Lords Sitting of 28 November 1960

Preamble
The House met at half past two of the clock, The LORD MERTHYR on the Woolsack.
Prayers—Read by the Lord Bishop of Liverpool
The Lord Dunning (L. Rollo)—Took the Oath.

REMPLOY AND THE MENTALLY DISORDERED
2.35 p.m.
LORD STONHAM: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if, in areas where suitable facilities are available, it would be possible for Remploy to act as agents for local health authorities in discharge of their responsibilities under the Mental Health Act, to provide training and occupation for the mentally disordered.]
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, Remploy already provide employment for a number of mentally disordered persons. The company will continue to consider persons handicapped by mental disorders, together with other disabled persons for vacancies in Remploy factories, but it has no power to act as agents for local health authorities in the provision of training or occupation.
LORD STONHAM: My Lords, is the noble Earl aware that my Question invites consideration of granting such powers to Remploy? I would ask him to look at this matter again, particularly—having regard to the tremendous success of Remploy—with a view to seeing whether the Remploy sales organisation could not be used to dispose of the products of these centres, and in that way give the mentally disordered people a chance of earning at least part of their living instead of being in merely therapeutic centres.
THE EARL OF DUNDEE: I am very grateful to the noble Lord for his appreciation of the excellent work which is being done by Remploy. They do employ, out of a total of 6,300, I think about 500 people who are suffering from various kinds of mental or nervous disorders; and in view of the possibility of some of the persons placed by local authorities in special centres being able to go to Remploy afterwards very close touch is maintained. But that is not quite the same as giving the primary responsibility to Remploy for the care of mentally disordered people.
LORD STONHAM: My Lords, is the noble Earl aware that what I have in mind is that in these local authority centres mentally disordered people will make something and it is absolutely essential that it should be sold by a skilled organisation; otherwise they will be at the mercy of charitable disposals and it will not be a really serious project. Would he consider that possibility?
THE EARL OF DUNDEE: I gather the noble Lord is thinking of more efficient arrangements for the sale of their products, and I will most certainly look into that.

EGYPT: DISMISSED BRITISH OFFICIALS' COMPENSATION
VISCOUNT COLVILLE OF CULROSS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what steps they are taking to press for a settlement in accordance with Article III (f) of the Anglo-Egyptian Financial Agreement of 1959; and whether, pending such settlement, they would be prepared to make advances out of public funds in cases of hardship.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, under the first part of Article III (f) of the Financial Agreement of 1959, the Government of the United Arab Republic undertook to pay to the United Kingdom the sum of £100,000 as an interim payment in respect of compensation due to British officials dismissed in 1951.

921
The Article provides that the Government of the United Arab Republic shall cause the Commission, which had been created in 1955 to enquire into these cases but which had been in abeyance since the events of 1956, to resume its work and to make a final assessment of the compensation due. The Commission was re-established and held its first meeting on July 9, 1960. On August 15 the British Mission in Cairo were informed that the Commission had
"formulated the various different sets of criteria according to which compensation should be calculated".
and had referred them to the Government of the United Arab Republic for a Ministerial decision. Her Majesty's Mission in Cairo have been pressing for this decision to permit
"a final assessment to be made of the compensation due to ensure the payment of the balance thereof in sterling",
in accordance with the last part of the relevant Article. In view of the fact that discussions are actively proceeding in Cairo at the present moment, it is premature to consider advance payments.
VISCOUNT COLVILLE OF CULROSS: My Lords, I thank the noble Marquess for his reply and for the assurance that Her Majesty's Government's representative is pressing this Commission. Would he not agree, first of all, that the time lag has become almost intolerable; and secondly, would he not also agree that it is exactly because of that time lag that I am now asking for interim payments in cases of hardship? Further, will he tell me whether or not the promise of the noble and learned Viscount the Lord Chancellor that consideration of further contributions would not be excluded is intended to apply to these officials?
THE MARQUESS OF LANSDOWNE: My Lords, as regards the time lag, it is, of course, perfectly true that too long did elapse before the Commission was reconstituted; I perfectly accept that. But I would point out to the noble Viscount that the Commission was reconstituted in July and by August, as I told him in my original Answer, the sets of criteria had already been formulated. Now what we are waiting for is a decision by the Cabinet. As I said
922
in my first reply, I do not think that this is the time to consider advance payments. The matter is actively under discussion now and so I must ask the noble Viscount to take my first Answer as all I am able to say at the moment.
LORD SALTOUN: My Lords, would Her Majesty's Government agree that where the action of Her Majesty's Government in the past has had the not unnatural consequence of prejudicing the fulfilment of agreements of this kind, Her Majesty's Government have a moral responsibility, if not a legal one? And would Her Majesty's Government consider interest-free loans against the eventual payment to ease cases of hardship, an interest-free loan not being an advance and riot, therefore, prejudicing the rapidity of any settlement?
THE MARQUESS OF LANSDOWNE: With great respect, I must repeat that I have nothing further to add to my original reply.
LORD HENDERSON: My Lords, I think the noble Marquess said that the criteria had been agreed in August. Three months have past since then. Do I gather we are waiting for agreement by the British Cabinet—he used the word "Cabinet"—or by the Egyptian Government? If we are awaiting agreement by the Egyptians, may I ask whether the British Government are making strong representations to the Cabinet in Cairo to get a decision?
THE MARQUESS OF LANSDOWNE: My Lords, the answer is Yes.

