HC Deb 19 June 1981 vol 6 cc1286-90 10.37 am
The Minister of State, Home Office (Mr. Patrick Mayhew)

I beg to move amendment No. 2, in page 6, line 4, leave out from 'omission' to 'the' in line 11 and insert 'intended to be induced is to a person's prejudice if, and only if, it is one which, if it occurs— (a) will result—

  1. (i) in his temporary or permanent loss of property; or
  2. (ii) in his being deprived of an opportunity to earn remuneration or greater remuneration; or
  3. (iii) in his being deprived of an opportunity to gain a financial advantage otherwise than by way of remuneration; or
(b) will result in somebody being given an opportunity—
  1. (i) to earn remuneration or greater remuneration from him; or
  2. (ii) to gain a financial advantage from him otherwise than by way of remuneration; or
 (c) will be'.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

With this it will be convenient to take amendment No. 3, in page 6, line 4, leave out from 'omission' to 'the' in line 11 and insert 'is to a person's prejudice if, and only if, it is one which, if it occurs— (a) will result—

  1. (i) in his temporary or permanent loss of property; or
  2. in his being deprived of an opportunity to earn remuneration or greater remuneration; or
  3. in his being deprived of an opportunity to gain a financial advantage otherwise than by way of remuneration; or
(b) will result in somebody being given an opportunity—
  1. (i) to earn remuneration or greater remuneration from him; or
  2. (ii) to gain a financial advantage from or over him otherwise than by way of remuneration; or
 (c) will be'.

Mr. Mayhew

The purpose of the amendment is to clarify the concept of prejudice, which is defined in clause 10. The need for clarification was highlighted by the right hon. and learned Member for Dulwich (Mr. Silkin) in Committee. I am grateful to him for bringing the matter to our attention.

The right hon. and learned Gentleman questioned the definition of "prejudice" and asked in particular whether it was sufficiently flexible to cover a situation in which one person gained a competitive advantage over another by means of forgery—for example, where two people are bidding for a contract, which one obtains by resorting to forgery. We have considered this point in conjunction with the draftsman and have concluded that the Bill as drafted would not cover such a situation. This has led us to consider further the definition of "prejudice" and to expand it in three ways.

As the Bill is drafted an act … is to a person's prejudice if, and only if, its occurrence—

  1. (a) would result in his temporary or permanent loss of property; or
    2. 1287
  2. (b) would give or has given somebody an opportunity to earn from him remuneration, or greater remuneration, in some office; or
  3. (c) would be or was the result of his having accepted a false instrument as genuine, or a copy of a false instrument as a copy of a genuine one, in connection with his performance of any duty."
The right hon. and learned Gentleman correctly said that this definition did not appear satisfactorily to cover the case in which a person may be said to be prejudiced in the sense that he is deprived of the opportunity to gain a financial advantage.

The example that the right hon. and learned Member gave was that of two people bidding for a contract, which one succeeds in obtaining as a result of some forgery that he perpetrates. In such a case, the other competitor does not lose "property" in any sense; nor does the person who awards the contract necessarily give the winner of that contract the opportunity to earn remuneration from him, since "remuneration" is a fairly narrow term, indicating, in general, payment for a particular service. I am sure therefore, that the right hon. and learned Gentleman was right, as he so often is, when he doubted whether the Bill covered this situation, and accordingly we have sought to remedy this defect by making specific provision, in paragraphs (a)(iii) and (b)(ii) of the amendment, for cases involving opportunity to gain a financial advantage.

The existing wording of the Bill broadly follows the wording of the Law Commission's definition. The Bill is designed to give legislative effect to the commission's report, save that the commission referred in paragraph (a) to the loss of money or other property. It defined "property" as meaning real and personal property, including things in action and other intangible property. In our view, the additional gloss on paragraph (a) contained in the commission's definition is unnecessary, as it adds nothing to what would be a court's normal interpretation of the term "property"; nor would it appear to cover the sort of case mentioned by the right hon. and learned Gentleman.

In the right hon. and learned Gentleman's example, what is lost is not property, in any sense, but the opportunity to gain a financial advantage. In our view, that is not the same as an opportunity to gain remuneration in some office, which suggests something like an employer-employee relationship. Therefore, the situation does not appear to be adequately covered in the Bill.

