COMMERCIAL COURT

HC Deb 04 May 1970 vol 801 cc117-44

Sir P. Rawlinson

I beg to move Amendment No. 2, in page 4, line 4, leave out subsection (3).

Mr. Speaker

I suggest that with this Amendment we take also the following linked Amendments:

No. 3, in page 4, line 8, leave out ' either or both of the following powers, that is to say '.

No. 4, in line 10, leave out paragraph (a).

No. 5, in line 13, leave out paragraph (b).

No. 6, in line 15, leave out ' any '.

Sir P. Rawlinson

In this part of the Bill we deal with the Commercial Court and the provision, if the Bill becomes law unamended, that that Court is to be given powers which, I understand, no other court possesses. This is a matter which we debated in Committee, but on that occasion my hon. Friend the Member for Wembley, North (Sir R. Russell), he being the Chairman, had to give the casting vole as there was a tie between the two sides of the Committee. By your selection of the Amendments, Mr. Speaker, we now have an opportunity to debate the matter on the Floor of the House.

Certainly, this is a subject which warrants debate on the Floor of the House. Other right hon. and hon. Members and I referred to it on Second Reading, when we expressed our concern. The Attorney General said in Committee that no concern had been expressed at earlier stages of the Bill in another place. Nevertheless, concern was expressed when the implications of Clause 3 were fully understood.

Subsection (3) of Clause 3 gives wide and general powers for the Commercial Court to sit in secret—that is, excluding public access to the Court and the Press from reporting proceedings within the court. Thus, if we permit subsection (3) to be passed at it stands, litigants in this court can have their issues decided upon in private.

Courts have, of course, powers to sit in private and on occasions they do so. There is not a right hon. or hon. Member who does not know of the power of a court to sit in private when dealing with State secrets and even with trade secrets. When dealing sometimes with juveniles and sometimes when dealing with matters of particular intimacy—I emphasise the latter—in matrimonial proceedings, the court can exercise power to sit in private. That power is given to the court under Order 72 of the Rules of the Supreme Court.

Parliament has given those powers to the courts, but it should look with the greatest jealousy against any extension. This is a very wide extension indeed. I suggest that Parliament should be very reluctant to grant any extension of the practice of courts sitting in private.

Save on the most rare occasions, all our proceedings in this House are in public. In the same way, it is a cardinal principle that justice should be administered in public. It is not just an idle principle or one which does not matter. All can watch the administration of justice. Anyone who wishes to listen can do so. In that way, the sanction of public approval is imposed on the administration of justice, the manner of the court administering the justice, the procedure of the court and the behaviour of those who preside over it. That public scrutiny is a matter of the greatest importance, and, therefore, no one would underestimate the importance of the principle.

It is often said that the court reporter's pencil, more often now the microphone, and the fact that any spectator can go into the public gallery and listen to the proceedings in the court have played and continue to play an important part in establishing and maintaining the reputation of our courts. I believe that the judges would be the last to want to see any extension of secrecy unless the strongest of cases was made out for it.

It may be that, at the end of the day, the observers of judicial proceedings may not agree with the conclusions of the judge who decides a case. But at least they can understand how the court can decide as it does, they can see the court's attitude and behaviour, they can see the conduct of witnesses and can test in their minds whether the administration of justice is carried out in accordance with practice and to a sufficiently high standard.

In private civil disputes, where the State provides only the tribunal to which the parties come to have issues decided, many litigants would like proceedings to be in private. Some may have good reasons, but those of others may be bad. In the first category, one might put those who want secrecy because, in the public examination and cross-examination to which they must subject themselves, there may be revealed intimate family relationships. In many cases, nothing could be more desirable than to have them given in private. Into the second category I put those who want to avoid a public demonstration of their greed or gross negligence. Both categories may wish to have their disputes decided in private. However, they have to come to the court, the court tries and judges in public, and, therefore, what they have to say and what is said about them must be said in public.

Many people may think that there is a strong case for having the dissolution of a marriage dealt with in private, for instance. The evidence given in public is no longer reported, but anyone can hear the evidence being given. To that extent, there is public access. Others may think that accident cases should be heard in private. On the one side, such a case may reveal an employer's negligence, his bad management or his callous indifference, and he might prefer that kept away from public scrutiny. On the other side, the employee may not like to have exposed his attitude of scrim-shanking, exaggeration, or willingness to blame others.

7.45 p.m.

Another example which is akin to these matters is where the dissolution of a partnership has to be decided by a commercial judge. The behaviour, conduct and affairs of the partnership have to be brought out in public. In this Bill, we seek to create a privileged class of litigants who, if they so wish, may have the matters that they want litigated decided without public knowledge.

The reason advanced in support of the proposal is that it will attract to the commercial court the business of the law merchant. It has often been held in London that more work would go to our commercial courts if we provided for proceedings to be heard in private and dispensed with the rules of evidence. I suggest that that is not sufficient and good reason for breaching a very important principle.

It has been said that the Law Merchant has grown up separately from the common law, the Law Merchant being the law which is said to deal with disputes between merchants and, therefore, the Commercial Court. At the Commercial Court Users' Conference in 1962, many representatives of distinguished and important bodies asked that this court should sit in private and said that, if it did, many more people would use the court. Again, is that really sufficient?

Can the fact that the Association of British Chambers of Commerce, the Baltic Exchange, the Federation of British Insurance Associations, the London Chamber of Commerce and the Society of Motor Manufacturers and Traders would all prefer actions to be heard in private be a sufficient and good enough reason for us to agree to it? I suggest not. Certainly they want it, and I do not criticise theme for wanting it. However, if they choose to come to the courts of this country, it is not for them to make the rules. The rules of the court apply to all, and they must accept those rules. We should not seek to change the rules of the administration of justice merely to encourage business into our courts.

