§ Order of the Day for the Second Reading read.
EARL RUSSELLMy Lords, I must apologise to your Lordships for the rather frequent postponements of this measure, but I can assure you that I am not personally responsible for more than one of them. Most of the others were made in response to requests from the other side of the House. This is a Bill similar to the one that I introduced last year, and I propose this year to carry it to a Division in order to ascertain the feeling of your Lordships upon the principle of compulsory insurance for motor vehicles—subject, of course, to anything that the noble Viscount opposite may say. The reason for the measure is that which I gave your Lordships last year when I took it to a First Reading only. It is that there are a great many motor vehicles uninsured driven by persons who are not solvent when it comes to a question of paying damages and which inflict damage in regard to which those damaged have no recovery. Last year that statement was challenged in the debate by, among others, the noble Viscount, Lord Ullswater. Curiously enough very soon after the debate I received a letter, which I think might interest your Lordships, from a solicitor practising in Derby.
He said that this was his experience as a country solicitor as to actions which did not succeed owing to the non-solvency of the driver of the car and the non-insurance of the car itself. His first 687 instance is that of a motor driver who is a small shopkeeper, in which £700 damages were awarded and the man went bankrupt. His second instance is that of a motor cyclist, the son of a wealthy farmer, who refused to have anything to do with the matter and allowed the son to be made bankrupt. The third case is that of a taxi-driver who ran down and killed a foot passenger who left a dependent wife. No action was taken in view of the driver's impecuniosity. Then he instances the case of an undischarged bankrupt, who goes joy-riding in his father-in-law's car. And he also refers to a junior clerk who borrowed a Ford car from a friend and ran down a working man, who was unable to work for six months and who has no hope of obtaining damages. The solicitor gives case after case and sums them up by saying: "This makes thirteen cases in one ordinary country solicitor's office in six months." I think that if one ordinary country solicitor has thirteen cases in six months in which people have been injured and have not recovered damages, it does look as if there was come reason and some necessity for this Bill if the public are to be protected.
Since I introduced it there has been a good deal of comment in the public Press upon it, and I do not think I exaggerate when I say that the notices I have seen have been almost uniformly in favour of some principle of this kind. I doubt if there are five per cent, on the other side. In addition to that resolutions have been passed by special bodies, including chambers of commerce. I received one only the other day from the Association of British Chambers of Commerce, who unanimously adopted a resolution that no licence should be issued except on the production of an unlimited third-party risk insurance policy. So that the Bill has not been without support from the public. There was a well-informed article, written some time ago, in the Post magazine in which this matter was dealt with by a writer who is far better informed on insurance matters than I could claim to be and who pointed out some facts to which I would like to call your Lordships' attention. For instance, that in Denmark compulsory insurance is now in existence; that in Switzerland there is a project for the same thing; and that in Belgium the 688 I principle has been adopted, but there is no Act. I confess that I do not know what that means, but possibly the noble Viscount Lord Peel does. In Massachusetts, also, there is a compulsory insurance Bill.
The same writer, dealing with later illustrations points out that two days after the Bill of last year was before us damages of £12,000 were awarded for the death of a third party. It does appear that damages are sometimes awarded of a considerable sum. In this Bill I have put a compulsory minimum of £5,000. It may be that some of your Lordships who have not carefully examined your own insurance policies may think that is a large sum, but I believe I am right in saying that practically every motor insurance policy now gives unlimited third-party insurance; therefore, £5,000 is less than the ordinary policy gives now.
There is another question and that is the question which was raised last year as to whether the insurance should be of the vehicle or of the driver. Probably no one knows better than the noble Viscount opposite, if he has discussed this with the Ministry of Transport, how difficult these questions are. Those who write about this matter in the Press think it is very easy, but anyone who attempts to frame a measure to apply to it discovers at once that there are very considerable difficulties. One of the difficulties is whether you should insure the vehicle or the driver. I adopted what may be called, in popular language, the vehicle, because that is rather the form of the present policy. Actually, what the present policy does is to insure the driver, Mr. A., while he is driving vehicle B. That is actually what it does—it insures both the person and the vehicle he is driving. Very often it goes further than that and insures that particular person, Mr. A., while he is driving any vehicle. Therefore this form of insurance is one that is already known. I think your Lordships would find that there is not, as a rule, a case where a man would be insured himself irrespective of the vehicle he was driving, although, if he is insured in respect of a particular vehicle, the insurance sometimes is extended to another vehicle. That is a very difficult question, but it seems to me that probably it will be found that the vehicle 689 is the best way to deal with it, because the vehicle is what is licensed and the vehicle us what does the damage. If any of your Lordships like, at any subsequent stage, to add a clause such as was suggested last year, that the use of the vehicle, to whomsoever it belongs, should be forfeit until the damages are paid, I confess I should have no objection to that.
There is also a question of the duration of the policy. There is one difference which I ought to mention between the Bill this year and the Bill of last year. Last year I provided that the policy should be a policy taken from the insurance office, that the licence should expire when the policy expired, and that it should be marked on the licence what the date was. There are obvious difficulties in that. Your Lordships know that licences are issued for periods expiring on quarter days. You cannot have them expiring on odd days. This year, therefore, I have left it that the policy should be co-terminous with the licence. I am glad to say that the writer from whom I have quoted before does not think there will be any difficulty about that. He thinks that the insurance companies will at once fall in with what is required, as, after all, they always do. You tell your insurance company what the duration of the cover is that you want; you settle it with them; and there will be no difficulty in saying to them: "I shall take a licence from such a day to such a day and my third-party cover must agree exactly with those days." I do not think that will present any difficulty.
