§ Mr. A. E. P. Duffy (Sheffield, Attercliffe)I beg to move Amendment No. 67, in page 74, line 2, at end insert:
'(3) The amendments to section 20 of the Act of 1956 and section 7 of the Act of 1968 contained respectively in subsections (1) and (2) of this section shall not apply so as to enable an order to be made against a trade association or against a person acting on behalf of a trade association unless the Court is satisfied that such trade association or person—1821 The Minister may recall my interest in the matter from last night's proceedings. I am concerned for all small traders and small firms, and combinations of both, who find themselves at a severe disadvantage as a result of quite praiseworthy and understandable efforts on the part of the Government to maintain and even restore competitive conditions in the economy. Last night, I showed the grave disadvantage at which the National Federation of Retail Newsagents found itself as a result of the Restrictive Trade Practices Act 1956, and the inability of the federation after the passage of nearly 16 years to take advantage of any of the gateways provided in that Act.
- (a) in the case of the said section 20, had procured or assisted a party to the relevant agreement to make or to give effect to or to enforce or to purport to enforce such agreement or was likely so to do; or
- (b) in the case of the said section 7, had procured or assisted the party to any relevant agreement against whom an order is made under subsection (3) of that section to do anything by virtue of which such order is made against him, or was likely to procure or assist him to do anything which would be a contravention of the order in its application to him'.
Tonight I concern myself with something a little different that arises on Clause 100 which aims to give power for a court order against parties to a restrictive agreement to be extended to the parties' trade association even though the parties act as individuals and without even the knowledge, let alone the approval, of the association.
I am aware that the court can already make an order against a trade association that is party to a condemned agreement. What concerns me is the way in which the court will be enabled to make an order against a trade association which administers or operates the agreement though it is not a party to it. That, to me, is the objectionable feature of the clause.
I shall not be able to accept an assurance from the Minister that a trade association would be given an opportunity to contest an order because the trade association would still face extensive legal involvement in proving innocence—or, by default, submit to an order on a matter it knew nothing about. It will not be good enough for the Minister to say that the court will always do its utmost to avoid the unwarranted involvement of a trade association in an order. Thus, in this respect the orders would only be those which appear to the court to be proper to ensure that restrictions do not operate against the public interest. The burden of proof will be on the trade association and that proof could be expensive.
There are other difficulties which face a trade association such as the National Federation of Retail Newsagents. It has 30,000 members and it is impossible to 1822 know what all those members may do and it is unreasonable to hold an association responsible when there is no evidence whatever for the association to believe that its members are acting in a particular way. This pinpoints a basic failing in the legislation, which is that such associations will be considered guilty unless they can prove their innocence to the satisfaction of the Restrictive Practices Court. As my hon. Friend the Member for East Stirlingshire (Mr. Douglas) said in Committee, this is and always will be contrary to the British judicial concept that a man is innocent until he is proved guilty—indeed, my hon. Friend went further and said that it is contrary to the concept of natural justice.
Let me relate the experience of the National Federation of Retail Newsagents. There have been occasions on which reports have been received at its headquarters of local action by individual traders which the general secretary has instantly condemned as contrary to the restrictive practices legislation. Sometimes the traders concerned have been federation members, and sometimes not. But in all cases the message from the headquarters has been the same, and here I quote the words of the general secretary:
Report the facts to the Registrar within seven days or I will do it from the federation headquarters.Thus the federation has tried to adjust its conduct to the Restrictive Trade Practices Act, no matter how painful on occasion this has been.The clause threatens to make life intolerable for the federation. Obviously in future the federation will not act in such a responsible manner if by so doing it lands itself with a court order. It also follows that if a trade association learns of a local restriction, the realisation that it will as a result be subjected to a national order will surely tempt the trade association to widen it to become a national restriction—on the principle of "In for a penny, in for a pound".
The right hon. and learned Gentleman last night conceded that the Restrictive Trade Practices Act presents problems for the federation and for similar associations. He praised the diagnosis put forward by the Opposition though he could not accept the prescription.
1823 The Minister kindly offered to receive further representations before the Bill goes to another place, and that offer is gratefully received. But it is recognised that the onus is on the federation committee to provide that prescription and that will be extremely difficult, even over a longer period of time than that necessarily available between now and when the Bill goes to another place. The Minister has an opportunity to redress the balance by accepting this amendment.
