§ 2.56 p.m.
§ Order of the Day for the Second Reading read.
§ LORD MANCROFT
My Lords, those Members of your Lordships' House who have had the courage to proceed even as far as the Long Title of this extremely complicated little Bill will, I think, agree with me that it hardly comes into the category of light bedside reading. It is a very detailed and a very complex measure, and I hope, therefore, that your Lordships will bear with me if I spend a little longer time than usual in striving to set out the principles of this measure, because it involves a large number of people and a large number of firms. It has a very important principle behind it, and, furthermore, this is the first occasion on which it is being considered by Parliament.
The Bill is an essential step in winding up the consequences of the war. Its object is to confer indemnity on private individuals, commercial or financial institutions, or Government Departments or officials, who, in the interests of the war effort, took action in regard to the property or rights of persons who were enemies or were believed to be enemies and who by that action may now be liable to legal proceedings by the former owners. The general effect of the Bill is 396 that, provided action taken was in the spirit, if not within the letter, of the legislation relating to trading with the enemy, or was done under the authority of a Government Department, legal proceedings cannot be brought in respect of the action taken.
A Treaty of Peace generally includes provisions under which the ex-enemy Government on its own behalf, and on behalf of its nationals, agrees to waive claims against all parties in respect of actions taken because of the existence of a state of war and to accept the consequences of these actions. Waivers like those I am discussing were given after the 1914–18 war, and others will be found in the Treaties of Peace with the Satellite Powers, signed in 1947, and in the recent Treaty of Peace with Japan, signed as recently as 1951. Parliament is normally invited to enact legislation enabling effect to be given by Order in Council to provisions of the Treaty of Peace, such as I have indicated, and by this means they are given full legal force and effect in this country and provide a defence in our courts against claims by nationals of the ex-enemy country concerned arising out of actions taken during the war period. Thus, it appears that the principle that, after the war or period of emergency, action should be taken to bar claims against people in this country for what was done in good faith is generally accepted, and such action is normally the outcome of a Peace Treaty.
The present situation is one of unparalleled complexity to which normal procedure is not applicable. In the first place we have the very special position of Germany. In the second place, the long period of hostilities, the occupation of so much of Europe and of the Far East by Germany and Japan, and continual migrations and counter-migrations of people, have produced a state of affairs without parallel; and these afford opportunities for persons with extremely doubtful claims, or even, quite frankly, bogus claims, to start actions for all sorts of damage done to their property or rights which British companies and individuals might find it impossible at this stage to accumulate the evidence to resist. For example, a person thought to be a Japanese enemy, or a person who was thought to be technically an enemy when his country's territory was overrun, and whose bank balance or house property 397 is in this country and was therefore regarded as enemy property, may now come forward and allege that he had, in fact, escaped before hostilities broke out and was never an enemy, that his property was wrongly treated as enemy property, and that in one way or other he suffered loss thereby.
Claims fall, roughly, into two types. In the first place, there is the sphere of trading with the enemy. Your Lordships will no doubt remember that the Trading with the Enemy Act, 1939, was intended to provide for the preservation of enemy property and to prevent commercial, financial or other dealings with, or for the benefit of, an enemy of the King. That Act proved a very important and successful weapon of economic warfare. Under it, all holders of enemy property—for instance, a bank holding a bank balance or a block of securities belonging to an enemy, or a person or firm owing a debt to an enemy, or an agent looking after an enemy's house—were required to report such property and were not allowed to deal with it except with permission. The term "enemy" was defined on a territorial basis. Enemy status depended not on a person's nationality so much as on the territory where he was resident. The word "enemy" included any individual resident in enemy territory, and "enemy territory" included territory Occupied by the enemy. I emphasise these definitions merely to draw attention to the fact that it is extremely difficult, and, indeed, sometimes impossible, to know with any certainty where an individual was resident at any particular time during hostilities.
Moreover, as successive countries were overrun and occupied, the field over which private individuals and the commercial community were required so to order their affairs as to deny any possible benefit to the enemy was enormously expanded. Indeed, the statutory requirements of necessity overrode pre-war relationships. Goods, instead of being dealt with in accordance with a pre-war arrangement, were reported to the Custodian of Enemy Property. May I briefly remind your Lordships what was the function of the Custodian of Enemy Property. These Custodians for England, Scotland and Northern Ireland were appointed by the Board of Trade under 398 the Trading with the Enemy Act, 1939. Their statutory functions were the prevention of the payment of monies to enemies and the preservation of enemy property in contemplation of arrangements to be made at the conclusion of peace. Similarly, money, instead of being held by a bank at a customer's disposal, was payable to the Custodian. Securities which were deposited in this country for coupons to be cashed or dividends collected were reported to the Custodian as enemy property.
All these actions were in accordance with the law, always provided that the owner of the goods or securities, or the customer of the bank, was, in actual fact, an enemy; but, in some cases, subsequently available information showed that he was not an enemy at all. Acting on pre-war information, the only information at hand, a bank or a merchant could only assume that the customer was resident in enemy territory and act accordingly, whereas the customer might have left before the outbreak of war or before the occupation of his country by the enemy; or the owner of securities may have died without the knowledge of the bank in this country, and may have left them by will to a person who never became an enemy. Custodians of Enemy Property themselves are also open to attack for their part in any of these transactions. Strictly speaking, the Custodian was not authorised to deal with property in any of these cases if it was not enemy property: normally, he could act only on what was reported to him, and there was usually no way in which he could verify his information. The information available may have been inaccurate or incomplete, so that in all good faith he may have been handling property to which he had no right. In time of grave emergency it might well have been regarded as dereliction of duty if benefits in property had accrued to the advantage of the enemy while the Custodian was running around like a beetle on a hot plate busily engaged in proving its ownership to the hilt.
