HL Deb 21 June 1864 vol 176 cc5-18

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR

My Lords, I rise to move the second reading of this Bill, which appears to me of a very important character. It contains provisions of various kinds which my experience in the office I have had the honour to hold has convinced me will be of great importance in the improvement of the law. One of the most important, and that with which the Bill commences, relates to the present mode of remunerating solicitors and attorneys. The vicious manner in which this most necessary and most honourable order of practitioners is remunerated lies at the root of many of the abuses in the administration of the law. Their remuneration bears no reference to the skill, ability, or judgment which each individual employs in his work. The skilled practitioner is paid just the same as the unskilled; and this mode of remuneration, which is recognized by the law, leads directly to the great evils of prolixity, unnecessary verbosity, multiplication of proceedings, delay, and expense. The attorney or solicitor is placed in such a position that in common justice to himself he is obliged to conduct his business not in the way which his skill, judgment, and his own conscience would teach him is the most proper; but in the way which alone will obtain for him the ordinary reward of his exertions. Take the ordinary case of a solicitor employed to draw up a deed of an important character and requiring considerable judgment. If he strung together a number of ordinary forms and legal common-places, he would probably prepare a deed which may extend to 200 folios, and for that prolix verbose instrument he gets ten guineas. Suppose that by great care and judgment he reduces those 200 folios to 100, thereby avoiding great prolixity and uncertainty, he finds that he is only entitled to be paid five guineas; and if by a still greater exercise of judgment he reduces the 200 to 50 folios he gets two guineas and a-half—a sum utterly disproportioned to the professional skill exercised in the preparation of such a document. The attorney is now unable to contract for any business which he may be about to transact; he is unable to apply to any standard by which he may obtain his reward; and he is in all cases compelled to seek his reward for direct services, which are unpaid, indirectly through the medium of long drafts, long pleadings, and a repetition of unnecessary writing. Your Lordships are no doubt aware of the great evils arising from this state of things. It operates injuriously on the public at largo and on the profession, but still more injuriously on suitors, who are now unable to make an agreement for a more satisfactory mode of remuneration. These evils have been felt and acknowledged for a very long time; but as is usual with defects in English law, which, however frequently they may have been pointed out, are generally put up with for at least half a century before any earnest endeavour is made to remove them, no redress has as yet been obtained. As long ago as 1840—I might go back to an earlier date for a condemnation of the system—a noble and learned Lord on my left (Lord Brougham) said— The other cause of delay and expense is the perfectly faulty mode of remunerating professional men, solicitors especially, but I do not except counsel. This opinion is the result of my whole professional experience and observation, and it is not confined to proceedings in Equity. The subject is one of great difficulty, but it is of yet greater importance, and I feel assured that whatever other changes are effected to improve our system, whether of Equity or Common Law, a large proportion of the evil will remain unless this difficulty shall be grappled with and overcome. In the Report of the New York Commissioners, published in 1848, there is this statement— We cannot perceive the right of the State to interfere between citizens, and fix the compensation which one of them shall receive from the other for his skill or labour. Government is instituted for the preservation of order and the protection of rights. It is not its province to make bargains for the people or to regulate prices. This it assumes to do in respect to the dealings between lawyer and client. It fixes the prices of skill and labour. It has no more just right to do this than it has to fix the price of property; it may prescribe the salary of the clergyman or the fee of the physician with as much reason as the compensation of the attorney. I do not mean to go as far as to say that the costs of an action shall be measured as between the parties, but I mean to apply the system of this Bill to the whole range of transactions between attorney and client. I desire to emancipate the attorney, and at the same time to emancipate the client, being convinced the result will be that the business will be done in less time, at less cost, with a greater amount of certainty, with a greater amount of skill, and that both parties immediately concerned, as well as the public, will be gainers by the alteration. The evil which exists as between attorney and client is best described by one of the former, who says— To give all practitioners an interest in forms and prolixity, and so to tempt them to spin out in every way, instead of lessening, the clerk-work part of their business, manifestly tends to damage the integrity of their minds. But, besides this, it also interposes a difficulty in the way of every improvement. The interest in forms and words begets a bigoted love for forms and words. Whenever a useless form is to be discarded or a simple practice introduced, you are met at once by the attachment, interested or bigoted, of almost the whole profession to that system whereby at present it gets its bread. In Scotland there has existed for a very long time a