§ Order of the Day for the House to be put into Committee read.
§ Moved, That the House do now resolve itself into Committee.—(The Earl of Munster.)
§ On Question, Motion agreed to.
§ House in Committee accordingly:
§ [The LORD STANMORE in the Chair].
§ Clauses 1 to 8 agreed to.
878§ CLAUSE 9 [Obligations as to employment of quota of registered persons in substantial staffs]:
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF MUNSTER)The Amendments to this clause which stand in my name on the Paper are all drafting Amendments. Their insertion has become necessary because of the introduction in another place of the Reinstatement in Civil Employment Bill. If we do not make these Amendments in the Bill now it would be necessary to introduce legislation at a later stage to amend the Bill now before your Lordships. I beg to move.
§ Amendments moved—
§ Page 6, line 42, leave out ("it is") and insert ("apart from that subsection it would have been")
§ Page 6, line 42, leave out ("reinstate in ") and insert (" take into ")
§ Page 6, line 44, leave out from the first ("of") to ("or") in line 47 and insert (" any Act, whether passed before or after the passing of this Act ")
§ Page 7, line 1, after ("agreement") insert ("to reinstate him in his employment").—(The Earl of Munster.)
§ On Question, Amendments agreed to.
§ Clause 9, as amended, agreed to.
§ Clauses 10 to 18 agreed to.
§ Clause 19:
§ Provisions as to offences.
§ (4) Where an offence under this Act has been committed by a body corporate, every person who at the time of the commission of the offence was a director or officer of the body corporate, or was purporting to act in any such capacity, shall be deemed to be guilty of that offence, unless he proves that the contravention was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his functions in that capacity and to all the circumstances.
§
LORD TEVIOT moved to leave out subsection (4) and insert:
(4) Where any offence under this Act committed by a corporation is proved to have been committed with the consent or connivance of any director, manager, secretary, or other officer of the corporation he, as well as the corporation, shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
§
The noble Lord said: I have had this matter drawn to my attention in my capacity as the honorary treasurer of the Association of British Chambers of Commerce and I feel that it is a matter that ought to be brought before your Lordships. Subsection (4) of this clause as it stands at present provides that where an offence has been committed by a body corporate any director or officer of that body corporate shall be deemed to be guilty unless he proves his innocence. This provision appears to introduce into a Statute, which I would particularly point out will operate in peace-time, provisions which are contained in Regulation 91 of the Defence (General) Regulations, 1939, made under the Emergency Powers (Defence) Acts, 1939–40. That Regulation provides that:
Where a person convicted of an offence against any of these Regulations is a 'body corporate,' every person who, at the time of the commission of the offence, was a director or officer of the body corporate, or was purporting to act in any such capacity, shall be deemed to be guilty of that offence unless he proves that the offence was committed without his knowledge; or that he exercised all due diligence to prevent the commission of the offence.
§ While it is realized that this provision has been accepted by Parliament as a war measure, I wish to submit that it is an elementary principle of our law that no man is deemed guilty until his guilt is proved. I submit therefore that before this subsection (4) as it stands is accepted by your Lordships this departure from a well-established principle should be carefully studied and considered.
§
If provisions similar to Regulation 91 are to be embodied in Acts of Parliament which are going to operate in time of peace, it is going to be within the power of those instructed to act for Government Departments to issue summonses against directors, and such directors will be placed under an obligation individually to go to Court and into the witness box to prove their innocence in any case in which they are summoned. I submit that there is no justification for any such provision in any Statute intended to operate in peace-time. The Companies Act, 1929, contains no such provision and I am informed that the only case where the onus to prove his
880
innocence is placed on the defendant is the case of false information in a prospectus. That, I understand, is law today. The Prevention of Fraud (Investments) Act, which I understand is to come into force shortly, provides us with an alternative subsection to which, so far as I can see, there can be no objection. Under Section 18 of that Act there is a similar provision to that which I seek by my Amendment to insert in this Bill. I think I ought to read Section 18 of that Act of 1929. It is as follows:
Where any offence under this Act committed by a corporation is proved to have been committed with the consent or connivance of any director, manager, secretary, or other officer of the corporation, he, as well as the corporation, shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
I submit to your Lordships that a similar provision should be adopted in this Bill.