It is also suggested that the various changes which have to be made are matters which can or should be made under the rules of court. They would specify when and how the commercial judge should sit in private or avoid complying with the rules of evidence. Again, I do not think that that is good enough. It is not appropriate for the rules of court to make these provisions. It is for this House to decide how our courts should proceed. When I say that, I do not refer to technical matters for which the Rules Committee is by far the most appropriate body. Its members are experienced practitioners, and their aim is to make provision for the better and more speedy transaction of court procedures. Those are matters of detail, but this is a matter of principle. It is not right that it should be handed over to the Rules Committee.

On occasions, the experience of the Rules Committee has shown that it may face theipse dixitof a Minister, the Lord Chancellor, who will say what he wants and get it. That is not right. His decision may be correct, but it is not right that this House should hand over to such a Committee the power to decide an important principle like this. I am neither happy with the powers which are given nor with the way in which those powers are to be extended. We should recollect that a decision made by the Rules Committee can be brought before this House and debated, but we cannot amend those rules. We can reject them but we cannot amend them. It is not appropriate that the Rules Committee should make this decision which is a matter of principle that this House should decide.

The second provision in subsection (3) is that the courts should be able to dispense with the rules of evidence by admitting evidence which would not otherwise be admissible under the law relating to evidence. What makes these people so different that issues of fact which have to be determined by the court are to have different rules of evidence applied to them from those which are applied to other litigants? The rules of evidence have been devised because evidence is different from gossip. Wide powers have been given to the judges. We dealt with this a year or more ago in the Civil Evidence Act. Even wider powers are given as to what is and what is not evidence.

There are not juries except on rare occasions. The judges are sophisticated enough to exclude from their minds matters which may not be evidence. Nevertheless, we have rules of evidence. If judges are to try 99 per cent. of all civil actions and we point them to the rules of evidence in that respect, why should we relieve them in this respect? What is the difference between a partnership action and an action in a commercial court? What is the reason for it? Of course people will come to it only if it is flexible and, they say, if they can have privacy. Is this the appropriate price that should be paid? The courts should follow the pattern of procedure and method of trial which should be followed on the general principles throughout every transaction and before every court.

This litigation should not be treated uniquely because it is a matter of principle. In Committee the Attorney-General acknowledges that the Chairman of the Bar Council and the President of the Law Society had written a letter toThe Timessetting out very strongly the points of view of those whom they represent. I believe there have been other comments. TheLaw Guardiansupported the criticism of these proposals. There have been letters in theSolicitors Journalwhich supported the principle and a letter from one of the learned masters. If their evidence is to be prayed in aid, what is the categorical reason for having to alter this principle for these litigants? If it is only to attract business, let us hear that. If it is, it is not a worthy or sufficient reason.

We have provided in the Bill for judge arbitrators. If people want to go to arbitration they can do so. That is a private transaction with a private umpire. With the shortage of judges while the establishment is not up to strength and with the business pressing upon them, how in the immediate future can we contemplate any judge being free to sit as an arbitrator in a private dispute? If one goes to arbitration one goes before a private umpire, but this matter concerns the Royal Courts of Justice where justice is administered in accordance with the rules. We should not make this change. We should acknowledge that this is a matter of principle and we do not wish in any way to extend any forms of secret justice.

Mr. S. C. Silkin (Dulwich)

The right hon. and learned Member for Epsom (Sir P. Rawlinson) rightly said that this issue was debated at length in Committee. I then took an opposite view from his and I still do. He put this matter forward as one of principle, but I regard it as a matter of practical convenience. It is not as though it were something completely novel. As the right hon. and learned Gentleman himself said, rules already exist whereby certain evidence may be and certain evidence must be given in private in our courts. As evidence which may be given in private I have in mind evidence about matters regarded as trade secrets in the Restrictive Practices Court. The interests of the parties are protected by hearing evidence of that kind in private.

The right hon. and learned Gentleman referred to the possibility of arbitration by judges, which is being introduced by this Bill. It seems that the argument is the converse of that which he put forward. The very fact that it is possible for the parties to a commercial dispute to have their case dealt with in private by arbitration, and now by judge arbitrators, seems to reinforce the point that by this provision we are not doing anything startlingly novel.

The Commercial Court has always been a court in which there have been very special rules for the convenience of commercial parties. The commercial parties who make use of that court are often persons or companies domiciled abroad whose law is very different from the law in regard to evidence and sittings in public in this country. They are used to a different sort of law. When they come before our courts this Clause provides that the same sort of provision as to evidence and sitting in private can be applied in our courts as are normally provided in their countries. Subject obviously to what the Rules Committee may provide in future and, as the right hon. and learned Gentleman said, subject to what we in this House or another place say about the rules put forward, I understand that the intention is that those provisions shall apply only where the parties both agree that they should apply. In other words, it would be precisely as in an arbitration.

The right hon. and learned Gentleman said that he thought that no judge would welcome provisions of this kind. I cannot agree. I can say from my own discussions that one very distinguished and experienced judge who tried many cases in the Commercial Court and who is now a member of another place strongly supports this proposal.

Apart from that, which is a matter of private knowledge, as my right hon. and learned Friend the Attorney-General said in Committee, this provision went through the House of Lords without any opposition. In that place are gathered together a wealth of judicial knowledge and experience. If there had been real opposition from the judges, and if they had regarded this as a matter of real constitutional significance, as the right hon. and learned Gentleman suggested, it is inconceivable that not one voice would have been raised from the noble Lords who are knowledgeable and experienced in the law.

I believe that far too much is being made of this as a matter of principle. It is a provision which will be undoubtedly convenient, particularly to parties who come from foreign countries. I hope that the Government will not give way to the right hon. and learned Gentleman's submissions.

8.0 p.m.

Sir D. Renton

I do not consider that the precedents that the hon. and learned Member for Dulwich (Mr. S. C. Silkin) has put forward in support of the Clause as it stands are sound. I enthusiastically support the stand taken by my right hon. and learned Friend the Member for Epsom (Sir P. Rawlinson).

I am deeply shocked by this provision. I say this on broad principles. Not only in this century, but for many centuries, legislators, statesmen, lawyers and others throughout at any rate the western and the free world have tried to ensure that the laws of their countries shall conform to certain basic principles of what has broadly been called natural justice. The various charters of human rights lend weight to those principles. Magna Carta, which is perhaps the oldest human rights charter that there is, enshrined it.

