SECOND READING. (Hansard, 5 June 1894)

§ *LORD WATSON,
in moving the Second Reading, said, that as the law stood at present in Scotland, where two parties agreed to refer a question to arbiters named, the reference was effectual and binding upon them both, and excluded either party from resorting to a Court of Law in order to obtain a settlement of the dispute. On the other hand, should the parties make an agreement binding themselves to refer to arbiters not named in the agreement, or merely designated as the holders of an office or appointment, as in the case of an agree- 391 ment to refer to the Lord Advocate for the time being, that agreement was of no value in law, and either of the parties could withdraw from it and resort to the ordinary tribunals of the country. That was not the ancient law of Scotland; the rule was introduced by judicial decision about a century ago. Since that time members of the same body who introduced it had referred to it in not very complimentary terms, which have been re-echoed by noble and learned Lords in their Lordships' House. Not only so, but what was of more importance in considering whether a change ought to be made in the law, it had become a very serious inconvenience to the mercantile community. Companies and other large concerns frequently entered into contracts having currency during long periods of years, and they found it quite impossible to name a series of arbiters with any certainty of the gentlemen named; being in a position to take up the reference when a dispute emerged, the consequence being that on some occasions it had been necessary to incur the cost of applying to Parliament in order to obtain statutory authority to do that which they could not bind themselves to do by contract. Again, in ordinary business transactions Scotch merchants dealing with foreign or English merchants, where the law was otherwise, found it was not to their interest that they should be constantly setting their hands to agreements which were not binding upon them, and strong expressions of opinion had emanated from many commercial bodies in the country to the effect that an alteration should be made in the law. In those circumstances, he presented this Bill. The second was the leading clause. It declared simply that henceforth agreements of reference in Scotland should not be invalid, although arbiters were not named, or only described by their office. The other clauses of the Bill were simply auxiliary. They gave to the Sheriff or to any Lord Ordinary of the Court of Session the power to name an arbiter where the party who was bound to do so declined to perform his obligation. This explanation would probably be sufficient to induce their Lordships to grant a Second Reading to the Bill. Its details could then be considered in Committee.

§ THE LORD CHANCELLOR (Lord HERSCHELL)
My Lords, there are some respects in which the Scotch law differs from the law of this country, and sometimes I think the Scotch law is superior to our own. But the experience which I have had in listening to appeals in this House has led me to the conclusion that this undoubtedly is not one of those instances, but that in the present case it would be an advantage to Scotland to bring its law into conformity with that which prevails here. I am led to that conclusion for two reasons. In the first place, inconvenience is undoubtedly experienced from the present state of the law in Scotland; and in the next, that condition of the law has not been and cannot be rested upon any satisfactory basis. I therefore support the Motion for Second Reading.

§ LORD HALSBURY
I only wish to express my entire concurrence in this proposed alteration of the law. Within the last 12 months two cases, at all events, have come before this House in which that condition of the law of Scotland has been brought prominently forward, showing the great inconvenience which has resulted from the state of the law as it now exists.