HC Deb 09 March 1915 vol 70 cc1297-310

Order for second reading read.


I beg to move, "That the Bill be now read a second time."

This is a Bill which I presented yesterday, and which was circulated with the Papers to the House last night. I do not ask that any further stage of the Bill be taken to-day, but it is a short Bill, and I hope that we shall find it possible to go through its other stages to-morrow. It is the result of a great deal of consultation with and consideration by business men and lawyers, both inside and outside the House. It deals with a topic which has been regarded as one of difficulty ever since the War began. It provides machinery by means of which the question may be answered, What is the effect of the outbreak of war upon commercial contracts which were running at the time the War broke out, and which, if peace had been preserved, would have come to be fulfilled in the intervening time, and the time still to come? That question is one which presented itself at the very outbreak of the War. Within the first few days of the War it was considered both by the Government and, as I know very well, by commercial and legal people in all quarters. At first sight it looked as though the best way of dealing with the matter would be to legislate in the form of a code, and to pass an Act of Parliament to say that the effect of the outbreak of war upon current contracts was either that they were extinguished or suspended, or were not interfered with, as the House of Commons might decide. As perhaps hon. Members will recollect that sugges- tion was made and debated in this House more than once in the early weeks or months of the War. It is a suggestion which has been most carefully considered. Here I speak of consideration given not merely by myself or other Members of the Government, but given by other Members of the House sitting in all quarters of the House for whose help I am very greatly obliged. It has been considered, in the same way, by a number of prominent business men who have been consulted, as well as by others with special qualifications, and the unanimous conclusion of all who have considered the matter carefully is that the question cannot be solved by the enactment of a code.

There are two reasons. One is that the enactment of a code which will lay down what the law is in reference to pending contracts, so far as they are affected by War, is only practicable and wise if you have plenty of time in which to draft the language of your code, and a great number of legal decisions directly bearing upon it which illustrate and solve the various points at issue. Neither of these conditions exist here. This question is an urgent question, and therefore we have no more time for debating the precise language of a code. Of course, the difficulty which the question presents is due to its novelty, is due to the fact that neither in the experience of practising lawyers, nor in the work of the practical business man, nor in business has this precise question in this precise form presented itself before. Therefore, there really are no conditions existing which make it at all wise or satisfactory to attempt to enact a code. There is one further reason why any attempt to codify the law on this subject is bound to fail. The question of what is the effect of the outbreak of War upon commercial contracts is one which it is very easy to ask in general terms and, I am bound to say, it is one that I do not think is very difficult to answer in general terms. But it is a question which can only usefully be considered if it is capable of being applied to individual cases.

Each commercial contract, as commercial people know very well, differs from every other commercial contract in the precise terms in which it is expressed, and it is not possible to find a simple formula which will automatically supply the answer "yes" or "no" as regards the infinite variety of commercial contracts in connection with which this question has arisen. Therefore, after the most thorough and careful consideration, it was unanimously agreed both by the commercial authorities whom I have had the opportunity of seeing, and by lawyers, Members of this House, and others whom I have consulted, that to attempt to enact a code would be certain to result in failure and disappointment. The alternative which suggests itself is that which is contained in this Bill.

5.0 P.M.

It is to provide some means by which a judicial decision can be obtained on the point in a limited number of cases, because once you obtain a judicial decision in a limited number of cases, I feel confident that those decisions will be regarded as a good and sufficient guide in many other cases, and may be brought in. I may be asked: "Why do you need an Act of Parliament in order to allow a judicial decision to be obtained?" No civilised Court of Justice could ever contemplate, a decision of a question of this sort between two different parties to a contract unless they first had presented to them, or at any rate have had the opportunity of having presented to them, the arguments which might be put not only on one side, but on the other. You cannot decide a question of this sort against the German party to a contract unless you have taken the utmost steps to give him notice of what you are doing, and also give him any opportunities that may be necessary to present his case for review. Therefore it was necessary to search for some method which would enable the judges to be made use of in deciding this question, while at the same time satisfying the substantial necessities of fair play in a judicial proceeding. This Bill is the result of efforts which we have been making, and I think I can in a few sentences explain to the House what are its provisions. If any hon. Member has a copy of the Bill before him he will see that it is not a long one, and, inasmuch as a great deal of time has been taken in its preparation, I hope it will be found to be a proper mode of dealing with the matter. We do not propose to deal with any case except cases in which the plaintiff is a British subject; and we do not propose to deal with any case except cases in which the defendant or one of the defendants is an enemy. That is a proper limitation in the first instance. We propose, when those conditions are satisfied, that the British plaintiff may issue a writ asking from the Court a declaration as to what is the position of his contract in view of the outbreak of War. It is not contemplated that a writ may be issued to get damages or an injunction, or anything else except a declaration, because all the commercial community needs in this matter is certainty; they want to know where they are, and I think that in many cases the matter which is most important to them is to have the question decided, one way or the other, as to what is their position, and they want to know it now.

