HL Deb 19 April 1923 vol 53 cc755-69

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR

My Lords, I am afraid that this Bill will not have the same general interest for the House as the Bill with which your Lordships have just dealt, but it has a very real interest for a section of the commercial community; I mean those who are concerned with ships. It is by that section of the community that the Government have been urged to legislate on this subject. I think I can explain the purpose and origin of the Bill in a few sentences. It deals with those documents called bills of lading, which, as your Lordships know, are given by shipowners and charterers to those who ship goods to be carried by sea. These carriers of goods by sea are, under the common law subject to certain well-known liabilities—the liability to provide a seaworthy ship, properly equipped, to stow and handle the goods properly, and matters of that kind. But for a good many years past a practice has grown up under which charterers seek by special conditions in the bills of lading to limit their liabilities to the shipper. These documents are long and complicated, and the shippers and those who act with them have complained that when their goods are lost or damaged they find that, by some condition which they had not properly read, or had not properly understood, they have no remedy for the loss or damage. A good deal of complaint has been made on that score.

Of course, nothing could be done without legislation, as this was a matter of contract. But during recent years there has been legislation on this subject in other countries and in the Dominions. It was in the year 1893 that the United States of America passed what is known as the Harter Act, which prevented shipowners contracting out of some of their liabilities. That Act was followed by legislation in Australia and in New Zealand, and afterwards, in 1910, by similar legislation in Canada. Then a proposal was made for legislation of a similar kind throughout His Majesty's Dominions, and a body called the Dominions Royal Commission reported in favour of legislation throughout the Empire respecting the power of charterers to limit their liabilities in this way. That question was then referred to the Imperial Shipping Committee, on which this country, the Dominions, and shipowners are represented, and that Committee reported in February, 1921, unanimously recommending uniform legislation throughout the Empire on the lines of the Canadian Act. That Report came before the Imperial Conference, which met in the summer of 1921, and was adopted by that Conference. That Resolution, of course, committed His Majesty's Government, as well as the Governments of the Dominions, to propose legislation on the matter.

But since then the proposal has taken a somewhat wider shape, because this question was brought before the meeting at The Hague of the International Law Association. At that meeting there was brought up a code of rules which is known as The Hague Rules of 1921. Those Rules did not entirely agree with the recommendations of the Imperial Conference, and there was a good deal of discussion upon them. Ultimately they were amended, and in 1922 they assumed the form known as The Hague Rules of 1922, which do agree with the proposals made by the Imperial Conference, to be passed by all the Legislatures of the Empire. There has been great deliberation and caution in this matter, and those Rules were again further discussed by the International Maritime Committee, which met in London in October, 1922. The draft, as approved by that Committee, was submitted to the International Conference on Maritime Law, which was held at Brussels, and at which this country was represented by very distinguished representatives. That Conference at Brussels finally approved a set of Rules as a basis for international legislation. Therefore we have now this set of Rules recommended in substance by the Imperial Conference and finally approved, after prolonged discussion, by all the countries represented at the Maritime Conference at Brussels. It is that set of Rules which is contained in the Schedule to this Bill and which the Government recommend now to Parliament.

I do not propose to go through the Rules in detail. They relate to a number of questions which are familiar to those who are concerned in these matters. They deal, principally, with such matters as the liability of the carrier in respect of sea-going ships, with his responsibility for loss and damage in certain particulars such as the manning and equipment of the ship and the fitness of the holds for stowing the goods, with his responsibility for the proper and careful handling, loading, and stowage of the goods which are carried, and with his responsibility for the issue of a bill of lading to the shipper. They provide also that any clause or covenant for cawing down those duties shall be null and void.