There is another point which would obviously have occurred to your Lordships from this particular aspect. Enemy air raids were another cause of actions which were inevitable at the time but which may have been outside the strict letter of the law. There was, of 399 course, great anxiety by everybody concerned to clear goods from docks and warehouses as soon as possible; and in some cases, quite frankly, goods were sold without the prior legal requirements as to formal vesting having been strictly observed. Your Lordships may have noticed a case recently in the courts about a cargo of sponges which was disposed of in this way, the value of which rose threefold in the course of the negotiations; and there are many other cases obviously which have, or will, come to light.
Apart from actions in the sphere of trading with the enemy, property rights of various kinds have been prejudiced or infringed during and since the war at the instance of the Government. The net result is that persons and firms in this country are in real danger of having legal proceedings brought against them. Immediately after the end of active hostilities in Europe, all sorts of technical and scientific information about German industrial processes were collected by teams of scientists and industrialists who visited Germany, under Government auspices, with the express purpose of making this information available to manufacturers in this country and elsewhere. The results of their inquiries and of their discoveries were issued under the authority of the Government; but, none the less, our manufacturers using this information may have incurred risk of actions for infringement of copyright. I will return to this topic, if I may, when I come to deal with Clause 6, which is one of the most difficult and important clauses in the Bill. Again, there may have been infringements of German-owned patents which, under international agreement, have since been placed in the public domain.
Finally, there is the position of the present holders of property removed from Germany and allocated to us under the reparations programme. The House is no doubt aware that large quantities of plant and equipment came to this country in this way after the end of hostilities—plant and equipment which was very useful to British industry at a time when requirements were difficult to fulfil and when the reconstruction programmes were particularly heavy. As things stand at present, all these people, all the people I have been discussing, can be sued in the courts by the former owners con- 400 cerned and might be hard put to find a legal defence, although they acted on direct instructions, or with the encouragement, of a Government Department.
With regard to property taken as reparation, the position is more serious, as the present holders purchased it in good faith. The position has already been dealt with partially in the Treaties of Peace with the Satellite Powers and with Japan, to which I have already referred. The Conventions with the German Federal Republic contain certain waivers of claims which the Federal Republic will give on their own behalf and on behalf of Germans under their authority. But, as your Lordships are only too well aware, the Federal Republic is not in a position effectively to bind all Germans, since the Federal Government do not exercise jurisdiction over Germans in the Soviet Zone of Germany or other former German territories not under their administration. In consequence, for the Government simply to seek power to give effect by Order in Council to waivers to be given by the German Federal Republic, as in the case of the usual kind of treaty waiver of claims, would not achieve the object. Nor can such waiver be made available in cases of formerly occupied countries. Her Majesty's Government have therefore come to the decision, after most careful deliberation and a minute examination of this problem, that a comprehensive measure is necessary. This is the measure which is now laid before your Lordships' House for approval this afternoon. The general effect of the Bill is that, provided the original action was taken in furtherance of the Trading with the Enemy legislation or by or under the authority of a Government Department, legal proceedings are not to be brought in respect of certain action.
The Bill is divided into three parts. The first part consists of general provisions as to enemy property, and property treated as enemy property. The second part contains special provisions in respect of Germany, and the third part consists of certain supplementary provisions. The General effect of Part I of the Bill is to validate transactions in relation to enemy property or property treated as enemy property in excess of powers conferred by law relating to trading with the 401 enemy, but the transactions must have taken place in the circumstances laid down in Clause 1. These are, that the transactions must have taken place in time between September 3, 1939, the beginning of the war, and the commencement of the Bill, as enacted, and they must have taken the form of action under the Trading with the Enemy Act, 1939, whether the action was taken by Government authority or by some other person.
Clause 2 deals with three cases where money has been paid or withheld in these circumstances, and provides that the making or withholding of payment is deemed (I apologies for using that dreadful word) to have been authorised by the Act of 1939. Thus, for example, where someone paid money to the Custodian as being due to a creditor whom he thought to be but who was not in fact an enemy, the effect is that the person who paid it is given a discharge just as if the debt had been due to the enemy. Similarly, where someone has refrained from paving money in the ordinary course of business to somebody whom he thought to be but who was in fact not an enemy, he is relieved from any liability arising, from the withholding of payment. Clause 3 applies in a similar way to other dealings with property—for example, where property was sold by the Custodian, or transferred to an Allied Government, or released from Trading with the Enemy Control, and the property was regarded as enemy property but afterwards proved not to be. The effect is that the person who transferred the property is in the same position as if he had been authorised to make the transfer, and the person to whom he transferred it is given a good title.