What I should have proposed to do myself would have been, if your Lordships thought fit, to agree to the principle and to give a Second Reading to this Bill—because I do not suggest that it carries more than the principle—and that the Bill should then be referred to a Select Committee to consider the details. The details are very difficult. But that, of course, is subject to anything that the noble Viscount may have to say. I do not suggest that the details can be settled offhand, or that there has not been a good deal of controversy. Nor do I suggest that this Bill is necessarily the best way of settling the difficulties, though I am a little emboldened by the fact that the noble Lord, Lord Banbury, has put down a Motion for the rejection of this Bill. Although, I am sorry to say, the omens 690 of the last Motion he put down for rejection are not entirely favourable to me, I notice that, as a general rule, if he puts down a Motion for rejection, it does not have a disastrous effect upon the fate of the Bill. Therefore I am not altogether discouraged by the fact that he has put down a Motion for rejection. I think I have explained the object of the Bill and the principle to which I am asking your Lordships' assent. I will simply, therefore, move that the Bill be now read a second time.
§ Moved, That the Bill be now read 2a— (Earl Russell.)
§ LORD BANBURY OF SOUTHAM had given Notice to move, That the Bill be read 2a this day three months. The noble Lord said: My Lords, I think everyone of your Lordships will agree that there have been and are at the present moment a very large number of accidents which might be prevented and ought to be prevented. I find that in the week-end from the 12th to the 14th of this month there were no fewer than sixty cases of injury and nine deaths. Therefore, I think we are probably unanimous in desiring that some legislation should be passed or some means adopted to lessen the dangers which are incurred whenever you go upon a public road or upon a street, cither in this City or in any other part of the kingdom. But the question is: Would the principle which the noble Earl desires to introduce in his Bill have the effect which we all desire?
§ The noble Earl says that motorists are in favour of it. Of course they are. What the Bill means is that if the noble Earl runs over me and kills me he does not suffer in the least, for some third person pays my heirs a sum of anything up to £5,000. What consolation is it to me, when I am in another place, that not the noble Earl himself but some third party pays? It does not affect the noble Earl at all. If the noble Earl himself had put his hand into his own pocket and paid my heirs something it might possibly console me for having been run over, but it can be no consolation to me that some other person pays for the faults committed by the noble Earl. It is quite natural that all motorists, and certainly all reckless motorists, should be in favour of this Bill. After all, what does it amount to for them to have to pay a sum 691 to the insurance company? Whatever happens they have to pay that sum and, having paid it, they are free to do what they like. They may go at any pace over dangerous or non-dangerous roads. They may, when they see a pedestrian, content themselves with blowing their horn and expecting the pedestrian to get out of the way; and if he does not get out of the way and they run over him, somebody else will pay for the damage which they have done. Therefore I am not at all surprised to hear that motorists are in favour of this Bill
§ I would suggest to the noble, Earl that a month's hard labour is much more likely to be effective than this compulsory insurance. It would give me much greater pleasure if I were killed to know that the noble Earl was spending twenty-eight days in prison with hard labour for having run over me than that, somebody else had paid a certain sum of money to my heirs. I do not for a moment suggest that when a motorist who is insured goes out on a journey he goes out with the determination of doing damage to any person or property. But the fact remains that if he is, perhaps, going to catch a train and is a little late, or he is going to do something and wants to get to the station at a particular time, he says: "Well, I must go at so many miles an hour"—some excessive speed. And he may also say to himself: "If there is an accident, after all it does not matter, because the insurance company pays." I think it is probably well known to your Lordships that under compulsory health insurance and under the various insurances which we suffer from owing to our having had the misfortune to have Mr. Lloyd George as Prime Minister, there is a tendency amongst people to say: "Oh! well, I have had an accident. The insurance company pays. Let us see how much we can get out of them." That is one of the things which is sure to arise if you have this compulsory insurance.
§ The noble Earl has great knowledge of the law, which I have not, and I would ask him what he means by "use." Perhaps that is rather a Committee point. The Bill says "in the sum of not less than £5,000 of any damage caused by the use of such vehicle." What does he mean by the word "use"? Suppose his chauffeur takes out his car one evening without his knowledge and without his 692 consent and does damage to some person, does the insurance operate then? Or suppose there is a race at Brooklands, does the insurance operate then? What is the meaning of the word "use" in this connection? I think we ought to be very careful in all this sort of legislation that we put in words which are easily understood by the people. I read in the newspapers a day or two ago some observations, I forget whether by a County Court Judge or another Judge, who described a Bill—a Bill brought in, I believe, in deference to the wishes of various women's associations—as being so complicated that it was quite impossible to understand it. We want to avoid that sort of thing.
