Lords Amendment: In page 2, line 23, at end insert:
'insurance money' includes a return of premiums; and 'pension' includes a return of contributions and any payment of a lump sum in respect of a person's employment.
§ Read a Second time.
§ Mr. Niall MacDermot (Lewisham, North)
I beg to move, as an Amendment to the Lords Amendment, in line 1, after "money" to insert:means any sum paid or payable under any contract of assurance or insurance and.I find myself in the difficulty that a number of hon. Members have been in this evening, of being faced with this sort of blackmail that if one opposes one of 1462 their Lordships' Amendments, or seeks to amend it in any way, the result will be the loss of the Bill. I do not want this Bill to be lost. I am happy to be one of its original sponsors, and I think it a most useful Bill.
The purpose of my Amendment is to ventilate—I will not say a grievance, although it is almost becoming one, but a point that has been discussed very thoroughly during earlier stages of the Measure. I will, therefore, not delay the House for long. What has happened now is that a new term has been introduced—the term "insurance money." This is nowhere defined in the Bill and, as far as I am aware, it is not defined in any other Act of Parliament. It is intended to replace the well-known words in the 1908 Act aboutany sum which is paid or payable in consequence of the death of the deceased under a contract of assurance or insurance.My fear is that the courts, when confronted with this new term "insurance money," and in particular when they are confronted with it in the context in which it is to be found—that is to say, in Clause 2 (1) in a list of new exempted benefits, namelyany insurance money, benefit, pension or gratuity which has been or will or may be paid as a result of the death"—may say that it is clear that by substituting a new term, Parliament intended something different from that which was defined in the 1908 Act, and in particular where we find introduced a new exemption including pension or gratuity it might be thought that the term "insurance money" ought to be construed more narrowly.
I have particularly in mind cases which we were discussing at an earlier stage of the Bill of payments which are made under a group life pension scheme. There has been a series of cases in the courts—I will not weary the House with particulars of them—in which the courts held that moneys paid under these schemes were moneys paid under a contract of assurance or insurance within the meaning of the 1908 Act. That was so even though the insurance company did not pay the money direct to the beneficiary at all but paid it first to a fund administered by trustees. Even though the trustees had a discretion as to whether or not they paid the money over to the beneficiaries, the 1463 courts held that that was still money paid under a contract of assurance or insurance.
It appears to me far from certain that the courts would place the same construction on the words "insurance money." They might construe those words more narrowly and say that by "insurance money" Parliament meant only those moneys which, strictly and directly, are paid to the beneficiary by the insurance company under a policy of insurance. If that were so, it would then be a matter for argument whether in a case of that sort one of these discretionary payments by trustees under a group life pension scheme fell within the meaning of the word "pension."
It was to try to obviate the necessity for points like this to be raised and perhaps taken on appeal to higher courts—a very expensive process—that I have been urging throughout that some definition Clause should be written into the Bill which would make it plain that the term "insurance money" was intended either to mean the same as or at least to include everything that was provided for under the 1908 Act, and to make it impossible for anybody to reopen in the courts with the new terminology the cases which have already been decided under the 1908 Act.
There are on the Order Paper two Amendments in my name. The first one would limit the term "insurance money" precisely to those matters which have been already decided under the 1908 Act, with the exception of the new addition introduced in another place including "a return of premiums." The second Amendment in my name would merely state that the words "insurance money "would include any sum falling within the 1908 Act, leaving it open to anybody who wished to argue that it might be wider and would include some other payments. For my part, I fail to see how it could. I shall be glad to hear what the learned Solicitor-General or perhaps other hon. Members have to say about this. As I have indicated, it is not a matter which I would wish to press to a Division because I am only too anxious to see this Bill become law; but I do not wish to let this opportunity pass without registering once again my concern at the introduction of this term without any definition.
§ 12.15 a.m.
§ The Solicitor-General
I am very sorry it is now so late, and also so late a stage of this Bill, because this is a serious point which should have more prolonged discussion than we could reasonably be expected to give it at this hour. I appreciate the force of what the hon. Member for Lewisham, North (Mr. MacDermot) was saying. This matter, he will recall, was raised on the Report stage here by himself and also during the Second Reading in another place. Certain observations were made there, and I am sure that he would understand that I am not in a position to advise the House to accept either of his Amendments.
At the same time, I sympathise with his difficulty and do not want him to think that, having raised the matter on the Report stage here, he is to be told that we have done nothing. My noble Friend the Lord Chancellor gave the most careful consideration to this matter, and I will briefly explain what happened.
We found it very difficult to devise any Amendment which would meet this point, and the objection to his Amendment is easy to see. If we adopt the "includes" formula and say that insurance money includes any money paid or payable under any contract of assurance or insurance—and by virtue of the Lords' Amendment which we are discussing, any repayment of premium—there is the implication that there remains outside that category some other insurance money; and it is difficult to think what it is.
Where we use the word "means" it is narrowing instead of Widening—as is the purpose of the Bill—the type of payment excluded. There are so many difficulties, but as the hon. Gentleman knows, it was only in the middle of June that the courts decided the last of the batch of these cases. Before coming to the House I refreshed my memory by looking at them, and then saw the horrible little italicised words, "Leave to appeal to the House of Lords granted". So, although we are legislating on slippery sands, the House of Lords will review them and, before we decide on a precise formula, we should know the result of that review.
1465 The difficulty arises where the payment goes through a number of hands between the insurance company and the beneficiary, and it seemed to us much easier to say that the payment retained the category of insurance money rather than the category of a payment made under a contract of assurance or insurance. I think the hon. Gentleman will say that that must be right; and, to that extent, we are operating exactly in the way that he would desire.
There are other objections. We do not want to perpetuate the archaic contrast between assurance and insurance, and in the context of this Bill there is a drafting difficulty; because in line 35, as amended on Report, we have already the words, "have been, or will, or may be paid", and some adaptation of this formula would be necessary to get over the duplication difficulty here. Some adaptation of this formula would be necessary to overcome the difficulty there. I concede that it is a small point.
The basic problem is this. Is not the concept of insurance money in this context one which imports the characteristic more easily worn through a continued process of transfer than the old phrasesum paid or payable under a contract of insurance "?A good instance is the case of Greene v. Russell. The Court of Appeal had very definite doubts upon the facts of that case. All members of the court decided that the payment should be excluded in computing the damages of the mother of the deceased man; where the circumstances were that there was no legal obligation whatever on the insured so-called under the policy to pay the money over to her, they all came to the conclusion that the money should be excluded, and it would seem to be much easier to exclude the moneys, in the facts of that case, had the expression been "insurance moneys" rather than the expressionsum paid or payable under a contract of insurance".I hope that I have satisfied the hon. Gentleman that we have taken trouble. In fact, my right hon. Friend the Lord Chancellor caused an examination to be made of all the cases under the 1908 Act on the point. The result of the examination was that we were not able to find any claimant, so we think, whose claim 1466 would have been defeated on the formula which the Lords Amendment is designed to put into the Bill.
§ Mr. MacDermot
I believe that I have a right of reply, and I will exercise it only to thank the learned Solicitor-General for his courteous answer. I appreciate that great consideration has been given to the point. I remain unrepentant and to some extent unconvinced; but, as I indicated, I do not wish to press the matter further.
I beg to ask leave to withdraw the Amendment.
§ Amendment to the Lords Amendment, by leave, withdrawn.
§ Lords Amendment agreed to.
§ Subsequent Lords Amendments agreed to
§ Postponed Lords Amendment in the Title, line 1, agreed to.