Clause 4 seeks to ensure that monies derived by the Custodian of Enemy Property from investment of funds in his hands are paid only to the Exchequer, and to legalise payments which have already been made. The Custodian's monies are invested, as your Lordships' probably know, in Treasury Bills and in Ways and Means advances. The interest on these monies was paid into the Exchequer before a recent judgment of the Chancery Division of the High Court raised doubts as to the legality of this course and suggested that it was possible for any person whose money was held by the Custodian for any period and then released to him to claim to be paid in 402 addition the precise share of investment interest proportionate to his capital monies. The number of individual owners to whom money has already been returned by the Custodian may be well over 100,000. The accounting operation involved, if this argument proved right, would be formidable and protracted, and scores of trained accounting staff would be required to deal with it. Quite apart from that, I am not certain that it is really in the interests of the country or of the taxpayer, because interest on the investments comes out of the funds provided by the taxpayer, and I see no reason why that benefit should accrue to anybody else. The Government therefore consider that no alteration is necessary in the existing practice, and that consideration is confirmed by this clause. Clause 5 defines a number of terms used in previous clauses and contains provisions as to evidence.
As to Part II of the Bill, Clause 6, the one to which I recently referred, is necessary because of an essential fact: that, in law, possession of a document does not carry with it a copyright in its contents. At the end of hostilities with Germany, a body known as the British Intelligence Objectives Sub-Committee, a body which was given the inevitable nickname attached to its initials, B.I.O.S.—which I may say was not the name by which it was known by the majority of Army units with which it came into contact during the war—was sent to Germany by the Government, with instructions to collect technical information about industrial processes, including documents, drawings and patent specifications, and, in some cases, prototype plant and equipment. Information was made available to manufacturers in this country and elsewhere by these investigators. Similar action was taken by the Americans. The two countries in fact worked hand in glove in this matter: each had the full benefit of information gained by the other.
As part of the drive to increase production and to improve our competitive position in world markets, British industrialists were encouraged to take full advantage of the fruits of this combined operation. The copying, the importation, or distribution to the public of copies of these documents and drawings in many cases infringed copyright—that is, German-owned United Kingdom copyright. Industrialists who made use of this 403 information with the encouragement of the Government may have incurred risk of action for infringement. It is essential to protect our people against claims in respect of the original infringing act if done by or under the authority of a person acting on behalf of the Crown, and also in order that the post-war user of such infringed works may be protected against any claims which might arise out of some subsequent infringing acts done since the war or which may be done in the future. To give your Lordships only one example, extensive use has been made of captured German records for the purpose of official histories of the war. No doubt many of those records have found their way into the present popular Adulation of Field Marshal Rommel, and no doubt there will be some more adulation applied by those engaged in writing books extolling the British soldiers who finally succeeded in defeating the much-adulated and talented Field Marshal.
Clause 7 is intended to protect persons who during the war infringed German-owned patents or registered designs. I rather hesitate to mention the word "patent" in the presence of the noble Lord, Lord Lucas, as I remember that he steered the Patents Bill through your Lordships' House until it became the Patents Act, and by the time he had finished doing so he knew a good deal more about Patent Law in this country than most members of the Patent Bar. He will therefore forgive me if I just mention in passing that the grant of a patent is the right to make, use or exercise some invention, whereas the registration of a design protects only those aspects of an article which appeal to the eye. Thus, a process of weaving cloth may be paten table whereas the design of the finished piece could only be registered. Many of the patents remained in the name of German owners on the Register of Patents in the United Kingdom Patent Office from the beginning of the war until they expired or until they were vested in the Custodian of Enemy Property on May 2, 1951, when all patents then remaining on the register in German proprietorship were vested in the Custodian by a Board of Trade Order. It is quite possible that a German owner or German ex-owners could now bring actions in respect of in- 404 fringements which took place while the patents concerned were on the Register in their names. Such claims would be quite contrary to our international obligations on the subject of German-owned patents. This particular clause therefore ensures that such claims are barred. It also covers registered designs, rights in design being closely associated, of course, with patent rights.
Clause 8 is intended to protect the Crown against claims by Germans in respect of the use of their inventions for war purposes while they were enemies. In a sense, the clause is complementary to Clause 7 which I have just been discussing as the reasons for protecting individuals and manufacturers who during the war infringed German patents apply here also. Clause 9 protects those manufacturers who, at the request of a Government Department, passed on secret information to contractors in breach of contract. Arrangements for technical information to be passed on by one manufacturer to others were common in war time and, when the question of increasing production of a particular munition or store was paramount, no consideration of disclosure being in contravention of a pre-war licence agreement with the enemy could be allowed to stand in the way. It is now necessary to give protection to those of our manufacturers who, quite rightly and properly, acted in this way. I should have liked to give some examples coming under the head of these last three clauses—Clauses 7, 8 and 9—because they are of extreme interest, but I now realise that there is considerable danger in so doing because the German owner of a patent which I might mention might be encouraged to launch a claim for damages against a British manufacturer or seek compensation from the Crown for infringement of patent or unauthorised disclosure of information.
Clause 10 applies to certain descriptions of "property allocated by the Inter-Allied Reparation Agency by way of reparation from Germany." The descriptions of property concerned are very wide and they include plant, equipment, ships, aircraft and other chattels, and certain non-German currencies. The Inter-Allied Reparation Agency was an international agency established by the Paris Agreement on January 14, 1946—the Agree- 405 ment on German reparations. Its purpose was to provide for equitable distribution amongst the Allies of German assets available as reparations. The Agreement divided those assets into two categories. The first of those, Category A, comprised German external assets and all other forms of reparation except those included in Category B, which were, roughly, industrial and capital equipment removed from Germany. Most of the equipment was allocated to this country and was disposed of by the Ministry of Supply to firms in this country who needed it for post-war reconstruction of various and numerous kinds. The object of this clause is to protect the present owner against proceedings for its recovery and to give him a good title.