§ I do not know whether the noble Earl can explain how we are to determine what is the meaning of the word "use." Viscount Ullswater, who is not able to be here to-day, has given me one or two notes of a speech he was going to make Among other things I see that he asks: Does the word "use" include pace-making, speed-testing, a stolen car? It is well known that many dangerous accidents are caused by stolen cars. There was one reported in the newspapers the other day of four youths who stole a car, knocked over a girl and left the car. I think one of them was caught. What happens in such a case? If all these various accidents are covered by an insurance is it not likely that the insurance companies will put up their premiums? If they put up their premiums to a more or less prohibitive degree is the noble Earl going to recommend that there should be a national insurance company to insure motorists? I am rather afraid from the quarter in which he sits that it is possible that something might be nationalised if this Bill ever becomes law. Then, what will be the position if the insurance companies refuse to insure a person? I am informed on the authority of Viscount Ullswater that that is not altogether an uncommon occurrence, that occasionally insurance companies do refuse to insure. In those circumstances what is going to happen?
§ Finally, there are a great many careful drivers, a great many people who use motor cars in a proper way, who have never had an accident. Are they to be compelled to pay a high insurance premium because there are certain careless 693 people who do drive recklessly and do have accidents? Surely, the proper course to pursue is to put the penalty on the right person; that is, the person who causes the accident. Do not let him got out of it by saying: "I will render myself immune from any liability for damage to person or property by insurance." Let him know—or let her know, if it is a woman—that he or she will have to go to prison and have a very unpleasant time of it, and then you will find these motor accidents will diminish.
§
Amendment moved—
Leave out ("now") and at the end of the Motion insert ("this day three months").—(Lord Banbury of Southam.)
§ LORD MONTAGU OF BEAULIEUMy Lords, in listening to the noble Lord who has just sat down I was very much amused by his speech, but, if I may say so respectfully, I do not think it had very much to do with the subject you are asked to consider this afternoon. The subject we have to consider—and I dare say many noble Lords appreciate the point brought forward by Earl Russell—is this: At the present moment, I am sorry to say, there is an increasing number of accidents in which people are knocked down or injured by motor cycles or small cars, owned in very many cases by people who have not much means, and the people injured are therefore unable to get any compensation from those owners as would be the ease if the owner of the car was comparatively well off, or if the car was valuable. Anybody who watches the roads to-day can see that the smaller class of ear, owned by people of small means, is very largely on the increase and they are just the sort of people—I do not wish to speak with the least prejudice—who are not very skilled in conducting a vehicle. These are the people who take more risks than the owners of valuable cars, represented very largely by your Lordships in this House. I think it is quite right that there should be some provision made so that people knocked down and injured by this class of vehicle should have some compensation.
With regard to the question whether the fact that a person is insured or not makes any difference to his care on the road, I would remind my noble friend behind me that 60 to 70 per cent, at least, I should say, of the vehicles on the road are insured against third-party risks, and 694 quite rightly so. No man who owns a motor vehicle and either drives it himself or is driven in it should omit to take out an insurance to cover accidents which may not be due in any way to any lack of skill or precaution on the part of the driver but entirely to a risk which comes from something outside. We all know that the number of accidents that occur is terrible, but is the greater number of cases where these are caused by moderate sized or large cars there is an insurance company who has insured the risk. I think that is an important point and I have not heard it answered in to-day's debate. I can assure the noble Lord behind me that I have never seen the least evidence of an insured person driving a car more recklessly than an uninsured person. Would it be said that because a man has insured his house against fire he would leave matches lying about or do nothing to prevent the fire falling on to the floor?
§ LORD BANBURY OF SOUTHAMSome burn the house down.
§ LORD MONTAGU OF BEAULIEUThat would be a general argument against all insurance. It might be said that people should not insure ships because those who insure ships are careless of the lives of the sailors. It is an argument that has been disproved in the history of insurance for many years past. Every kind of risk should be insured against because then justice can be obtained by the aggrieved person with greater ease. There are one or two points in the Bill which I will not consider just now because they are more or less Committee points. With regard to the sum of £5,000, I am informed that that is a thing unknown in the insurance world. What happens in the ordinary way is that a man takes out a policy on a car to insure him against damage, third-party risks and so on. If no claim is made by the end of the year it is in many cases the practice of the insurance company to give a rebate of 5 per cent, or 10 per cent, of the premium, or oven more, and if the owner is also the driver a reduction is sometimes made, as also in cases when the car is driven by only two persons. In other words, the careful driver has an advantage over the man who is not careful. It is quite true, as the noble Earl said, that one or two well-known 695 black sheep in the motoring world cannot insure their cars at any ordinary rate and suffer accordingly. But the bulk of the motorists on the road to-day are insured at reasonable rates and, considering the millions of miles per day that are run and the risks that, I must say, are very recklessly incurred by motor cyclists and pedestrians—I am not running them down in any way, but we must all have known cases of recklessness on their part—I think that the number of accidents is not really greater than the development of motor transport leads one to expect.
The argument of the noble Lord who opposes the Bill is that if you imprison and give hard labour to people who cause accidents you are following a better plan than that suggested by the noble Earl opposite. But that is the business of the criminal law. If recklessness is proved, either under Section 1 of the Motor Car Act, 1903, or in regard to the speed limit, the Courts to which the noble Lord refers can deal with the matter, which is a criminal and not a civil one. I am concerned to see that the poor man who is knocked down and whose wife is deprived of her husband's salary and earnings for a considerable period owing to an accident incurred on the road should have some means of redress against those who are not able themselves to give it, and though, as I have said, there are many Committee points on which I may differ from the noble Earl, I agree with the general principle of the Bill. I think that it will lead to more careful driving and to a greater measure of compensation to those injured and, on those grounds, I support the Bill as moved by the noble Earl.
