CLAUSE 15.—(Provisions as to offences.) (Hansard, 9 April 1948)

§ Mr. Glenvil Hall
I beg to move, in page 11, line 44, at the end, to insert: Provided that such a society shall not be guilty of an offence under the Act of 1896 by reason of its insuring in contravention of Subsection (2) of Section two of this Act if it is proved that, owing to any false representation on the part of the proposer, the society did not know that the insurance was in contravention of that Subsection. This Amendment gives a registered society which is not a collecting society a good defence against a charge of insuring a parent, or other person coming within the permitted categories, for more than £20, if it can be shown that, owing to a false representation of the proposer, it did not know that it was over-insuring.

§ Mr. Molson
To what society did the right hon. Member refer in his opening sentence?

§ Mr. Glenvil Hall
A registered society not being a collecting society. This and the following Amendment—in page 12, line 2—are proposed in response to representations made in Committee, in order to protect innocent persons against contravening the insurance limit of £20 set forth in Clause 2.

§ Sir D. Maxwell Fyfe
We on this side of the House—and I think hon. Members opposite—are grateful to the right hon. Gentleman for having gone so far as he has to meet the point which we raised in Committee. We have examined his form of words and believe that it will meet the case where a good defence can be made out by the society charged. As the Financial Secretary knows, we felt disturbed in Committee, and suggested a form of words which, in turn, gave him some qualms. We are glad to think that he has given the matter the consideration which has resulted in this Amendment.

§ Mr. Glenvil Hall
I beg to move, in page 12, line 2, at the end, to insert: Provided that such a society or company shall not be guilty of an offence under the Act of 1923 by reason of its insuring in contravention of Subsection (2) of Section two of this Act if it is proved that, owing to any 554 false representation on the part of the proposer, the society or company did not know that the insurance was in contravention of that Subsection. This Amendment does for collecting societies and industrial insurance companies what the previous Amendment does for non-collecting registered societies.

§ Sir D. Maxwell Fyfe
I beg to move, in page 12, line 7, at the end, to insert: Provided that no collector of any collecting society or industrial assurance company shall be regarded as being guilty of an offence under the Act of 1923 where such offence is due to any misrepresentation or non-disclosure of material and relevant facts by any assured person or member or anyone acting on behalf of or claiming through such member. Here we seek to ensure that the same defence as was made available to the different kinds of societies tinder Subsections (I) and (2) is made available to the collector under Subsection (3), which says: Any collector of a collecting society or industrial assurance company, or any other person, who contravenes or fails to comply with any of the provisions of this Act, or of regulations made for the purposes of Section eight thereof, affecting such collector or other person shall be guilty of an offence under the Act of 1923. Obviously, any collector who is deceived by misrepresentation or non-disclosure of material and relevant facts should be able to put up that defence. Unless the right hon. Gentleman can show us, by tracing through some of the provisions of other Statutes—which our researches have not been able to discover—that the defence does exist, then we think that it ought to be put into the Bill. This Amendment is moved in the alternative hope, either that this matter is so well covered that nothing is necessary, or that the right hon. Gentleman will accede to what I am sure is a widely held view, that the collector's position should be put beyond doubt.

§ Mr. Glenvil Hall
I must ask the House to resist this Amendment, because I think that it is misconceived. As the Bill is drafted—particularly Clause 2—we are 555 not dealing with agents at all, but with offences by companies and societies. Obviously, it would be grossly unfair if, whenever an offence was committed, the onus of proof was on the prosecution. As the House knows, in this Bill, we have, by Amendments which have been made, set up certain safeguards for societies against unwittingly and innocently accepting certain types of insurance. We think that those Amendments sufficiently cover societies and companies, and that we should let it go at that.
As I understand the right hon. and learned Gentleman, his object here is to protect agents and not societies. If an agent contravenes the law wittingly and knowingly, the existing provisions of the law are sufficient, either to protect him when it comes to putting forward a defence, or to give the prosecution sufficient powers if needed. If it becomes necessary to prosecute an agent for his part in overinsuring a life, there seem to be two possible alternatives. Proceedings could be taken under Section 5 (2) of the 1923 Act, which makes it an offence knowingly to assist in effecting an illegal policy, in which case provision already exists. If, on the other hand, he has aided and abbetted, and the prosecution is levelled against the society or company, then, under the present law, it would be possible to prosecute the agent for aiding and abetting someone to insure with his society or company without the knowledge of his employers. In either case we think that the law is strong enough as it stands, and I must ask the House to resist the Amendment.