Clause 11 deals with physical property removed from Germany and imported into this country by or under authority of a Government Department without being actually allocated as reparation. In fact, a quantity of plant and equipment was removed from Germany and used in this country either for actual production or for research and development. Clauses 12 and 13 are mainly interpretative. As to Part III of the Bill, I think I need make reference only to Clause 17, which provides that the Bill shall operate as from the date of its introduction into Parliament. Actions begun earlier are not affected, but, under this clause, protection is to be afforded as far as possible to the defendant in any action begun on or after that date.
Your Lordships will, I hope, appreciate from this that the provisions of the Bill do not apply simply to the protection of bureaucracy—very far from it. I have explained, I hope to your Lordships' satisfaction, how many and varying sections of the community played their parts and did what was required of them so as to deny any possible benefit to the enemy in the sphere of enemy property. These persons are now liable to have the legality of their actions called into question. They may have great difficulty, so long after the event, in satisfying the courts that what they did was strictly covered by the law. If so, they may have damages, and heavy damages, awarded against them, to say nothing of the trouble and expense to which they will have been put. The Government feel that 406 everything possible should be done to mitigate possible hardship arising from these circumstances.
I have a word of apology, perhaps, for this Bill, not only because it is an extremely complex measure, which I am afraid cannot be avoided, but for the fact that it is an indemnity Bill, and indemnity Bills in general are not particularly popular measures. The reason is obvious. Indeed, on the occasion when the noble Viscount, Lord Samuel, introduced his Liberties of the Subject Bill, I fulminated a good deal myself on the subject. The reasons for the unpopularity of such Bills are I suppose, because their two chief features are that they bar the subject's right of access to the courts, and, of course, they are retrospective in nature. But the reason for barring access to the courts here is simply that we are dealing with what was done by persons who took actions for which there was no legal authority, but who did so in the interests of the country and at a time when those interests were most gravely threatened. When the action was taken in the stress of war, and when transactions have since been entered into on the faith that what was done was done with legal authority, there is ample precedent on the Statute Book for doing what this particular Bill proposes, so that those who acted in good faith or are holders for value will know precisely where they stand. An indemnity Bill also is necessarily retrospective in nature, as its whole object is to legalise actions which have already been taken. I do not feel, therefore, that objection can properly be taken to the present measure on this score.
But objection can most certainly be taken to the intolerable time which I have spent in seeking to explain this complicated measure to your Lordships. I felt, however, that a mere perusal of the Bill would not be any great comfort or support to anyone. I have now attempted, somewhat clumsily maybe, but to the best of my ability, to lay the essential principles of the Bill before your Lordships, and I hope you will now be good enough to give it a Second Reading. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Mancroft.)407
§ 3.26 p.m.
§ LORD LUCAS OF CHILWORTH
My Lords, I am sure that all your Lordships are very much indebted to the noble Lord, Lord Mancroft, who, with his usual lucidity and courtesy has been at such great pains to explain this Bill to the House. As he has rightly said, it is a highly technical Bill; and it really stems from the fact that there can be no Peace Treaty between this country and Germany, otherwise all that is in this Bill would be contained in that Treaty. In the absence of a Treaty, it has to be spelled out at this inordinate length. The noble Lord has a great deal of my sympathy. I remember being, in 1949, in the same position as that in which he now finds himself, when I piloted through your Lordships' House the Disposal of Enemy Property Bill. I had the advantage—or, perhaps I thought then, the disadvantage—of having to meet the keen opposition of the noble and learned Viscount, Lord Simon, who spoke from a vast experience of this particular subject—I am sorry not to see him in the House this afternoon—and also that of the noble and learned Viscount, Lord Maugham, who ably aided and abetted Lord Simon. I am indeed glad to see Lord Maugham making one of his all too rare appearances in your Lordships' House to-day. I hope that he will summon up sufficient courage to put the noble Lord, Lord Mancroft, on the rack, as I am certain that no one but a most eminent lawyer could digest this Bill in all its implications.
The noble Lord, Lord Mancroft, has been frank. This is a Bill which none of us likes. We like no Bill that bars anyone from "access to the courts"—and that is the exact expression which the noble Lord himself used. Again to use his words, "it protects bureaucracy," and when bureaucracy sets out to protect itself it does the job well and truly; and undoubtedly it has done so in this Bill. I suppose the essence of it all is to give a legal interpretation to the old adage that "All's fair in love or war." That is what the Bill really says. Let me set the noble Lord's fears at rest straight away by saying that we shall agree to the principle of this Bill—the principle is inevitable—but at some later date we shall very seriously look at the infringements, if any, of the proper rights of the 408 individual, to see whether or not the Bill goes too far in its effort to give protection to those who acted in good faith, and by doing so protects those who acted in other than good faith; furthermore, to see whether the proper rights of the individual are being unnecessarily infringed.