Two of those basic principles are, first, that justice should be administered openly and in public and, second, that laws should be clear and certain so far as is humanly possible. Paragraphs (a) and (b), which it is sought to delete, are a clear defiance of those two principles.

The Government invite us to depart from those two principles. I do not consider that the Government are choosing a good occasion to depart from them. Occasions can be imagined when it might be as well if an exception were made to the good general rules which I have mentioned. For example, in matrimonial proceedings there are times when one has felt that it is a great pity that the parties' detailed private lives have to be dragged out in open court, whether or not there is a restriction on reporting. The Government say that that can go on just the same but that businessmen must be protected; they must not have their transactions dragged out into the open.

There is a very important distinction between arbitration, upon which the hon. and learned Member for Dulwich relies, and the proceedings in the Commercial Court. The Commercial Court is the High Court. Cases there will become precedents. Even though they will be held in private, they may be reported— at least, I assume so. To the extent that they are reported, they will become precedents. That does not apply in the case of an arbitration.

The hon. and learned Gentleman referred to the Restrictive Practices Court. It is only to the extent that trade secrets may be given in closed court that that court is a precedent. That is to a very limited extent indeed and certainly would not justify what could become wholesale departure in commercial cases.

The hon. and learned Gentleman's point that foreign businessmen are unfamiliar with justice being held in open conditions is a bad point. If it be the fact that businessmen come from countries where lower standards prevail, let them keep their lower standards; but when they come here let them abide by our higher standards, standards which have stood the test of time pretty well. One hears no great complaint that the Commercial Court is other than likely to provide just decisions.

Therefore, I do not think that the argument that foreign businessmen will not be attracted unless we do this for the Commercial Court is a good one. If foreign businessmen want to avoid any kind of publicity, they can write arbitration clauses into their contracts. Indeed, they frequently do so. Arbitration is a way to secure this privacy, if that is the aim. But let it not be secured by making a division of the High Court exempt from good principles of basic justice.

Paragraph (a) reads in a strange way. To paraphrase it, it means that rules of court may be made to enable the court to exercise a power to admit any evidence which would not otherwise be admissible under the law relating to evidence ". In our system we all understand what evidence is. Evidence is, broadly speaking, admissible evidence, admissible according to Statutes which have been passed by Parliament, including the Civil Evidence Act, 1968. This is the whole range of something which is normally regarded, not as evidence, but as inadmissible evidence.

As my right hon. and learned Friend suggested, we are rather funking the issue by saying that we will pass it to a subordinate law-making body to take these very important decisions on matters on which we have legislated within the lifetime of this Parliament, and done so to a considerable extent in matters of detail. That is not right, quite apart from the broader issue that it will create uncertainty.

I do not see the Rules Committee of the Supreme Court committing itself to very great detail when exercising its powers. Just as we are passing the buck to that Committee, I think that it will be rather inclined to pass the buck to the Commercial Judge. Therefore, there will be uncertainty as to the rules of evidence which will apply. That will be completely unsatisfactory to everyone concerned, especially to those who will have to resort to the Commercial Court.

My right hon. and learned Friend has good reason to complain of the contents of the Clause as it stands. I hope that the Attorney-General, who has shown on some occasions a very commendable open-mindedness on some of the difficult matters arising on the Bill, will even at this late stage realise that what is proposed in the Bill is not as good as it seemed to be.

Mr. David Weitzman (Stoke Newington and Hackney, North)

I regret that owing to certain circumstances I was unable to hear the greater part of the speech made by the right hon. and learned Member for Epsom (Sir P. Rawlinson). In the Second Reading and in Committee I supported the view which he put forward, and I certainly support it now.

I strongly disagree with the comments made by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). It seems to me that we ought to recognise at the outset that this point should not be taken lightly, that it is a point of fundamental importance. My hon. and learned Friend the Member for Dulwich queried that. I dare say that he, too, read very carefully the letter inThe Timeswritten by the Chairman of the Bar Council and by the President of the Law Society. If he did so I am sure that he noticed in that letter the very cogent reasons for regarding this as a fundamental change. No one can doubt that it is so.

I wish to express my strong opposition to the inclusion of subsection (3). First of all, I take the point that rules to make provision for conferring certain powers on the commercial judge should be made by the Rules Committee. That is wrong. If it is intended that a power of this kind is to be given, let it be done openly by Parliament and not by the Rules Committee. As the right hon. and learned Member for Huntingdonshire (Sir D. Renton) said, the Rules Committee will probably pass the buck to the commercial judge. It will probably say that if in the opinion of the commercial judge, it is right that this sort of provision should be made, the commercial judge shall do it. That is not very satisfactory from any point of view. I think it is utterly wrong that that power should be given to the Rules Committee.

I now wish to say a few words on paragraphs (a) and (b)—first, paragraph (a) on the admission of evidence which otherwise would not be admissible. It seems to me that over the years we try so hard to remove many of the advantages of our great legal system. When I was a young man at the Bar we used the jury system in most cases, and it was a very good thing. Gradually that right has been whittled away, and now, but for very exceptional circumstances, one cannot get a jury to deal with the case.

Here we have another change allowing inadmissible evidence to be given. Why should it be given in any court? It has been rightly said that the Commercial Court is part of the High Court of Justice. It is one of those courts where evidence is given openly, where the public can be admitted and can hear what is said. Why should there be this provision for the admission of inadmissible evidence?

My right hon. and learned Friend the Attorney-General gave a very cogent reason, namely that apparently we want to attract trade. That is a very unworthy reason indeed. Apparently we want to attract business away from arbitration so that it can be dealt with in a court of law. Why should we do a thing of this kind? Evidence should be given in the same way as it is given in other courts. As has been pointed out, there are powers whereby one can dispense with the giving of evidence strictly in accordance with the rules of law. But why extend it in this way? It is utterly wrong.

8.15 p.m.