system of paying for conveyancing according to the value of the property. The same rule prevails in France and other countries. I propose to remove from the solicitor the difficulty under which he now labours by means of his not being able to make a specific contract with his client, and to enable him to enter into such a contract and to take security for costs to be incurred, which at present cannot be done. Passing on to the next subject of my proposed enactments, the House is aware that, generally speaking, the absolute own- ers of property may enter into any contracts they think proper. But with respect to reversions and estates in remainder, there is an arbitrary rule which is still observed by the Courts, much to the disadvantage of owners. Generally the owner of property, who has power of sale, may make his contract irrespective of every consideration of value, and the buyer who buys without fraud may be certain of retaining the subject-matter of his bargain. But Courts of Equity, choosing to exercise a sort of moral supervision over the transactions of mankind, have said that whenever a reversion or remainder is sold the duty shall lie on the purchaser when the life falls in of proving that he gave the value for his purchase. The evil resulting from this interposition on the part of Equity has been pointed out by my noble and learned Friend (Lord St. Leonards) in one of his most valuable works. He says — It seems, therefore, an Equity not founded on reason or convenience, which in these cases inquires the calculated value of the subject of the contract, instead of its value according to the well known market price. The effect of such an Equity must ultimately be to injure the very persons in whose favour it was introduced. Reversions will never fetch their calculated value. Fair purchasers will not dare to purchase them at their market price, and consequently they will be thrown into the grasp of usurers, who will give very inadequate considerations for them, running the risk of a suit, in which event they will stand in as good a situation as if they had given the fair market price for them. I am sure your Lordships will agree with me in the conclusion that this was an interposition, to use the language of my noble and learned Friend, "not founded on reason or convenience." The truth is, that you never can use a Court of Justice for the purpose of prescribing to parties either moral rules of conduct or rules of convenience and expediency in the mode of dealing with their property. The existence of this rule is a fertile source of litigation, and renders dealings with property of this description most insecure and most prejudicial to the owner. I propose, therefore, to sweep away this rule by the Bill now before your Lordships, as an interference with the ordinary rights of property which ought never to have been exercised by a Court of Justice. I pass on now to another rule, which is a simple example of the interposition of the Court, and, I think, is productive of the same description of evil —I allude to that rule which relates to the property of married women. By the common law, a husband is invested upon his marriage with all the personal property of his wife, which is either in possession or which he may reduce into possession during the marriage. Such is the rule of the common law. But Equity has taken upon itself to abrogate in effect the common law upon this question. If a married woman becomes entitled to property after her marriage, and if in order to obtain the benefit of that property it is necessary that the husband should go into a Court of Equity, the Court will not interpose unless the husband makes a settlement upon the wife and upon the children of the marriage. Now, that is an interposition which the Court unquestionably had no authority to make, Equity is bound to follow the law, except in cases where good conscience requires that the rule of law should be modified or controlled. But here Equity had no right whatever to interfere. The mode in which it reasoned appears to have been this:—It said, "The principle of the common law is, that the property of the wife is given to the husband provided the husband maintains the wife." Equity, therefore, might with some reason say, "If we find a case in which property accrues during coverture to a wife who is deserted or is not maintained by her husband, we may then interfere to give effect to the implied condition upon which the rule of law giving the wife's property to the husband is founded." But, instead of limiting its interposition to cases of this kind, which might possibly justify such an interposition, Equity has interfered generally, and hence a great amount of litigation, much disturbance to the peace of families, and much uncertainty with regard to property are introduced. It is true that the wife may allow the husband to have the property; but in many cases she is induced by the trustees to stipulate for a settlement, and this is the source of much dispute and ill-feeling. Experience has satisfied me that benefit would arise by putting a stop to the unnecessary interposition of Equity hero. If the parties desire a settlement, it is easy for them to make one; but do not force upon them that which ought to be a matter of contract between them, and of contract alone—you have no right to make for competent parties any agreement beyond that which they desire to make for themselves. I pass now to another point, for which I desire the particular attention of your Lordships, and I trust that the alteration which is proposed will be regarded with approbation by the House. There exists in Eng- land, in the distribution of a man's property among his creditors after his death, the greatest anomaly and the greatest uncertainty. Your Lordships are aware that a man's property after