CLAUSE 18.—(Offences by corporations.) (Hansard, 14 November 1939)

§ The Solicitor-General
I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment was inserted in another place in order to give effect to a promise that my right hon. and learned Friend the Attorney-General gave to the hon. Gentleman the Member for Peckham (Mr. Silkin), that he would look into an Amendment that the hon. Gentleman had on the Paper, to substitute "and" for "or" in Clause 18. What the hon. Member for Peckham was trying to do was to make it necessary for the director of a company who wished to escape liability to show that the offence was committed without his knowledge and that he exercised all due diligence to prevent a contravention. My right hon. and learned Friend resisted that Amendment on the ground that there would be cases due to causes such as illness or the fact that the director was not employed in the department concerned, and that it would not then be possible for him, although he was quite guiltless, to satisfy both tests. But we have considered very carefully what the hon. Member said in answer to that. Among his points was the argument that it rather encouraged a company director to evade his liability by taking care not to be aware of the actual items that were charged—I am rather summarising the arguments of the hon. Gentleman. We thought that that was a good point, and we have tried to meet it by the Amendment, which will now provide that, in order that a director may escape responsibility, he has to prove not only that the offence was committed without his knowledge or connivance, but also that he exercised the care which was consistent with the nature of his duties. That relieves the man who was not in charge of the department concerned, but it imposes upon him the measure of responsibility which I think the hon. Gentleman had in mind.

§ Mr. Silkin
The hon. and learned Gentleman has fairly summarised the case which I made on the Committee stage for the Amendment I put forward. I think the Amendment meets in a perfectly satisfactory way the case I put up.

§ Mr. Rhys Davies
I hope the hon. and learned Gentleman will forgive me if I am clumsy in putting my case. When the Bill was before the House on a 604 previous occasion, he will remember that I raised the point about the salesman. We are dealing here with a body corporate, and we are saying in effect that it will be a defence for the directorate to prove that they have exercised due diligence and care against the contravention of the provisions of the Act by a servant, I have obtained the impression that when an offence: is committed by a business firm it is customary under some Acts of Parliament to prosecute the firm for an offence by one of its salesmen leaving the firm to deal with the assistant who broke the law in its name. I have been trying, as the hon. and learned Gentleman and the Parliamentary Secretary know, to see to it that there should not be a prosecution at all of the assistant under the Bill when it becomes an Act, if he commits in offence in the name and on behalf of his employer. I am told by seme legal gentlemen that the law in this country is gradually being changed and that recent legislation passing though the House has had a tendency to put the responsibility upon the employe instead of upon the firm, and I should like to be assured from the hon. and learned Gentleman whether we are doing anything at all in this Clause which will do away with the rights of the assistant who actually commits the offence in favour of his employer, and, in fact, sometimes for the personal gain of his employer. I have some knowledge of how these corporate bodies work, and I am rather afraid that what I have suggested might happen to the assistant unless we are careful in drafting this Measure.

§ Mr. K. Griffith
Surely the hon. Member for Westhoughton (Mr, Rhys Davies) did not suggest that, if an assistant committed an offence under the Act which might incidentally profit his employer, but which was done through, perhaps, the intemperate zeal for the good of the business but which was made completely without his employer's knowledge, and indeed against the instructions he received from his employer, the employer must then be made responsible for an offence which he never contemplated but which, indeed, he desired to avoid.

§ The Solicitor-General
Once again I have no shame in availing myself of the 605 argument of the hon. Gentleman the Member for West Middlesbrough (Mr. K. Griffith), but as far as the question of the hon. Gentleman the Member for West-houghton (Mr. Rhys Davies) is concerned, my answer is that the Amendment with which we are now dealing has nothing to do with the position of the assistant of whom he is speaking. It neither strengthens his position nor weakens it. The sole effect of the Amendment is to deal with the case of a director or officer of a company. This very stringent Section makes the director or officer of the company—not a firm in the legal sense of the word, but a body corporate —liable for offences that are committed, but it gives him an escape provided, and provided only, that he establishes that he knew nothing about the offence and that it was not his duty to know anything about the commission of the offence. Beyond that, it does nothing. It imposes no new responsibility that does not already exist in the Bill, and the servants of the company are not touched by the Amendment. The servants would in any case only be guilty if a deliberate intention contrary to the wishes of their master had been established, and this Amendment does nothing to infringe that.