SECOND BEADING. (Hansard, 2 August 1869)

§ THE MARQUESS OF LANSDOWNE
, in moving that the Bill be now read a second time, said, that its object was to transfer funds now standing to the credit of the Accountant General and the Accountant in Bankruptcy to the Commissioners for the Reduction of the National Debt. The Commissioners would cancel stock representing these funds, and replace it by a book debt. These funds might be classed under three heads —1, funds representing investments for suitors in Chancery, standing in their own names and bearing interest for their benefit; 2, funds belonging to suitors, invested, however, not by their own desire but by the court, and bearing interest; and 3, funds consisting of fees, accumulations of interest, and so forth. Now, the Bill did not interfere with the first class, but transferred the second and third classes to the National Debt Commissioners, the funds of the Court of Bankruptcy being dealt with in the same manner. The salaries and pensions of Judges would henceforth be charged on the Consolidated Fund, while the minor salaries and expenses of the courts would be charged on the Votes, and would be subject to the annual review of Parliament. The Bill would put an end to much complication, and he hoped their Lordships would give it a second reading.

§ LORD ST. LEONARDS
said, he had always been opposed to the Government putting its hand on this fund, and saw no reason for the application of any portion of it, either to the building of new Common Law Courts or to the reduction of the National Debt. It was true that no individual could say "So much of that fund is mine; "but it had been contributed by suitors in equity, and suitors in that court as a class ought from time to time to have the benefit of it. As to the indemnity to be given to suitors out of the Consolidated Fund, that fund could not be got at except through the Votes of the House of Commons, and it was moreover greatly overcharged, while various Acts of Parliament provided that certain claims should have priority over all others. He once knew a gentleman who locked up his property in Chancery for the express purpose that it might be made secure for his children; but if this 1063 Bill passed no one but an idiot would take such a course. It made the Treasury the master of the Court of Chancery for all time to come; and its object was not merely to take the £4,000,000 now available, but to enable the Treasury to apply to the Court of Chancery whenever there was supposed to be a surplus, and to claim that surplus in order to appropriate it to the reduction of the National Debt. He saw no reason why the court should be tied hand and foot by the Treasury, nor why Parliament should, at one fell swoop, seize upon this fund. The administration of justice ought to be free, and it was unbecoming a great nation first to exact these payments from suitors, and then to apply £1,000,000 of the amount to the expense of building new Courts for other suitors, and now to confiscate £4,000,000 for the National Debt. The fund ought to be applied for the benefit of suitors themselves, whose fund it was, by the reduction or abolition of fees. In 1852 he had reduced the charges in the Court of Chancery by means of this fund, and he had hoped, if he remained in Office, to enable suitors in equity to enter that court without payment of the heavy charges to which they were liable. If this Bill passes there can no longer be any reduction of the taxation. The building new Courts for all suitors, and the reduction of the National Debt were national objects, to which the nation at large should contribute. Independently, moreover, of the objections to the principle of the Bill, their Lordships ought to reject it on the ground of time. It was introduced into the House of Commons on the 23rd of April, but it did not reach this House till the 23rd of July—almost the last week of the Session. The other House had thus several months allowed them for its consideration, and it was clear that their Lordships could not give sufficient consideration to it at this advanced period of the Session.