death is denominated in law by the technical term "assets"— meaning that which is or should be enough for the payment of his debts, or, more properly, property applicable to the payment of debts. These assets are divided by the law into legal and equitable assets; and the difference is, that where the property consists of legal assets certain debts obtain a priority and a preference, while in the case of equitable assets; the debts are paid pari passu without distinction. Personality represents legal assets; but if a man charges his freehold estate with payment of his debts, or directs it to be sold for that purpose, the proceeds are equitable assets, and the administration of the estate is governed by different rules. Thus, if A dies leaving legal assets, the property is distributed in one way; if B dies leaving legal and equitable assets, the property is distributed in another way. If a man dies leaving; £10,000 in Consols, it is distributed in one way; but if be directs his trustees to raise £10,000 out of his estate, the money is distributed in another way. Your Lordships will recognize at once what a fertile cause of litigation this is, and I propose that such an anomaly should not continue. The history of this distinction is in itself very singular. Debts are divided into specialty and simple contract debts, a specialty debt being evidenced by a writing with a bit of sealing-wax or a wafer, while a simple contract debt may be a promissory note, a bill of exchange, or any paper signed by the party without the wafer or the wax. Now, in ancient times, an act evidenced by writing had a greater value than one which was mere matter of parol evidence; but in those times, writing not being a common accomplishment, persons generally made use of a seal. Thus the seal, which was originally the "signature," became of greater value in the eye of the law as constituting a deed than a simple signature not accompanied by a seal. What reason can there be for such a difference in dealing with simple contract and specialty debts? In Equity no such preference is allowed. Now, the greater number of estates are administered in Equity, and I want the law to be administered in all respects in the same spirit. When a man becomes bankrupt in his lifetime no preference is given in the administration of his estate to specialty debts over simple contract debts. Then why should any such preference be acknowledged in respect of landed property? This, again, is one of those things which it is difficult for any unlearned person to understand. It is one of those numerous anomalies and technicalities which characterize our law, arising from original practices which have long since lost their real value and significance, and which, when examined, it is found do not merit the solemnity which has attached to them. The object of the enactment which I desire to introduce is to bring property in its administration to a simple rule of justice, which requires that all property should be dealt with alike without distinction and without priority of claims, as at present is done in Courts of Equity, leaving still to judgments a certain priority. I will now mention one alteration proposed in the Bill, of a not very material character, with respect to claims for dilapidations. The law as it now stands with respect to these claims is most singular. The succeeding incumbent has a right to sue his predecessor for dilapidations, but all the debts of the preceding incumbent must be paid before the succeeding incumbent's claim for dilapidations is satisfied. I am sorry to say that many instances have been brought before me in which, upon the death of incumbents, their property has been found to be inadequate to satisfy their debts, and consequently the claims for dilapidations have remained unsatisfied. I propose by this Bill to place claims for dilapidations on the same footing as simple contract debts. I will now mention what are the final provisions of the Bill, which, I trust, will meet with your Lordships' approval. At present it is a very difficult thing for a man about to regulate his affairs by will to determine who shall be his trustees. In many cases it is hardly possible for a testator to make a choice with any satisfaction to himself. Many a man leaves his property to his family under circumstances in which he would be glad if there were any public institution in the country to which he could intrust the general management of his affairs — the collection, investment, and distribution of his estate. I therefore propose by the last clause of this Bill to introduce a power, to any person desiring by will or by deed to dispose of his personal estates, to make the Court of Chancery his trustee for the purpose of receiving and administering his estate. I am happy to say that from in quiries I have made, and from letters I have received, the system of administration of estates in the chambers of the Equity Judges is so much better than it used to be, that I will venture to say that an estate is wound up there in less time and at a less cost in nineteen cases out of twenty than it would require if wound up out of Court with the constant aid of a solicitor. I think that this provision will prove of great advantage. With respect to the question of remuneration to the profession, I have received many letters, especially one from the Incorporated Law Society, which expresses the opinion that, subject, of course, to any amendments that may be introduced hereafter, the Bill is entitled to the approbation of that body, as they believe that it is capable of being worked to the great benefit of the profession and of the public. Whatever benefits the solicitor will benefit the client, and whatever benefits both cannot fail to be an improvement of the law and of the general administration of justice.