§ I feel sure that there ought not to be included in any Act of Parliament intended to operate in peace-time any provision under which, when an offence is committed by one person, any other person, even if he is a director or employee of that other person, is to be deemed guilty of the same offence unless he proves that the offence was committed without his knowledge or that he exercised due diligence to prevent the commission of the offence. It has long been recognized that a "body corporate" is a separate legal entity from its members, directors and officers. The principle of making all directors and officers automatically guilty of the company's offence unless they prove their innocence is in my view fundamentally contrary to British justice. If subsection (4) of this clause as it stands is passed by your Lordships' House it will set a precedent for any other Bill introduced into Parliament dealing with offences by companies. I ask your Lordships to view this matter very seriously and not to permit this subsection to be passed into law without very grave consideration. It simply means that whereas in the past no one was guilty here in this country until he was proved guilty, now in certain cases if this subsection is passed instead of having guilt proved against him he will have to prove his own innocence. Therefore I move this Amendment hoping that it will cover, as I think it does, anything that is likely to arise. I think that 881 my Amendment meets any case which may have been in the minds of those who drafted this Bill and I beg to move.
§
Amendment moved—
Page 16, line 12, leave out subsection (4) and insert the said new subsection.—(Lord Teviot.)
§ THE EARL OF MUNSTERMy noble friend has moved an Amendment which seeks to make it incumbent to prove affirmatively consent or connivance on the part of a director or other officer of a company which has contravened the provisions of this Bill before in fact any such director or officer can be 'made answerable for that contravention. If I accepted this Amendment it would render practically unenforceable the clauses of the Bill which deal with companies. In practice, I am advised the Amendment would mean that the director or officer of a company who has taken a decision which led to the company acting in contravention of the Bill could hardly in fact ever be made answerable. The facts showing consent or connivance on his part would hardly at any time be discoverable by those whose duty it would be to enforce the provisions of the Bill. On the other hand, these facts will be fully within the knowledge of the director or of the officer and he should not really have any difficulty whatever in proving his innocence.
My noble friend supported his Amendment by arguing that the present wording of subsection (4) was based on war-time practice only, and that it should not be continued into (permanent peace-time legislation. I hope he will forgive my saying that in point of fact that argument is not sound. There are plenty of precedents in Acts of Parliament which are in operation to-day containing words very similar to those of subsection (4). I need not read out the titles of all the Acts, I think, but I might mention the last three that have been passed. There was the Theatrical Employers Registration Act, 1925, the Betting and Lotteries Act, 1934, and the Public Health Act, 1936. My noble friend will therefore have observed that when he objects to the words in this Bill by saying that they are based on war-time practice, in point of fact that objection is not capable of any substantiation at all. My right honourable friend the Minister of Labour and myself have thought over this Amendment with great care and I cannot really sec that 882 there is any likelihood of hardship being inflicted upon directors or their servants in a company if we leave this subsection as it stands in the Bill. In view of the fact that there are precedents I hope your Lordships will support the Government and leave the subsection as it stands.
§ LORD TEVIOTI thank my noble friend for his reply, but I am afraid I shall go away with much perturbation. It does appear that for the first time, so far as we know and so far as I am advised, it is laid down that it is necessary for a citizen of this country to prove his innocence and not for the prosecution to prove his guilt. I know that in France, if a case was brought against a man, he had to prove his innocence, but in this country guilt had always to be proved against him. It appears from the noble Lord's answer that in certain cases the position here will be the same as in France; and, while I must accept his answer I am very perturbed at this new departure in regard to the administration of justice in this country. I ask leave to withdraw my amendment.
§ Amendment, by leave, withdrawn.
§ Clause 19 agreed to.
§ Remaining clauses agreed to.
§ Schedule agreed to.