TRUSTEE INVESTMENTS BILL [H.L.]
2.43 p.m.
Order of the Day for the Second Reading read.
THE EARL OF DUNDEE: My Lords, the proposals contained in this Bill have been considered for a long time. As my noble and learned friend the Lord Chancellor said in your Lordships' debate on the subject in May of last year, they affect the fortunes and interests of a large number of individuals and organisations in this country, and therefore they cannot be taken lightly.

923
This Bill confers power on trustees to act contrary to the expressed intentions of the persons, the testators, who drew up the trust instruments, and a power of that kind ought not to be given without strong reasons. In particular, Clause 1 (3) of this Bill provides that
"No provision of any Act or instrument relating to the powers of the trustee which was passed or made before the passing of this Act shall limit the powers conferred by this section, but those powers are exerciseable only in so far as a contrary intention is not expressed in any Act or instrument so relating which is passed or made after the passing of this Act."
That is to say, if after the Act is passed a new trust is drawn up, the testator or the person who makes the trust, is allowed to insist that all trust investments shall be in trustee stocks in spite of what is in this Act, because he knows already what the Act is about and, in spite of that, he wants to make a different arrangement for his own trust. But in the case of a person who made the trust before this Act was passed and who might have had the same ideas, the trustees are given power to act contrary to his expressed intention. I think there are a number of sufficiently strong reasons for doing that. One of them, of course, is the fact that, in practice, nearly all the trusts which have been drawn up since the war have conferred on the trustees much wider powers of investment than used to be customary before the war.
The reasons are well known and obvious, the principal one being the decline in the value of fixed-interest stocks in relation to other kinds of property. If nearly everybody who makes a trust now is giving power to his trustees to invest, either wholly or partly, in equities, the presumption is, I think, that those who drew up their older trusts at an earlier time limiting them to the investments laid down in the Trustee Act, 1925, would presumably have wished their trustees' powers to be altered had they known what the pattern of investment would be in post-war conditions. If fact, if it were possible now to ascertain the opinions of these people who have passed away, I think it is very probable not only that they would approve of what we are doing, but that they might severely reproach us for not having done it a good deal sooner.
924
That, of course, applies to the general provisions of this Bill. But another reason for making this general provision in subsection (3) is that it might otherwise be difficult to give the right legal interpretation to the intentions of a testator. He may have mentioned in his trust that his trustees' powers should be subject to the Act of 1925 because he had looked carefully at the investments and particularly liked them; or it might have been simply an expression of his general intention that his trustees should be guided by whatever investments were approved by the Government. This subsection will remove any doubt. I think a third reason is this: that under modern conditions the difficulty in administering these old trusts in the best interest of the beneficiaries is so great that very often the trustees have to go to the court and get an order allowing them to set aside the limitations to which they are legally subject. In some cases they require a Private Act of Parliament. When these things happen as often as they are happening now, I think it is a clear indication that the law is in need of revision.
The Committee which sat under the noble Lord, Lord Nathan, who I am glad to say is to follow me in this debate, and which reported in 1952, was not asked to consider the whole question of trustee investments; it was asked to consider the question of the law and practice relating to charitable trusts. One of the recommendations which the Committee made was that the trustees of charitable trusts should be allowed to put one-half, 50 per cent., of their funds into investments which were not included in the Trustee Act, 1925. The Government, after some consideration, decided to accept that recommendation, and a White Paper published in 1955 proposed to give trustees of charitable investments these wider powers. But that did not at all satisfy public opinion, which wanted other trusts also to be given similar advantages. A Private Member's Bill in another place was withdrawn only on the assurance that consideration would be given to this; and in your Lordships' debate in May, 1959, which I have already mentioned, my noble and learned friend the Lord Chancellor stated that more comprehensive proposals were then being prepared. These were published in the White Paper of December, 1959,

