§ Lords amendment: No. 1, in page 2, line 4, leave out from "above" to end of line 6.
§ The Secretary of State for Trade (Mr. John Nott)I beg to move, That this House doth agree with the Lords in the said amendment.
§ Mr. Deputy Speaker (Mr Bernard Weatherill)Perhaps it would be for the convenience of the House if we were to take the 17 Lords amendments together.
§ Mr. Jeffrey Thomas (Abertillery)The Opposition have no objection, Mr. Deputy Speaker. In fact, we welcome that course.
§ Mr. NottThese amendments are uncontroversial. Most of them are improvements to the wording of the Bill. The Bill's provisions are legal and complicated in character, although they are simple in theory. Because of the considerable legal expertise in another place the Bill returns clarified and more effective in a number of respects. Most of the 17 amendments are either for clarification or declaratory. There are only two substantive amendments and one of them is basically technical.
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The first substantive amendment is to clause 6, which has been amended in two ways. It will now operate more simply and effectively in cases where there is more than one judgment debtor. Secondly, the definition of judgment creditor is tightened to take account of cases where the benefit of a judgment is assigned to another person or a contribution claimed by one defendant from another.
The other substantive amendment permits the United Kingdom to enter into a bilateral agreement for the reciprocal enforcement of "recovery-back" judgments, as provided for under clause 6, with countries with similar legislation.
I am glad that, as in this House, there was general agreement in the Lords about 1108 the desirability and scope of the Bill. This is the first time that I have dealt with Lords amendments and I have no doubt that I shall be out of order. I seek the views of hon. Members on the group of amendments and I shall seek to resolve any difficulties later.
§ Mr. Eric Ogden (Liverpool, West Derby)The United States Government have an interest in the Bill. What representations have been made by the United States Government, directly or indirectly, since the Bill was given a Second Reading? I understand that they have made no direct representations to the Secretary of State since Second Reading. Have the United States Government made any representations about this group of amendments?
§ Mr. NottThe United States Government have not made any representations since Second Reading, so far as I am aware. We have been in touch with a host of people on the Bill's technicalities. I am not aware of any specific, technical proposals by the United States Government. I shall let the hon. Member for Liverpool, West Derby (Mr. Ogden) know in detail of any specific technical representations that have been made, but so far as I am aware there have been no general or technical representations. However, I shall have to check, and I shall let the hon. Gentleman know.
§ Mr. David Crouch (Canterbury)I read very carefully the debates in another place, and in particular the proceedings in Committee. Lord Lloyd of Kilgerran referred to a description of the Bill in this place by my right hon. Friend the Secretary of State, and commented upon by me, to the effect that I was concerned that the Bill was not strong enough. I was concerned in particular with a word that my right hon. Friend used, in that he regarded some aspects of clause 6 as symbolic. Lord Lloyd of Kilgerran shared my fear that we might enact the Bill as a symbol rather than as a powerful device to protect British trading interests. Will my right hon. Friend say whether these amendments remove the symbolism, that we are producing the legislation to protect ourselves and that there is more than just symbolism in it?
§ Mr. NottAll the comments made in the Lords were for strengthening rather than weakening the Bill. Lords Amendment No. 15 represents a substantial strengthening of the Bill. My hon. Friend the Member for Canterbury (Mr. Crouch) was concerned on that score. I endeavoured to give in Committee and on other occasions the reasons why it was difficult to strengthen the Bill in the ways that he had sought.
The amendment is important. Since publication of the Bill we have been approached by several countries which have also been considering legislative action to protect their interests in the way that we are seeking to do here. It has been suggested to us that should some of these other countries introduce provisions along the lines of clause 6 it might be desirable to enter into a bilateral agreement for the reciprocal enforcement of judgments under such decisions.
The new clause is designed to enable us to give effect to such bilateral agreements should they ever become both feasible and desirable. This could represent a substantial strengthening in the sense that if, for instance, we were not easily able to attach the assets of a particular company in the United Kingdom, means might become available as a result of the new clause whereby as a result of a bilateral agreement with another country those assets could be attached elsewhere. This is a strengthening of the Bill.
Some of the minor drafting amendments which have come back from the Lords are explanations and represent a minor strengthening of the provisions and wording of the Bill.