Moved, That the Bill be now read 2a.— (The Lord Chancellor.)

LORD BROUGHAM

said, the Act which he had succeeded in passing had been inoperative on account of the indisposition of those for whose benefit it was intended to avail themselves of its provisions. The noble and learned Lord was understood to say, that although he saw objections to allowing a professional man to act as trustee and solicitor, yet he thought the Bill contained some valuable provisions which were well worthy of consideration.

LORD ST. LEONARDS

said, that the tendency of the law hitherto had been to protect the client against the attorney, who was quite able to take care of himself. At present an attorney or solicitor could not bring an action until he had delivered his bill of costs for one month, to enable the client to consider it and to obtain advice. Parliament had also provided, at a great cost to the country, certain public officers whose function it was to tax the bills of costs sent in by attorneys to their clients. The noble and learned Lord (the Lord Chancellor) sought to make the client's contract with the attorney a specialty debt, although at the time of signing the contract the client could not know the value of the service which he would receive. In a recent case of "Swinfen v. Swinfen," an able and learned counsel undertook to manage Mrs. Swinfen's cause upon a con- tract that he should receive, if successful, £20,000. He did succeed by his talents, zeal, and ability in winning the cause; but when he claimed the promised remuneration his client had changed her mind and refused to pay. It was a contract that was not binding, and he could not recover upon it. But suppose that instead of a barrister it had been an attorney, what would he have done? He would have done precisely what the counsel did; and if this Bill passed he would recover every single shilling of the contract. But if the Bill did not pass, what then? Whatever fair remuneration he was entitled to receive for his skill and ser-vices he would be enabled by law to recover; and he ought not to be able to recover any more. There never was a case in which interference was less called for, or one in which the remedy proposed by his noble and learned Friend would work more mischief. It would strike at all confidence, and would inevitably lead to over-reaching and taking advantage of the client. His noble and learned Friend had not grappled with the difficulty. The difficulty was that the attorney must, for example, be paid according to the length of the deed prepared. If he drew a short deed he was paid so much. There were many good as well as short forms, but an attorney was not paid for reducing a long to a short deed. If, however, the deed was an important one, the attorney only drew instructions, and took them to a conveyancer, who drew the deed; and in that case the attorney charged his client as if he drew the deed, and charged the fee to counsel as a fee for advice. The effect of the Bill would be to introduce two classes of attorneys; one would submit to the fees allowed, and the other would make all sorts of contracts with their clients. He had the greatest possible respect for the body, and he could not show his respect for them more than by opposing this Bill. He did not believe that attorneys' bills in the present day were of such a character as to place them under any particular difficulty. The next provision of the Bill was that if there were several trustees, and one of them a solicitor, he might with the consent of his co-trustees, or, being sole trustee, by his own authority, act as solicitor and charge his bill of costs to the trust. If he was sole trustee, he might retain himself—he would become, in fact, his own solicitor, and make out his own bill of costs. There was another objectionable feature in the Bill, and it was this — an attorney was not permitted by law to take a security for future litigation, on this ground— that by allowing a solicitor to take such a security expensive litigation might be incurred, over which the client might have no control. It was then proposed to take away from all the women of England, present and future, the right which the law now gave them to participate in the benefit of property acquired by them subsequently to their marriage. If the wife's property was so settled as at some time to go to the husband, and the husband took it, he took it properly in virtue of the settlement. But where there was no settlement as to the wife's subsequently acquired property, then Equity interfered, and said that if the husband wanted the wife's property he must give her a fair share, to be settled upon her. That, however, would be interfered with by this Bill. Why? Another provision of the measure—to which his noble and learned Friend had not called attention— was, that whatever a man might have done by his will in regard to his real estate, his executors or his administrators should have power to mortgage or sell such real estate and pay off his debts. Before that step was taken, however, they would have to go into a Court of Equity to have an account of the personal estate taken. The law at present provided that the executor or administrator should pay all debts out of the estate, and formerly the law was that if he paid a debt before another that had priority, or paid over the residue before all the debts were paid, he rendered himself personally liable for the unpaid debts. The consequence of that state of the law was that executors generally took the wills into Chancery, and every will was made the subject of a Chancery suit. He (Lord St. Leonards), therefore, two or three years ago, caused a clause to be enacted providing that it should be sufficient for an executor or administrator to advertise for all outstanding claims to be sent in by a certain time, just as the Court of Chancery would do, if a bill were filed. Now, if their Lordships looked down the columns of The Times they would see many advertisements from executors requiring creditors to come in and claim payment of their debts or be excluded. Every one of the advertisements was a Chancery suit avoided. But this Bill would indirectly operate to repeal the law as it now stands, and every man's estate would once more be the subject of a Chancery suit. Again, this Bill took away a man's power of testamentary disposition. Under it every man's will might be set aside, and a person to whom be had not given his real estate was to step in and say he would sell or mortgage it and pay off the debts. An enormous amount of the capital belonging to suitors was already in the bands of the Court of Chancery, and the Government had shown a disposition to use the suitors' funds for other purposes than the suitors' benefit, and if the Bill passed he would say to every man in England, "Keep your money out of the hands of that Court." This Bill struck at the true interests, both of attorneys and clients, and in other respects it was most dangerous in principle. He should, therefore, give it his hearty opposition.