The House will appreciate that there are two aspects of the situation that need to be covered: there is, first, the element of prejudice, which the person who fails to obtain the contract suffers, and there is the element of prejudice suffered by the person who awards the contract as a result of the forgery. Both those aspects need to be covered, as there may be cases in which only one element is involved—for example where, out of spite, a person who is not himself bidding for the contract forges testimonials relating to a person who is bidding for it which results in his losing the contract. In such a case only the person who fails to get the contract can be said to be truly prejudiced. Alternatively, there may be cases in which the person who perpetrates the forgery is the only person seeking a particular contract, which he gains as a result of his forgery. In such a case no one else is deprived of the opportunity to gain a financial advantage, but the person who awards the contract is prejudiced to the extent that he has given someone an opportunity to gain a financial advantage, which he would not otherwise have given.

10.45 am

It has become clear, in considering the amendment required as a result of the point raised by the right hon. and learned Gentleman, that both these aspects also need to be covered in cases in which what is at stake is the opportunity to earn remuneration, or greater remuneration—a category covered in subsection (1)(b) as already drafted. It is still necessary to deal separately with this sort of case, as, although "financial advantage" may seem wide enough to cover "remuneration", there may be circumstances in which that is not the case. If one considers, for example, the case of a person who, as a result of a forgery, obtains a job, which he performs adequately, and for which he is adequately paid, one sees that in such a case, he has gained an opportunity to earn remuneration, but it is difficult to argue that a fair day's pay for a fair day's work is a "financial advantage", as such.

I am not saying that that argument could not be made, but one can see that there would be a strong case to the contrary. I shall put it in another way. At first sight it may appear that the expansion of the definition of the term "prejudice" to cover cases in which an opportunity to gain a financial advantage is lost or won renders unnecessary subsection (1)(b). It talks of an act being to a person's prejudice if it would give or has given somebody an opportunity to earn from his remuneration, or greater remuneration, in some office". Although in some cases the term "financial advantage" may be synonymous with "remuneration", there are circumstances in which that will not be so.

Therefore, it seems necessary to retain the notion of earning remuneration but in addition to expand the definition to include not only the case in which a person is prejudiced by the fact that he was tricked, for example, into giving someone remuneration as a result of forgery, but the case in which another person loses the opportunity to earn remuneration as the result of forgery. Paragraphs (a)(ii) and (b)(i) of the amendment therefore cover those circumstances. In both cases, the notion of earning remuneration in some office has been omitted on the ground that it is unnecessarily restrictive.

I make no apology for dealing with the amendment at some length, because it is technical and represents to some extent a departure from the wording of the Law Commission's draft Bill, although not from its intention or spirit. I believe that something akin to the existing subsection (1)(b) is necessary, but that it needs to reflect the two different aspects of the situation that are reflected in paragraphs (a)(iii) and (b)(ii) of the amendment in relation to "financial advantage".

Mr. Tristan Garel-Jones (Watford)

Will my hon. and learned Friend clarify the matter for those of us who do not enjoy his legal expertise, or that of other hon. Members? Am I right in understanding that if the amendment is accepted any company tendering for a contract and not subsequently being awarded that contract, as a result of false documents or false information contained in the tender submitted by one of its competitors, would have redress under the law against the other company?

Mr. Mayhew

The company would certainly have redress in the circumstances that my hon. Friend has put forward, but that, of course, would be redress of a civil nature, and that right to be compensated for damages for the loss of the advantage that it sought or the harm that it suffered as result of that piece of deceit or forgery exists under the present law. The effect of the Bill, and, therefore, of the amendment, is limited to the criminal jurisdiction. Although it may not seem so when one looks at the extent of the Bill, running to 34 clauses, with a schedule following, it seeks to put into much more succinct and modern form the criminal law relating to forgery, which is to be found in several statutes, the root statute being the Forgery Act 1913.

The short answer to my hon. Friend's question is that the Bill simply deals with the criminal jurisdiction, in which Parliament says that this shall be a criminal offence that shall be visited with criminal penalties of a fine or imprisonment. The question of redress for compensation for what one has lost or the harm that has been done to one will remain a matter for the civil law.