925
which, I believe, was received with fairly general agreement; and, with one or two minor exceptions, this Bill is based on the contents of that White Paper.
The essential feature of this Bill is the power given to trustees to divide their investments into two halves, one of which is called the "narrower range", the other to be known as the "wider range". This division, if it is made, is to be made once and for all; that is to say, trustees do not have to keep revaluing their investments every year in order to see whether the "fifty-fifty" ratio has been altered because of the increase in value of some stocks and the diminished value of others, and then to make an adjustment between the two halves. Obviously, that would be very troublesome, although I believe that it has been done in the ease of some special court orders. If, after five or ten years, the narrower-range investments have been reduced in value while the wider-range half have perhaps doubled, nevertheless that will not make it necessary for any sums to be repaid or transferred from one half to the other.
The narrower-range half of the investments are described in the First Schedule to the Bill, in Parts I and II. I have very little to say about them. They include the present trustee list, but they go a good deal wider. For instance, for the first time they include the fixed-interest securities of local and public authorities of the Commonwealth as well as of the United Kingdom; fixed-interest United Kingdom securities of the International Bank for Reconstruction and Development; the debentures of United Kingdom companies which conform to certain conditions, and deposits in the ordinary and special investment departments of trustee savings banks.
Commonwealth Government stocks will continue to rank as trustee investments but without the Government concerned having to comply with the conditions laid clown in the Colonial Stock Act. And here, since I understand that the necessity of repealing one part of the Colonial Stock Act, 1900, has caused a certain amount of doubt about the future of Commonwealth stocks and their trustee status, I should like to make it clear that, subject to the conditions of this Bill, fixed-interest
926
securities issued in London by the Governments of any Commonwealth countries will be trustee investments. It is necessary, therefore, to repeal Section 2 of the Colonial Stock Act, 1900, and the associated statutory provisions which Commonwealth Governments hitherto have accepted in order to obtain trustee status for their stocks. The obligations in respect of existing stocks assumed by Commonwealth Governments under the provisions of the Act of 1900 are in no way affected by the repeal by this Bill of Section 2 of that Act. As regards future issues of stock by Commonwealth Governments, Her Majesty's Government have under consideration the institution of voluntary arrangements, under which Commonwealth Governments may, if they so wish, assume obligations similar to those assumed under Section 2 of the 1900 Act in respect of existing stocks. That is all I have to say on the narrower-range half of the investments.
With regard to the wider-range investments, defined in Part III, I think that the definitions are fairly obvious. Trustees are, of course, allowed to have narrower-range investments in the wider-range half of their portfolio if they wish to do so, either temporarily or permanently, although they are not allowed to have wider-range stocks in the narrower-range half of their fund. These wider-range stocks include all securities issued in the United Kingdom and shares in any building society and in unit trusts. There are in Part IV of the Schedule certain conditions which apply to these Part III investments and also to the debentures which are included not in the wider-range but in the narrower-range part of the investments. The conditions to which I am referring are to be found in paragraph 3 of Part IV of the Schedule. One is that the company in which the trustees are buying either ordinary shares of debentures must have a capital of at least £1 million and must have paid dividends on its ordinary shares over a period of live years.
The powers conferred in this Bill are intended to be in addition to the existing special powers under trust instruments, and are not intended to derogate from those powers. Trustees can either avail themselves of the special powers they have already and not avail themselves of this Act, if they think that that course will be to the advantage of the

927
trust; or they can avail themselves of the Act and not avail themselves of their special powers; or they can combine the two together. Clause 3 of the Bill describes the manner in which trustees may combine the two courses. Safeguards are contained in Clause 5 of the Bill. There is, first of all, the duty of obtaining good professional advice. That is something which probably most trustees do, anyhow. They are not compelled under this Bill to accept the advice. It would not be desirable to abrogate their judgment as trustees; but they have to get such advice in writing when making changes in investments.
If they do not make any change in their investments they have to get professional advice on the general balance of their investments every five years. They are also required to have regard to the need for diversification of investments, but on this point this Bill does not follow the White Paper, which stated that the trustees would not be allowed to have more than one-tenth of the fund or £250, whichever was the greater, in any one company. I do not know what consideration that was based on. But, on reflection, it has been decided that it is impracticable and therefore is not contained in the Bill. In fact, there is no arithmetical rule which the trustee must follow in giving effect to his duty of providing for diversification of investments. One reason for that is this. It has been strongly represented to us that some unit trusts, such as "Charifund", have got so much and such well-ordered diversification of investments that if a trust were to put their money into such a unit trust then they would achieve all the diversification of investment which a good trustee could be expected to provide for.
On reading this Bill, some of your Lordships who are not well acquainted with the duties of trustees might perhaps wonder whether the danger in being a trustee may not be rather great. But I think that the requirements laid upon trustees by this Bill are no greater than those which a prudent trustee would follow now, and I am advised that the legal dangers of a trustee having an action brought against him for mismanagement are no greater—or will be no greater—under this Bill than they are now.
928
There are, of course, some bodies other than trustees which are affected by the Trustee Acts, including local authorities. Clause 6 of this Bill extends its provisions to those bodies. Clause 7 enables schemes to be put forward for a number of different local authorities to combine their investments in a common fund. That was introduced at the request of the local authorities and I think it will be of great help, perhaps in particular to some of the smaller ones which have not had any previous experience of investing money. Clause 8 gives power to confer additional powers of investment and to alter the present Schedules by Order in Council, which will be subject to a Negative Resolution.
My Lords, I am sure that your Lordships will give this Bill the close examination which it deserves. I do not think it would be possible to devise an Act of Parliament which would apply in the best conceivable way to every conceivable trust in this country, but I hope that your Lordships will take the view that the proposals in this Bill are at least a sensible and practicable solution to the problem. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Dundee.)
3.3 p.m.
LORD NATHAN: My Lords, there are many who have been waiting a very long time for this Bill, and no one with more anticipation than myself, because, as the noble Earl indicated, I have a sort of avuncular interest in it. The recommendations of the Committee on Charitable Trusts, to which the Minister referred, included recommendations in regard to trustee investments; but, realising that our remit was in relation to charities, we limited our recommendations to charities, though knowing that they could not be regarded as applying to charities only but would have to be applied to the whole field of trust investments. But we there set out certain recommendations, and I am glad to think that, when I read the White Paper of December, 1959, I found that the Explanatory Memorandum with which that White Paper was prefaced really paid my Committee's Report the compliment of being very much a paraphrase of what we there said. I can therefore assure your Lordships that the White Paper fell very acceptably upon our ears.