With regard to the Bill itself, it is of a simple character. Clause 1 provides that the Rules in the Schedule shall have effect in relation to the carriage of goods by sea from any port in Great Britain or Northern Ireland to any other port, so that it applies only to outgoing goods. Clause 2 provides that there shall not be implied in any contract for the carriage of goods by sea any absolute undertaking by the carrier to provide a seaworthy ship. That is because there is a limited liability imposed by the Rules themselves. Clause 3 provides that every bill of lading which relates to goods carried under the Rules shall contain an express statement that it is to have effect subject to those Rules. The object of that provision is to make it not only part of our law but part of the contract, so that if the contract is sued upon in a foreign country notice must be taken of the effect of the Rules.

That is the short effect of the Bill. Having regard to its form and nature, I am afraid it will be difficult for Parliament to make Amendments in the Rules themselves, because they form an agreed code which cannot be altered by one country without being altered in all the other countries concerned. Therefore, we are pledged to lay the Rules before Parliament as an agreed code to be adopted or not as Parliament may think fit. This, in the main, is a matter which concerns shipowners and shippers, and they have in substance agreed among themselves. The representatives of all our Dominions are of one mind: that legislation on these lines is desirable, and, therefore, I hope that the Bill will commend itself to your Lordships for a Second Reading. I beg to move that the Bill be now read a second time.

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

LORD SUMNER

My Lords, it is a little difficult to address your Lordships upon this subject, partly because it is a dry one and the hour is growing late, and partly because the Lord Chancellor has, with his wonted skill, presented it to you as a simple and beatific measure which really would appear after years and years of war and strife to make a commencement of universal agreement and universal harmony. I feel bound to make a few observations to your Lordships because a large part of my life has been spent in trying to argue about bills of lading whether I understood them or not. I do not pretend to suggest that this is a Bill which in the circumstances anyone could propose to ask your Lordships to reject. But it would appear to he necessary before the Bill passes that your Lordships should thoroughly appreciate what it is that is being done.

The school in which I was brought up taught one that the sheet anchor of trade was freedom of contract, and I should have thought that of all trades the great shipping and carrying trade of our Empire was the one in which one would most suppose—and for many years we have supposed—that the parties were quite able to make contracts for themselves, and that, if they did make contracts, all that the law had to say to them was that those contracts should be interpreted and enforced. This Bill, however, provides that if any person being a carrier of goods within the meaning of the Rules—that is to say, for the present on outward voyages and with under-deck cargo—fails or refuses to issue a bill of lading in accordance with the requirements of the Rules, or makes, signs, or issues a bill of lading which contravenes or does not comply with the Provisions of the Act and the Rules, he shall in respect of each offence be liable on summary conviction to a fine not exceeding £100.

Now, a large ship may have separate consignments which require hundreds of bills of lading to be signed and issued for a voyage, and these contracts which, under this Bill, have to be embodied in the form required by these Rules, which must not contravene the Rules and which are made void as to any portion of the bill of lading that does contravene the Rules—these contracts are not to be made between the carrier of the goods and the owner of the goods so as to satisfy them both. They must be made in a statutory form; they must be issued—you must not try to shirk that—and they must be issued in a form which conforms to the Rules. There is a liability, on summary conviction in a police court, to a fine of £100 in respect of any bill of lading which fails to be forthcoming, or which, when it is forthcoming, fails to comply with this cast-iron statutory contract..

I should like to ask the Lord Chancellor whether it is really necessary to treat it as a crime for merchants and shipowners to make their own bargains with regard to their own business. This kind of thing, of course, is not new. Beginning about 1860 and terminating some years later, there was a great, international effort made to regulate what is called "general average." Let the name suffice for your Lordships without any endeavour on my part to explain what it is. It is a very important feature in shipping and insurance work. After a series of conferences very like those which were detailed to us by the Lord Chancellor—though I am bound to say that the bodies of those days did not enjoy quite such august names as the committees which were recited to us—and as the result of a long series of discussions, they succeeded in embodying a set of Rules which have long been honoured as the York-Antwerp Rules and have become, with voluntary modifications, the foundations of modern general average in practice. Those Rules have become the code of that business, because shipowners and merchants have voluntarily seen the advisability of adopting them and have adopted them in their contracts.

