§ Sir J. Mellor
I beg to move, in page 2, line 38, to leave out Subsection (2).
This Subsection provides:Where an offence under this act has been committed by a body corporate.….—and that of course means a servant of the body corporate—….every person who at the tune of the commission of the offence was a director, general manager, secretary or other similar officer of the body corporate, or was purporting to act in any such capacity shall be deemed to be guilty of that offence unless he proved that the offence was committed without his consent or connivance and that he exercised all such vigilance to prevent the commission of the offence…This does seem to be a most extraordinary provision to have in a Bill of this character. I think one must consider the example of a shop assistant employed by a large company perhaps committing an offence and perhaps quite a small offence, and all the officers of the company, perhaps living far away, having no responsibility for the action of the shop assistant, being liable to be convicted for the offence unless they could prove that in fact they 2164 were not in any way responsible and exercised all due vigilance to prevent the offence. It is absurd to go so contrary in this case to the principle of English law, which assumes innocence, and to assume guilt. I do not think the Attorney-General would care to justify this, and I would be interested if he would intervene on this point. There may have been cases during the war, in times of great difficulty, when it was necessary to have provisions of this sort for the sake of public safety; but I cannot think that in a Measure such as this, put forward by the Government as a rather minor Bill, brought on at the end of other business, treated by the Government with a certain degree of levity, they should introduce such a smashing innovation as this—that people should have to prove their innocence when they are only remotely connected with some offence. I hope the Government will agree to the deletion of this sub-section.
§ The Attorney-General
Companies, as hon. Members are aware, are intangible bodies with no souls to damn and no bodies to incarcerate, and we do not think that those who are actively concerned in the management of companies—and this Clause only affects those who are actively concerned—should be able to shelter themselves behind the shadowy form of the company. It is often very difficult to establish the exact degree to which a particular officer or director of a company may have been involved in some particular transaction. That is a matter far better known to that officer or director than it would be known to the prosecuting authority. While I would not wish to commit myself to any general rule to which there would be no exception, it is our intention in general to impose this kind of liability on those who choose, whether as directors or important officers, to concern themselves with the activities of companies.
There is nothing new in this. The principle has been accepted time after time by the House even in the present Parliament. In the National Insurance Act, the Industrial Injuries Act, the Atomic Energy Act, the Exchange Control Act, and the Cotton (Centralised Buying) Act, to mention some of the recent statutes, this form of words has been used, and it is, we think, the right form of words in which to impose liability in 2165 respect of these matters. It is, of course, a matter for the tribunal which has to consider any prosecution brought before it to decide whether, in the circumstances of the particular case, the officer or the director concerned, having regard to questions such as whether he was in the country or not, or what degree of control he was exercising, had shown due diligence to prevent the commission of the offence. There is not the slightest reason to think that this Clause, in these terms, can be the cause of the slightest injustice to those concerned with the management of companies.
§ Mr. Walker-Smith
I wish I could share the complacency of the right hon. and learned Gentleman about the innovation in our law represented by this Clause. He justifies it on the grounds that similar provisions have been incorporated into various Acts passed since this Government took office in 1945, but I cannot admit the proposition that, because a bad provision has been incorporated into these various Acts in the last two years, it is therefore any less the duty of this Committee to challenge that provision when it is sought to be incorporated once again into an Act of Parliament. Surely the point about this particular provision is that it shifts the onus of proof on to the person holding one of these various offices. In other words, he stands convicted. He is guilty until he can produce proof of his innocence, which is a direct reversal of the normal principle which has characterised British justice, in contradistinction to that of many other countries and peoples of the world.