§ Mr. Marlowe (Brighton)
I do not think that the Financial Secretary has quite followed the point made by my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe), because he has answered the argument by saying that this particular part of the Bill deals only with societies and various institutions, and not with individuals. That is not really so. Subsection (3) refers to a collector, and says that the collector shall be guilty of the offence. Subsection (3), although it includes the societies, makes it an offence for either the collector of the collecting society or industrial insurance company, or any other person to be guilty of the offence. The offence is thrown specifically on to the individual. 556 The right hon. Gentleman has accepted the principle that so far as the societies are concerned there shall be inserted the proviso with which he dealt. I find it difficult to follow why, if that defence is admissible in the case of a society, it should not be equally admissible in the case of the individual.

§ Mr. Mack (Newcastle-under-Lyme)
Our object surely is to ensure full and adequate safeguards for collectors and other individuals who may be unwittingly deceived into contravening the law and who may otherwise have to bear penalties imposed upon them to the extent of £50 for each offence. It is clear to me that the society or company should have in the normal order of things a better knowledge of the law than the individual agent who may be careless without being criminally careless. I think that the powers taken are too drastic, and I shall feel obliged to resist my right hon. Friend unless he can satisfy me that he is giving adequate safeguards to the agents as well as to the companies and societies. To leave out an agent, who may conceivably be deceived into breaking one of the provisions of the Act, particularly in view of the many pitfalls contained therein, may cause him grave financial hurt and personal discredit. The agent who does not wittingly and knowingly commit an offence must not be punished. My right hon. Friend will require to be much more specific to safeguard me, and I must therefore insist upon a clear assurance from him on this point.

§ Mr. Glenvil Hall
By leave of the House, I will reply. I think that the House is under a misapprehension. Clause 2, to which reference has been made, deals with offences by way of misrepresentation or where an agent may innocently find himself engaged in an illegal act because of lack of knowledge. I pointed out in Committee upstairs, as I point out again, that Clause 2 does not deal with the agent at all. Under the Bill, it is not possible for the agent himself to suffer so far as misrepresentation is concerned. The offence, if it is committed, must be committed by the society or company. At the same time, it is necessary to keep these words in the Clause because there are other offences under the Act, apart from misrepresentation, of which the agent may be guilty. There are all sorts of requirements about premium 557 receipt books and other things, and we must somewhere within the Bill make an agent liable for his own acts for which he must be considered to be completely responsible, and which can be in no sense interpreted as confined to the kind of offences on which he is acting on something said to him by a person who comes to be insured.

§ Mr. Molson
I appreciate the point made by the right hon. Gentleman. If it should prove to be the case that in seeking to protect the collector where it seems to us he is likely to be the victim of misrepresentation or fraud, our Amendment is too widely drawn, we would not press it. The point of substance that the Financial Secretary has made is that Clause 2 of the Bill only makes it an offence for a society or industrial assurance company to insure in contravention of the limit of the amount. Clause 15 (3), which must be read with Clause 2 of the Bill, states: Any collector of a collecting society or industrial assurance company, or any other person, who contravenes or fails to comply with any of the provisions of this Act … shall be guilty of an offence under the Act of 1023. Surely, the effect of this Subsection is to widen Clause 2 of the Bill, and to provide, not only that the society in such a case shall be guilty of an offence, but that the collector shall also be guilty of an offence. It is the advantage of our Constitution that a Bill has to go to another place. I am sure we shall not wish to press this point unduly now, but I do not think that the Financial Secretary has fully appreciated the wide scope of this Subsection, and perhaps he would give us an assurance that the Government have no desire to cause the collector who is innocently misled, to become a victim of a prosecution, if our interpretation is correct. I hope that the right hon. Gentleman will ensure that before the Bill becomes an Act an Amendment will be made to protect the innocent agent.