I pass to paragraph (b)—the power to sit in private during any part of the proceedings. There are certain cases in which the court can sit in private. Surely private sittings should be restricted to matters of that kind. Why should people have the right to have their cases heard in private because they do not want publicity to be given to the matter? We have said again and again so proudly that our courts are open to everyone, that anyone can go and listen to the evidence. The power proposed in paragraph (b) seems to me extraordinary. I do not know why such a proposal has been made.

I hope that even at this stage my right hon. and learned Friend the Attorney-General will recognise the real opposition that there is to a provision of this kind. This is not captious criticism. We regard the present situation as something of a bulwark in the rights of our legal profession. Having built up our great legal system, do not let us tamper with it in this way. I hope my right hon. and learned Friend will look at this again and will decide to omit subsection (3).

Mr. Hooson

I could not disagree more with the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzmann) or with those who spoke before him in favour of the Amendment. To suggest that we are dealing with basic matters of principle is absolute rubbish. The Commercial Court exists for one purpose alone—to serve the needs of the commercial community. Otherwise there is no purpose in the Commercial Court.

The country is nothing if not a commercial country. For many decades London has been the centre where international commercial disputes have largely been decided. The reputation of the Commercial Court has been high. The evidence is that over the past years a high proportion of people who formerly used the Commercial Court have been going to arbitration and have had their disputes settled abroad. If we are a commercial country, we are naturally involved in international agreements. The Commercial Court Users' Conference in 1962 was unanimous in the view that there was a great need to reorganise the rules of procedure of the Commercial Court in order to meet the needs of the commercial community in a technological age. Now it is argued that we must regard the Commercial Court as absolutely analogous to the civil and criminal courts —that the legal system is a sort of ivory tower which must not be touched.

I am told—I am not a commercial practitioner—that in the Commercial Court the practice has grown up whereby evidence is admitted in most cases which in strict law is inadmissible.

Mr. Bruce Campbell

Will the hon. and learned Gentleman give way?

Mr. Hooson

I will in a moment. Even when somebody who is unaccustomed to the procedures of the Commercial Court objects to this system, the judge by his tone of voice or by a raising of the eyebrows discourages the point being taken. Certainly where the parties agree, the rules of evidence can be waived. There are cases in which matters are in dispute and where a vital document may not be admissible under our law. One party to the dispute may want to take advantage of the fact in order to ensure that the document does not come to the light of day so that the judgment that is given is not correct. That is why the Commercial Court Users' Conference wants a much broader interpretation of the evidence in commercial disputes.

What is the purpose of people engaged in industry and commerce going to court at all, unless they have a swift commercial decision in accordance with what they agreed in their contracts? The opposition to this proposal is entirely misconceived. The real question to decide is: does the Commercial Court as at present organised meet the needs of the commercial community? The answer is: in the opinion of all the people who use the court, it does not.

Sir D. Renton

While I do not claim to be one of those people, I assure the hon. and learned Gentleman, having taken the trouble to inform myself by discussing the matter with several of our learned colleagues at the Bar that what he has said is contrary to the facts.

Mr. Hooson

The right hon. and learned Gentleman has misunderstood me, and that is, no doubt, my fault. When I referred to "users" I was referring to the Commercial Court Users' Association who are litigants in the court as opposed to lawyers; and it is the litigants' interest in this instance which is paramount and not the lawyers'.

If this House is contemplating going into the E.E.C., we should be aware that the Common Market countries have been re-organising their rules to meet the needs of a swiftly developing commercial community. We must be prepared to adapt our rules, otherwise we will find that London, far from being the commercial capital of Western Europe, will be left out on a limb and by-passed. That is why this provision is so important.

Mr. Weitzman

Would not the hon. and learned Gentleman agree that many litigants in ordinary civil suits would desire the rules of evidence to be departed from entirely, so that their cases might be dealt with on that basis?

Mr. Hooson

There is no evidence to show that any large body of people in this country who litigate in the civil courts wish that change to occur, whereas there is every evidence, from the Commercial Court Users' Association, to show that that body is unanimously in favour of changes of this kind. It said so in 1966, but now, in 1970, the matter has not yet been dealt with; that is, until it was brought forward in this Measure. I will, therefore, be voting for the Government on this occasion.

Mr. Percy Grieve (Solihull)

The hon. and learned Member for Montgomery (Mr. Hooson) reiterated twice, though in a slightly different form, his view—and I quote the first time he said it—that the Commercial Court had only one purpose, which was to serve the needs of the commercial community. With that, nobody would join issue.

However, the needs of the commercial community served by the Commercial Court must be subject to the overriding requirements of the administration of justice in the interests of the people of Britain as a whole. It is for this reason and because, in my submission, an inroad is being made into the principles in which we administer justice that I support my right hon. and learned Friend the Member for Epsom (Sir P. Rawlinson) in urging that subsection (3) be deleted.

I did not have the advantage of being a member of the Committee which considered the Bill. I have read the debates which took place on that occasion, though I would not be so conceited to think that I could add greatly to the arguments which were adumbrated on both sides. I submit, however, that the subsection, and particularly paragraphs (a) and (b), are liable to grave objection. This applies particularly to paragraph (b), with which I will deal first.

Already, by the Administration of Justice Act, 1960, trade secrets can be protected in litigation—but beyond that, how far should we go? Cases which come before the Commercial Court can, of course, be of varying importance and, in terms of money, of vary consequences. But among the cases which are likely to come before the court are those involving litigation between substantial public corporations where disputes have arisen in, for examples, such matters as takeover bids.

In matters of this kind the public are greatly and seriously concerned, as are the shareholders of those companies. If the court were permitted, under rules made by the Rules Committee of the High Court, to sit in private when such a course was thought by the parties to be in their commercial interests, then one can foresee a situation in which both sides might wish to have their cases litigated before the Commercal Court in private and behind closed doors because there were matters which they desired to conceal from their shareholders or from the public at large.