Both the noble Lord, Lord Mancroft, and I, find ourselves in some difficulty. We could explain this Bill far better if we could give illustrations, pro and con. The noble Lord has rightly said that it would be highly dangerous to do so from the Government side, and I do not intend to embark upon examples from this side. But there are one or two things to which I want to draw your Lordships' attention. I am going to ask the noble Lord, Lord Mancroft, whether he will allow more time between the Second Reading this afternoon and the Committee stage of the Bill than the Government seem to have been disposed to give to us in recent months. I do not think there is any undue hurry to get this Bill on to the Statute Book, and I feel certain the noble Lord will agree with me that, in the light of the explanation he has given, for which we have been waiting, it will be necessary for us to examine some clauses in the Bill. The noble Lord said that he could not find anybody who knew much about this Bill outside the Department which produced it. I have tried equally, and cannot find anybody who has read it. So we have all waited for the lucid explanation we have had this afternoon, which will assist us materially in our study of the Bill.
There is one peculiar feature of this Bill—it has three Parts and three interpretation clauses. In my short Parliamentary life I do not remember seeing a Bill that had three interpretation clauses. Every Part starts off to cover the bureaucracy and the individual in a different way. Part I deals with the interpretation, literally and otherwise, of the Trading with the Enemy Act, and of the disposal of enemy property. It talks abouta competent authority purporting to act under the Trading with the Enemy Actand aboutany person in purported compliance with a restriction or obligation proposed by or under the Act of 1939.That umbrella grows bigger as the Bill goes on, and covers a multitude of things. I have no particular complaint about 409 Part I, because it is fairly clear. The noble Lord argued very well his case for not giving interest on money accruing through the disposal of alleged enemy property. He made a very good case: the noble Lord is a skilled advocate. But he will agree with me that there may be a case to be argued on the other side, and at some future time we may decide to argue it. I was pleased to see that subsection (4) of Clause 3does not bar from the courts anyone who thinks he has a case to argue that property taken from him by the Custodian was not, in fact, enemy property. That is a good protection.
When I come to Part II, I find myself in some difficulty. Clause 6 deals with the infringement of copyright and now, apart from a "competent authority purporting to act," we havea person acting on behalf of the Crown, or a person authorised by a person so acting…or a person acting on behalf of the Crown, or on behalf of a Power allied with His late Majesty….We now have a different set of people. I can imagine many things that could be done which would come outside the legitimate category which the noble Lord has mentioned. He mentioned, for instance, the difficulty of people using documents which have come out of Germany. I expect that future historians—and the world never lacks historians, competent or otherwise, who will go an writing history for years to come—are likely to infringe some copyright. I should like to ask the noble Lord a question on this point. Am I right in saying that the Bill deals only with an infringement during the specified period and that if it takes place after the specified period, such an infringement is actionable and not invalidated by this Bill? What about the case of a book written after the period of invalidation, if I may so term it? Is that actionable or is it not? What happens if it uses material which came from an enemy source before the end of the prescribed period?
When we get to Clause 7, we are again in some difficulty. While Clause 6 deals with copyrights and has certain limitations, Clause 7 deals with patents. It begins:Subject to the provisions of this section, where at any time within the war period anything was done so as to infringe a patent,…410 That is very wide. I may be wrong, but it does not speak of any infringement by "a competent authority purporting to act," and there is no question of good faith. If a patent has been infringed during the prescribed period, then this Bill invalidates any access to the courts. I wonder whether that is what the Government intend. The scope is so wide that it could cover people who should not be covered. It is only fair to say that, as the noble Lord himself knows, in time of war a number of enemy patents were used by ourselves and our Allies, and a number of things came out of Germany which never come out of Germany under the cloak of "a competent authority" or anyone "acting with the authority of the Crown." Does the noble Lord really mean that no action can lie if it can be established in the court that such an act was committed? It appears to me that this Bill invalidates any action. I am not a lawyer, as your Lordships know, but I have applied as best I can a common-sense, layman's interpretation to a lot of involved legal jargon, and I am apprehensive that the umbrella which the noble Lord wishes to put up to cover legitimate cases will also cover a number of illegitimate cases. This, I feel, would not be the desire of Her Majesty's Government.
I am not going to discuss Crown use. We then come to Clause 9—that is, the disclosure of secret information. As we all know, there were many British firms operating in this country, under licence and agreement, on German patents, and the general practice was not to disclose any information. Sometimes, however, they were forced to disclose this information—as Clause 9 says:at the request of a Government department, for a purpose which appeared to that department to be in the interests of the defence of the realm or otherwise in the public interest.That is a wide interpretation, but I am not going to quarrel with it. However, under an umbrella or that description, there might be a number of disclosures made for the personal gain of the unscrupulous individual, which would be difficult to prove in a court of law in the face of an Act on the lines of this Bill.
I hope that between now and the Committee stage—and I hope the noble Lord will agree that the date of that shall be mutually arranged, through the usual channels—he will give consideration to 411 these matters. We shall do our best to help him. As I have said, we do not quarrel with the principle of this Bill. It is a necessary Bill; but anyone who has the interest of the individual at heart, and who is jealous of the liberty and rights of the individual, must, as the noble Lord, with his usual frankness, admitted, look with keen suspicion on any Bill that goes to the length of this attempt to indemnify certain people and to bar access to the courts of this country under such a wide umbrella. I believe that the noble Lord, as an eminent member of the legal profession, and all noble Lords in your Lordships' House, who are ever jealous of preserving the individual's right of access to the courts, will agree that this umbrella should not bar from access to the courts—as it does, as the Bill is drawn, to a great degree—anybody who feels aggrieved at a wrongful act done under the guise of war or at an indemnifying Bill following the acts of war. With those few remarks—because I do not profess to be able to understand much of what is contained in this Bill—we on this side of the House will vote for the Second Reading of the Bill. But we reserve the right to examine it carefully between now and the Committee stage to protect the interests I have mentioned.
