PROVISIONS SUPPLEMENTARY TO S. 4 (Hansard, 15 October 1976)

§ Mr. Lee
I beg to move Amendment No. 58, in page 7, line 45, leave out 'or to be attributable to any neglect on the part of'. In a sense we have gone over much of the argument involved in this but that does not mean to say that one should lightly pass over defects which appear in this amateur piece of lawmaking. We have already talked about the difficulties which arise in relation to inadvertent offending when I moved Amendment No. 46 to include the word "knowingly".
Again the same problem rears its ugly head because the principle of crime by negligence is a principle virtually unknown to English law. I find it odd that it should be introduced as a sidewind to this particular Bill. If I wanted to be 867 unkind I should probably say that it was as a result of being introduced through the ignorance of non lawyers, otherwise it would not be there. Let me just read the effect of it. Clause 5(5) says— When an offence under subsection (5) of the preceding section 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 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 be liable to be proceeded against and punished accordingly. Is this an attempt to produce a mass trial of everybody, from the office boy up to the managing director or the chairman? That is what it looks like. It looks very much as if not only does that apply but the principle of crime by negligence is involved. I do not want to appear inconsistent with the remarks that I made earlier when we were discussing the penalties. I tried to draw a distinction, but failed to prevail upon the Minister to accept it, between what one might call inadvertent publication on the one hand and deliberate and malicious publication on the other.
In one sense the former is an example —I suppose it could be so construed—of being an offence committed by neglect or omission. If we are talking of that, what we are thinking of primarily is the position of somebody who through rank carelessness, doing something in their ordinary line of duty, should be on inquiry as to the possible risks involved in publishing the name of a person in relation to court proceedings. Therefore, it is just about right, but only just, that such conduct should be objectionable.
What seems to be behind this particular part of the Bill, and which I seek to delete, is an attempt to deem an officer of a body corporate to be guilty of an offence if the offence comes to be permitted merely by virtue of the fact that they hold an office. Put in shorthand, is this an attempt to introduce Royal British Bank v. Turquand company law into the criminal law. Is that what we are trying to do? Otherwise, why is it there?
Why should an act be attributable to a person? That is the most objectionable aspect. Either one commits an offence or 868 one does not. One does not have an offence attributable to him. That is the problem which arises and, in a sense, I ridicule it by using the example of the ower. It now looks as if somebody who owned an organisation such as this in a proprietary sense might get off scot free because although he was a director, secretary or other officer of the body corporate, no one could attribute it to the shareholders.
I suppose the Minister will say "that is wholly in accordance with the principles of limited liability under company law at the moment. You can go against the shareholders of a company, or the torts, or the breaches of contract committed by the company, even if you are 100 per cent. owner of the shares until you happen to hold office as defined under company law." Therefore, it will be wrong for the shareholder, albeit the sole shareholder, to be deemed to be culpable in the same way as some officer remote from the offence itself but who nevertheless is an officer of the body corporate itself.
I take the view that we should have a proper companies Bill before the House, as I hope we shall. I intend to put down a lot of amendments to it to get away from the principle of limited liability altogether, which was introduced in the 19th century in totally different circumstances. It is time that shareholders were made, as it were, to earn their dividends in more ways than one for as long as we have a mixed economy. I hope that we shall not have such an economy for very long.

Mr. Deputy Speaker
I think the hon. Gentleman is straying from the sense of his amendment.

§ Mr. Lee
I would not seek for one moment to argue with the Chair. Maybe I was permitting myself a few ruminations about the future situation. However, the Minister will say "We must deal with the situation as it stands here and now and as the law it". I am glad that my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) is in the House. Perhaps he can say why this provision was included. I think that he will find that it adds very little to the strength of the provisions. It is not necessary, and probably it is undesirable, because at the end of the day it increases the risk that perhaps somebody will be found guilty of an 869 offence which he has not, in fact, committed. That is the basis of nearly all the objections to nearly every part of the Bill.

§ Mr. Lawrence
May I briefly support the strictures of the hon. Member for Birmingham, Handsworth (Mr. Lee). Mere negligence should seldom if ever be the basis of criminal law and in our view it is wrong here.

