PUBLIC TRUSTEE BILL [H.L.] (Hansard, 27 March 1906)

§ THE LORD CHANCELLOR
My Lords, this is also a Bill of great importance for which I anticipate a more propitious journey than appears likely in. the case of the Bill which your Lordships have just read a second time, as feeling in favour of this measure is really unanimous on both sides of politics. As long ago as the year 1890 a measure of this kind was introduced by the noble and learned Earl who preceded me on the Woolsack, and it passed through your Lordships' House. I do not say that it was identical, nor that the scheme was framed in exactly the same way, but in substance it was not different from the Bill the Second Reading of which I am now moving. On the change of administration which subsequently followed there was a great desire in the House of Commons for such a measure, and a Select Committee, of which I was chairman, was appointed to consider the subject. We reported unanimously upon the necessity of some measure of this kind, and, in the vain hope that a system which works admirably in Scotland might be made to-work also in England, we recommended the passing of a Judicial Trustee Bill. That Bill met with opposition from interested persons and was not passed by the Liberal Government. It was, however, passed by our successors in the year 1896, although mutilated, to some extent, on account of opposition. But it has not led to the good results that were expected. Sir Howard Vincent, who deserves the greatest credit for his unremitting efforts in this matter, for many years kept constantly pressing one Minister after another to do something in this direction, and at last, in the year 1905 a 1009 Bill was introduced in the House of Commons by Sir Howard Vincent which was practically supported by both sides. I, therefore, do not anticipate any unfavourable reception for this Bill.
I will now state to your Lordships the substance of the Bill, and the objects sought to be carried out. In all ranks and conditions of life it is difficult to get private persons to undertake the troublesome and unsatisfactory duties of trustee. But among the poorer classes it is almost hopeless to get people to administer their properties, which, though small, are of extreme importance to their families. Then, again, there is the uncertainty that when you place your money in the hands of a trustee you will ever see it again. There have been many cases of dishonest trustees. The temptation is very great to people in difficulties who are sole trustees to convert the money to their own uses, and as a consequence a great amount of distress has been caused. In the newspapers one constantly sees cases of that kind. We are very anxious to prevent that, and the Bill proposes that there shall be established the office of public trustee, with special facilities for the administration of small estates. In the case of other trusts, the public trustee may be appointed as custodian trustee, which means that the property of the trust shall be in his custody while its administration remains in the hands of the trustees appointed by the creator of the trust. There is also a provision by which the public trustee may be appointed in a will or any other deed as trustee for any kind of private trust. Of course it will be in the discretion of the public trustee to decline to take up any particular trust. It is also provided that any money lost by any omission or fault on the part of the public trustee shall be made good out of the public funds.
That is the scheme which we recommend to your Lordships. This is not a Bill directed against any particular profession. I believe that solicitors think that it is directed against them. Nothing of the kind, though, of course, there are black sheep in that flock as in every other. The only other observation I need add is that there are persons who look with the greatest apprehension on what they call officialism. I do not want to see officialism obtruded into private affairs more than is necessary, but I must say I 1010 think that nothing is more desirable than that some official should be responsible for carrying through affairs of this kind. I beg, therefore, to move the Second Reading.

§ THE EARL OF HALSBURY
My Lords, I need hardly say that I heartily support the Bill, the Second Reading of which the noble and learned Lord on the Woolsack has just moved, because for many years past I have been in favour of passing such a measure. As the Lord Chancellor has pointed out, very great difficulty is experienced in getting trustees. From my judicial experience I can say that if everybody knew the responsibility they undertook in becoming trustees there would be fewer trustees than there are. There can be no doubt that the public conscience has been shocked very much during recent years—I do not say whether the trustees belonged to one profession more than another, though a good many of them were solicitors—by the number of frauds committed by persons who have had trust funds to administer, and who have applied the money to their own use. Case after case of that sort has occurred within the last three or four years, and there is great need of a public trustee being appointed. I therefore heartily support the Second Reading of this Bill.

§ LORD FABER
My Lords, though it is not my intention to oppose this Bill, I should not like to be taken as one who admits that the Bill is a necessity. The Bill is, in my opinion, a very much better measure than the one of last session which was not successful in getting through the House of Commons. I am afraid that a Bill of this kind will lead to concentration of business in London. The official trustee, I suppose, will reside in London, and it will be only natural, in those circumstances, that the business over which he has superintendence will be conducted in London. The country at present is suffering from the concentration of men and money, if I may put it in that way, in London. Again, as the noble and learned Lord has said, this Bill will create a new department with all its officialism and all its expense. In our very laudable desire to guard against 1011 fraud we shall be drifting, I fear, into officialism. Again, we shall want business men as officials if we can obtain them, and if we do not we shall find that occasional dishonesty is less costly than constant incapacity. We can insure against dishonesty, but we cannot insure against the incapacity of officials, and I confess I think it will be difficult to get capable officials. The Bill will require careful scrutiny in Committee. It was only placed in our hands yesterday. We have not had much opportunity of looking into its clauses, and I shall be glad, therefore, if the noble and learned Lord on the Woolsack will assure us that the Committee stage will not be taken before Easter.

§ LORD AVEBURY
My Lords, I should like to say one or two words in support of what has fallen from the noble Lord who has just sat down. The noble and learned Lord on the Woolsack informed the House that there was unanimity in favour of this Bill among the Leaders on both sides. Although there may be a consensus of opinion in favour of this Bill among political leaders, I can assure your Lordships that there is by no means unanimity in the commercial community. I acknowledge that when Sir Howard Vincent first took up this question there was a strong case for an official trustee, but since then some of our most important banks and insurance companies have undertaken to act as trustees, and there is not now the same need for a Bill of this kind. I am not speaking from any interested point of view, because the firm with which I am connected have not taken up this business. This is, of course, part of that general system of transferring to Governments and to municipalities a great deal of business which has hitherto been carried on with great advantage to the community by private persons and by joint stock companies. The Bill has only just been distributed. Those who are interested in the matter have had no time to consider it, and I sincerely trust that His Majesty's Government will accede to the very reasonable request which has been made by my noble friend Lord Faber, and allow a reasonable time to lapse before taking the Committee stage, so that those who are engaged in this business may have an opportunity of considering 1012 the clauses of the Bill and the changes in the law which are proposed.

§ THE LORD CHANCELLOR
My Lords, with regard to the request which has been made to me I can at once comply with it. I would remind the noble Lord Lord Faber that in the House of Commons last year the Bill which he thinks was worse than this Bill was so altered that it satisfied him, and he expressed his satisfaction with it in the other House. I hope we shall be able to satisfy him equally in regard to this Bill when we go into Committee.