§ 9.15 p.m.
§ Mr. MillanI support my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy). This matter was dealt with in Committee when the Under-Secretary did not quite understand the point which I was making. It was not then adequately answered but he has sent me a letter since explaining what the Government had in mind. The clause allows orders to be made against trade associations even when, in the words of the clause, the trade association may not be involved in any way in the agreement which has fallen foul of the restrictive trade practices legislation and which is the subject of a court order.
I moved an amendment in Committee. It was not to eliminate this provision— for I agree that there should be an extension of the powers of the court to trade associations—but to limit it to situations where either directly or indirectly the trade association had been involved or there was a reasonable apprehension that without the order the trade association would be involved in the agreement directly or indirectly or would be involved directly or indirectly in encouraging others of its members to enter into similar agreements. It seemed that that was as far, in terms of natural justice, as we ought to go, but it was not accepted in Committee. From what the Under-Secretary has told me in his letter it is clear that the Government are not disposed to accept it now.
Judging from the letter it seems the Government are unpersuaded. The Minister said in his letter that if the circumstances arise which I fear where a trade association is liable to be in danger even though it is not in any way involved in the agreement:
… it is hardly conceivable that the court would make an order against a trade association.1824 If it is hardly conceivable, or the Government do not intend that an order should be made in these circumstances, why on earth is the clause expressed in these terms and why cannot the Government accept the amendment? This amendment covers every conceivable circumstance in which one would reasonably wish the court to make an order. But the clause goes wider than that. It says that there does not even have to be an apprehension, fear or expectation that the trade association which is behaving well now will behave badly in the future. Provided that one of the parties to the agreement is a member of the trade association the order can be made—[Interruption.]I should appreciate it if the Minister would listen to the argument. As I said earlier, he did not appear to understand it in Committee and it would be nice to have an answer now. If it is not the Government's intention to give the court power to act against a trade association except in the kind of circumstances which are outlined in this amendment, then it is entirely wrong that the clause should be drafted in an even wider way. The implication must be, if the clause is more widely drawn, that there is an expectation that the legislation intends the court to act even in circumstances in which the trade association is not involved, directly or indirectly.
If this matter came before a court, it seems to me that the court would be bound to take the view that since there was no restriction in the clause it was not the intention of the legislation that the court should act only in these restricted circumstances but that it should act even where it could not be shown that the trade association was directly or indirectly involved.
The question arises whether the registrar under the existing legislation or the Director General under the new legislation would be likely to bring an action against the trade association in those circumstances. It might be argued that that would be so unjust as to be unlikely to happen. But I do not think that that is the situation. I think that the registrar now or the Director General in the future might simply take the view that, having gone to the trouble of getting a court order against certain parties and knowing that some of them were members of a 1825 trade association, he would tidy up the operation by getting an order against the trade association as well, even though it had not behaved disagreeably in the past and there was no expectation that it would in the future. It might simply be looked upon as a nice, tidy operation which took care of everything at one go and avoided the necessity of having to go back and to get a separate order against the trade association if the need should arise. That is what the clause allows the Director General to do and the court to do, given that an application is made.
I feel strongly about this because, although I am not a lawyer I have studied the matter carefully and consulted a lawyer about it. It seems to me that we are giving powers well beyond those which are needed. This amendment is very wide. It gives all the powers which could be reasonably needed by the Director General or by the court in making on order in any circumstances. I hope, even at this late stage, that the Minister will accept the amendment.
§ Mr. EmeryThe amendment seeks to ensure that an order may be made against a trade association or a person acting on its behalf only if that trade association or person has procured or abetted the condemned agreement.
If the amendment were accepted the effect of it would extend to the provisions of Section 21A contained in Clause 101 by virtue of the reference to Section 20(3) in Section 21A(4).
The Government believe the amend-to be unnecessary. A similar amendment was moved in Committee, and I know that hon. Members showed some concern about it. I am sorry that the hon. Member for Glasgow, Craigton (Mr. Millan) did not think that I fully understood the points which he made in Committee. I recall that the amendment sought to make it possible for an order to be made against a trade association because a member was party to a condemned agreement and only if that was the case.