§ LORD SUMNERMy Lords, that there is some principle underlying this Bill we have been told by the noble Earl opposite, but what that principle is I have been unable to gather. That it is introduced with the very best intentions, that it will be welcomed by many motorists for the reasons already given and still more by many insurance companies for the sake of the flood of new premiums that will accrue, I can quite understand. But what its principle is and how the Bill is to fulfil the excellent intentions of its promoters I am still entirely at a loss to appreciate. It is a perfectly practical 696 proposal to make compulsory the taking out of a particular form of insurance with which we are all at present familiar, and it is hoped that by that means persons who are run over by bankrupts will be able to get money out of somebody else. If that result is not achieved the Bill is quite useless; and I greatly deprecate your Lordships being asked to pass in the name of a principle a short and sketchy measure which is to be remodelled afterwards by a Select Committee or some other kind of Committee.
The question is whether we ought to give any sanction to the proposal to make it compulsory that persons who take out a licence for the use of a mechanically-propelled vehicle shall be obliged at the same time to produce a particular kind of third-party risk insurance policy. I will not stop to inquire whether this is not, in a slightly disguised form, a tax additional to the motor licence tax imposed upon persons who seek to drive cars, or whether it might not raise questions which it would be desirable to avoid between this House and another place. Perhaps the noble Earl has considered that point. It is quite plain, I think, that the person really hit by this Bill will be the ordinary owner-driver, and particularly the poor owner-driver. As a matter of common sense everybody who has a car and can afford to do so takes out a third-party risk insurance along with the general insurance upon the car itself. Why does he do that? He does it for his own protection. He does not care twopence about the victim, but he does it because, under that form of insurance, if anyone makes a claim against him, he is entitled to say to the insurance company: "You have contracted to indemnify me against any claim that is made and can be proved against me. Fight the case, or do not fight the case, as you like. I am in your hands. If the claim is pursued, and you do not ask me to defend it, you will have to pay me the sum recovered on the judgment. If, on the other hand, you think that there is a case to fight, I am at your disposal as a witness, and if you can win the case you will pay the costs, the claimant will not get anything and I shall be content." That is the basis of the third-party risk policy.
As a matter of fact, as I think my noble friend said, sixty or seventy per 697 cent. of drivers take out such an insurance already, and it seems to me quite clear that any one who can afford to employ a servant to drive him probably has the sense and the money to take out such a policy. His servant, having his place to think about as well as his own driving licence, is not disposed to be reckless and, even if he is reckless, a person who can own a car, employ a chauffeur and insure himself against all risks is probably fairly good for the money in case a claim is made against him. But as soon as you take the people who are not in that position, who, as I say, are the owner-drivers, the only people really material to this issue, you will observe that they are called upon to take out this policy precisely for the reason that it is not supposed that they have any money of their own. How much better off will the victim be when this compulsory policy has been taken out? I suppose—it is not a model of drafting—that when the Bill says that it is to be an insurance against "any damage caused by the use of such vehicle" it does not mean to interfere with the ordinary law concerning negligence. It does not mean, I suppose, that if my motor car runs over somebody entirely owing to his fault then, because my motor car has been used, I have to pay for it. I suppose it does not mean that, if the person injured is to blame, he should be relieved of the consequence of what is called contributory negligence, and allowed to recover damages if his leg has been broken though, if my leg is broken, it would be he who would have to pay for it.
If this kind of claim is to be asserted in the ordinary way in which such claims are asserted now, the first result is that, instead of having an uninsured owner to face, the injured person has to face an insurance company. So far as I know, insurance companies behave very sensibly arid reasonably in these matters, but, of course, it is their business not to be victimised and the odium of defending the case does not hurt them. I can quite understand the careless owner or driver rather hesitating about going into the box and disputing that he ran over the widow or orphan carelessly, but the insurance company need have no scruple about saying that the orphan did not look where he was going or that the widow 698 was in liquor. Accordingly it is very much more likely that the claims will be resisted and defended by legal assistance of the best kind, accustomed to this sort of case, than if no such insurance had been taken out. Every time you can defeat a claim, either by saying that the defendant was not to blame or by saying that the plaintiff was to blame, the insurance company does not pay anything except the costs, and the victim, whose tragic case has been pictured to us already, gets nothing. The person who is killed would be no better off whether £5,000 is paid or not—he would just be killed—and I do not see how the injured person is going to be any better off. He would have a more skilled antagonist against whom to assert his claim, an antagonist who would have no scruple about taking all the points that can be taken, instead of being amenable to some feelings of shame.
It is quite clear from the language cited, and I understand it to be the view of the noble Earl opposite, that the intention of the policy is to make a fund to which the injured person could have recourse where the real culprit, the careless driver, was impecunious or bankrupt, or so situated that he could be made bankrupt at any time. If the notion is that this kind of third-party insurance will be one in which an injured man can bring an action under the policy against the insurance company in his own name, then it is an entirely new kind of third-party insurance, and I should like to know whether any insurance company has been approached with a view of ascertaining whether it would accept a large risk of that kind, and if so at what price. The person you would sue is the person who ran you down, and he brings in the insurance company to defend him. He has a contract between himself and the insurance company, and if it comes to be a conflict the injured person is the plaintiff, the defendant is the assured or the owner of the car, and the insurance company cannot be brought in as defendants in that action at all. If the defendant, the assured, is reasonably well-to-do he puts his hand into his pocket and pays on the judgment, whether his pocket has already been filled for him by the insurance company or not. The injured person gets his damages by any form of execution he likes to employ. If however, the defendant is not well-to-do, 699 but has nothing but the policy, and also plenty of debts to other people, his right under the policy is one of the assets of his estate. What are the other creditors to do? Are they to be left out in the cold? Are there any means in the Bill, or any which can be readily introduced, by which an asset of a bankrupt person can be made to assure 20s. in the £ to one creditor, although there are no other assets and numbers of other creditors are left out in the cold?