There are many other reasons why we in this country have not merely paid lip service to, but have set on a pedestal, the cardinal principle that in our administration of the law, justice must not only be done but be seen to be done. For the reason I have briefly outlined, the importance of which speaks for itself, there may be litigation before the Commercial Court where the importance of that principle is underlined and illustrated as being vitally necessary for the protection of the public.

Paragraph (a) speaks of a power to admit any evidence which would not otherwise be admissible under the law relating to evidence ". I am not one of those who thinks that our law of evidence is sacrosanct or should not be subject to change. Those of us who practice in the courts will have welcomed the changes in the law of evidence in the criminal courts initiated in 1938 and in the civil courts by the legislation of last year. There may be a case for even more radical reform of the law of evidence. but if such reform is necessary, it should be initiated and undertaken by Statute of Parliament and not by rules made by the Rules Committee.

I say at once that I have the greatest respect for the Rules Committee. However, in my submission it is not the proper body to initiate changes which, although they are by definition are changes in adjective law, which nevertheless vitally and radically affect the rights of the subjects who are litigating because they are likely to affect the outcome of the litigation.

If changes of this kind are to be made, they should be subject to two overriding principles; first, that such changes, if they are to be made at all, should be effected only by statute, and, secondly, that, once made, they should be universally applied throughout the civil courts and not merely in the Commercial Court. I earnestly ask the Attorney-General to think again about subsection (3).

8.30 p.m.

Mr. Bruce Campbell

Our courts spend most of their time trying to ascertain where the truth is in a dispute. Some of them, particularly the higher courts—the Court of Appeal and the House of Lords, spend some of their time ascertaining what the law is and then declaring how it is to be applied to a certain set of facts. But by and large the other courts throughout the land spend their time trying to discover the facts and where the truth lies.

In doing this they are assisted by two rules. One is that the courts sit in public, and the other is that we have rules of evidence which must be complied with. Any relaxation of those two rules is bound to make it more difficult for courts to ascertain the truth, and therefore to do their proper job.

If courts are allowed to sit in private, that does not simply mean that the public are not allowed in. The situation is much worse, because the Press are not allowed in. Whereas hardly anyone may bother to go to court and listen to a case, thousands of people may read the newspaper reports. It is because witnesses realise that what they say is not said behind closed doors, but may reach a very wide audience, that they are much more careful to tell the truth than they would otherwise be.

Our rules of evidence are designed to assist the courts in ascertaining the truth, and they are wise rules. The two proposals we are considering, which will enable the courts not only to sit in private but also to ignore the rules of evidence, are a dangerous combination. Either is bad enough, but to have the two together is thoroughly dangerous. Inadmissible evidence, unreliable documents, hearsay evidence, will not only be allowed but will be given behind closed doors, so that no one, even afterwards, will be able to see whether it is sound evidence.

That is a dangerous precedent which we should not allow. If it is important for the commercial gentlemen concerned to have certain of their evidence given in private, surely the existing provisions of the law are sufficient? Who are these people, that they think they should be in a special position to have courts which sit in private and can hear inadmissible evidence?

I must repeat, something which I must have said about 16 times since I entered the House, but which I shall go on saying whenever I have the opportunity so long as I have the privilege of remaining a Member, that it is thoroughly unsatisfactory to leave legislation of this kind to a rules committee. I have served on a rules committee and know what happens there. That is not a democratic body. It has draft rules put before it. I know that it is allowed to discuss them, but I also know that if the Lord Chancellor wants a rule in a certain form it must be in that form, even if all the other members of the rules committee want it otherwise, because, he has a veto and no rule would be passed unless he agreed to it. That means in effect that rules are made by the Lord Chancellor, by a Minister. When we are interferring with fundamental principles of law, as we are here, when we are saying that certain people may have their litigation in private and that the court may relax the rules of evidence in certain kinds of litigation, that is an interference with the existing state of our law that should be done by Parliament and by a Minister.

Therefore, if we are to do this we should do it properly. I understand that it will be said that the rules, when they are made, will provide that only if both sides agree will the rules of evidence be relaxed, or the court sit in private. I do not know whether that will be in the rules. If the Government are so certain that it will, that fortifies my submission that it is the Minister who makes the rules, and not the rules committee.

If the parties agree to it in private or to the relaxation of the rules of evidence, there cannot be so much objection. But as the Clause stands, there is nothing in it about consent. It will therefore be open for one litigant to say, "I want this hearsay evidence to be admitted ", but for the other to say, "No, I object". In face of that objection, the court will still be able to admit the evidence. We should not allow this but if we are to have such a provision then it is Parliament which should legislate about the conditions and not the Rules Committee.

Mr. Daniel Awdry (Chippenham)

I feel some trepidation about joining in, as a mere solicitor, a debate in which so many learned counsel are taking part, but I dislike subsection (3) and support the Amendment. I did not take part in the debate in Committee on this issue, but I listened carefully to all the speeches, including the Attorney-General's. I did not find his case convincing then and I doubt whether I shall find it convincing now.

My view is simple. If commercial parties want a private hearing, they should provide for it in an agreement to go to arbitration, and they can do this under Clause 4 before a High Court judge. It is common practice to provide in legal agreements that in the event of disagreement the parties can resort to arbitration. Many of us have often drawn up agreements on these lines—for example, for partnerships between doctors or solicitors. There are also leases and service agreements. In all kinds of commercial contract one can easily put in an arbitration clause.

If there is no such provision in an agreement and there is a dispute, the matter should be argued out in public and judged in public. Despite what the hon. and learned Member for Montgomery (Mr. Hooson) said, I believe that it is a fundamental principle of English law that justice should be administered in public and that we should never depart from that even if we join the Common Market. He said that if we wanted to join the Common Market we would have to get used to this type of legal arrangement. If we do join, then let it be understood that this is a fundamental principle which will remain a fundamental principle of English law.

Most people involved prefer their cases to be heard in private. Those of us who act in court cases know that to be so. I have spent some time in dealing with domestic and divorce cases and obviously most parties in them would prefer their differences, many of which are of an intimate nature, to be heard in secret. Then there are cases relating to wills or other personal and private affairs. It is, however, the principle of our law that all cases should be heard in public and judgment given in public. Why should businessmen be treated differently?

