that would only be until the first meeting of creditors, and immediately the creditors met they would have the power of appointing a creditors' assignee, to whom the estate of the bankrupt might be transferred. If the opinion of the gentlemen he had alluded to on this subject was to be received, it would appear that although an official assignee may very often be a man of very considerable activity and knowledge, yet in other cases, by indolence or carelessness, he might consume a great deal of time and much of the property of the creditors; and it was therefore only fair that they should have an assignee of their own. It was further proposed that the process altogether should be very much simplified, that it should be cheaper than it now was; and in certain cases it was proposed that after an adjudication had been filed creditors might resort to the County Court, as another mode for recovering debts. By another provision, it was proposed to place the retiring allowances on the Consolidated Fund; and there were other provisions affecting the position of bankrupts and insolvents; but the main feature of the Bill was to consolidate the bankruptcy with the insolvency laws, so as to have but one general law, and do away with the necessity of having exclusively an official assignee. As the subject was a complicated and a commercially important one, all that he (the noble Lord) intended to do on the present occasion was to obtain 222 leave to bring in the Bill. He did not intend to proceed further with it this Session, but he laid it before the House in order that the Government and hon. Members might deliberate on the whole question before any alteration was made in the existing law.

THE ATTORNEY GENERAL
said, he thought that the House and the country were much indebted to the noble Lord for calling public attention to so important a subject as the amendment of the Bankruptcy Laws. Her Majesty's Government had already directed their attention to this subject, and a Bill had, he believed, been brought into the other House, which would also deal with the question, and by which it was hoped that many of the defects of the existing system would be remedied. He had observed with some surprise and disappointment that the Bill introduced by the noble Lord did not profess to deal with perhaps one of the most important subjects connected with the Bankruptcy Laws, and which throughout the whole compass of those laws most required amendment—namely, the state of the law with respect to insolvent joint-stock companies. The effect of recent legislation was such at the present moment that, when joint-stock companies became insolvent, it was impossible to do justice to the creditors or to the shareholders without instituting proceedings, not only in the Court of Bankruptcy, but also in the Court of Chancery. The consequence was that there was a concurrent jurisdiction exercised by both these Courts—a conflict of jurisdiction, a conflict of evidence, and a conflict of officers, who under the law were authorised to wind up insolvent companies; and the necessary consequence of this was that an immense expense was incurred. All manner of litigation was introduced, and the law, after all, was so uncertain that it was utterly impossible justice could be done to either the creditors or shareholders. He (the Attorney General) would abstain from adverting to the provisions of the Bill until it was fully before the House. He was glad the noble Lord had proposed in his scheme to abolish the distinctions that existed between bankruptcy and mere insolvency, and he hoped that the suggestion he had made with reference to joint-stock companies would not be lost sight of. No doubt, under the inspiration of the noble Lord and other hon. Members, they would succeed in securing an effective measure.

MR. HEADLAM
said, he agreed with the hon. and learned Gentleman that some consolidation of the existing Winding-up Acts was requisite, but he did not think it desirable that that subject should be mixed up with the improvement of the Bankruptcy Law in general. The Winding-up Acts had been passed from time to time, and now formed a series of Acts which left the law at present in a state of confusion. It would be very advantageous if the Government would consider the subject during the recess, with a view to introduce some general measure in the ensuing Session.