929
I share the view of the noble Earl that this Bill is one to be treated to-day as a broad issue upon which, in general, I think your Lordships' House can agree without controversy. But there are, of course, various points of detail which will arise for consideration on the Committee stage. I ought perhaps to interrupt myself to say to the noble Earl that I had not expected the House was going to meet on Monday afternoon for this purpose, and I committed myself to an engagement of what I might call an official nature from which I cannot disentangle myself. So I hope that your Lordships, and the Minister, will forgive me if I am unable to remain for the whole period of the debate. I am sorry about that because it is a subject in which I take a very special interest.
In the course of some 40 years of practice I have made it a point always to advise that settlors and testators should leave the widest possible power of discretion to their trustees; that the powers contained in the Trustee Act were far too limited. My observation over that long period of time is that that advice was well founded. Up to a point—up to a very far point—the advice which I have given to others is now adopted by the Government in relation to testators and settlors in general, and I am glad of that.
I must tell your Lordships that there are one or two points in this Bill which I find somewhat disappointing. I have held the view, and hold it now, that in considering their investments trustees should be very careful to remember what really is the duty which lies upon them. It is, of course, well recognised that the protection of the Trustee Act is not so much a protection to the beneficiary, or only indirectly: it is really designed as a protection to the trustee. It is to prevent him from becoming the subject of proceedings by beneficiaries if investments he has made turned out wrong. So long as he restricts himself to the permitted range of investments he is, generally speaking, free from any fear of action on the part of beneficiaries arising out of loss on investments. Although I believe that to be the true legal position, there is no doubt that it has been interpreted widely and generally as implying protection for the beneficiary. In truth, that is only incidental
930
and arises out of the course of action which it is open to the trustees to take under the Trustee Act. And in a sense, in the context in which I am speaking, the Minister will agree that these investments are to be regarded as trust investments in the same way as if they were within the Trustee Act, 1925. Speaking generally, that is the position which these investments will have.
A trustee has the duty of investing in such a way as to hold a proper balance, a reasonable balance, as between the capital and income. He is therefore as much concerned with the preservation, and indeed the increase, of capital as he is with the amount of dividend or interest which is to be received. He has to preserve a reasonable and proper balance between life tenant and reversioner. Now that puts a great responsibility upon trustees; and, although I speak in the presence of two former Chancellors of the Exchequer, one in front of me and the other by my side, I am bound to say that I feel that trustees are in a great difficulty in investing in non-redeemable stock. I do not think trustees should invest in non-redeemable stock in these days, whether they be Government stocks or other such securities. It is no satisfaction to a beneficiary—except, possibly, a life tenant—if Government stocks are bought for a low price and he is to receive a larger return, because any children coming after him will have to pay for that by way of obtaining in the market a much lower price for the capital value of the trust fund.
I believe—and I shall attempt to persuade your Lordships of this in Committee—that there should be, as indeed was recommended in my Committee's Report, a fixed date by which it shall be obligatory for such securities to be redeemed, whether they be Government securities, debentures or preference shares. Money stocks are no good for a trustee, and they are no good for a trustee's beneficiary. If we look back into financial history, we see that that is the way in which fortunes have been lost. It would be a great safeguard to beneficiaries if there were a date, not too far ahead yet not too early—a reasonable date—by which the investments or the loans (because that is what they are) must be redeemed: a fixed date and an obligation upon the borrower to redeem on that

931
date. I should say that less than 15 years would be unreasonable; more than 30 years would be equally unreasonable. But between those two dates there is a reasonable margin for manœuvre, and, at the same time, the trustee would know that it was unlikely that the change in the value of money would operate so fast as to deprive the investment of a large proportion of its value, as has happened during the past years.
The number of widows and others who have been ruined, or nearly ruined, by investing in non-redeemable Government stocks is legion, and such investments were made, for the most part, out of a sense of patriotism. They were originally often investments made during war at the special wish or exhortation of the Government of the day, for the purpose of facilitating the conduct of the war. In that respect, patriotism has not been well rewarded. But the Government, of course, can easily make that situation good by now determining—and there has been much agitation in many quarters in this respect—that at a certain date those stocks now not liable to be redeemed may become redeemable under an obligation gratuitously accepted by the Government. I speak now not only of a single Government, but of any Government. It is not a single Government that is responsible for these stocks: it has been the Governments of all Parties over a long period of years. I believe that nothing is more important than that people should know that money lent to the State will be repaid by the State, and will be repaid at a fixed date.
Now if that applies to a Government, as in my view it does, how much more, must it apply to debentures and preference shares issued by industrial and commercial companies! It has long been the habit of those responsible for these matters to advise those who consult them not to invest in irredeemable preference shares, for the same reason as they advise them, or may advise them, not to invest in irredeemable Government stocks. Money stocks are a trap for the investor, especially in these days of fluctuating values of money and rates of exchange, and of inflation. I advise the Government now that I propose to
932
raise this matter on the Committee stage in the appropriate way, but I hope that, meanwhile, they will give the matter some consideration. Without very much optimism, I at least hope that they may possibly feel themselves able to accept such a suggestion.
Now, my Lords, I am very glad that, for the reasons mentioned by the Minister, the Government have resiled from their position so far as limiting the proportion of wider investments is concerned. I am sure that that is right, as the Minister mentioned just now. I am not so certain about the necessity for the written advice. On the whole, I think that trustees are accustomed to taking, and are well competent to take, advice from those whose professional duty it is to proffer it when asked. If, as is said in this Bill, trustees must seek advice at least once in every five years, then that is making it all rather nugatory and aloof. If they have to obtain advice only once in five years, we might just as well leave out the provision altogether, because to have his portfolio looked at once every five years would not, I think, be very satisfactory to anyone who is serving in these positions. Either it ought to be done at regular periods—which I do not advise—or the matter should be left open to the trustees. The latter course seems to me to be far better. For what is the duty of trustees? The duty of trustees is to act with the money entrusted to them as trustees in the same way as, being prudent men, they would act with regard to their own affairs; and it may be assumed that, in that capacity in their own affairs, they would seek advice just as much. Therefore, even more so must they seek advice if they wish to make changes in regard to the investment of their trust monies.
My Lords, it would be quite wrong for me, as I am myself very much pressed for time, to put pressure upon your Lordships' time by speaking unduly upon this matter. I think this Bill is overdue. It is eight years since my Committee's Report brought this whole matter prominently to the public notice, and this Bill has been a very long time in gestation. But here it is. It is a Bill which, broadly speaking, can fairly be said to fulfil a necessary public purpose; and, for my part, and for that of my friends, I would