§ 3.45 p.m.
§ LORD JESSEL
My Lords, at the outset, I should like to make it clear that I am not taking over the invitation of the noble Lord, Lord Lucas, to the noble and learned Viscount, Lord Maugham, and trying to put somebody on the rack—far from it. I should like to congratulate the noble Lord, Lord Mancroft, on the lucid way in which he has explained this complicated Bill. He has given us a clear overall picture, and I am sure we are grateful to him. So far as I can see, this is in no way a controversial measure. It has aroused no interest whatever in any quarter. No victims of the Custodian of Enemy Property have raised their voices, nor have any professional bodies had any fault to find with the provisions of the Bill. As the noble Lord, Lord Mancroft, said, Part I of the Bill seeks to indemnify the Custodian and others acting under the powers of the Board of Trade for actions taken between September 3, 1939, and the passing of this Bill as an Act. My only experience of the Custodian of 412 Enemy Property during this period was an attempt to negotiate the purchase from him of a company. However, he was unwilling to "play," and I have no interest to disclose in regard to the provisions of this Bill. As the noble Lord, Lord Man-croft, explained, Part I of the Bill gives the Custodian indemnity in respect of actions taken which may not have been strictly legal at the time.
Part II of the Bill, which is concerned solely with Germany, covers various activities during the war and after the end of hostilities. Clause 6, I feel, is particularly useful, in that it protects persons acting on behalf of the Crown who may have infringed copyrights if those copyrights were in existence before March 29, 1949. The noble Lord, Lord Mancroft, has reminded us that soon after the end of hostilities special teams were sent to Germany to collect industrial information. I well remember that members of these teams had to wear uniform and were I given temporary military rank, so urgent was the gathering of this information considered to be. In fact, I think it is now generally agreed that the results were disappointing, and that although the reports of the teams may have infringed copyrights, they added little to our industrial knowledge. Your Lordships will note that Clause 7 deals with infringements of patents and registered designs, and we have had the difference explained to us. Apparently, this clause does not cover trade marks, and no doubt for very good reasons; but perhaps the Government will give us a little further information on that point. In Clause 9 mention is made of the war period. This is later defined in Clause 13 as beginning on September 3, 1939, and ending on July 9, 1951. It would be interesting to know why this latter date, particularly, is considered appropriate.
Clause 10, as has been explained, deals with property taken by way of reparation: and it will be noted from subsection (6) that the property concerned includes ships. I understand that there are a number of German ships affected which have not been condemned as prize, and in relation to such ships the effect of this Bill may not be beyond dispute. I believe—I may be wrong—that when a ship is condemned as prize, that condemnation is internationally recognised; but it is not so certain that such international recognition will necessarily be given to the 413 effect of this Bill if one of the German ships in question should be made the subject of proceedings. By way of illustration, let us suppose that the German shipowners sought to regain their ship by taking legal proceedings when it was in some South American port. Does this Bill go far enough to safeguard the title of the present owner in circumstances of that sort. I should also like to draw your Lordships' attention to Clause 12, and, in particular to the definition of a German enemy asan individual being a German national resident in Germany or in enemy territory other than Germany….The noble Lord, Lord Mancroft, has touched on this point, but I should like a little further explanation, because it would include a refugee of German nationality who had taken refuge from the Hitler régime, shall we say, in Denmark, which was later overrun by the Germans. Such a person might not necessarily be an enemy in any real sense, but none the less might lose his rights as if he were a real enemy, under the definition of Clause 12 of this Bill. It may well be an impossibility to exclude such individual cases from the operation of this Bill, but I submit that innocent people of this kind have a case for consideration, and I would ask the Government for further clarification on this point. Apart from these very minor points of criticism. I think this is a most useful Bill, and I hope your Lordships will give it a Second Reading.
§ 3.51 p.m.
§ LORD CHORLEY
My Lords, I am afraid I cannot altogether agree with the noble Lord who has just resumed his seat in commending this Bill. There are certain aspects of it which seem to me to be quite iniquitous, especially in the first Part, which has been welcomed by previous speakers. In effect, it is a Bill to provide that people whose property has been wrongfully disposed of shall be deprived of all their rights in respect of it. That seems to me not only a thoroughly illegal proceeding—only to be made legal, of course, by means of an Act of Parliament—but a thoroughly immoral proceeding, too. I think this is a good example of how one evil is derived from another. It used to be an accepted principle of the law of civilised States that the private properly of an individual was 414 not, so to speak, stamped with the impress of the State to which he belonged, and that it could not be lawfully taken by a victorious Power at the end of a war. That principle, which was a sacred principle of international law until the First World War, was abrogated at the Treaty of Versailles. I have always thought that was a thoroughly immoral thing to do, although it was understandable, in a way, in view of the new forms of warfare which prevailed during that period.
