HC Deb 08 May 1970 vol 801 cc749-52

Where an offence under this Act which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary, or other similar officer of the body corporate, or of any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.—[Mr. Arthur Davidson.]

Brought up, and read the First time.

Mr. Arthur Davidson

I beg to move, That the Clause be read a Second time.

The purpose of the Clause is to make provision for offences by corporations where responsibility falls on the director, manager, secretary or other similar officer of the body corporate ". The Clause attempts to make sure that when an offence is committed the person running the firm cannot shield behind the inefficiency or dishonesty of his salesmen. One abuse which has happened, as I said earlier, in respect to both Part I, which deals with the provision of unsolicited goods, and the Clause dealing with directory entries, has been that, when a complaint has been made by a consumer, the person running the firm or a responsible person holding office in the firm has said "It is nothing to do with me. We had a dishonest, sharp salesman. He has now gone. We cannot do anything about it."

The new Clause will make sure that a director, secretary, manager or anybody else who has a principal interest in running the firm will be similarly caught by the provisions of the Bill. I am sure that the new Clause will be accepted.

Sir Stephen McAdden (Southend, East)

I intervene briefly to explain that, being a simple soul, I always think that words mean what they say. But to members of the legal profession they sometimes something quite different.

The new Clause—I agree with its principles—refers to any director, manager, secretary, or other similar officer of the body corporate ". In my simplicity I did not realise that a manager was, in law, an officer of the company. It may be that he is, but I did not know. Similarly, in my ignorance, I did not know, until the Parliamentary Secretary spoke, that a person was a firm or company. So I am learning by being here during the proceedings on the Bill. I shall be grateful if the hon. Gentleman would clear this us, and also tell me how far up or down this will go.

The Clause says, or similar officer of the body corporate ". Will the liability go down as far as the senior clerk? How far up or down is the restriction to go? In most of the Bill we talk about the sender. It is only now that we have got down to talking about bodies corporate, and I am not clear about who is involved. I am anxious to catch all those concerned, but I am not clear whether a manager is properly so described.

Mr. John Lee (Reading)

I endorse what was said by the hon. Member for Southend, East (Sir S. McAdden). The Clause is clearly admirable in intent, but I fear that it is not as simple to devise a valid and appropriate Clause as my hon. Friend seems to imagine. As I understand it, there are only two officers whose existence is recognised statutorily under the terms of the Companies Act. One is a director, and the other is a secretary. These persons are criminally liable under various provisions of the Companies Act, subject always to the defence of the absence of mens rea.

There is no such thing as a manager in law in relation to a company. Administratively there may be a manager, just as there may be a person who is the controlling shareholder. Someone might loosely be described as a manager or a controller of a company, but he would have to be stipulated other than in this way. and I do not think that the situation is regularised by the inclusion of the words or other similar officer of the body corporate ", because there is no other officer similar to statutory officers designated in terms of the Companies Act.

The hon. Member for Southend, East is right in saying that we must, in fairness, stipulate how far down this goes. What my hon. Friend is trying to do is to catch anybody who operates fraudulently through the medium of a company. This is wholly acceptable, but my hon. Friend will have to think again about the wording of the Clause with a view to deleting the words "manager" and "or other similar officer", otherwise he will run into considerable difficulty.

It may be that what is needed is something which places responsibility fairly and squarely upon the statutory officers, the company director and secretary, and perhaps another Clause which stipulates that any person with authority to act in regard to these matters might be made liable for culpable acts such as the Clause is intended to catch. I am loth to differ from a fellow member of my profession but, with great respect to my hon. Friend, I must tell him that as it stands the Clause will not do.

12.15 p.m.

Mrs. Gwyneth Dunwoody

One of the hard lessons for any mere woman to learn when she enters the Board of Trade is that in all attempts to put any form of words on the Statute Book one takes ad- vice from lawyers, one arrives at the House, one quotes confidently the advice that one has been given, and then one is instantly trampled to death by other lawyers in the House. I find myself in considerable sympathy with the hon. Member for Southend, East (Sir S. McAdden) who says that he has learned a little in dealing with the Bill. I think that I have learned quite a lot.

I can only tell the House that it was my advice that offences committed by a body corporate, where the responsibility fell on any director or other senior officer of the corporation, would be caught by the wording of the Clause. In view of the remarks of my hon. Friend the Member for Reading (Mr. John Lee), I shall be only too happy to look at this again, but I am advised that there are various Statutes which would deal with the problem he has raised. In Committee the hon. Member for Blackpool, South (Mr. Blaker) included a similar provision, which he later withdrew.

By separating this from the directories Clause we apply it to the Bill as a whole. We thought that this would be advisable, because there is no reason why there should not be individual responsibility for demands and threats regarding payment for unsolicited goods. This is an important matter, and I should not like it to be lost because of an argument about interpretation. I take my hon. Friend's point that this needs to be clarified, but I am advised that it is covered by existing Statutes.

Mr. Arthur Davidson

It is bad enough being criticised by one's fellow lawyers. When one is criticised by an unholy alliance of fellow lawyers and distinguished laymen, it is quite terrifying.

I think the House will agree that the Clause is well-intentioned. I accept that there may be some legalistic difficulty about it, and I assure the House that I shall take further advice on the matter. I agree with my hon. Friend the Parliamentary Secretary when she says that it would be a pity to lose the Clause. I am sure that there is nothing in it which cannot be improved to satisfy all the criticisms that have been made.

Question put and agreed to.

Clause read a Second time and added to the Bill.

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