933
say to the House that, subject to any modifications necessary in Committee, we shall be prepared to support it.
3.20 p.m.
LORD HAWKE: My Lords, I suppose we owe this Bill, which has been rather long on the way, to my noble friend behind me, and we must express our gratitude to the former Chancellor of the Exchequer for having pushed this matter along during his term in office. I listened to the words of the noble Lord, Lord Nathan, with great interest, and very wise words they were, some of them. The advice about money stocks is most valuable. Would that we had taken heed of these precepts and principles a good many years ago! But I should say that to make it impossible for trustees to hold money stocks—and that would involve a similar provision regarding unredeemable preference stocks—might in some cases create a certain amount of hardship, because this type of stock is rather a valuable one in the exceptional type of trust where the last beneficiary is alive and is an elderly person with an expectation of life of, perhaps, under 10 years, The difference between 4 per cent. and 7 per cent. on the money might make a considerable difference to the happiness of that person's final years of life. Therefore I should think an absolute prohibition of the holding of money stocks and preference shares would not be advisable, especially as I believe trustees are more and more alive to this point than they have ever been before
I am interested to see that the noble Lord trotted out our old friend, the redemption of War Loan,et cetera, and I shall look with great interest to see what reception he has at the Committee stage if he is really going to put down some Amendments about that matter. I should have thought it would not be past possibility that the Government should create some sort of sinking fund for these irredeemable stocks in the same way as there is a sinking fund for (I think it is) the 3 ½per cent. Conversion Stock. If one chooses to do the arithmetic, one cart work out the last date on which one is likely to get paid off. It is a very long way ahead, but the date will come when one's grandchildren, at any rate, might be paid off at par.
Generally speaking, I welcome the freedom of this Bill, long as it has taken
934
in arriving. I think it is going to be criticised in Parliament, probably on two grounds: first of all, that the freedom is inadequate; secondly, that the Bill is incomprehensible.
SEVERAL NOBLE LORDS: Hear, Hear!
LORD HAWKE: On the question of the inadequacy of the freedom, I do not disagree in principle on this question of dividing the funds into a narrower half and a wider half. Investment trends—all economic trends—always tend to be overdone in all communities, and perhaps some sort of hard-and-fast rule laid down is, to some degree, a protection to trustees from perhaps importunate beneficiaries, and so on, who want to stampede them into doing the fashionable thing at the moment, though in the long run it may not necessarily be the wisest.
After all, one can lose a lot of money in equities. It is wrong to think that you just have to pop money into an ordinary share and you have made your fortune; that is far from the case. There may be occasions when equities are a very dangerous thing to buy. So many funds have to provide emergency money at times—to meet death duties, and so on—that there should be something which one can be certain of realising so as not to be caught in a financial crisis, or something like that, and having to raise large sums of money in a very bad market. So, my Lords, I support this statutory limit. I am not quite sure whether perhaps a different ratio—two-thirds wider and one-third narrower—might not have been a better proportion. I think that anyone who looked at the last accounts of the Church Commissioners, who are supposed to be fairly shrewd in this matter, if I remember aright, will find that they had one-third equities, one-third fixed-interest securities and one-third in land and property.
So far as I can see—and here I come to the incomprehensible part of it—the Bill does not provide any power to invest in land. Yet I can visualise circumstances in which land might fall into a trust. Presumably in that event the land would immediately be sold quite regardless of whether the time was ripe for selling or not. I said that this part is incomprehensible, and I have heard rumours that even the Lord Chancellor finds one or two of the clauses not so