That was the old way in which these reforms were carried out. But those days are gone by, and now the proposal is that compulsion—which, I think, has been called a blessed word before now—in this stringent form shall be applied. I would venture to suggest to the Lord Chancellor that it would have been quite enough to have provided that no bill of lading should be admissible in evidence which did not comply with the requirements of those Rules, or that any bill of lading which failed to comply with them should be null and void. To make shipowners and carriers liable to penalties of this kind for doing something to which, as between themselves and their customers, both parties are perfectly agreed, to my mind marks another mile-stone on a road which I never thought I should live to travel.

I should also like to ask the Lord Chancellor what is the origin of this penal clause. I do not find any reference to it in the Report of the British delegates at the International Maritime Conference at Brussels last October—which, I think, is the last of these Conferences—at which they appear only to have got 60 far as to agree upon a basis for a diplomatic instrument of some kind. I should have supposed that whatever respect might be due to the issue of a diplomatic instrument by an international conference they would hardly have ventured to purport to bind the Government of this country to introduce penal legislation and to create a new crime. I suppose, therefore, it is the view of the Lord Chancellor that this provision is necessary as a matter of legislation in order to give effect and binding force to the Rules. I suggest that it is an unusual, an untoward, and an unnecessary feature in our legislation, because it is not only very contrary to the economic principles upon which we were brought up, but it appears to me to be harassing in the last degree, and to expose shipowners and their servants to a risk of proceedings that may of course come to nothing, but in any case would be troublesome and quite unnecessary.

I shall not trouble your Lordships with any observations about the contents of these Rules. I recognise that if they have the character of an international agreement it is necessary that they should be enacted, if at all, in identic terms, and so minutely faithful is this Bill to the agreement which was arrived at by the gentlemen who attended at Brussels that I see they punctiliously reproduce a split infinitive: they confuse shall will: and traces of American phraseology have not been removed. I have sufficient experience of that kind of thing to say that on the whole this is quite a favourable specimen of international English, and that it should be characterised by these features in so small a measure is a matter of which the draftsmen have some reason to be proud. But T do not think any lawyer familiar with shipping law and shipping litigation will differ from me when I say that in certainly every article, and in almost every Rule, one finds staring one in the face questions of uncertainty, of obscurity, and, I think, of contradiction between different parts of the Rules which must lead to disputes that can only be settled by litigation.

Do not imagine that I am making any complaint of this. It is our business as Judges to dispose of these questions when they arise. That is our job, and we are prepared to do it. I do not think that the members of the Bar ought to be accused of any manner of insincerity when they say, as to my knowledge they are disposed to say, that these Rules leave much to be desired in the way of clearness. The members of the Bar desire that our law should be as clear and har- monious as may be, and when these difficulties arise they are prepared to deal with them. If the shipowners and the merchants are content to have their Rules in a form which will require a very extensive amount of litigation before they can be cleared up that is their look out.

What I want to emphasise is this. There is little or no use in these Rules unless they become uniform and identic Rules among all the maritime countries of the world. We shall only be getting back into the same kind of difficulties we were in before if we have different interpretations put upon the instrument by the different countries concerned. When you have fixed your contract in the castiron form of a Schedule to an Act it can only be altered by an amending Act, and if you have to have identic legislation in twenty or thirty different countries it can only be altered by twenty or thirty different pieces of legislation in the respective countries. If once you have these Rules enacted in their present form in all the maritime countries, it will be a herculean task to get them altered. If it had been provided that alterations could be made by way of conference then another conference could have cleared up our doubt that had arisen, but if it has to be done by legislation, and by simultancous legislation over a very wide area, it will be very difficult indeed, when once it has passed, to bring about any alteration.

