HC Deb 22 May 1950 vol 475 cc1619-21
1. Lieut.-Colonel Lipton

asked the Attorney-General whether he will make a statement on the proposed termination of the Courts (Emergency Powers) Act, 1943.

The Attorney-General (Sir Hartley Shawcross)

As the statement is, of necessity, somewhat long I will, with my hon. Friend's permission, circulate my answer in the OFFICIAL REPORT.

Lieut.-Colonel Lipton

While thanking my right hon. and learned Friend for what I have no doubt will be a full and informative statement, may I ask whether, in the light of a typical case which I submitted to him from the Lambeth Chamber of Commerce, and other recommendations which he has probably received, he is satisfied that no additional hardship will be imposed upon debtors adversely affected by the war, who have hitherto had some measure of protection?

The Attorney-General

Yes, Sir. I will give careful consideration to the case which my hon. and gallant Friend has just sent me, but I should point out that for over two years no order has been made under this Act in the High Court.

Following is the statement:

The Courts (Emergency Powers) Act 1943, which consolidated the legislation passed on the outbreak of war in 1939, requires the leave of the court for the execution of judgment debts and the exercise of such remedies as distress, recovery of possession, or the realisation of securities on a failure to pay rent or perform mortgage obligations. The court may refuse leave if it is satisfied that the failure is due to circumstances directly or indirectly attributable to the war. The Act applies not only to pre-war contracts but to contracts entered into at any time since the 3rd September, 1939, if the defendant satisfies the court that he is unable to pay by reason of circumstances directly or indirectly attributable to the war and that such circumstances arose after the contract was entered into.

There is no doubt that these provisions were of considerable value in avoiding injustice to debtors, tenants and mortgagors of property during and immediately after the war. In present circumstances, however, the need to apply to the court in order to obtain leave to proceed in cases in which it is apparent that the defendant has no ground whatever for invoking the protection of the Act leads to a considerable waste of time and money and, of course, the cost of the application in each case is added to the amount recoverable from the defendant. I understand that there have been no cases in the High Court for upwards of two years in which the court has refused leave to proceed, although no doubt the need to obtain the leave of the court has led in some cases to the creditor consenting to payment by instalments. In the county courts, which already have power to order payment by instalments, the need to obtain leave to proceed under the Courts (Emergency Powers) Act is even less justifiable.

The opinion has been widely expressed in the legal profession for some time that the Act is no longer serving any useful purpose, and after careful consideration the Government have decided that this view is correct. I may say that, before a decision was reached in the matter, the Law Society were consulted and they agreed with the decision to bring the Act to an end, as did the Bar Council.

The Act continues until such time as His Majesty may, by Order in Council, declare the emergency that was the occasion of the passing of the Act of 1939 to be at an end. As I have already mentioned, no application for leave to proceed has been refused for at least the past two years, and it is highly unlikely that any persons can still be regarded as prejudiced by circumstances attributable to the war in such a manner as to disentitle their creditors to exercise their ordinary remedies In these circumstances the Government consider that adequate notice of the intention to bring the Act to an end will have been given if an Order in Council is submitted to His Majesty towards the end of June.

Perhaps I should add that the Liabilities (War-Time) Adjustment Acts, 1941 and 1944, which provide a means for the adjustment and settlement of the affairs of persons financially affected by war circumstances, without the stigma of bankruptcy, are dependent upon the existence of the Courts (Emergency Powers) Act and will automatically come to an end at the same time as that Act. The Liabilities Adjustment Acts have ceased to serve any useful purpose so far as fresh applications are concerned but they will remain in force as regards any liabilities adjustment proceedings commenced before the date of termination of the Courts (Emergency Powers) Act.