Once they know that, they can make their own arrangements, and when the happy time comes that the War is over, the consequential relief to which they may be entitled is a thing which will be got in the Courts in the ordinary way. Therefore, when those conditions are satisfied, when the plaintiff is a British subject and the defendant is an enemy, the writ may be endorsed with a claim for a declaration as to the effect of the present War on the rights or liabilities of the plaintiff or defendant. Then, when that is done, we think it would be right to authorise the Court to permit the service of the writ, in case of need, by advertisement, either alone, or together with such other conditions as the Court, in the individual case, think right. Obviously, you cannot send a clerk over to Germany, in the present circumstances, to serve a writ on the German defendant, and there are other difficulties of a technical kind, and we therefore thought it necessary to propose this new Statutory provision. The Court may be trusted to see to it that the conditions imposed are at once adequate to protect the interests of the German party to the contract while they reasonably safeguard the interests of the British party to the contract, and we propose to leave to the Court latitude, in any individual case, to decide what is right.

The main thing is that the Court is authorised in these circumstances to permit the service of the writ by advertisement, a method—as Members of the House no doubt are aware, and may be others, too—which is already followed in very exceptional cases even under our own jurisprudence, and quite constantly followed under the jurisprudence of other countries in Europe. The defendant, who is advertised for, may not actually appear; if he does appear, or if he instructs Counsel to present his case, of course the matter can go forward in the ordinary way and there will be nothing exceptional about it. There is no question that, having been summoned by writ of the Court to appear, he will be perfectly entitled to employ an adviser in order to present his case. But supposing he does not appear, then of course the case has got to be dealt with by the Court without the assistance of the defendant's presentation of his own case.

In that event we provide that we only permit this procedure if there is written evidence of the contract. Most contracts of any importance are contained in written documents, and if we have the written document presented to the Court, even if the defendant, after service of the writ by advertisement does not appear, the Court, in most cases at any rate, will be able to pronounce a decision declaring what is the effect, after the outbreak of War, on the rights of the parties under that written contract. Subject, therefore, to the limitation that there shall be written evidence of the contract we think the conditions which are proposed in this Bill may be found to work fairly smoothly. In order to work this scheme out, it will obviously need a certain number of rules and regulations, and Sub-section (2) of the first Clause of this Bill provides that the Lord Chief Justice shall give directions for expediting proceedings. Of course, despatch in this matter is of great importance, and regulating the procedure generally in a case. We go on to provide in these cases, when, owing to the absence of the defendant, it is not possible to observe to the full the very strict and precise rules of evidence which obtain in our Courts, that there shall be power in the Courts to admit, for example, the press copy from the letter book of the original letter, or the like, in order that they may have before them in substance the materials on which they have to judge.

These are the provisions of this Bill, and the House will see at once that, assuming this is a proposal which ought to be passed, it should be passed with as little delay as conveniently possible. I do not propose to ask for more than the Second Reading of the Bill to-day; if we get that, probably we may be able to got the rest of the stages to-morrow, and place it on the Statute Book, with the assistance of the other House, without any loss of time; so that on those questions which arise, we will be in a position to solve them forthwith with the minimum of delay. Arrangements have been made, in view of this Bill when it is carried, for a special list of the cases to be drawn up. I am divulging no confidence, I think, when I say that the Lord Chief Justice will nominate some particular judge to deal with those matters, in order that all possible despatch may be secured, and by that means I hope it maybe possible to find out what is the effect of the outbreak of war upon the enormous number of commercial contracts which existed when the War broke out between this country and Germany. Once three or four really illustrative cases have been dealt with, the doubts which are entertained in many commercial quarters will, I hope, be very largely solved, and at the same time we shall have avoided doing anything which the most sensitive conscience could regard as any breach of the traditions under which justice is administered in this, country.