I can see no justice in this Clause. I find it utterly offensive and fundamentally wrong. It is clear that all hon. Members who have spoken, with two exceptions, also feel it to be offensive. Hon. Members on both sides of the House are troubled on the issue. It is a vital issue, I support the Amendment and I hope that we shall get support from hon. Members opposite when we come to vote upon it.

The Attorney-General

The proposals in Clause 3, which weare rightly discussing with great care and undoubted concern, are based on the proposition that it is proper to justify modifying, in the specialised area of commercial cases, the more general principles of presumptions which apply to other parts of the legal system. Down the centuries, common law has tended to decay and decline when it disregarded the needs of commerce and to thrive when it showed itself willing to change and adapt itself to meet those needs. As the hon. and learned Member for Montgomery (Mr. Hooson) reminded us in a speech which impressed me, in 1962 the powerful and representative Commercial Court Users' Conference indicated that businessmen tended to avoid litigation in the courts about their affairs because they disliked the formality and publicity of legal proceedings. Thus, they often take their disputes to arbitration instead of going to the courts.

In the view of the Government, it is desirable for many reasons, legal and economic, national and international, that we should do what we can to attract commercial litigation into our courts. In genuine commercial cases, the desire of the business community for informality and privacy is legitimate, and it should be met so far as we can properly meet it. As my noble Friend the Lord Chancellor has said, as most proceedings are and must remain both formal and public, it is right that the special power in relation to the commercial court should be regarded as a limited experiment. That is why the Bill makes no substantive provisions on these points, but merely confers power on the Supreme Court Rules Committee to make such rules as it thinks fit. But the House in dealing with the Bill and in discussing these Amendments will be deciding the principle of the matter and the Rule Committee will have to fill in the details.

In the interesting discussion on this Clause in Committee, I endeavoured to say why for historical and functional reasons commercial litigation was and always had been a separate compartment of our legal system, ever since the days when the law merchant grew up in the Middle Ages, and it is a special term because of the specialised subject matter to be dealt with and because of the demand by the commercial community that its disputes should be decided as speedily as informally and as privately as possible. The Commercial Court Users' Conference, representing 21 separate institutions and industries, the F.B.I., trade organisations and so on concerned with a substantial portion of the international commerce of the country, stated unanimously that revision was necessary if the decline in the use of the commercial court was to be arrested and its greater use encouraged.

Since 1962, the reasons why commercial litigation should be attracted to our courts have become stronger than ever. The settlement of commercial disputes is an important subsidiary service offered by any major financial and commercial centre, of which London is one. There are many competitors, as has been pointed out.

The arguments which have been developed against giving our commercial community what it wants are not decisive. There are two aspects to the proposal in Clause 3(3)(a). The first deals with the rules of evidence and with the proposed power—to admit any evidence which would not otherwise be admissible under the law relating to evidence. That law has developed in the last two or three centuries during a period when juries tried almost all civil cases and when rules had to be created in the days when jurors were not as educated as now to prevent them from being over influenced by certain kinds of evidence, such as hearsay evidence, to which they might be disposed to give a disproportionate weight. The outcome has been a body of law of great complexity which has never ceased to confuse and astonish the layman from the days of Dickens when it was observed that what the soldier said was not evidence.

Mr. Bruce Campbell

Would not the Attorney-General agree that if that is an argument for enabling the commercial court to sit in private and admit inadmissible evidence, it would apply equally to all other courts?

The Attorney-General

I am dealing with the specific case and the specific special circumstances. This part of the work of the commercial court has always been separate from the general stream of our administration of justice. It is the case, as is said in Cross on evidence, that the tendency of the modern law is in favour of a broad basis of admissibility. In the various Evidence Acts which we have passed in recent years, that has been the trend, so there is nothing revolutionary in this.

8.45 p.m.

I do not go so far as the colleague of the hon. and learned Member for Norwich (Sir J. Foster), who said that rules of evidence should be scrapped altogether because they are a subtle contrivance designed to prevent the court from learning in a given case what the truth is. But the issue about the admissibility of evidence is a practical one. It is nonsense to say that the retention of the law of evidence as it now stands is a fundamental principle of the constitution.

But I would expect this power to be exercised only in a very narrow range of cases. The purpose of the provision would be, for instance, to allow documents and written statements to be used where appropriate as evidence instead of oral testimony and unsworn documents instead of sworn ones. The judges could be relied on not to make undue use of the power where it would clearly be inappropriate—for instance, where fraud or misrepresentation was alleged or where a party sought to put in hearsay statements by obviously biased persons. In any such case, the agreement of both parties would clearly be required. One can rely on the combination of the Rules Committee which will deal with this matter and the judges who will be administering the law in this court to see that any latitude in this field is not abused.

Greater feeling was expressed about Clause 3(3)(b) dealing with the proposed power of the Commercial Court to sit in private. The development of our court proceedings has been on the lines that courts of law should usually sit in public but may in certain cases be allowed to sit in private. That is the way in which our law and its administration have developed. The question is, which cases are or should be on which side of the line? I am inclined to agree with the hon. and learned Member for Montgomery that there is no great issue of principle here but only an issue of practical convenience.

Parliament has tended during the decades to accept the view expressed by Lord Loreburn that a court should be able to sit in private where publicity would reasonably deter a litigant from proceeding. It appears to be the case, judging from the report of that conference in 1962, that commercial disputants have been so deterred from litigation by reason of the publicity of the proceedings.

I should emphasise that it is contemplated that the Commercial Court should be able to sit in private only if all parties concerned want it to do so. So there is no question of a private hearing if anyone concerned wants the proceedings to take place in public.

Mr. Grieve

But is not that precisely the danger—that the parties, both of them, may desire the court to sit in private because they have something to hide from the public which should not be hidden?

