HC Deb 20 April 1939 vol 346 cc659-63

Lords Amendment: In page 26, line 5, leave out from "of," to the second "any," in line 6.

The Solicitor-General

I beg to move, "That this House doth agree with the Lords in the said Amendment."

The Amendment is to leave out from Clause 18 the words: Where any offence under this Act committed by a corporation is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any director.

There is a precedent for these words, but they are not very happy words. The mere statement that any neglect on the part of a director, manager, secretary or other officer of the corporation is a criminal offence, is a proposition that causes great doubt in the minds of people who have anything to do with the criminal law. To a large extent the matter is academic, because a conviction in these circumstances would be exceedingly difficult to obtain. The mere words "attributable to any neglect on the part of" would cover the case of say, a man who had put a letter in his pocket which he ought to have posted, or a secretary who has committed some other trifling neglect of duty. It was thought in another place and it seems to the Government, that it would be a rather tall order to retain a criminal sanction against an act of neglect of that kind.

11.10 p.m.

Mr. Silver man

I hope the House will not agree with the Lords in this Amendment. It seems a pity that Amendments of substance should come or ho late, when there is not time for adequate discussion and when many people who might like to exercise a vote, if not a voice, on the principles involved are no longer here. Amendments of the criminal law always seem to come on very late at night in circumstances of difficulty and embarrassment. In this case, there is no adequate reason for interfering with the decision to which this House came. It is true that new principles, or rather new applications of principles in the criminal law have been introduced in this Bill but that has been due to circumstances which necessitated some drastic step by the legislature if easy fraud is to be prevented. There should be no difficulty in proving where an offence has been done with the consent or connivance of, or is attributable to the neglect of any of these persons. If an offence has been committed, it does not seem unjust that the responsible officer of the corporation whose consent or connivance or neglect caused it, should be answerable for the consequences of his default.

The Solicitor-General

Perhaps I did not make it clear that we are not leaving out the words "with the consent or connivance of." Those words remain.

Mr. Silverman

I am much obliged to the hon. and learned Gentleman. I had overlooked that fact, and my remarks are therefore confined to the question of neglect. But I must point out how much weaker the Clause will be if we omit these words. The accused person will only have to say, "It looks at first sight as if I had consented to this, but I did not consent. It looks as if I connived at it, bat I did not connive. What looks like consent or connivance was only my neglect I am a director, manager, secretary or other officer of the corporation, and I did not do my job properly, and the result is that an offence has been committed, but do not blame me." He can say, "It is true that I earn my salary as an officer of the corporation and that I did not do my duty, and that there has been a criminal offence, but that is not my fault." The result will be to weaken the Clause immensely and unnecessarily, and I hope the House will not agree with the Lords in this Amendment.

11.14 p.m.

Mr. Pet hick-Lawrence

I confess that I am somewhat puzzled as to the effect which will be produced by the omission of these words. The defence offered by the Solicitor-General very far from satisfies me On the other hand, there are other considerations which, if they are correct, will tend to modify the opposition of my hon. Friend. Most of the serious offences in this Bill are offences of commission. That applies in particular to Clause 1, which relates to the licence restrictions; Clause 12, dealing with fraudulent inducements to invest; and Clause 13, restriction on circularisation. So far as these are sins of commission, the reference to neglect cannot affect them, because you cannot commit a sin of commission by neglect. Therefore, I do not suppose the omission of the words relating, to neglect will prevent the penalty falling on the right shoulders for these sins of commission. Therefore, the words really only apply to those offences which are offences of omission and those are minor offences in this Bill.

What some of us are anxious to avoid is to allow what is known as the guinea pig director to escape all responsibility for actions which have been really taken owing to his neglect to interfere. If it is correct: that anything like serious offences can be attributable to the neglect of a director, it would be a great mistake if these words were omitted. On the other hand, I think my hon. Friend would possibly agree that if the effect of the omission of these words does not release such person from the liability which the Bill as it left this House placed on them, then we might agree to their omission.

11.18 p.m.

The Solicitor-General

I am much obliged to the right hon. Gentleman for pointing out so fairly that it is the fact that this alteration leaves the main offences under the Bill untouched. As he rightly pointed out, offences under Clause 1—licence restrictions; Clause 12—fraudulently inducing people to invest money; Clause 13—circularising restrictions; Clause 8, Sub-section (2), which deals with information to be furnished to the Board of Trade in relation to licences—all these are serious matters under the Bill, and therefore quite untouched by this Amendment. The Amendment would deal only with the very minor cases where it is a pure act of neglect or omission with which we are dealing. I will give the right hon. Gentleman reasons why I do not think, if the words remain in, it will make a great deal of difference to the Clause. The courts, in dealing with any case of criminal neglect, always impose an obligation on the prosecution to prove something more than mere neglect.

I argued the leading case on the point in another place not long ago, and it was there laid down that in order to establish neglect criminally you must arrive at something which is tantamount to recklessness. If these words were left in the court, in deciding whether there was any neglect, would be driven in every case to consider the extent to which there had been consent or connivance which would show that the act was the act of a man so reckless as to make it a crime in law. On the face of it, the words appear to go very much further than our ordinary criminal law goes, and it is for that reason, no doubt, that they were moved out in another place. In actual practice, their moving out does not make very much difference. As regards serious crimes, it does not touch the impingement of the criminal law, and, as regards the cases of omission with which the Clause deals, for the reasons I have given in any case in which one could get a con- viction for neglect one could, I feel confident, get a conviction for connivance and consent.