Have your Lordships conceived the case of an owner-driver who has nothing in the world except his clothes and the car that he owns, and the magnificent spirits which he enjoys? He is sued to judgment. The insurance company may take the risk of paying direct to the injured person if it likes to take the risk, but in so doing it runs a risk. Of course it must pay the right person. You have to make the debtor bankrupt on your judgment, and then the trustee in bankruptcy is entitled to collect from the insurance company, and if there is only one creditor the trustee will pay the money to the plaintiff. If, however, there is more than one creditor the widow and orphan may only get 6d. in the £. That is the way in which this scheme will work. Then we have not been told whether any insurance company has been approached to see whether any different kind of insurance policy can be devised which would be acceptable to them, and to what extent the risks would have to be represented in the premium.
The limit of £5,000 is mentioned. I thought it was the maximum, but the noble Earl called it the minimum. I do not know whether he means that it should be a policy insuring the payment of £5,000 as an indemnity to the wrongdoer in respect of any one accident, or £5,000 in respect of all the accidents occurring in the course of a year. If it is to be £5,000 in respect of any one accident, it might not be too much if one considers the importance and dignity of some of the potential victims suggested to us, but the first accident may exhaust the policy and in that case the other victims who suffer during the remainder of the twelve months get nothing. If, on the other hand, it is to be a payment in respect of any one accident, then the premium which would have to be paid for a risk potentially so large as that 700 would, it seems to me, be very formidable. And there is another little difficulty. The insurance is on the car. I do not know whether the noble Earl means that the policy is what lawyers call a policy to run the car, or not. If it means that the person who has taken out the policy, having sold the car, will be able in some way or other to substitute the buyer in his own shoes as the person insured, then, of course, that process can be done over and over again in the course of the twelve months, and the insurance companies would have to say what is to be the premium for persons of whom they have never heard driving this abominable vehicle to the danger of His Majesty's lieges.
A person applying for a policy would be bound to answer all questions put to him as to previous convictions and accidents, and his disclosures would be the basis of the contract; but how is it going to be in the case of the man who buys the car? The insurance companies would have to calculate the premiums on the assumption that any other person to whom the car may pass by purchase will be a person of, perhaps, rather more than average heinousness, and the person who takes out the policy in the first instance would have to pay for all that. It is suggested that we need not be afraid that British enterprise will fail to discover a form of policy which will cover all these risks. That sounds all very well in a hopeful company such as your Lordships are, but any one who knows anything about insurance will realise that it is not so easy a matter. The old companies are well set and it is not so easy for a new company to get a look in. If it is a new business as well as a new company, see what will happen. If you begin by taking a benevolent view of the risks and fix your premiums low, you become bankrupt, and then what becomes of the widow and orphan? If, on the other hand, you are prudent and have a quorum of Scottish directors and so forth, and take rather a high view of the risk until you have gathered experience, these people who already pay a tax for a motor licence will, it seems to me, pay a double or treble tax for an insurance policy.
I could say more, but I do not wish to detain your Lordships. May I, however, ask you this? The thing we are aiming at is the iniquitous recklessness of drivers—drivers who have one defence 701 which they constantly urge in their favour, and that is that cyclists and pedestrians and other drivers are also very reckless. There is always the risk of the load. I think it is a perfect miracle, on the roads that we drive along night and day, with hundreds and hundreds of motor cars proceeding at a speed which, when I was a boy, would have been excessive for a railway train, that there are so few accidents. But still there are quite enough to make it a national scandal, and whether imprisonment with hard labour, or a rope to the nearest lamp-post, or merely social condemnation and ostracism, and a trust that they will experience a change of heart, is the right line that we should pursue, I am sure I cannot tell.
But I should have thought it was quite clear that you must get at the reckless driver in one of two ways. Either you should make it so dangerous for him to be careless that you would inculcate some sort of care in him, or you should prevent the sale to him of vehicles that are capable of being driven at the high rates of speed of which we complain. To think that by constructing a newfangled instrument of ordinary commerce in the hope that it may solve the problem, and that, if it will not, some Committee may solve it for you, seems to me not to be reasonable legislation. Having said this—I hope the noble Earl will not think in a carping spirit—I must add that I cannot see that there is any principle in this Bill which will ever lead to anything but disappointment, and I would suggest to him that, as the Bill is only introduced now for the second time, and is perhaps not certain to pass this year, it might be as well for him to constitute his own special committee, to withdraw the Bill, reconsider it and take further advice, and possibly get some solution of the whole problem which will really meet with universal approval.