I am anxious to make any suggestion that I can to prevent the inconvenience that must arise in these circumstances, and I will ask the Lord Chancellor, if he will be good enough, to consider this suggestion. There is a passage worthy of observation which I will quote from the report of the Liverpool Steamship Owners' Association, and in which, I think, I recognise the hand of a very eminent public servant, Sir Norman Hill. This observation is: The rules are a new departure. They constitute an international code, framed to secure, on certain points, uniformity in the interests of those engaged in international commerce. If the lawyers of all nations will interpret them as they are understood by the traders and shipowners of all nations, the rules will serve a useful purpose"— That assumes that the traders and shipowners of all nations do understand them, and understand them in the same sense, which is not by any means so certain. The observation proceeds: but, if the lawyers of each nation seek to read into the rules the laws and practices of their own country, the rules will serve no useful purpose as uniformity will not be established. I think that is perfectly obvious, and it is very important.

"If the lawyers of each nation seek to read into the Rules the law of their own country" says Sir Norman Hill. I ask what else can the Judges of each country do? This will be a Statute which must be construed, like other Statutes, according to its meaning in the English language, according to the established rules of construction, and in accordance with the general law of contracts and the general law relating to mercantile affairs. We have no power to depart from that, and yet it will be of great importance that when the Courts of this country and other countries come to interpret the statutory contracts, as they will be called upon to do, they should no longer be obliged absolutely to follow the decisions of their predecessors in similar matters, no longer be bound strictly by the rules of interpretation as they have been laid down, but should be at liberty to inform their minds of and to have regard to the interpretations placed upon these Rules in other countries. It is only in that way that it will be possible for Courts of law to arrive at something like a uniform interpretation and a uniform resolution of the disputes that arise.

I do not propose as I am speaking to attempt to draft such a clause, which, after all, ought not to emanate from me. But I venture to suggest to the Lord Chancellor that it would be advisable to frame some clause that will empower the Judges, before whom any litigation on questions concerning this international set of Rules may come, to take What I may call the international view and inform themselves of the current of decisions in other countries, so that they may, so far as they can, keep in step with the development of the Rules under judicial decisions all over the world.

I should like to draw attention to one other point. It is provided by the Bill that The Rules shall not by virtue of this Act apply to any contract for the carriage of goods by sea made before such day, not being earlier than the thirtieth day of September, nineteen hundred and twenty-three, as His Majesty may by Order in Council direct. That is to say, that it is not to come into force until there is an Order in Council, and that Order in Council, which is not to fix a day earlier than September 30 next, may be indefinitely postponed. I assume that is for the purpose of giving time to all the other countries concerned to make some progress towards passing the same legislation that is contemplated by this Bill. That being so, it is plain that time does not press very much and the Government might hold its hand with regard to the Order in Council for a considerable time. This may be very important. Before the Bill proceeds any further I think we should have a Paper circulated giving a full statement of what exactly is the present condition with regard to international agreements for the provision of this identic legislation.

The countries that met at Brussels were curiously selected. The meeting enjoyed the advice of representatives of Hungary, which is without a seaboard; Serbia, which has a disputed claim to a seaport at the head of the Adriatic; and Poland, which enjoys by the intervention of the "corridor" some kind of rights at Dantzig. Latvia and Esthonia were also there, but Brazil was not represented, Greece was not represented, and, unless the representatives of His Majesty's Government undertook the duty, Egypt was not represented, nor were the Dominions represented except by the delegates appointed by His Majesty's Government. What steps have been taken to ensure that those who were not represented at all, as well as those who were, are prepared to pass these Rules in this particular form and give them the force of law step by step with our legislation and at the same time? Unless something like that is carried out we may find our shipowners running the risk of a £100 fine while a corresponding danger does not affect their rivals who sand ships inward bound from foreign ports.