I do not apprehend that there will be in any quarter of the House any stringent criticism of this proposal of His Majesty's Government. The right hon. and learned Gentleman has said that the project is one which he has submitted in every quarter where the need of some such legislation has been discussed, not only in this House, but among business men with a variety of interests outside. I think the right hon. Gentleman has also submitted it in quarters where it will have to be administered, if it become an Act. I hope no exaggerated expectation will be entertained as to what this Bill can effect. One cannot fail to remember the discussions which from time to time arose with regard to the necessity of some action by His Majesty's Government to enable the business community to obtain some degree of certainty as to the position of parties to a contract during a state of war, and there were proposals made which seemed to suggest the existence of an expectation that His Majesty's Government would offer a certain solution in every difficulty of the kind. I hope that discussion of the matter has put an end to that extravagant and unfounded belief.

If business men supposed it possible that any means could be devised, either in the Courts of Justice or anywhere else, to put them out of the possibility of inconvenience occurring either during the War or after the War, or by reason of the intervention of a state of war, while contracts were in the course of being performed, I am quite sure that nothing but disappointment can follow from that expectation For a long time it was believed that you could not possibly decide cases such as are involved in this proposal except upon hearing both parties. The commercial community very naturally revolted from that, in a state of war which was not of our seeking but which had been thrust upon us, and it was thought that the community had a right to take some risk in giving judicial sanction with the strength of the whole community to decisions arrived at after the best hearing that could be got in circumstances of this kind. I think it is very generally believed, among those who have taken part in the discussion of this matter, that the proposal gives, not a discussion according to the everyday judicial procedure in time of peace, but it is the best discussion you can have, and a discussion which, if it is conducted under the safeguards that will no doubt be introduced, ought to satisfy the neutral States, and even belligerent States, that business interests are being dealt with in accordance with the traditions of which we are proud of in this country.

One of the safeguards is that the litigant who comes to the Court to get what is, in most cases, a decision ex parte, will, as I understand the matter, be under the ordinary obligation which attaches to a litigant of that kind, with the sanction which is behind it, namely, that if he does not fairly state his case to the Court, no decision which he gets will be operative when the time comes to revise it. That is one safeguard. The other is this, that it will be in the power of the Court not only to examine written evidence of the contract but to take what steps the Court thinks necessary in order to protect the interests of the absent party, or to make sure—as the judges would desire to do, I am sure, in a subject of this kind—that, there is an investigation which will be fairly likely in its result to stand the trial and criticism when the War is over. Under these circumstances this Bill proposes that you may get a declaratory judgment as to whether the War is hindering one party or the other from further performance of the contract. The commercial community has called loudly for some step of this kind. This Bill, I believe, goes to the fullest length which it could go with anything like a common assent between those who take part in administering the law and those who are engaged in business transactions. I hope it will not be supposed that this Bill must necessarily provide an infallible remedy in all cases that arise. For my part, I respectfully suggest that the Bill is well conceived and well worthy of acceptance by the House.


I rise to give this Bill my most hearty support. I think it is a Bill which will be of great use to the commercial community. It embodies the means and the idea that always seemed to me to be the best means and the best way of dealing with this question, and in fact, I think, the only way. The point which was of most importance, according to my experience, to the commercial community was to get a decision if they possibly could as to whether a running contract which had to be performed in the future had been put an end to by the War or only suspended. They could go to this man or to that man and get his opinion, but what they wanted if possible was to get a decision of the Courts on the matter, and, as the Attorney-General has stated, as quickly as possible. I quite agree with what the Attorney-General said about codification. There are many reasons against it, but the main reason now is that if we went in for codification months and perhaps years might elapse before we could get any satisfactory results. That put it, out of court, and the only other way was to alter the procedure of our Courts. I think some of us hoped, and I believe my hon. and learned Friend the Member for Exeter (Mr. Duke) was one of them, that we might get this done by the judges in the High Court, but they thought it was better to have legislation passed, and perhaps on the whole it was. This is, of course, an innovation. We are going to get power given to the judges whereby they may adjudicate on a matter when perhaps the enemy defendant has not in fact actually been served with notice. I do not think, however, that any alarm may or need be felt, and I do not think any injury is going to be done to the administration of justice in this country of which we are all proud, because, as the Attorney-General has pointed out, this Bill is limited in a very particular way.