935
easy to understand as they might be. Certainly several eminent solicitors to whom I have shown the Bill have told me that it is the most incomprehensible Bill they have ever seen. If that is true, of course, that is a very great charge. Therefore, unless the Bill is changed considerably in its course through Parliament—and I imagine that it will not be changed in this respect—I feel that some very clear guide to trustees should be issued, so that they know where they stand. I have had several queries, for instance, which show that it has put skilled people to considerable doubt; yet I know, from what I have learned of the Bill, that the fears expressed are quite groundless.
When one comes to smaller points, there are many, of course, and these will emerge in Committee. I cannot quite understand why convertible debentures are not allowed to be held in the narrower range, because, after all, they are a very sound two-way investment; and if they are converted into wider-range investments, well, the machinery exists for balancing up the two sides. Then again, with regard to the provision in Clause 2, subsection (4), the taking of money out of the fund "fifty-fifty" from each side, I visualise that the taking of money out of the fund would be, or might be, chiefly for payment of death duties, and nearly all such cases would arise at a moment when, clearly, one side or the other would be the better to sell. It might be a good moment for selling equities or a good moment for selling gilt-edged; but it might not necessarily be a good moment for selling both. Therefore I should have thought that there might be some arrangement by which sales could be made from a preponderance on one side, and arrangements be made to level out the matter over a period.
Then again, rights issues appear to accrue to the half of the fund in which the shares are held from which the rights issues accrue. I have received rights issues for debentures based upon a holding of ordinary shares. Clearly, they could not be taken up if the Bill stands as it is. One of my legal friends was rather intrigued by the permission to hold tax reserve certificates, because he could not conceive how it would be possible under this Bill for trustees to
936
have need to, or have power to, tender tax reserve certificates in due course; but that is a technical point with which I am afraid I cannot deal.
Your Lordships may have seen that the criterion of size for investment in the equities of companies has been strongly criticised in some of the financial papers. I am sure that the Government appreciate that merely to lay down that the company must have £1 million of share capital means almost nothing. It may well have lost a great deal of that share capital and still have paid dividends over the last five years; on the other hand, a company with far less than £1 million share capital may have colossal reserves: so this is a completely non-workable yardstick.
I am not sure whether I have interpreted the Bill correctly, but there appears to me to be an anomaly in this respect. Suppose at the moment a testator had an old-fashioned trustee clause in his will—if there be any such at the moment. If he died before the passing of this Bill, his trustees would get the freedom of the Bill. On the other hand, if he died the day after the passing of the Bill, his old-fashioned trustee clause would be binding on his trustees for ever, unless they chose to go to court. If the court followed the sort of reasoning that was followed in Berkeley v.Berkeley, from which I suffered once, the court might well say that the testator ought to have changed his will and must be deemed to have decided that the old-fashioned trustee clause was the one he wanted.
Finally, I should like my noble friend to confirm what I am told on all sides, though Clause 3 is most incomprehensible—namely, that if trustees choose to operate their own powers under existing legislation, they are not affected by this Bill in any way at all; but if they want to combine some freedom of their own with some of the freedom they would get under the Bill, they will have to divide the fund and come totally under the Bill. I hope that your Lordships will pass this Bill, which I support in principle. I hope that in so doing, it is possible that we may manage to make its language a little easier to understand by the uninitiated.
3.34 p.m.
LORD CONESFORD: My Lords, eighteen months have passed since we

937
had a debate on this subject, to which allusion has already been made, and at the end of which my noble and learned friend the Lord Chancellor promised this general legislation. In the course of that debate my noble friend Lord Clitheroe, who speaks with so much authority on these matters, described the operation of the Trustee Act, 1925, in limiting investments Which trustees could make as "acrying scandal." He said that for 20 years he had tried, with singular lack of success, to persuade Governments to end this crying scandal. The effect of those limitations was to cause disastrous and wholly unnecessary loss to beneficiaries—widows, children and others—whom settlers and testators had sought to protect by the trust instrument. The trust instrument had brought about precisely the opposite effect from that desired by the settlers.
It was for that reason, since I entirely share the views of my noble friend Lord Clitheroe, that I heard with so much delight the promise of my noble and learned friend that legislation to revise the powers of investment of trustees was to be introduced. And here it is. Here, at last, is this belated and much-needed legislation. I wish very much that I could welcome it wholeheartedly. Frankly, I cannot. I think that the fundamental fault (and here I differ from my noble friend Lord Hawke; though with much of his speech I agree) is the compulsory division of the trust fund into two equal parts, if any use is to be made of the new powers conferred by this Bill. In my submission, that division is bad, both in theory and in practice. I am aware that it follows the recommendation in paragraph 289 of the Report prepared under the chairmanship of the noble Lord, Lord Nathan; but, as he himself has pointed out, that was eight years ago, and I am not at all sure that he would take the same view to-day.
I wonder what is the theoretical basis of this proportion and in whose interests it is prescribed. I cannot believe that it is in the interests of the beneficiary. If the interests of the beneficiary are to be the first consideration, I believe that prudent and well-advised trustees should have the maximum freedom of investment, and of varying investments, in accordance with the circumstances of the
938
day. I think that at times that may lead them to invest the whole of the trust funds in fixed-interest-bearing securities and at other times to invest a very large proportion in equities; but I believe that the circumstances are very rare in which it has been advisable that that division should be half and half. Very seldom, since 1925, has it been advisable for prudent trustees to invest half the trust funds in fixed-interest-bearing securities. In passing, I would mention that possibly the present is a time when it may be so advisable. There may be such times, but I do not believe that it is advisable to lay down this fixed proportion by law when a first subdivision is made.
Why has it been prescribed? I rather suspect that the liberal ideas that inspired the movement towards this type of legislation were somewhat changed after they went through the Treasury. I believe that the advisers of the Treasury and the Treasury Ministers may have had in their minds the thought that there might be some risk of prejudicing the Government's ability to borrow in the gilt-edged market. In devising the Bill the authors could not quite make up their minds whether they wanted to consider the interests of the Government in borrowing or to help the beneficiary and the trustees to preserve the value of the trust property. In the result, they decided that the thing was roughly "fifty-fifty". I do not think that is a happy inspiration for the legislation.
One enormous disadvantage, to which my noble friend Lord Hawke has justly drawn attention, has flowed from it. This compulsory limitation has led directly to the complexity and obscurity of certain clauses. I am not saying this in criticism of the highly skilled draftsman; I think the fault almost certainly results from this initial decision. But the result is—my noble friend Lord Hawke was quite right in drawing attention to Clause 3—that I do not believe there is anybody in this House, except perhaps a Law Lord, who could say what the words mean; and I do not think any of the Law Lords will tell us, because they will prefer to wait until the matter comes before them in their judicial capacity and they then have the benefit of the argument of counsel upon