Further, as the Lord Chancellor told us, there are a number of Statutes already passed prescribing forms for bills of lading or imposing by law certain terms and liabilities on carriers. There is the Harter Act in the United States; there are also Acts in Australia, in New Zealand, and, I believe, in Canada. Will the arrangement that is made include a repeal of the legislation that exists already as part of the common arrangement so that there may be one and only one code applicable. Is the United States to maintain its Harter Act while at the same time legislating in such a way as to embody these Rules? Unless that is dealt with in advance, there will only be further confusion, and although the United States was represented at this Conference, a Conference which results in anything like an international engagement is subject to the ratification of the Senate under the United States Constitution, and does not always receive it. Therefore, it is not to be too confidently expected that harmony, identity, and uniformity will be arrived at by September 30 of this year.

I wish we could have a full statement on this point and an assurance from the Lord Chancellor that before these Rules are brought into force matters will have been carried so far in concert with foreign Powers and the Dominions that we shall have good reason for thinking that the full object of this legislation will be attained. I apologise for having been so long, but I have taken this opportunity of making some observations on the question of freedom of contract. I recognise that British commerce is now regulated by large associations which meet, together and arrange things to whom smaller men must bow. That is the way of the world now, and nothing more can be said about it.

LORD NUNBURNHOLME

My Lords, I must apologise for intervening in this debate, but I hope your Lordships will not pass this Bill. The provisions in the measure will be very harassing to British commerce. They are much more likely to hit British interests than those of foreign ships inward bound to this country. Many ships carry very diverse cargoes in very small parcels. You may have a ship carrying 3,000 parcels, requiring 3,000 bills of lading, and it seems to me most unfair to the carrying companies to ask them to incur a liability of perhaps £30,000 on a single voyage, particularly as up to now we have never found any inconvenience from existing Rules. I do not think the Rules have been properly considered from a broad stud British point of view. I do not think all interests concerned were represented at the Conference, and if you read through the Bill you will find that it is somewhat contradictory. I read it through from beginning to end, and I see a great many opportunities of endless litigation for which somebody will have to pay, either the shipper or the shipowner. I hope that your Lordships will reject the Bill.

LORD PHILLIMORE

My Lords, in common with the noble and learned Lord who addressed you a short time ago and in common, I think, with all commercial lawyers or Judges, I regret that it should be necessary to have any interference with that freedom of contract under which our carrying trade has been carried on so successfully for the last sixty or seventy years. I should very much have preferred that sonic system, such as Lord Sumner has alluded to, under which the York-Antwerp Rules were passed, or the Baltic conference bill of lading, or the Black Sea bill of lading, should have taken the place of legislation.

It has to be admitted that, at any rate in the Latin countries, our system of contractual legislation on this matter has never been entirely grasped or understood, and that our bills of lading have not, for instance, fared well in the hands of French Courts. Ever since the Harter Act was passed it has become obvious that there must be some form of legislation; at any rate since that Act has been supplemented by the legislation of so many British Dominions, and I think I could add to the list which has been mentioned. I feel therefore that His Majesty's Government were right in giving effect to this agreement and in proposing this legislation, which, after all, is on the same lines as the international Rules for preventing collisions at sea, which were agreed to in very much the same way and enforced by Statute here in the hope that they would also be enforced by law elsewhere, as, in fact, they have been.

I was very glad to hear the Lord Chancellor pay a tribute to the various societies and Conferences which have laboured so earnestly in this work. As a former President and permanent Vice-President of the International Law Association, I was very glad to hear him begin by referring to the work which was carried on at The Hague, in my presence, but with very little intervention on my part, under the very careful and admirable chairmanship of the right hon. Sir Henry Duke, President of the Probate, Divorce and Admiralty Division, who also gave his services the next year in London and under whose auspices, with the help of the leading shipowners, underwriters and persons interested in the shipping trade, both shippers and shipowners, these Rules have been, to my knowledge, most carefully adapted, minutely discussed and thought over.