It is, first of all, going to deal with written contracts, and it is only going to deal with matters where the British subject is asking for a declaration against somebody who is an enemy and who cannot be served in the ordinary way, and which is in respect of a matter which is of great urgency. To give an instance, you may have a person with a large contract in this country, for perhaps a million pounds, and he may have made a subcontract with a German firm for a large part of that million pounds, and he does not know whether, as a matter of fact, the War has dissolved that contract, or whether it is only suspended, and he wants a decision on the point. It seems to me it would be very unjust if he could not get a decision in a case like that till after the War was over. This Bill will give him the opportunity of going to the Court, and, if the Court thinks right, to get leave to exercise the powers of service which are provided for by this Bill. The question of urgency is undoubted, and I entirely agree with the Attorney-General that the sooner this legislation is put into force the better, because, everybody who has had any opportunity of dealing with this matter knows that there are many cases of the kind, and many people in the commercial community will be glad to take advantage of the provisions of this Bill. For my part, I think it is exceedingly useful legislation, and I hope the House will give it a Second Reading.


In rising to support the Second Reading of this Bill I wish to say on behalf of the commercial Members of the House that it is of the utmost importance that we should have, in many cases of most important contracts between British subjects and enemies, a declaration as to the effect of the present War on the rights and liabilities of the plaintiff or defendant in a contract entered into before the outbreak of the War. We had a largely attended meeting of the commercial Members of the House, when my right hon. Friend the Attorney-General was good enough to come and make a statement in regard to this important matter. I believe the unanimous opinion of those who attended that meeting, and as well of the commercial Members who were absent from it, but with whom we had opportunities of consultation subsequently, is that the simplest and best way to get the earliest decision by way of declaration for the guidance of British subjects who have these important contracts with enemies is the method provided for in this Bill. The commercial community is, indeed, indebted to the Attorney-General for the extreme promptitude with which, since that meeting was held, he has had the matter most carefully considered, and with which he has sought advice in many directions, with the result that I believe we have before us in its simplest form the most practical measure for promptly and quickly dealing with this most important matter. I therefore have the greatest pleasure in supporting the Second Reading of the Bill.


There is one suggestion I would like to make. It is interesting to note that in the last two days the German Reichstag have presented a Bill practically similar to this. I do not know whether they copied the idea from the Attorney-General, but they have one Clause in it which I would venture to suggest for the consideration of the Attorney-General. That Clause is to the effect that the judges shall be guided very largely by and take note of the costs of the material or subject of the contract on the date on which the contract was proposed to be abrogated. I think that would simplify the proceedings if the Attorney-General, in the rules which he proposes to make, include one to the effect that in all cases of contracts where there is a question of material, such as cotton or whatever it may be, that note should be taken of the price of the particular commodity on the day when the contract is broken or determined, so that calculations shall be made promptly.


I desire to ask what provision is made for Scotland in this Bill? I do not know whether the Attorney-General is aware that we have a commercial community in Scotland and that they require as much attention as the English commercial community. I notice that provision is made in this measure for dealing with Ireland, but Scotland is conspicuous by its absence.


I am much obliged to the hon. Gentleman, who raises a question of great importance and one which has not been overlooked. There are two reasons why Scotland is not mentioned. The first is, that that country is in so advanced a state of civilisation that its existing legal procedure gives facilities for solving these questions which do not exist in our barbarous communities. The second reason is that we thought it would be very wrong in a matter of this importance to treat Scotland as a mere appendage of England to be provided for in the Sub-section of some penultimate Clause. We propose that if Scotland requires legislation on the subject, on which I have no means of expressing an opinion, that it should have its own Bill introduced by its own lawyers.


The right hon. Gentleman has indicated that this measure is urgent, while Scotland is told that later on, perhaps when the War is over, Scotland will be dealt with. I would like to know, under those circumstances, where the Lord Advocate is; and why, since the commercial community of England are to be given this boon, Scotland should be deprived of it or put off with the promise of it at some future time? If I had the capacity I should speak at much greater length in order to delay this measure under the circumstances, but I shall simply enter my protest at the present time, remembering that there is a Committee stage, when perhaps we can bring the Lord Advocate to book.


There is one point which has not, I think, been touched upon. It has been assumed that the question to be decided would be whether the contract was to be abrogated or not. I can conceive cases where it would not be desirable to claim abrogation even if an English Court would say that the contract might be abrogated. There are contracts of a continuing nature extending over a large number of years, such as the erection of machinery. In those kind of cases the man might desire to go to the Court and say, "I must do something; this is what I propose to do, and what view does the Court take if I adopt that line?" I should like to know whether that is one of the kind of cases contemplated by the Bill. I notice that in Sub-section (5) of Clause 1 there are the words,

"A declaration in accordance therewith shall not prevent any other declaration or any consequential or other relief being claimed in other proceedings or prevent the case being dealt with, although no such other declaration or consequential or other relief is claimed."