LORD CHELMSFORD

said, that remembering the speech delivered by the noble and learned Lord on the Woolsack last Session upon the manner in which Acts of Parliament were framed, he was surprised that such a measure as the present should have proceeded from his hand. Its title spoke of "Attorneys and Solicitors Remuneration," but the Bill contained provisions relating to various subjects of very great importance, and proposed various alterations of the law which were utterly unconnected with each other. It was quite impossible, so far as he could see, to grasp any one principle by which the Bill was pervaded. Each division would give rise to a separate discussion. It would appear, indeed, as if his noble and learned Friend in drawing it up had stumbled on an Act passed in the reign of George II., entitled— An Act to continue several laws for preventing exactions by the occupiers of locks and weirs on the river Thames westward; for ascertaining the rates of water carriage on the said river; for continuing and explaining the several laws for the better regulation of attorneys and solicitors; for regulating the price and assize of bread; for preventing the spreading of distemper amongst horned cattle; also to make further regulations respecting attorney and solicitor, and for further preventing distemper in horned cattle; for more frequently returning writs in the county palatine of Lancaster, for ascertaining the levying of writs of execution, and for allowing Quakers to make affirmation in cases were an oath was required, & c That Bill had an advantage over the Bill of his noble and learned Friend, for it fully explained its object. But, various as were the points with which the Bill of his noble and learned Friend dealt, he was afraid it would occasion considerable dis- appointment after the promises which he had made. He said that, in consequence of the mode in which solicitors were enabled to charge, inducement was held out to them to draw out very long deeds; but the clauses which he had introduced, instead of being confined to conveyancing, empowered all attorneys and solicitors in every case to enter into an agreement with their clients to receive a certain sum of money—so that the necessity of having their bills of costs taxed would thus be obviated. Instead, therefore, of the client being protected by the provisions of the Act of Parliament, which required that an attorney should send in his bill of costs a month before bringing his action upon it, he would, by the clause to which he adverted, get rid altogether of that power of revision, and would be able to enter into an arrangement, and in consequence great over-reaching and oppression might take place. It was even doubtful whether the limited application of the new system to the case of conveyancing only was at all desirable. In reference to the next clause, he might say that he thought there was some inconsistency in the course which his noble and learned Friend had pursued. His noble and learned Friend some time ago compared the family solicitor to the Old Man of the Sea in the story of Sinbad the Sailor, whom it was impossible to shake off. Now, however, his noble and learned Friend proposed to place this Old Man of the Sea more firmly than ever on the shoulders of his clients by enabling him to become a trustee and charge his costs. For these reasons, and also because he regarded it as impossible to discuss the various provisions of the Bill on the second reading, he was of opinion that it should be sent to a Select Committee. He should like before sitting down to state that a speech made some time ago by his noble and learned Friend had given great pain to a considerable body of solicitors, inasmuch as he attributed the ill-success attending his Land Transfer Act in some degree to the circumstance that its objects had been thwarted by the profession to which they belonged. That charge could not, at all events, apply to the Metropolitan and Provincial Law Association, which consisted of 800 members who had petitioned in favour of the measure. Of course there were instances where solicitors had prevented their clients taking advantage of the Act; but he was perfectly sure, from what he knew of solicitors generally, they were far too honourable a body of men to sacrifice the public good to the promotion of their own selfish interests.