I was saying that paragraphs (a)(ii) and (b)(i) are designed to achieve the object that I have tried to describe. The amendment derives from the helpful intervention of the right hon. and learned Member for Dulwich in Committee, who has courteously informed me that he is not able to be here this morning. However, I owe it to him to say a word or two about an aspect of the amendment, which we can see from the Amendment Paper has occasioned him some anxiety.

The right hon. and learned Gentleman believes that the Bill should cater for the case of getting a financial advantage to someone else's disadvantage, as well as from him. It would be possible so to provide in express terms in the amendment, so that it would read to gain a financial advantage from or over him otherwise than by way of remuneration". However, in our view, those additional words add nothing to the definition of "prejudice", but merely duplicate the effect of paragraph (a)(iii).

It is difficult to see how a person can obtain an opportunity to gain a financial advantage over someone without at the same time depriving that person of an opportunity to gain a financial advantage. If one were to take the example of two people bidding for a contract, the person who gains the contract by means of a forgery thereby attains an opportunity to gain a financial advantage over the other bidder, but he does so by depriving the other bidder of the opportunity to gain a financial advantage. That situation is already catered for in paragraph (a)(iii), so the words "or over" add nothing. On the whole, it is generally thought to be a sensible principle not to add to legislation words which, in fact, add nothing, lest it be thought that they are intended to add something that does not stand out at first sight.

The only other way in which the right hon. and learned Gentleman criticises the amendment is on purely grammatical grounds, and there is no need for me to deal with that in any substantial way.

The right hon. and learned Gentleman has, however, indicated that the words "intended to be induced", with which the amendment begins, do not fit in naturally. It is true that they could be omitted, but the wording of this part of the clause is identical to the wording of clause 6(3) of the Law Commission's draft Bill. Moreover, although the right hon. and learned Gentleman may feel that they do not flow naturally, they accurately reflect the wording of the offence provisions in the Bill, which talk, for example, of a person making a false instrument with the intention that he or another shall use it to induce somebody to accept it as genuine, and by reason of him so accepting it to do or not to do some act to his or any other person's prejudice". In other words, the prejudice flows from the act that the forger intends to induce. Therefore, I believe that the House may be confident that the wording of this part of the amendment is not in any way defective.

To revert to the earlier point, paragraph (b)(ii) adequately covers the person who in the example that we have been taking towards the contract, since he has given the forger an opportunity to gain a financial advantage from him otherwise than by remuneration. As for the other bidder who is disadvantaged, he is prejudiced in the terms set out in paragraph (a)(iii), because the forgery has resulted in his being deprived of an opportunity to gain a financial advantage otherwise than by way of remuneration.

Although I appreciate the spirit in which the right hon. and learned Gentleman has criticised in a friendly way the wording of the amendment, I do not consider that further amendment is either desirable or necessary. The House can be confident that the purpose that he sought to achieve is met.

The revised version of the first part of clause 10 which the amendment seeks to insert is designed to clarify the meaning of the word "prejudice", and to ensure that the term adequately covers circumstances in which a person gives or is deprived of an opportunity to gain a financial advantage or remuneration or greater remuneration as a result of a forgery. The amendment is both desirable and necessary to ensure that the Bill adequately covers all circumstances in which a person may suffer prejudice as a result of forgery. I repeat our gratitude to the right hon. and learned Gentleman for drawing our attention to a lacuna in the Bill.

Mr. Norman Miscampbell (Blackpool, North)

I readily accept the amendment, which closes a gap in the Bill.

I have only two brief comments. First, I revert to the amendment in the name of the right hon. and learned Friend for Dulwich (Mr. Silkin). The amendment moved by my hon. and learned Friend covers the point raised. I commend it to the House, with thanks to the right hon. and learned Gentleman, who drew our attention to the matter in Committee. As is often the case, he turned out to be right. The gap will be closed by my hon. and learned Friend's amendment.

In considering the amendments we should perhaps remind ourselves that we are dealing with an aspect of the law which has existed in common law down the centuries, and which has been in a statute since 1914, and that Act was in itself a consolidating measure. We are dealing with a measure that will no doubt last for half a century, and it is important that any gaps should be closed. The matter should be dealt with at this stage.

Amendment agreed to.

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