§ Mr. John
All I can say is that the recognition of both hon. Gentlemen of the wrongness of this matter is a rather fleeting recognition because my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) was accused of ignorance and, therefore, of defects in drafting by my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee). I find, upon looking at the statutes, that this is a perfectly normal director's clause in every Bill which seeks to deal with corporate liability for a criminal offence.
It is perfectly possible for both hon. Members to take issue with the generality of such matters, but I do not think that they can take issue with the fact that it is a common form of law. What my hon. Friend the Member for Hands-worth said about limited liability, and about company law generally, is irrelevent to this issue. It is relevant to the doctrine of the criminal law of a company.
I do not believe that there can be any justification for making this case an exception to the whole body of criminal law by absolving directors and officers of responsibility for neglectful behaviour. If we say that they can publish a name and be neglectful about it, yet escape their liability, we shall be going a great way to making a mockery of this Bill. This is why I believe that my hon. Friend should resist the amendment.

§ Mr. Lee
Surely there is a valid and practically definable distinction between neglect in the sense of carelessness or negligence—the concepts overlap—on the one hand and shutting one's eyes deliberately—in other words, behaving in a reckless way, not knowing or caring whether something has happened. As an illustration, one of the attributes of the offence of handling 870 stolen goods is whether a person knows or believes those goods to be stolen. He cannot escape his criminal culpability if he deliberately shuts his eyes to that situation. That analogy is appropriate here and the amendment would have helped to correct that situation. In other words, my hon. Friend's reply is misdirected.

§ Mr. Lawrence
I would ask the Minister to look at this again. There is a difference between the liability which a company incurs as a result of a series of acts which are fraudulent and in which the approach to the handling of the company's accounts gives rise to details of criticism which in the end may or may not amount to fraud, and the situation which is envisaged here whereby a company, commits an act which would require a more specific intent than negligence if it were an individual person. Those are two different situations. It is not enough merely to say that because companies in one fraudulent type of offence are liable for negligence they must be liable for negligence in this matter which is of a wholly different nature.

§ Mr. John
With due respect, what I said did not relate only to the question of fraudulent behaviour or fraud by a company. It had to do with every statute and every way in which a company could be criminally liable for acts. As I have said, my researches show, as far as I can advise the House, that this is perfectly common form. Nevertheless, of course I will look at the words uttered in the debate to see whether my advice is wholly correct.
But I believe it to be a standard form. Certainly there is a distinction between negligence and recklessness, but what I am saying is that where other acts are committed for which the company and its officers are liable through neglect, it would be wrong to single out this Bill for treating directors or managers differently from how they would be treated in other cases. As I have said, I will make sure that my statements today are correct, but subject to that, there can be no objection in principle to the wording.

§ Mr. Corbett
While I am happy to go along with that undertaking, the context in which we are discussing the amendment is that of the anonymity of the 871 complainant. That is one of the sensitive parts of the Bill. The reason for this provision is that we want to underpin that anonymity for the complainant in every reasonable way possible.
I am not a lawyer—a fact for which my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) berated me—but it seemed to us that the concept in other areas of the criminal law of neglectful behaviour could be an added and important buttress to that anonymity provision. I hope that, on the grounds that this matter can be thought about again before the Bill goes to another place, the amendment will be withdrawn or defeated.

§ Mr. Lee
I am grateful that the hon. Member for Burton (Mr. Lawrence) has come to my assistance. I am sure that the Minister has spoken in good faith. I should be happier if he said in terms that a clarificatory amendment would be introduced in another place. Whether he gives me that undertaking or not, I do not propose to divide the House. I am not trying to filibuster. Since the sponsors intend that the Bill shall complete its passage today, there will be no opportuniy for further discussion here and the only legislaive way to deal with it is for some announcement a least to be made when the matter goes to another place. If my hon. Friend says that, I shall be much happier.

§ Mr. John
If what I have said is correct, no clarification is necessary, because the words are perfectly clear in themselves. It is only in the event of what I have said needing to be corrected that we shall need to consider clarification. I will advise my hon. Friend about the action he should then take in the other place.

§ Mr. Lee
In those circumstances, I beg to ask leave to withdraw the amendment.