§ Mr. Crouchrose—
§ Mr. Deputy SpeakerOrder. The hon. Member has spoken once.
§ Mr. Jeffrey ThomasWe on the Labour side give a general welcome to the Bill, with the caveat that it does not go far enough. As welcome as the amendments made in another place may be, and they certainly strengthen the Bill, we regret that the Lords did not take their courage in both hands and go just a little further. What obtained in the earlier stages of the Bill still, we believe, obtains today in spite of these amendments.
Clause 6 still does not go anywhere near far enough, and in our view will to 1110 a large extent be ineffective. One of the difficulties is that the resulting clawback judgments would not be recognised in the United States, and any United States defendants to proceedings here would quite easily be able to arrange their affairs so as to have no assets within a jurisdiction where it would be possible for us to exercise a clawback.
The only reason for that is that the Government have shrunk from going the whole way by allowing clawback proceedings to be brought against subsidiaries of American plaintiffs.
What the Government say—and they said it in another place by way of justification—is that we must not do in Britain what we condemn under American jurisprudence, where the corporate veil is not only lifted in ways that we would regard as almost indecent, but where they often do not appear to recognise the existence of any veil at all.
The House will recall that the Secretary of State recognised that there would be a degree of ineffectiveness in practice, but tended to justify this halfway house on the ground that clause 6 would act as a deterrent and would mark our disapproval of American anti-trust legislation. We agree that it is essential to mark our disapproval in that way. If what we say is wrong, the clause should not be included in the Bill. If what the Government say is right, theirs is the duty to make the clause effective.
It is difficult to understand how the clause, as presently drafted, would act as any real deterrent. Multiple damages in anti-trust cases follow as a matter of course and are not in the discretion of the courts unless the plaintiff fails to claim them. In reality, that is unlikely to follow.
I ask the Government to think again about the clause, even at this late stage; because they may come to the conclusion—and I hope that they will—that in this wholly new venture, and in the wholly peculiar nature of this legislation, it would be defensible for us to adopt the same course as the Americans in the context of judgments based on legislation which we regard as reprehensible because of its penal character and extraterritorial implications, but not—I hasten to underline—in any other context.
§ Sir Graham Page (Crosby)I understand that the clause will be a deterrent to actions being brought in which multiple damages can be awarded. So far as I have had an opportunity to discuss the matter with American lawyers, I understand that they are frightened of the whole Bill, and especially clause 6. Does not the hon. and learned Gentleman agree that it will be a deterrent to the actions being brought, even if the damages are automatic when judgment is given against the defendant?
§ Mr. ThomasI take the right hon. Gentleman's point. I hope that it will be a deterrent to some extent. In terms of practice, and in terms of American legislation, provided that the Americans take steps of the sort that I anticipated in by speech on Third Reading, I do not think that the clause will help a great deal. That is what concerns me. In short, the Government are willing to strike, but not to wound. Perhaps they have taken Spenser's advice, which he gave in "The Faerie Queene" when he said:
Be bold, be bold, and everywhere, be bold.But not too bold.12 midnight
It may be that this is indeed an historic Bill. It may be not the first of the Government's U-turns, but the first of the protectionist measures that they will be forced to take. Anyhow, that is another matter.
I end as I began. We are anxious that the Bill should be successful and meet the mischiefs that it is intended to meet, but we have serious doubts in that regard.
§ Mr. Deputy SpeakerMr. Nott.
§ Question put and agreed to.
§ Lords amendments Nos. 2 to 17 agreed to.
§ Mr. OgdenOn a point of order, Mr. Deputy Speaker. Would you clarify one point about our proceedings? I make no complaint about how they have gone. The Minister spoke twice—and the House wanted to hear him—and you then offered him the opportunity to speak for a third, time. However, when the hon. Member 1112 for Canterbury (Mr. Crouch) attempted to intervene a second time, you suggested that that might not be welcome. Would you clarify that matter?
§ Mr. Deputy SpeakerAs the amendments where being taken together, I took the view that the hon. Member for Canterbury (Mr. Crouch) had his opportunity of speaking to them, whereas the Secretary of State was replying to the speeches that had been made.