But in this last war large numbers of individuals, in all sorts of countries which were thoroughly hostile to the Nazi régime and which were our Allies as far as they could be, but which were overrun by the German armies, became technically enemies, and their property thereupon became subject to our own Statutes; and it became necessary that their property, which was, say, in London or in some other part of this country, should be handed over to the Custodian of Enemy Property and sold by him. There have been cases before our own courts. There is a very good illustration of this in a case in which a Danish chemical company had deposited a large quantity of insulin in a London bank before the war started. As soon as the German armies occupied Denmark that insulin became technically enemy property, and it was handed over to the Custodian, who proceeded to sell it, at very much below its real worth, against competitive offers by concerns in this country, one of which afterwards purchased it from the concern that bought it from the Custodian of Enemy Property, at a very large profit to that purchaser. It has now been held, and no doubt quite correctly as a matter of technical law, that the Danish company is not entitled to have that profit back. Not only does it not get its insulin, but it does not get the profit which was made in this way. That case, of course, is outside this Bill it comes under the Act under which enemy property is taken over by the Custodian.
The purpose of this Bill is to subject property which never was enemy property at all, to exactly the same control. A large number of German Jews who owned property in London and in other parts of this country succeeded in escaping from Germany on the eve of the war. In the chaos of that time, many of them found their way to the United States, to Brazil and to other States all over the world. 415 They were not only Jews. Other people living in Denmark, Holland and other countries owning property in England, or Jews who had succeeded in getting their property away in the nick of time—valuable jewellery and articles of that kind—into banks in London, and who afterwards themselves escaped, were unable in the distress of those terrible times to get to London but "fetched up" in this country or that all over the world. This property, on the face of it appearing to be the property of enemy nationals—because so far as the banks or other concerns in London who had the custody of it realised, it belonged to people who were still resident in Germany—was handed over to the Custodian, and the Custodian disposed of it, often at a very small price indeed. If the information which I have is correct, it was disposed of often at not more than a third of its real value, to people who came along and made offers for it. That is understandable in the circumstances, because times were difficult and it is quite intelligible that the Custodian, acting with the best will in the world, should have been prepared to dispose of the property in that way.
But is it right that the purchasers of that property should now be protected by a British Act of Parliament against those people whose property it still morally is? As the noble Lord, Lord Mancroft, who explained this Bill so lucidly this afternoon, appreciates perfectly well, if you sell somebody's property without any legal authorisation to do so, then the sale is quite ineffective and it remains the property of the original owner. The object of this Bill is to deprive that man of his property; to confirm the position of the person who purchased it, often at a very small figure, and not to give the original owner any right beyond that of receiving what was paid for it, which may not be more than a half or one-third or even one-tenth of its real value. Surely that, on the face of it, is a completely wrong thing. The noble Lord seeks even to deprive him of the interest which may have accrued on this small sum of money, and says that that is necessary in the interests of the taxpayer. I think that is rather a mean attitude to adopt.
416 My first inclination was, even if I were the only one, to divide the House against this Bill, but I appreciate that there are many parts of it which are necessary because there are, no doubt, possibilities of technical rights of action which ought not to be encouraged. A bank which handed over valuable jewellery which had been deposited with it to the Custodian would be technically guilty of a conversion, and it is quite right that the bank which acted perfectly properly in that way should be protected. I agree with the noble Lord when he said that it was in the interests of the war effort. But the action of the persons who purchased a great deal of this property—the insulin, for example, in the case to which I referred a moment ago—could hardly by any stretch of imagination be described as necessary in war interests; and it is difficult to see how it was necessary in the war interests that that insulin should be sold at all. One would have thought that it might have been kept for the Danish owners against the time when the Nazis were defeated and peace came once more.
The noble Lord, Lord Mancroft, made a great point that many of these claims would be bogus claims and that it would be difficult to prove that they were bogus. But surely it is for the man who makes the claim to satisfy a court of law in this country that he had a genuine claim in the first instance. I cannot see that there is any real force in that argument and I suggest that it is wrong to deprive people of their genuine rights of property on the basis that there may be a certain number of bogus claims which are difficult to deal with. Surely it is a new proposition that because there may be bogus claims the people whose claims are bona fideand genuine should be deprived of their rights. The noble Lord used continually the expression "acquired in good faith" or words of that kind. I cannot find in Clause 3 of this Bill, which is the operative clause in respect of these particular matters, that there is any need for the person who acquired the property or rights to have acted in good faith. Perhaps the noble Lord would point out where that essential condition is proposed in this Bill.
I ask the noble Lord and the Government whether they really think that this part of the Bill is necessary. It may 417 save a few pounds, shillings and peace, but I suggest that if it does so it will do so at the expense of a great deal of honour. There are at present a number of unfortunate people who have been harried for many years, who had property which they succeeded in bringing away under great difficulty and strain and who deposited it in this country just before the war. These are affected, and I should like to know how much in pounds, shillings and pence it is calculated that this country is going to save by sacrificing its honour in this way. Many of these people whose property rights are being so confiscated are foreign nationals who have become naturalised in the United States, or in the States of South America, or in other States all over the world; and it does not, in my submission, consort with the honour of this country to take action of this kind, confiscating, in effect, the property of friendly neutrals.