I imagine it is contemplated that people situated as I have indicated should get the advice and assistance of the Court in order to tell them what is the right thing to do under the circumstances, and which would protect a man in case at the end of the War the alien party was advised to have recourse to proceedings in an English Court. I lay great stress on what was mentioned by the hon. and learned Member for Exeter (Mr. Duke), namely, that those affected by this Bill should not take an exaggerated view of its possibilities. It can give you protection in the English Courts, and, in my opinion, the difficulty about service is a matter of very little im- portance. I am glad that, such great facility is given by this Bill to get any sort of representation you can of the alien party before the Court. If you cannot get any, you still get the advice, and that would be sufficient for the practical purposes of the mercantile community. I welcome this Bill, altogether apart from the point of view of whether a contract is at an end or not. You must protect the British party to the contract in doing that which he, as a matter of common sense and justice, thinks the best thing to do, when the contract by reason of a state of war has become incapable of full performance.


There was a time when in consequence of the great anxiety felt in the commercial community on this question, I thought it might be possible for some rule to be laid down, either by the Government or in consultation with a Committee, which would serve as a guide for all the parties involved. On consideration I have come to the conclusion that that is not so. The diversity of contracts is such that it is necessary to deal with each contract on its own terms. Therefore, this Bill, I think, offers the best solution possible under the circumstances. I rose to put a question which seems to me to arise on Clause 1 (4), the terms of which I do not quite understand. It says:—

"The Court or judge shall have power, where an enemy service order has been made and the enemy defendant does not appear, to order the plaintiff, though successful, to pay the whole or any part of the costs of the proceedings if he considers that it is just to do so in the special circumstances of the case."

The plaintiff asking for a declaratory judgment cannot hope to get costs; but there will be a great number of smaller questions to be determined under this Bill, and perhaps the Attorney-General will consider whether it is quite wise to put in any provision which might deter people from seeking the relief which this measure proposes to confer, by holding in front of them the fear that they may have to pay, not only their own costs, but some other costs—I suppose the costs of the intervention of some third party to argue a question of importance which might arise in the case.


As the hon. and learned Member will see, the Sub-section is not compulsory in any way. It only authorises the Court to do that which there might be some doubt as to its power to do, unless there was authority in the Statute. There are small cases where one would not expect the Court to make such an order, but, on the other hand, there are sometimes very big cases—one has already been attempted to be raised in the Courts—where it is so important for the plaintiff to get his position defined that it would appear to be quite right to say that, although he is successful in his contention, the costs ought to be provided by him.


It is not worth discussing at length, but, personally, I incline to the view that if the Crown thinks it ought to intervene in the interests of the country—and that is the only reason on which it can ground its intervention—it might reasonably pay its own expenses, instead of putting the costs on the plaintiff.


I suppose there is another case to which the Sub-section might apply—that is, where the enemy alien does not appear, and the procedure laid down by the Chief Justice provides for appointing someone as amicus curiၓ to represent the alien enemy, or to put forward the views which he might desire to urge if he were there. In that case it would seem only right that the Court should have power to order the successful plaintiff to pay the costs of that person. In common with others, I desire to see this Bill passed as soon as possible; but there is one point I should like to raise. Is it quite certain that under the terms of Sub-section (2) the Chief Justice can give directions for someone to be appointed to represent the alien enemy and argue the case?


I think so.


I do not think that we are sufficiently taking into account what our enemies are doing against ourselves. Under this measure, judgments might be given which would have international consequences. The judge would have to decide matters according to English law. When you are at law questions of policy cannot enter. I think it would be very desirable if the Attorney-General could get any information as to the kind of jurisprudence which is in vogue in Germany during time of war. I should like that same inquiry to be made in France and in Russia; because we are now, quite properly, taking certain steps, but we are taking the matter out of the hands of the Administration, and putting it into the hands of the Courts, which must be bound not by questions of policy, but by questions of precedence. While agreeing that legislation of this kind must proceed, I should like a little more information as to what is going on in other territories. The Law Courts should, if possible, take no step which would expose our merchants and those who have interests abroad to reprisals, because I greatly fear that the amount of money we have invested abroad is larger than any-thing that may be involved in the passage of this Bill. We are legislating to some extent in the dark, and I should like a little more information on the lines I have suggested.

Question put, and agreed to.

Bill read a second time, and committed to a Committee of the Whole House for to-morrow (Wednesday).