They may, of course, like any other form of legislation, ultimately give rise to some nice questions of law, but I agree with what I understand Sir Norman Hill to have said to one noble Lord now present in this House, that for one case that comes before the Courts there will be a hundred cases that will not be brought up but will be determined by the general view of shipowners and shippers of the meaning of these clauses. I hope your Lordships will see no difficulty in passing this Bill into law, although I sincerely regret that it should be necessary to interfere with the freedom of commerce.

LORD SOUTHWARK

My Lords, I have not risen with the intention of entering into any detailed discussion of this measure, but merely, at the request of the Association of Chambers of Commerce, to convey to your Lordships a Resolution passed unanimously this morning at the annual meeting of that body. It is to this effect:— That this Association welcomes the introduction in the House of Lords, by the Lord High Chancellor, of a Bill for an Act to 'amend the Laws of carriage of goods by sea,' and requests the Executive Council to consider the provisions of the Bill and to watch its progress through Parliament, having regard to the provisions of The Hague Rules, 1921, and the draft Convention of the Brussels Diplomatic Conference, 1922, and urges that bulk cargoes should be excluded. My only object is to convey to your Lordships this request of my colleagues of the Association of British Chambers of Commerce, and I have no intention of doing more than to present that Resolution to your Lordships' notice.

THE LORD CHANCELLOR

My Lords, with the consent of the House I may be allowed to say a few words in reply. I think the somewhat general criticisms of the noble Lord on my left are answered, first, by the fact that the Rules have been approved by one association after another, bodies on which the chief business men of this country concerned with shipping have been present or have been represented; and, in the second place, by the resolution which has just been read by the noble Lord, Lord Southwark, which shows that the Chambers of Commerce unanimously approve of this Bill.

With regard to what was said by my noble and learned friend Lord Sumner, no one has a better title than he to criticise or consider a Bill of this kind. Notwithstanding some expressions which seemed to indicate a qualified confidence in certain parts of the Bill, I do not gather that he is hostile to the measure as a whole. He has, however, made a number of comments which, I think, deserve an answer. In the first place he refers to Clause 3 which, as he says, requires that everybody who issues a bill of lading which is subject to these provisions must insert a reference to the provisions of the Bill, and he points out, not unnaturally, that the penalty for failing to do so, as proposed by the Bill, is somewhat severe. I believe that the Canadian measure contains a somewhat similar provision, except that the maximum penalty there, is not £100 but $1000. I have paid great attention to what he said, and I will with pleasure consult my right hon. friend the President of the Board of Trade, who is mainly responsible for the introduction of this Bill into Parliament, and will see whether it may be possible to adopt one or other of the alternative suggestions made by the noble and learned Lord.

The second point which he made was to suggest that our Courts, in determining questions which arise under the Rules, should be at liberty to consider the decisions of the Courts of other countries as to their interpretation. I am sure that, like myself, the noble and learned Lord sees some difficulty about that suggestion. I should find it very difficult off-hand to frame a clause giving effect to it, but I quite realise that the matter needs to be considered, and I will see what can be done, although at the present moment I foresee grave difficulties.

The third point which the noble and learned Lord raised was this. He referred to the clause of the Bill under which it would not come into operation until an Order in Council was made, and he inferred, quite rightly, that the object is, if possible, to get legislation of a corresponding character passed in the Dominions and in other countries whose representatives have agreed to these Rules. He asks that before the Bill passes out of your Lordships' control there should be issued a statement showing how that matter stands; that is to say, what similar legislation already exists in those countries, what they have agreed to do and how far they have progressed in carrying out that agreement. I think that is quite reasonable, and I will do my best to get such a statement prepared and issued, so that before the Bill passes from the hands of the House your Lordships will be in possession of the information desired. I think those are the main practical requests which the noble and learned Lord made, and with that explanation I hope your Lordships wilt give a Second Beading to the Bill.

On Question, Bill read 2a, and committed to a Committee of the Whole House.