INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES BILL. (Hansard, 24 April 1929)

§ THE LORD CHANCELLOR
My Lords, in moving the Second Reading of this Bill your Lordships would like to have from me, I think, a short explanation of the matters with which the measure deals. There are two topics, both of which are of urgent importance to the industrial assurance companies, in regard to which experience has shown that there is a real need for an amendment in the law in order to ensure that what was believed to be the law should receive legislative sanction, and that the companies should be protected from what apparently has been an unwitting departure from, and transgression of, their legal limitations.
The first point is with regard to the granting of endowment policies on the lives of relations. Section 3 of the Industrial Assurance Act of 1923, re-enacting an earlier enactment, provides for the issue by industrial assurance companies and collecting societies of policies on the lives of certain relatives for funeral expenses. There is a somewhat similar provision for friendly societies in the Friendly Societies Act of 1896; but no provision is made anywhere for the issue of endowment policies on the lives of such relatives, except a provision in the Friendly Societies Act, 1896, which provides for the endowment of nominees of members at any age, and that applies only to friendly societies. Such policies have been issued for a great many years past without any question of their legality having been raised. But the question has been raised and it becomes necessary therefore to deal with the situation and to legalise the position by enacting what has always been supposed to be the law—namely, that these endowment policies should be included in Section 3 of the Act of 1923.
The second point, similarly, is a point which arises through a misunderstanding. As your Lordships are aware, the existing law provides that where there are insurances on the death of a child the amount which can be paid shall not exceed a specified sum at various ages. There is a common provision that in the event of policies being more the amount of the premiums paid shall be returned. At the time when the section was passing through Parliament in 1923 an Amendment was moved in Committee in another place to make it clear that the return 175 of the premiums in certain events should not be illegal merely because the premiums, when added together, came to a little more than the specified amount. An assurance was given to Parliament then, on the authority of the Chief Registrar of Friendly Societies, that there was no need for that Amendment because that was the law. On the face of that assurance the Amendment was dropped and the Bill passed into law as it stood. Unfortunately, in a prosecution which took place last year the Courts decided that that view of the Chief Registrar was a mistaken one, and that in fact, on the language of the Statute, it was illegal to return premiums if, when added together, they amounted to more than the specified sum. Obviously the industrial insurance companies were placed in very great difficulty by that decision, the more so as they were liable to very heavy penalties if they issued illegal policies. The other amendment which is proposed is to deal with that situation and to provide that the law is as it was believed to be.
Finally, when those two amendments are made, one has to remember that if these policies are made legal there will be certain rights in the holders of policies issued before 1924 to a free policy at certain rates and to the return of premiums in the case of policies issued after January 1, 1924. In order to protect any existing rights and inasmuch as this in one sense is retrospective legislation, provision is made in a later clause of the Bill that sums shall be payable in respect of these policies to a substantially larger amount than is given in the case of forfeited policies under the Act of 1923. The Bill, I believe, has the approval of all Parties and of all persons interested, and it is desired, if possible, to pass it into law during the present Parliament. I beg to move that the Bill be now read a second time.

§ LORD ARNOLD
My Lords, I do not propose to discuss this Bill in any detail. It is, as the noble and learned Lord on the Woolsack has said, a noncontroversial Bill and, broadly speaking, it is supported by all Parties. But I think it right to point out that had the advice of the Labour Party been followed in 1923 this 176 Bill would not have been necessary. The noble and learned Lord did not tell your Lordships that. As a matter of fact this point, the main point of the Bill, was the subject of an Amendment by Mr. Tom Johnston in 1923 in another place, and Mr. Johnston was told by the present Attorney-General, who was then Solicitor-General, that the Amendment was not necessary, that it was not needed. On that assurance, coming from a Law Officer of the Crown, naturally enough, Mr. Johnston withdrew his Amendment. That advice was wrong, completely wrong. That was not the only mistake made and not the only wrong advice given by the Law Officers in that year, 1923, as your Lordships may remember.
I mention this because I think it is right that the facts should be known, and also because I observed very recently that the noble and learned Earl, Lord Birkenhead, suggested in an article that when the Labour Party came into office they would not have lawyers of sufficient capability to discharge the functions, or words to that effect. In view of what I have said, the article of the noble and learned Earl leaves us quite unmoved.

§ THE LORD CHANCELLOR
My Lords, I do not think it necessary to enter into controversy with the noble Lord as to the legal attainments of my right hon. and learned friend the present Attorney-General. I did tell the House just now that this Amendment had been moved and had been dropped in 1923 on the assurance then given on the authority of the Chief Registrar, who is the administrative officer conducting the affairs of these societies, that it was unnecessary, and I told the House that it was because a conviction recently obtained shows that that view of the law, which had been acted on for a great many years, was erroneous, that this Bill became necessary. I did not inform the House that the gentleman who moved the Amendment was Mr. Tom Johnston because I did not think that was relevant. As the noble Lord thinks it important, by all means let it be known that Mr. Tom Johnston moved the Amendment which was dropped in those circumstances. Beyond that I do not know that the discussion as to the competence of those who will be called upon to fill legal offices 177 in the unlikely event of a Socialist Government ever being formed is relevant to the present Bill.