939
it. For that reason, I will not put a series of conundrums to my noble friend who introduced the measure, because it would barely be fair, even if my noble and learned friend the Lord Chancellor were the Minister who was going to reply.
What must be the result of this obscurity? The result is perfectly simple. It is that no layman in his senses will agree to become a trustee of any settlement to which these clauses apply. It is quite insufficient for my noble friend who introduced this Bill to say that, so far as the law is concerned, the trustee will not be more liable to have an action brought against him. That may well be so; but there are trustees who like to be able to understand the powers conferred by Statute under which they are supposed to act. Which of us, if this Bill goes through, if he is concerned with or interested in any trust settlement to which this Bill will apply, would ask a friend to become a trustee? Why on earth should he?
No doubt I am expressing a very old and reactionary view when I suggest that an Act of Parliament should be written in plain English and should convey some meaning at first sight to the ordinary reader. But all this obscurity is comparatively modern. If any noble Lord cares to take down any Victorian Statute from the shelves of the Library he will derive at first reading a fairly accurate idea of its meaning. Let him look at the Sale of Goods Act, 1893—of course, that was drafted by a draftsman of genius, on the basis not of the ideas of Parliament but of the Common Law, which is an advantage that few modern draftsmen enjoy. But, for my part, I cannot see why a Trustee Act should not be as plain to a trustee as the Sale of Goods Act is to a trader. Every modern settlement will give the trustee far wider powers than are conferred under this Bill. But in the case of the older trusts, which it is the purpose of this Bill to relieve, it will be very difficult indeed to find lay trustees willing to take on the trusteeship.
I pass for a moment to the clause to which my noble friend the Minister referred in introducing the Bill—namely, Clause 5, on the duty of trustees. I think I fully understand the intention of securing diversification. What I question is the aptness of the words for that purpose.
940
In the case of a small trust, far greater actual diversification will be secured if the trustees place the trust fund in one or two investment trusts than if they invest them in a much longer diversified list of particular investments. The Minister mentioned unit trusts. I do not know why he mentioned unit trusts rather than investment trusts, which I think are often the better investment for trustees. But, be that as it may, he implied that he would approve of the use of a unit trust for such a purpose. But, in my submission—it might well be a small trust—if all the trust funds were placed in one or two investment trusts, that would not be a compliance with the words that at present appear in Clause 5 (1) of the Bill.
The Minister has drawn attention to the somewhat curious fact that the trustee is put under an obligation to obtain and consider proper advice—and what is proper advice is explained in subsection (4)—yet he is under no obligation whatever to follow that advice. I agree with the Minister that there may be good reasons for that: it would be absurd to require a trustee to follow advice which he in fact believed to be unwise. But, at the same time, if he is not under any obligation to follow the advice when he gets it, the obligation to get advice may not be quite so effective as Her Majesty's Government imagined when they put this clause in the Bill.
It may be thought—I do not know—that my criticism is what is sometimes called destructive criticism and that I have no concrete suggestion to make on the method that the Government might have adopted. Well, my Lords, I will endeavour to say what I think they might have done, and I hope that, when this matter is dealt with further in this House and in another place, they may think it worth consideration. I believe the answer is perfectly simple. I believe that what is required is to add some class or classes of equity investments to the trustee list. A trustee would then know that, in addition to the other securities set out in which he could invest trust funds, there were some equity investments which he could also select. The obvious class of investment, to my mind, particularly suitable for trustees, consists of the stocks or shares of the investment trusts.
LORD HAVVKE: My Lords, may I interrupt my noble friend? Everybody

941
will agree with him, but you cannot buy them and therefore—
LORD CONESFORD: I was going to deal with that. It is not quite as bad as my noble friend says, but I agree with him that the market is narrow, and that is why, peculiarly suitable as I think they are and I think he thinks they are, they might not by themselves be sufficient.
There are also suitable insurance shares. There are probably very suitable bank shares. It is quite possible that, if you added all those classes and described them as possible trustee securities, the list might be too wide. You might prescribe, of course, such, requirements as can be put into the Statute—a certain age and record of payment of dividends and so forth—but something more might be required. I can imagine that it might be desirable for the Treasury to approve and publish from time to time a list of the equity investments that would be legitimate investments for trustees. Needless to say, for such a matter they would require an advisory committee, and an advisory committee has been provided on many occasions under Statute.
Let me throw out suggestions of the sort of people who might constitute such an advisory committee: representatives from the Bank of England, the Stock Exchange, the Public Trustee, the Investment Trusts Associations and the British Insurance Association Investment Protection Committee, and a good city lawyer. I believe that that would make a good advisory committee, and that with its heir the Treasury would not have much difficulty in adding one or two classes of equity investments to the trustee list.
The noble Lord, Lord Nathan, in dealing with money stocks in the course of his speech, talked about the great advantage of having a date by which they must be redeemed. He rightly mentioned the great losses that had often been sustained by a trust fund where an investment had been made in a money stock with no such fixed date. But, of course, immense losses have been made in trusts where there has been a fixed date, but where there has been no liberty to invest in equities—a point admirably brought out, if I may say so, in the report of the Committee over which the noble Lord presided. I believe that if you added a
942
few classes of equity investment to the trustee list, you would achieve everything which this Bill seeks to achieve without any of these appalling complications. May I mention one final matter? On one point it seems to me that this Bill—
LORD PETHICK-LAWRENCE: My Lords, it seems to me that what the noble Lord is suggesting would be grossly unfair as between one body of equities and another: that there should be certain equities picked out and favoured, and other equities left alone. I should have thought that it was an unfair proceeding which nobody could possibly support.
LORD CONESFORD: It all depends on what you are aiming at. I do not think Cut makes an enormous difference. The equity which the noble Lord imagines to be injured would very often be precisely the sort of equity that would be included in many of the investment trusts. I have so great a respect for the noble Lore who has just put this point that I should like to deal with it in a little greater detail. What I had in mind, of course, was the interests of the trust fund and of the beneficiary, which seem to me to be the overriding interests that we ought to have in mind. But I should not mind at all a further development under which even individual ordinary shares could be put upon a list. What I was wanting is something that gives a trustee clear guidance as to what he can invest in, without an obligation that may he disastrous to the trust—dividing the trust funds into two sections, one of which it is obligatory to put into fixed-interest bearing securities.
The final point which I was approaching is this. In most respects, undoubtedly, this Bill, apart from its complications, at least makes matters better than they are at present. But in one respect it may, I fear, unintentionally make them worse. Under the Variation of Trusts Act, 1958, which I had the honour of piloting through this House, it is possible to go to the court and have the investment clause altered. That has been done in a large and increasing number of these old trusts that contained an unsatisfactory investment clause. Generally the applicant, in applying to the court, applying both under the Variation of Trusts Act, 1958, and under the Trustee Act, 1925. When such