VISCOUNT GALWAYMy Lords, there is one point which leads me to support the noble Earl's Bill, and it is a matter which has hardly been alluded to to-day. While I fully feel that the road-hog should be made to pay for all damages done to other cars, what I am concerned with is the case of the working man who is going to and from his work either on a bicycle or on foot. If he is knocked 702 down and seriously hurt so that he may be in hospital for some weeks, or even months, and in consequence loses his work for all that time, then the road-hog who has done the damage pleads impecuniosity. As I understand, this Bill is intended by the noble Earl to meet that case, but we should make it clear that the working man would get the compensation due to him, either from the insurance company or from the motorist himself. I do not pretend to enter into the legal details of the matter, but surely it is only right and fair that steps should be taken to protect. the working man in such circumstances. I sincerely hope that I am right in surmising that that is one of the objects of this Bill, and on that understanding I shall certainly cordially support the Second Reading.
§ LORD DANESFORTMy Lords, the noble and learned Lord, Lord Sumner, has subjected the provisions of this Bill to a penetrating analysis, which must have convinced most of your Lordships that the Bill is perfectly unworkable. The truth is that you are trying by this Bill to force a man by Act of Parliament, against his will, to enter into a contract, the nature of which is not laid down in the Bill, the conditions of which are not laid down, the terms of which are not prescribed, and which, as I think, could not possibly be specified in any Act of Parliament. Because, after all, these contracts of insurance are matters of agreement between the insurance company on the one side and the person who proposes to be insured on the other, and you are going to say, without laying down—and you cannot lay down—what the terms and conditions of the contract are to be, that every man who obtains a licence to drive a motor car shall be forced by Act of Parliament to enter into this unknown contract.
I propose to say one or two words upon another aspect of the question. The really important matter in regard to motor cars at the present moment is not so much getting money out of bankrupts as the safety of the subject, the prevention of accident. As my noble friend Lord Montagu has very truly said, the number of accidents caused by motor ears on the road now is absolutely deplorable. You cannot open a paper without seeing 703 records of them. Is the Bill of the noble Earl likely to diminish the number of these accidents or not? I venture to say, agreeing as I do with my noble friend Lord Banbury on the subject, that if it were possible for a man to protect himself against the results of these accidents in the way suggested by the Bill the number of accidents would be largely increased. You would have more and more recklessness, and Heaven knows there is enough of it on the road already.
I think that the only mode of solving this very serious problem is a stricter administration of the law. It has been forced upon the observation of everybody who has occasion to go upon the roads on foot or in a motor car that almost every car exceeds the legal limit, even when the road is considerably congested. When the road is clear it does not so much matter, but every day your Lordships, like myself, probably see drivers going at thirty or forty miles an hour on the road when it is considerably congested. And as for motor cyclists, I have never seen one going at a less speed than about fifty miles an hour. Therefore I am not very greatly surprised when I read in the papers day by day of fatal accidents, both to the motor cyclists themselves and to those who accompany them, as well as to people on the road. In view of that state of things I suggest that the only way of improving matters is that the law should be more strictly administered. You never see a motor cyclist brought up, and yet we see them breaking the law every day and riding to the danger of the public. If any representative of the Home Office is here I should be very glad if he would let me know—what I have never been able to find out—why these motor cyclists are not prosecuted. For all these reasons I sincerely hope that this Bill will not receive a Second Reading.
§ LORD SHANDONMy Lords, I have listened carefully to this debate, and I agree that the Bill is properly open to adverse criticism. It is not well thought out, if I may say so with all respect to the noble Earl who has introduced it, and it would probably lead to difficulty in working. But there is one commonsense point. At the present time the roads are being used by a number of motorists who have not large incomes and who, if an accident takes place, are 704 not worth powder and shot, with the result that if the person who is injured takes proceedings he cannot recover anything. That is a condition of affairs that ought not to be allowed to continue if it can possibly be avoided. It is stated that in Denmark this difficulty has been overcome by insisting on third-party insurance. I do not know whether it is possible or not to frame a policy which would meet the adverse criticisms put forward by the noble and learned Lord, Lord Sumner. Very likely not; but, practically speaking, nobody would be any the worse if such policies were taken out and a great many people who are injured by those in impecunious circumstances would be very much better placed. That is how it occurs to me, and I think we should never legislate on any subject or try to remedy any great public grievance if we allowed ourselves to be seduced from doing anything by the possible and sometimes the impossible contingencies which it is suggested might arise by ingenious persons who want to do nothing. I do not think that the Bill as drafted would work, but I earnestly suggest that the main common-sense principle behind it is one that your Lordships' House ought to endorse. For that reason I shall certainly vote for the Bill, although I do not think it is likely as a practical measure ever to get much beyond Second Reading.
§ THE FIRST COMMISSIONER OF WORKS (VISCOUNT PEEL)My Lords, the noble Earl, Lord Russell, as he justly observed, introduced this Bill, or a Bill on the same lines, last year and he asks us this time to give it a Second Reading. There seems to be a good deal of difference of opinion among your Lordships as to the value or non-value of insurance. My noble friend behind me (Lord Banbury of Southam) took, I think, a completely different view on that point from the noble Earl opposite. I did not entirely follow the argument of my noble friend behind me because he seemed to suggest that if he was run over by the noble Earl opposite through his negligence and was killed he would be very dissatisfied if a sum of money was paid by an insurance company to his executors. If, on the other hand, I, not being insured, ran over him and paid out of my own pocket a substantial sum to his 705 executors, then my noble friend would feel that the case had been properly dealt with. That seemed to be his argument.
§ LORD BANBURY OF SOUTHAMI should be more satisfied if I felt that the man who had killed me was penalised than if I felt he had got off by penalising someone else who was not responsible.