We ourselves are maintaining, and maintaining with great vigour, our rights against the Iranian Government, who broke their Treaty and confiscated British property interests without offering proper compensation. I would remind you of the recent case in which the late Attorney-General, Sir Hartley Shawcross, made a moving and eloquent appeal—the case of the "Rose Mary," which many of your Lordships will have read—against the validation of such wrongful deprivation of rights of property. And now Her Majesty's Government introduce a Bill which, in my submission, is flatly contradictory to the principles which Sir Hartley Shawcross was maintaining and which I submit it has always been the pride of this country to maintain in the past. I therefore associate myself strongly with the words of the noble Lord, Lord Lucas of Chilworth, in pleading that there should be ample time before the Committee stage and that the Government should seriously consider whether they cannot do something to provide effective compensation for the rights of property which this Bill purports to confiscate. All necessary protection of banks and others against technical actions for conversion and such things can perfectly well be provided for, without sacrificing the genuine rights of the real owners of this property. I am sure that the noble Lord—and, indeed, the noble and learned 418 Lord who sits on the Woolsack, who has, with distinction, served as a judge for so long—must realise that this is a very serious business; and I hope they will be able to devise some method of ensuring that the rights of these people are preserved.
§ 4.5 p.m.
§ EARL JOWITT
My Lords, I rise for only a moment. I am sorry I was not able to be here to hear what the noble Lord, Lord Lucas of Chilworth, said, though he told me in advance what he was going to say. In the first place, I think it is necessary that we should have some Bill to clear up this matter. All sorts of difficult situations have arisen, through nobody's fault. With much of what the noble Lord, Lord Chorley, said I am in considerable agreement. There will be a great deal of sympathy with his point concerning the property of individuals affected by the war. The old doctrine was that you did not take private property. I can remember Lord Buckmaster protesting violently after the First World War against what we were doing then. It would obviously be an unpleasant thought if, as a result of this Bill, some Jewish refugee who was technically an enemy national but who had managed to escape, say, to Sweden, was deprived of any sort of right to get back his property which had been deposited in an English bank and had been sold. That would be to deal with the matter in a way which would make all of us rather unhappy.
I suggest that the House should give a Second Reading to this Bill to-day and that there should be, as Lord Lucas and Lord Chorley have both asked, ample time to consider between now and the Committee stage the points they have raised. I suggest, further, that whether or not these heart-breaking cases which have been suggested really do arise, the House should be given sonic sort of statement or schedule of the sort of cases that arise. We should be in a much better position if we were able to study the details of the Bill very carefully and find some solution which. is satisfactory to us all. I think that would be a practical solution. I make the further suggestion that, following a practice which we have recently developed in this House, this is a case in which the noble Lord, Lord Mancroft, and the noble Marquess the Leader of the House might see some of 419 us between now and Committee stage. There is no Party controversy about this Bill. We all want to do what is the right thing in the differing circumstances. I can promise that we will help to try to hammer out a solution which will satisfy us all. I must say that in view of what has been said by other speakers we ought to be given an opportunity to consider this Bill very carefully; and it will be helpful if we can have, as I have suggested, some sort of statement as to the nature and type of the cases which may arise.
§ 4.8 p.m.
§ LORD MANCROFT
My Lords, I am grateful to the House for the friendly way in which this Bill has been received. To deal with one or two questions which have been put to me by some noble Lords, and with the question that was raised by the noble and learned Earl, Lord Jowitt, I shall say at once that I have consulted with my noble friend Lord Onslow, who at the moment is dealing with these matters from the Government Front Bench, and he assures me that the "normal channels" will immediately start to flow. This is indeed a complicated Bill, and it is important that we should not rush it. The Government will welcome any assistance they can get. As Lord Jowitt has said, this is a non-Party matter, and we shall most certainly welcome any help in the working out of details and the clarifying of doubtful points. Lord Jowitt asked me whether I could give particulars of the sort of cases that are likely to arise. I can: but I am afraid I have not got them here in a form which would be digestible by the House. I will see that the information shall be made available to the noble Lord.
On Clauses 6 and 7 two or three questions arose which I think I can answer. Clause 6 validates both infringements during the war period and subsequent infringements. That, I am afraid, is inevitable, because they may all flow from what originally was brought out of Germany. It is a difficult and tricky matter and I will go carefully into the point raised by the noble Lord, Lord Lucas. The same remark applies to Clause 7, an equally difficult one. Clause 7 applies to infringement by anyone because it was agreed internationally some years ago that all German patents were to be thrown open to the public. 420 Both these points, and the point about ships raised by the noble Lord, Lord Jessel, in his interesting speech, the point about the identity of the enemy and the Jewish refugee who has gone to Denmark, are all difficult points, and some may well be borderline cases. I think I suggested in my speech, and indeed it is perfectly clear from the Bill, that it is most difficult to lay down a hard and fast rule. If we have not done it sufficiently tidily in the Bill, we shall be most happy to receive the assistance of noble Lords opposite to help make it more tidy still. It has been pretty carefully worked out, but, on behalf of the draftsmen, I certainly would not claim infallibility. I think you will find, when you come to try to improve the Bill, that it is very difficult to cover every case and to meet every objection to it.
There is one thing I should like to say quite definitely. We may not have got this Bill absolutely correct in every detail, but I assure the House that there is nothing whatever dishonourable about it. The noble Lord, Lord Chorley, suggested that there was something in this Bill of which we might be faintly ashamed. I can assure the noble Lord that there is nothing whatever in this Bill of which he need be ashamed in any way, and that his country's honour and name are in no way impugned by any single provision of it. Again, I reassure the House that I will do everything possible to meet the reasoned and helpful criticism that has been made; and so far as lies within my power ample time shall be given to the consideration of the points that have been raised.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.