It was something on which we were wont to pride ourselves, and to which we drew attention as characterising the fair-minded and tolerant approach in this country to the question of justice. Here it is sought to reverse that principle. I fully agree with the hon. Member for Sutton Coldfield (Sir J. Mellor) in thinking that injustice is bound to follow from the principle incorporated in this Measure. That it is incorporated in many other Acts must not excuse it here. That simply makes more widespread the injustice which will follow. Under the provision, as I read Subsection (2) of Clause 3, various officers are all going to be liable to be penalised for an offence committed by one individual in the company and will be punished on account of his offence. 2166 This seems not only to be encouraging injustice, but making it certain.
§ The Attorney-General
Before the hon. Member sits down, may I say that I am afraid that I misread my own handwriting and so misled the Committee in regard to two Acts which I mentioned. I was going to say that in the two National Insurance Acts the onus is put on the prosecution. To the other Acts I have mentioned I should have added the Coal Industry Act, which put this in the same way as we are putting it now. In general we do intend to put the matter in this way into future legislation. We think it is the duty of those actively associated with companies to show due diligence to see that offences are not committed.
§ Mr. Manningham-Buller (Daventry)
While agreeing that it is the duty of officers of companies to show due diligence to avoid the commission of offences, I feel that the learned Attorney-General, in his reply, put forward the strongest argument possible for the deletion of this Subsection. We have at this moment a Companies Bill in the course of discussion and consideration by this House. If it be the general principle of the Government now to cast upon officers of companies the obligation to prove their innocence when any offence is committed by the company, the right place to include a principle of that nature is in the Companies Bill. It should not be tucked away in a Penicillin Bill, or a Statistics of Trade Bill, or Bills of that sort. It is nonsense to say that the burden of proof should be cast upon any director because some employee of the company, perhaps in a branch of a chemists in a remote part of the country, happens to sell some penicillin when he should not do so. This provision is far too wide to achieve an object which is, I think, common to both sides of the Committee, namely to see that the guilty do not escape punishment. The learned Attorney-General, dealing with this Amendment in his customary fashion, has produced the strongest argument for leaving out this Subsection.
§ Mr. Challen
There is one point which has struck me during the Debate on this Subsection. The Attorney-General sought to justify it by getting up and saying that this was not so much a matter of precedents as an intention by the Government to introduce similar Clauses in similar cases. The question of onus of proof 2167 is again a matter which we have already discussed. But the inclusion in these provisions of secretaries, directors, or other "similar officers" is, I would suggest, something without precedent. The indication given by the learned Attorney-General in his subsequent remarks that it was the intention of the Government in future to introduce this matter in Clauses of this nature strikes me with alarm. What is a "similar officer" to a general manager or secretary? How far do we get with language of this capacity? We are dealing, I submit, with a vague generality of individuals who have to serve a company or body corporate which has onus of proof put upon "it"—I emphasise "it"—to justify something he has done and all kinds of undesignated people are to be made liable. Although the Attorney-General tried to say that this was justified by precedents, he corrected himself by saying "would be justified by future legislation."
§ The Attorney-General
I do want to be perfectly clear about this. I said this was justified by precedents, even in this Parliament. I mentioned the Insurance Acts where the onus is put the other way. In the Atomic Energy Bill, The Exchange Control Bill, and the Cotton (Centralised Buying) Bill this form of words was discussed in this House before the Bills were enacted. I must emphasise that this form was then accepted as an appropriate form, and we think that there is ample precedent for it in this context. In general, this is a form of liability which we feel it is appropriate to impose on those engaged in the management of companies.
§ Mr. Challen
I thank the learned Attorney-General for his statement, but I would like to pursue it because I am confused. The type of person to be found guilty concerns me. Will this precedent comprise director, general manager, secretary or other similar officers? Can the Attorney-General assure the Committee that, where "other similar officers"—whatever that means—have got the authority of precedents we can legislate for them now, or embark upon this in the future? The onus of proof is laid upon the company and certain officers to say whether they are liable or not, but we are laying it down here that every kind of vague servant may be found out. Can the 2168 Attorney-General give us an instance where this form of words has been used?
§ Amendment negatived.
§ Clause ordered to stand part of the Bill.