§ VISCOUNT PEELOf course, I should be overwhelmed with grief if I were to cause such a fatality to the noble Lord, but I am glad to find that I should gratify him in other ways. I was not quite clear from the statement made by the noble Earl and from the evidence he put before us as to the necessity for this Bill whether he really meant, as the noble and learned Lord behind me suggested, to deal or not to deal with the law of negligence.
§ VISCOUNT PEELI am glad to have that from the noble Earl. I was not sure from the evidence he brought before us and the cases he cited whether they were simply cases of people who had been injured by motor car accidents or whether they were people who had sued bankrupts and so on and had probably recovered in the courts of law from those negligent bankrupts.
EARL RUSSELLI am sorry that I did not make that clear; but with one exception, in which it was not thought worth while to sue, they were all cases in which judgment had been recovered at law in the usual way.
§ VISCOUNT PEELI was not quite clear from the statement of the noble Earl whether that was so or not. I would like to say a word as to the area covered by the noble Earls Bill, because the question has been raised as to the percentage of persons or cars or of persons driving cars who are insured and are not insured. My noble friend Lord Montagu of Beaulieu gave the percentage as between 70 and 80, I think.
§ LORD MONTAGU OF BEAULIEUSixty and seventy per cent.
§ VISCOUNT PEELThe official figures I have are much higher than that and they show that no less than ninety per cent have been insured. Therefore, on the analogy of his argument my noble friend 706 Lord Banbury runs a serious risk from at least nine-tenths of those who are using motor cars. The problem, therefore, is narrowed down to those ten per cent. who do not insure. In regard to the number of accidents due to negligence, which I do not say are inconsiderable—although I think many statements made by noble Lords have included in one figure accidents due to negligence for which damages are recoverable and accidents which are, as it were, accidents in regard to which no negligence has been disclosed—it will be obvious that whatever the number may be they are probably pretty widely distributed over the 100 per cent., and that only a comparatively small proportion, though it may be a larger proportion than it ought to be, falls within the ambit of the ten per cent. who are not insured. Let me give your Lordships the figures of the vehicles now plying upon the roads. We have, I understand, for the year 1927, vehicles taxed on horse, power, private cars, 700,000.
§ VISCOUNT PEELYes; that is the estimate, and they would be more than this year obviously. Motor cycles, 650,000; goods vehicles, 250,000; omnibuses, chars-a-banes and hackney carriages, 100,000—I hope your Lordships will note that figure—and other vehicles, 65,000; making in all 1,765,000. Those are the general figures, and I have given also the percentage of those who are uninsured.
The next point raised, I think, by the noble Earl was as to what the insurance should be; that is to say, whether the driver or the vehicle should be insured. By "vehicle" I suppose he means the owner of the vehicle. Whichever system you took there would be considerable administrative difficulties and also, as my noble and learned friend has pointed out, considerable legal difficulties. But taking the vehicle insurance I should like to point out one or two of the difficulties that confront a Government who might desire to take it up. First of all, it would effect a considerable alteration in the whole system of the insurance of motor vehicles. In order to ensure, of course, that damages were paid when negligence was established you would have, first of all, to secure that the policy was 707 always in force, and you would have to secure also that the financial position of the insurance company was satisfactory. Regarding the point that the policy ought always to be in force, these policies at present are restricted to particular matters, such, for instance, as the purposes for which the vehicle is used, whether for pleasure or business or both. The policies become void if the vehicle is used for purposes not disclosed, or if the holder of the policy has failed to disclose material facts, such, for example, as a bad accident record or that the vehicle is driven by an unauthorised person.
As regards that point, it would appear to be necessary, therefore, to have a standard form of insurance and to exercise some control over the policies issued by the insurance companies to see that there was capacity in the insurance companies to meet all possible claims. If that were not done you would, I think, have to fall back on the suggestion made by my noble friend opposite—that is to say, on a system of State insurance—and I understand that the noble Lords behind me who support this Bill are not in favour of such a system. If you follow the line that I have suggested you would have, of course, to allow contracting out. You would have to allow responsible firms and undertakings who are to-day their own insurers, like railway companies, large omnibus undertakings and municipalities, to contract out in respect of vehicles operated by them. The question of determining whether there should or should not be contracting out is one of some difficulty. Those are some general difficulties in the way of a complete insurance system such as the noble Earl has suggested, but there are one or two additional difficulties connected with the Bill in the form in which it has been placed before us.
Under the Bill it would appear to be necessary for the issuing officer to give an excise licence if the insurance policy against third-party risk for the amount named were produced, irrespective of the fact that the policy might be one of a restricted nature and, apparently, without. regard to the financial stability of the company or person with whom the insurance is taken out. But on t hose points probably the noble Earl intends to introduce some Amendments. There is, however, a general administrative diffi- 708 culty which has to be considered and that is this. There are 184 excise licensing authorities and it would be a considerable work to place upon these authorities the duty of examining all these different insurance policies in addition to their other work. The large majority of vehicle licences are renewed on January 1 and, presumably, the insurance policies in respect of these vehicles would be renewed at this time. The licensing authority officials, I understand, are at the present time overworked at this period of the year and to throw on them the additional work of checking these policies would be rather a serious matter. I have no doubt the insurance companies, who would have to issue their policies at the same time, would find means for meeting that difficulty so far as they themselves were concerned. The scheme put forward by the noble Earl is a very comprehensive one and it raises a considerable number of administrative and other technical difficulties which certainly, on the large scale he suggests, would be very hard to meet. I admit that many of the difficulties that I have suggested, and many of those that have been referred to by my noble and learned friend behind me, would be met with, though in a less degree, in a restricted system of insurance.