The Attorney-General

The parties will decide whether or not to sit in private if they wish to do so, but of course they can go to arbitration now and arbitrate their differences. It is desirable that the Commercial Court should be the place where differences between commercial users are decided. To say, as was suggested by the right hon. and learned Member for Epsom (Sir P. Rawlinson) that, if the parties want a private hearing, they should arbitrate—which they can do, of course, before the commercial judge under Clause 4, begs the question.

The fundamental purpose of the courts is to do justice between the parties. The principle that they must normally do justice in public is a means to that end and not part of the end itself. In my submission it is in the public interest that this class of litigant should be able to bring his dispute before the court, and if he will not do so unless the case can, if necessary, be heard in private and the class of litigation involved is so specialised and distinct from other classes that there can be no danger to the general rule that the public interest usually requires the courts to sit in public, I submit that it is reasonably clear that the first factor of the public interest outweighs the second.

I want to deal briefly with a further point concerning the role played by the Rules Committee in this matter. The Rules Committee consists of the Lord Chancellor, the Lord Chief Justice, the Master of the Rolls, the President of the Probate, Divorce and Admiralty Division —or the Family Division as it will hereafter be known—four other judges of the Supreme Court, two practising barristers and two practising solicitors, representing the Bar Council and the Law Society respectively.

Some doubt has been cast upon the independence of this body. Although the Lord Chancellor has a veto over any rules that the rest of the Committee may propose he cannot make any rules to which they do not agree. There must be mutual consent. The advantage of dealing with this matter by rule, the House having decided on the principle—if the House rejects the Amendment— is that Parliament having laid down the broad framework of principle it is convenient for the Rules Committee to fill in the details by subordinate legislation which, in the fullness of time, will be under the supervision of the House.

Accordingly, I submit that it is in the interests of London, as one of the world's great commercial centres—it is in the interests of our merchant, commercial and business community—that the latitude that Clause 1 contemplates for the Commercial Court should be part of our administration of justice.

Sir P. Rawlinson

I regret to hear the Attorney-General reject the Amendment. He and those who supported him—the hon. and learned Member for Dulwich (Mr. S. C. Silkin) and the hon. and learned Member for Montgomery (Mr. Hooson)— dismissed this as an issue of principle. They dealt with it pragmatically, as a practical experience. That is what is at issue between us. We do not suggest for a moment that any changes in the rules of evidence are matters of fundamental constitutional importance; of course they are not. We have never suggested that, and nobody who supports the Amendment has done so. But we say that it is a matter of fundamental importance that justice should be public, and we are not willing to see an erosion of that principle, purely and simply on the ground that these are special people, they want it, and we want their business. That is what is being said.

Why are they so special? They are no more special than any other litigant. There is no great need for them to be given this privilege. Nearly every litigant who was asked about it would say, "I would much rather have all this dealt with privately". But what is the public interest in a dispute between two neighbours in an action for negligence? The public interest is not the issue between the parties. The public interest is the administration of justice, with the courts and the State dealing fairly between parties.

That is the matter of principle involved. I regret that the right hon. and learned Gentleman has dismissed this argument. I expected that his case would be based

on the ground that this is purely what is needed and what is wanted—and we wanted to have this business. The Attorney-General ignores a matter of principle. If we start with this court, why not move to other courts? Why should not other Attorney-Generals hereafter say, "The principle has been accepted. Let us try it in other fields, because people want it because it will be more convenient"?

I very much regret that the right hon. and learned Gentleman has rejected the Amendment. I repeat, it is a matter of principle. For that reason, I propose to ask my right hon. and hon. Friends to take it to a Division.

Question put,That the Amendment be made:—

The House divided: Ayes 105, Noes 104.