§ Mr. Glenvil Hall
So far as any assurance is necessary, I will certainly give it. We have no intention, as I made clear upstairs, to penalise an agent for any act into which he enters quite innocently without any intention of conniving at a wrong doing or something that is illegal. We desire to protect agents, and indeed all other people, acting innocently. We 558 have looked at this matter with the utmost desire to meet the wishes of the Opposition and of my hon. Friends on this side of the House. We are quite certain that the fears that have been expressed are groundless. If in another place it is possible at this late hour to insert words which will make quite clear what is intended, we shall certainly be willing to insert them.

§ Mr. O. Poole
I do not know whether the statement which the right hon. Gentleman has made will stand up to what my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe) has said, and whether he will withdraw the Amendment. The Government have covered to some extent the various societies and others, but there are a large number of collectors. I would ask the right hon. Gentleman to consider this point again, and to realise that it does affect a very large number of people, the vast majority of whom are making a serious endeavour to conduct their businesses on the highest possible plane.

§ Mr. Daines (East Ham, North)
I was under the impression that the right hon. Gentleman at this stage would have met us on this point and inserted a form of words to cover it. I was surprised to find the Amendment in the name of the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) instead of in the name of the Financial Secretary to the Treasury, and I was very disappointed. The Government should realise that the Bill is bound to widen considerably the opportunity for offences being committed, by the limitation on the type of insurance commonly presented. In the first few years of change there is bound to be far greater temptation for offences to be committed. It has been pointed out that the position is adequately safeguarded. That is conceding very little because this practice would be safeguarded under the society's own rules by transferring the liability to the agent to transact the business. What we are pleading for is protection for the agent himself. I beg my right hon. Friend not to say merely that we have had no difficulties in the past, but to safeguard the agents concerned in a reasonable way by the insertion of some form of words when the Bill reaches another place.

§ Mr. Sargood (Bermondsey, West)
May I ask that the Minister if he is considering this matter should look at the word "non-disclosure" in the Amendment now proposed. I would suggest that that is drawing the matter rather tightly. I can quite conceive of certain cases where non-disclosure of relevant facts may be entirely due to the fact that the agent has not carried out his job properly. I suggest a better form of words would be "knowingly withholding."

§ Sir D. Maxwell Fyfe
In view of the fact that the right hon. Gentleman has said that he will meet the generally expressed anxiety in all quarters of the House on this point and consider the matter before it goes to another place, I would like to ask leave to withdraw the Amendment. I hope I am properly interpreting what the right hon. Gentleman said, because it is on that basis that I am meeting the view of everyone in the House in asking for leave to withdraw.

§ Mr. Glenvil Hall
I do not want to mislead the House, but it is my considered view that there is nothing more that we can do to tighten up this phrasing. We have tightened it up as much as we can. The House has just deleted the words on which the hon. Member for The High Peak (Mr. Molson) replied in his last speech. As a result of the Amendment we have just passed, the offences concerned are only those under Clause 8 of the Bill, which deals with receipt books. We have gone as far as we can to meet the general feeling, but to show that we were not being stubborn in this matter I gave an assurance that if any other form of words could clarify the matter, we would, in another place, certainly be willing to insert them. I do not for a moment imagine that we will find any other form of words, and I should not like the right hon. and learned Gentleman to think that we will be hunting round for definite words.

§ Sir D. Maxwell Fyfe
What we want the right hon. Gentleman to look into is the possibility of an agent committing a breach of these regulations by being misled by the misrepresentations of the proposer for insurance. There could be a case where the agent could commit a breach owing to such misrepresentation, and if the right hon. Gentleman will assure us that he will 560 look into it from that point of view it would meet with the approval of the House.

§ Mr. Glenvil Hall
I thought we had passed away from that, because the agent has a good defence if he has been misled. He has only to say that the proposer came to him and said, "I was not insured previously with any company or society and I want to to take out an insurance up to the limit of £20." That is a perfectly good defence for the agent if any misrepresentations should come to light afterwards. Actually the Clause which deals with that type of offence is Clause 2 which does not refer to agents at all. It is the society or the company which technically and in law commits the offence.

§ Mr. Speaker
Does the right hon. and learned Gentleman still wish to withdraw his Amendment?

§ Sir D. Maxwell Fyfe
With some doubts, I beg to ask leave to withdraw the Amendment.