I understand that the Minister of Transport hopes to introduce, when Parliamentary time allows him, a Bill dealing comprehensively with the licensing and registration of hackney vehicles and that that Bill will contain provisions to ensure that the licensees are either sufficiently substantial to be their own insurers or that they are adequately insured in respect of their vehicles against third-party risk. The view of the Minister, I understand, is that the case for the compulsory insurance of public service vehicles is stronger than the case for universal insurance. The owners and proprietors of these vehicles are licensed to exercise a special and exclusive privilege and it should be the duty of the licensing authorities when licensing vehicles to ply for public hire, to see that there is every measure of safety for the public using them—in other words, the licence to ply for hire should be a certificate that the vehicle is satisfactory mechanically and that the public, in case of accident due to negligence, should be able satisfactorily to enforce their remedies. The Ministry 709 hope that they may get experience from this limited form of insurance and then they will be able to consider whether any alteration should be made, or, possibly, whether the system of insurance should be carried any further.
That is what, for the moment, the Ministry propose to do when there is a gap in Parliamentary time that will allow of its being done. I agree that is a long way from the proposal that has been made by the noble Earl, but I suggest to him that practical experiment of that kind, even on a small scale, would possibly be of more value than even the best investigation by a Select Committee of this or the other House. I therefore trust, having brought this Bill forward, that he will see his way not to press it to a Second Reading. I could hardly accept the Bill as it is and I should not like, by accepting the Second Reading, to commit the Government to this general system of insurance. I should be compelled, as far as the Government is concerned, to challenge a Division if the noble Earl presses the Second Reading. I hope, therefore, that he may be willing to withdraw the Bill.
EARL RUSSELLMy Lords, I can never understand why, when this subject of compulsory insurance is discussed, a large number of your Lordships always run off upon the question of reckless driving. The question of reckless driving and the best punishment for reckless driving is an absolutely separate matter. I am in as thorough agreement, as I think the House knows from the Amendment that I carried to the Bill dealing with drunken motorists, with any measure to pat down reckless driving as any member of your Lordships' House can be. But that is a totally different and separate question. The criminal law is there now. The very Act for which the noble Lord, Lord Banbury of Southam, asks is on the Statute Book. A man who drives recklessly and negligently and causes damage can be given his month's hard labour now, and I shall be the first person to approve of the action of any magistrate who gives it to him. But that has nothing whatever to do with the subject of insurance.
The noble and learned Lord opposite, Lord Sumner, went into a great many details and ingenious speculations. With that ingenuity for which he is well known 710 he found a great many insuperable objections to this scheme. I confess, in regard to the receipt of the actual payment, that almost the only case to which his argument applied was the case of the man who was already bankrupt. The man who is nineteen or twenty years old and has only about £10 worth of this world's goods is not bankrupt. His case is that of a person who can be sued in the ordinary way and against whom judgment may be recovered in the ordinary way. judgment having been recovered in the ordinary way against him, the company will pay the amount of it. That is precisely what my intention was. The noble Lord said he could not for the life of him see what the principle was. The principle seems to me a fairly simple one. It is that any person who is injured on the road by a motor car, if he recovers damages in a court of law, should be sure of getting those damages, or as sure as it can reasonably be made. That is the principle to which I ask your Lordships' assent.
Then the noble Lord, towards the end of his speech, said that this Bill was proposing to put upon the world of insurance an entirely new commercial device or commercial scheme. It is not anything of the sort. It is simply proposed that an insurance policy which 90 per cent. of motorists now take out should be compulsorily extended to the other 10 per cent. who are too careless or reckless to do it. Whether it would have the effect of making them more reckless I cannot say. My own impression on that particular point is that it would have no effect at all, and really it is not relevant to the subject we are considering. It may well be that I have not adopted the most complete language and that the administrative difficulties may be considerable, but the principle to which I ask your Lordships' assent is perfectly clear and I am inclined to think the majority of your Lordships would assent to that principle.
But when the noble Viscount tells me that the Government themselves intend to adopt this principle and try it on a limited scale—I understand to the extent of 100,000 vehicles—I accept that willingly because it seems to me that nothing can be better than practical experiment. You will find out in that way whether the thing is practicable and whether difficulties do 711 arise. I would like, however, to say to the noble Viscount, and I am sure he will convey it to the Minister of Transport, that I do not think these commercial vehicles cause the accidents. Commercial vehicles are owned by responsible people who want to keep them running and to give a regular service and who do not want to go about driving recklessly. As Lord Montagu of Beaulieu said, the people who do cause the accidents are motor cyclists, practically all young men, and people who own small cars and have no means beyond the car. These are the people I should like to see drawn into the ambit of the scheme, but I should welcome some experiment and personally I will agree to withdraw the Bill. That, however, depends on the noble Lord opposite.
§ LORD BANBURY OF SOUTHAMIf the noble Earl desires to withdraw the Bill then I should not do anything to prevent him carrying out such a very laudable object.
§ Amendment, by leave, withdrawn.
§ Original Motion and Bill, by leave, withdrawn.