THE LORD CHANCELLOR
said, he had great satisfaction in hearing his noble and learned Friend (Lord St. Leonards) state so clearly his views with reference to this Bill, and to the admini- 1064 stration of justice in the Court of Chancery without fee or payment by the suitors. For a very long time, and up to 1865, when an entire change was made in the principle on which this fund had been hitherto dealt with, he himself shared the hope that, in a very few years, when the compensations to clerks and others fell in, there would be an opportunity of so administering justice to suitors in the Court of Chancery that while, of course, litigants would have to act in the usual manner with regard to the employment of solicitors and others, no fee would be payable to the court. But, in 1865, a scheme was brought forward for the construction of new Courts of Law and Equity; and, though he concurred in the necessity of providing new Courts, he then protested, against applying funds paid into court by suitors in chancery, and the profits made upon those funds, to providing buildings wherein to transact the business of other courts than those of equity. However, his protest was in vain—it was determined that the Suitors' Fund in the Court of Chancery should be applied to that purpose, and henceforth it appeared to him hopeless to expect that the fees would ever be done away with. That being so, any objection which he might have felt to the principle of this Bill, anterior to that period, appeared to him to be swept away. There was, he thought, a clear answer to the objections taken to the course proposed respecting these particular funds— namely, the cash paid into court by suitors as distinguished from the stock which stood to their credit. The matter might be easily explained. Suitors in the Court of Chancery might desire to have the money paid into court invested and carried to the credit of the particular cause; but, in many instances, they were not disposed to ask for this. Sometimes, for example, the cause was likely to be disposed of speedily, the sum might speedily be wanted in cash, and suitors did not desire to go to the expense of buying and selling out. In other cases, suitors were afraid of investing in the funds, with the possibility of a fall in value, and they, therefore, simply paid their money into court. In these cases, and in suits for the administration of estates in Chancery, the court was used by suitors simply as a private banker. Now, all the money so paid in was 1065 money which the suitor was only entitled to demand again in cash to the amount placed to his credit. But the Court of Chancery had felt itself at liberty to do with this cash just what bankers did when they had large sums standing to the credit of their various customers. Whether the court had herein acted properly or improperly was not the question; but he believed the practice had resulted very much to the advantage of all concerned. The Court of Chancery said—"We will not let this money lie idle; we will invest it, and thereby obtain interest upon the money, holding it as a fund out of which we may answer the call for any cash payments, the principal and the accumulated interest being sufficient to meet any possible deficiency caused by a fall in the price of stock, and being sufficient also to meet the cash demands of the suitor or customer." Accordingly, the cash had been from time to time invested in stock, the income of which was again invested, and the profits represented the sum of between £2,000.000 and £3,000,000, now proposed to be carried over to the Treasury, and applied in reduction of the National Debt. The simple fact was, that henceforth the Treasury meant to undertake the banking for the suitors, instead of the Court of Chancery. This stock, qua stock, in no way belonged to the suitors. It was the stock purchased by the gross amount of the cash tying in the Court of Chancery to the credit of all the suitors, each suitor being credited with the special debt due to him. But if you deposited £1,000 with your bankers you could not afterwards go and ask for the mortgage on which that money had been lent or the shares which it had purchased. You would ask for your £1,000, and to that you would be entitled. In the same way the Court of Chancery sold out stock to produce the specific sum which was wanted, and when that was done the suitor was satisfied and the court retained the profit. From year to year dividends were accruing upon this stock, and in those dividends the suitor had no interest. There were, in fact, two funds. One, consisting of the investments of the suitors' cash payments, was known as Fund A; and the income derived from Fund A was called Fund B. It was from that fund ' that the £1,000,000 was taken which had been applied towards the building of the Law 1066 Courts. He repeated that he should have been glad in 1863 to see the sum applied in reducing the fees payable by suitors; but it had not been so applied, and the Government had undertaken, all the responsibility which arose in connection with it. The Treasury now said, with regard to the remaining stock, that they would henceforth be the bankers of suitors in equity, claiming that any profit accruing there from should belong to the State. There were no individuals in the Court of Chancery to whom the profit could belong; and who was entitled to it, except the State? The Treasury therefore said—"As that is so in form at present, let it be so in substance." Nothing was really being given away to which the suitors had a right to look, and their security would be just as good in having a charge upon the Consolidated Fund as it now was in having a charge upon £2,500,000 of stock. The credit of the country would be pledged to satisfy the demands of suitors for cash paid by them into court, and the Government bound themselves to pay to the suitor, upon the direction of the court, the money to which he was entitled — always keeping the sum of £300,000 to the credit of the Accountant-General in Chancery for the purpose of satisfying current demands. The whole difference, in fact, would be that henceforth the suitors would have the State for their bankers instead of the court. His noble and learned Friend (Lord St. Leonards) said the Bill ought to have been before their Lordships earlier in the Session, and he (the Lord Chancellor) was anxious to explain how the delay had arisen. This Bill, though it originated with the Treasury, was submitted to him, and on examining it he found that there was a great deal in it which must be looked into and altered. Accordingly he placed it in the hands of the solicitor to the Suitors' Fee Fund— not, of course, that he should pronounce an opinion upon the expediency of the Bill, because the Government took upon themselves the responsibility, but in order that he, being a gentleman of extreme accuracy, and thoroughly conversant with the subject, might examine the details. Such an examination necessarily occupied many weeks; but the result was that, as he believed, there was now no risk of any mistake in the provisions of the measure. As to the several 1067 Acts of Parliament which it was proposed to repeal, they had been gone through with the same pains, and he believed that no apprehension need be felt on that score. As to the salaries of the officers being placed in the Votes, he must say that it did not appear to him that the Court of Chancery ought to claim an exemption, which was not enjoyed by other departments, from being subjected to the necessity of having the number of clerks inquired into by the Treasury, so that they might not be allowed to exceed the number requisite.