I agreed to look into this matter and consideration has been given to it not only by myself but by our legal advisers. It was because I thought it a matter of considerable concern to the hon. Gentleman that I wrote to him on 10th May.
1826 The point about which we must be clear is that the court can already make an order against a trade association which is a party to a condemned agreement. I do not believe there is any disagreement on either side of the House on that point. The new provision will enable the court to make an order against a trade association which administers or operates an agreement though not a party to it. The court has always taken the utmost care to avoid any unwarranted involvement of trade associations in its orders. That is a matter of fact, not opinion.
The hon. Members for Sheffield, Atter-cliffe (Mr. Duffy) and Craigton, in moving and supporting the amendment, expressed an opinion which seemed to cast considerable doubt on the action that the court could take. Orders which may be made under the Act can be made only if they
appear to the court to be properto ensure that the restrictions which are found to be against the public interest may not be operated.
§ Mr. MillanWhere does that phrase occur?
§ Mr. EmerySection 20(3) of the Restrictive Trade Practices Act 1956 provides,
the court may … make such order as appears to the court to be proper for restraining all or any of the persons party to the agreement who carry on business in the United Kingdom ".Viewed in this light it is hardly conceivable that the court would make an order against a trade association merely because one of its members was a party to a condemned agreement. That was the fear expressed by the hon. Member for Sheffield, Attercliffe.The fears expressed by the hon. Member for Craigton went perhaps a little further. I will ensure that the arguments that he has propounded in support of the amendment are looked at again. We will always do that where we consider that a major concern is being expressed on a point of detail.
I do not believe that the hon. Members for Sheffield, Attercliffe and Glasgow, Craigton have taken fully into account the provisions relating to the safeguard in the court. I have no reason to back down from the Government's view that what we are doing is correct. However, if hon. Gentlemen opposite or 1827 the association to which reference has been made still feel that there is a genuine point which is not safeguarded by the Bill, we will consider it. Having already reconsidered it once, it would be fair to say that it is unlikely that we would alter our view. I will undertake to look again.
§ 9.30 p.m.
§ Mr. MillanI am not a lawyer but I do not see that the words which the Minister quoted as being some kind of qualifying words do, in fact, have that effect. All they say is that a court may make such an order as appear to the court to be proper. If the court is given power to do certain things and that power is not qualified in any way, that does not seem to be a qualification on the court saying that it will do only what it thinks to be proper to achieve certain objectives.
There is complete discretion in the hands of the court, and that phrase does not qualify it. I do not think that that answers the argument. I take the view that if legislation gives the court certain powers it must be assumed that the intention of the legislation is that in certain circumstances the court will use these powers to the full. It is useless to argue that we need not worry about the wording of the legislation, that even if it contains quite excessive powers we can rely on the good sense of the court not to use them.
That seems a poor argument in this or any other context. If it is intended that the power should be exercised only in certain circumstances, then these circumstances should be outlined in the legislation. I welcome the fact that the Minister will look at it again, but I repeat that the words in our amendment give every opportunity to the court to exercise its powers in every kind of circumstance in which it would be reasonable and consistent with natural justice that these powers should be used. The wording in the clause goes well beyond that. It does not provide the kind of safeguards which, in a matter of this sort, we should have provided for the party being operated against by a court order.
§ Mr. EmeryI want to try to help the hon. Member as much as I can. He is 1828 not impressed by the structure within the Act, as it will be. The orders which will be made are orders which appear to the court to be proper to ensure that restrictions found to be against the public interest may not operate. Surely no one would suggest that the court would do other than that. The court could make an order against a trade association, if it administered or operated an agreement which was not thought to be proper although it was not a party to it. That is of considerable importance. The fears being expressed are to be viewed in the light that the court would not make an order against a trade association merely because one of its members was party to a condemned agreement. It reduces the argument to absurdity. Nothing is achieved by the amendment that we are not able to ensure in the Bill. For that reason the amendment is unnecessary.
§ Mr. DuffyI share the anxieties expressed by my hon. Friend the Member for Craigton (Mr. Millan). I listened with interest to what the Minister said and I will want to study it later. I hope that he will look again at our amendment, which has merit. In view of the undertaking which he has given, I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.