LORD CRANWORTH

agreed with the noble and learned Lord (Lord Chelmsford) that there was extreme difficulty in discussing such a subject on the second reading of this Bill; but he could not agree with his noble and learned Friend that it ought to be discarded because it contained a great number of subjects.

LORD CHELMSFORD

I did not say it should be discarded.

LORD CRANWORTH

With respect to the mode in which attorneys and solicitors should be remunerated, he partly agreed and partly disagreed with it. As to the proposal that they should be allowed to make bargains instead of charging according to the scale of fees provided by law, he would say that primâ facie all parties to contracts should be allowed to make arrangements between themselves as to the terms of remuneration, because, as a general rule, contracts ought to be free; but, on the other hand, it would not be safe to allow an attorney to go to his client and say, You shall pay me so much—or you shall give such a portion of the estate, as was done in Mrs. Swinfen's case. If such a course should be legalized, he thought the remedy would be worse than the disease. The attorneys and solicitors were a very respectable body, but there were many black sheep in the profession, and it would not be safe to leave them to contract bargains subject to no revision. It is absolutely necessary to fix a scale of remuneration in litigated cases, because the defeated party, who has to pay his ad versary's costs, cannot be bound by the contract of his opponent with his attorney. He thought it would be quite safe to say that a party might make a contract for costs in reference to matters of conveyancing; leaving costs in reference to other matters to be left as they were now. As to a solicitor being entitled to charge for professional services in reference to matters with respect to which he was trustee under a will, he doubted whether this should be the case when the solicitor was the only trustee, though it might not be improper in cases where there was more than one trustee. He thought that it was quite right that a solicitor should take security for future costs—and, indeed, he never could discover why this should not be allowed, especially as the costs were liable to taxation. In reference to the clause as to reversions, he must say that he entirely concurred with it. He could not see why a man should not be allowed to enter into the same bargain in reference to the sale of a reversionary interest as of an estate in possession. He could not assent to the 8th section. He thought that the law was quite right that where there had been no provision for the wife before marriage, and property afterwards came to the wife, and was recovered through the Court of Chancery, that the Court should act upon the principle that they would not assist the husband unless he made a fair settlement upon the wife. With regard to all these points, they could be much more conveniently discussed in a Select Committee.

LORD WENSLEYDALE

addressed their Lordships, but was quite inaudible.

THE LORD CHANCELLOR

said, that he had never thought of opposing the suggestion that the Bill should be referred to a Select Committee, As to the proposal in reference to the remuneration of solicitors, the Law Society approved of it, except in this, that they did not think that the precaution of having an agreement in writing would be necessary.

Motion agreed to.

Bill read 2a accordingly, and referred to a Select Committee, but nothing further was done therein.