Division No. 116.]	AYES	[8.5 p.m.
Allason, James (Hemel Hempstead)	Glover, Sir Douglas	Noble, Rt. Hn. Michael
Archer, Jeffrey (Louth)	Godber, Rt. Hn. J. B.	Nott, John
Astor, John	Gower, Raymond	Onslow, Cranley
Atkins, Humphrey (M't'n & M'd'n)	Grant, Anthony	Peel, John
Awdry, Daniel	Grant-Ferris, Sir Robert	Percival, Ian
Batsford, Brian	Grieve, Percy	Pike, Miss Mervyn
Bennett, Sir Frederic (Torquay)	Gurden, Harold	Pounder, Rafton
Bennett, Dr. Reginald (Gos. & Fhm)	Hamilton, Lord (Fermanagh)	Powell, Rt. Hn. J. Enoch
Biffen, John	Hawkins, Paul	Prior, J. M. L.
Boardman, Tom (Leicester, S.W.)	Heald. Rt. Hn. Sir Lionel	Pym, Francis
Body, Richard	Hirst, Geoffrey	Rawlinson, Rt. Hn. Sir Peter
Bossom, Sir Clive	Holland, Philip	Renton, Rt. Hn. Sir David
Brinton, Sir Tatton	Hunt, John	Rhys Williams, Sir Brandon
Brown, Sir Edward (Bath)	Hutchison, Michael Clark	Ridsdale, Julian
Buck, Antony (Colchester)	Iremonger, T. L.	Roosi, Hugh(Hornsey)
Bullus, Sir Eric	Irvine, Bryant Godman (Rye)	Royal Antony
Campbell, B. (Oldham, W.)	Kershaw, Anthony	Russell, Sir Ronald
Campbell, Gordon (Moray & Nairn)	King, Evelyn (Dorset, S.)	Scott, Nicholas
Chataway, Christopher	Kitson, Timothy	Sharpies, Richard
Chichester-Clark, R.	Knight, Mrs. Jill	Silvester, Frederick
Clark, Henry	Lambton, Antony	Smith, John(Londan & W'minister)
Clegg, Walter	Lane, David	Stainton Keith
Cooke, Robert	Legge-Bourke, Sir Harry	Summers, Sir Spencer
Cooper-Key, Sir Neill	Lewis, Kenneth (Rutland)	Taylor, Sir Charles (Eastbourne)
Corfield, F. V.	MacArthur, Ian	Temple, John M.
Costain, A. P.	McNair-Wllson, Michael	Vaughan-Morgati, Rt. Hn. Sir John
Crowder, F. P.	Maxwell-Hyslop, R. J.	Vickers, Dame Joan
Dance, James	Maydon, Lt.-Cmdr. S. L. C.	Walker, Peter (Worcester)
Dean, Paul
Deedes, Rt. Hn. W. F. (Ashford)	Mills, Peter (Torrington)	Walker-Smith, Rt. Hn. Sir Derek
Dodds-Parker, Douglas	Miscampbell, Norman	Ward, Dame Irene
Elliot, Capt. Walter (Carshalton)	Mitchell, David (Basingstoke)	Williams, Donald (Dudley)
Elliot, R.W.(N'C' tle-upon-Type, N.)	Montgomery, Fergus	Wilson, Geoffrey (Truro)
Errington, Sir Eric	More, Jasper
Fletcher-Cooke, Charles	Morrison, Charles (Devizes)	TELLERS FOR THE AYES:
Fortescue, Tim	Munro-Lucas-Tooth, Sir Hugh	Mr. Reginald Eyre and
Fry, Peter	Murton, Oscar	Mr. Hector Monro.
Noes
Allaun, Frank (Salford, E.)	Bessell, Peter	Coleman, Donald
Archer, Peter (R'wley Regis & Tipt'n)	Bidwell, Sydney	Davidson, Arthur (Accrington)
Armstrong, Ernest	Binns, John	navies, Ifor (Gower)
Ashton, Joe (Bassetlaw)	Bishop, E. S.	de Freitas, Rt. Hn. Sir Geoffrey
Atkinson, Norman (Tottenham)	Blackburn, F.	Dewar, Donald
Barnes, Michael	Blenkinsop, Arthur	Dobson, Ray
Barnett, Joel	Booth, Albert	Dumvoody, Dr. John (F'th & C'b'e)
Baxter, William	Boston, Terence	Eadie, Alex
Beaney, Alan	Brooks, Edwin	Ellis, John
Evans, Fred (Caerphilly)	Lewis, Arthur (W. Ham, N.)	Prentice, Rt. Hn. Reg.
Evans, loan L. (Birm'h'm, Yardley)	Loughlin, Charles	Price, Thomas (Westhoughton)
Fernyhough, E,	McBride, Neil	Rankin, John
Finch, Harold	McCann, John	Roberts, Rt. Hn. Goronwy
Fitch, Alan (Wigan)	MacColl, James	Ross, Rt. Hn. William
Fletcher, Raymond (Ilkeston)	MacDermot, Niall	Ryan, John
Fraser, John (Norwood)	Macdonald, A. H.	Short, Mrs. Renee(W'hampton,N.E.)
Freeson, Reginald	McGuire, Michael	Silkin, Hn. S. C. (Dulwich)
Galpern, Sir Myer	McKay, Mrs. Margaret	Silverman, Julius
Griffiths, Eddie (Brightside)	Mackenzie, Gregor (Rutherglen)	Snow, Julian
Hamilton, William (Fife, W.)	Mackie, John	Spriggs, Leslie
Harper, Joseph	Maclennan, Robert	Steel, David (Roxburgh)
Harrison, Walter (Wakefield)	Mahon, Simon (Bootle)	Steele, Thomas (Dunbartonshire, W.)
Hazell, Bert	Mapp, Charles	Symonds, J. B.
Heffer, Eric S.	Mellish, Rt. Hn. Robert	Tinn, James
Herbison, Rt. Hn. Margaret	Milne, Edward (Blyth)	Wainwright, Edwin (Dearne Valley)
Hooley, Frank	Morgan, Elystan (Cardiganshire)	Walker, Harold (Doncaster)
Hooson, Emlyn	Morris, Alfred (Wythenshawe)	Wellbeloved, James
Hoy, Rt. Hn. James	Morris, Charles R. (Openshaw)	Wells, William (Walsall, N.)
Hunter, Adam	Moyle, Roland	Whitlock, William
Hynd, John	Newens, Stan	Willis, Rt. Hn. George
Irvine, Rt. Hn. Sir Arthur	Oram, Bert	Woodburn, Rt. Hn. A.
Jones, Dan (Burnley)	Orme, Stanley	Woof, Robert
Jones.Rt.Hn.Sir Elwyn(W.Ham,S.)	Oswald, Thomas
Judd, Frank	Padley, Walter	TELLERS FOR THE NOES:
Lawson, George	Peart, Rt. Hn. Fred	Mr. J. D. Concannon and
Leadbitter, Ted	Perry, George H. (Nottingham, S.)	Mr. James Hamilton.

The Attorney-General

The verdict of the House having been given against subsection (3) of Clause 3, it is necessary to consider the technical consequences to the rest of the Clause which was intended to benefit the commercial and business community of London. Subsection (4) is entirely dependent on subsection (3) and has no meaning whatsoever without it.

I therefore beg leave to move a manuscript Amendment in the following terms: in page 4, line 17, leave out subsection (4).

Mr. Deputy Speaker

The Question is, "That the Amendment be made."

Sir P. Rawlinson

Amendment No. 2 has been carried and this has had a considerable effect upon the Bill.

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. I thought the right hon. Gentleman was rising on a point of order.

Sir P. Rawlinson

Then I rise on a point of order, Mr. Deputy Speaker, and address myself to you and not to the House. The Bill deals with several subject matters and this subsection is one of the most important parts of the Bill. The elimination of the subsection has consequences on other Clauses and affects the whole Part I of the Bill. The proper course is for the House to adjourn to give the right hon. and learned Gentleman an opportunity to consider what to do with the rest of the Bill. It would not be satisfactory to consider here a manuscript amendment on a very important Bill. I therefore submit that further consideration of the Bill should now be adjourned.

Mr. Deputy Speaker

Order. The right hon. and learned Gentleman has not moved the correct Motion. The Motion should be, "That the debate be now adjourned."

Sir P. Rawlinson

I beg to move. That the debate be now adjourned.

Question put and agreed to.

Debate to be resumed Tomorrow.