943
an application has been made, the Chancery judges, in their wisdom, have frequently allowed an excellent modern investment clause without any of the rigmarole provided in this Bill.
I believe it is the Government's intention that that practice of the court should not be interfered with. I gather that from the concluding words of paragraph 7 of last December's White Paper, which says about these proposals:
"They will not affect the existing power of the Court in England to extend the range of investment for particular trusts."
I am sure that that is the intention, and there is nothing in this Bill which expressly takes away their power. But I am afraid the practice of the courts may be greatly affected. I think it is unlikely that, if this Bill is passed into law, the courts can be relied on to go on allowing the type of investment clause that they have been allowing since the 1958 Act has been on the Statute Book, because they will be likely to say, "Here we have a modern and up-to-date declaration by Parliament of what the powers of investment by trustees should be, and in those circumstances we will not give you the new investment clause for which you ask". I would ask Her Majesty's Government, whatever else they do, if it is their desire that the type of order that has been made in the last two years by the Chancery judges should continue to be made in appropriate cases, to make it quite clear that the present measure is not intended to interfere with that Chancery practice.
I apologise for the time I have taken in my criticism of this Bill. The relief of trustees which the Bill provides is long overdue, but the main limitation which this Bill imposes—a compulsory division of the trust funds into two equal halves at the time of the division—is wrong in theory, and leads to great complication in practice. It will be very difficult to persuade laymen to become trustees of settlements to which the Act will apply, and the difficulties could all be avoided by a simple measure adding some classes of equities to the trustee list.
4.0 p.m.
LORD POLWARTH: My Lords, I am sure we all enjoyed the stimulating comments of the noble Lord who has just
944
sat down. I would go some of the way with him on some of his points, but not all the way. I do not believe in looking a gift horse in the mouth, and that is how I regard this Bill. I would therefore give it a welcome from some modest experience in all three capacities: as a trustee, as a professional adviser, and, of course, inevitably, as the ultimate abject of it all, as a beneficiary. I think this Bill shows a continuation of the enlightened policy of this Government, which started by giving us the Variation of Trusts Act, which I am glad to see is to be followed shortly by a similar measure for Scotland. Could I say how glad I am that this present Bill is to apply to Scotland as it is to England?
At the same time, I do not think we should over-emphasise the impact this measure will have, because, as the noble Earl said in introducing it, it applies in general only to the older type of trusts. Certainly it is my experience, as it is Lord Nathan's experience, that professional advisers to-day are more and more pressing for the inclusion of the widest possible investment powers, and I am, too, quite certain that they are right in doing so. But there is no doubt that in the case of these older trusts this new measure will save time, trouble and certainly expense, because while trustees can go to the courts, as the noble Lord, Lord Conesford, said, it is an expensive business and not one for the smaller type of trust. Like him, I hope this will not mean any change in practice in the Chancery Court, because having experienced their operations I realise how enlightened their handling of the Variation of Trusts Act has been up to date.
I do not think any of us need to have elaborated why the powers of this measure are needed. All the previous speakers have emphasised it. It is clear that over a long period it has only been by investment in equities of a proportion, at least, of the funds that beneficiaries have been able to enjoy even approximate equality of real benefit with their fellows who are wage and salary earners. I am particularly glad that the Government have improved on the terms of the White Paper. I think this Bill gives a wider measure of flexibility with-out removing adequate protection. I go a long way with the noble Lord, Lord Conesford, on the question of the spread

945
of investment, and I am particularly glad that we have not been restricted to those very small holdings of equities that the White Paper suggested. I must declare my interest as a director both of investment trust companies and also of a group of unit trusts who do precisely what the noble Lord suggested, namely, invest in the shares of banks, insurance companies and investment trusts. I hope that will not be considered what is known in the world of entertainment as a "plug".
But I am also particularly glad that we have the introduction of this requirement to seek skilled advice, even if it should not be taken. I am glad it applies to fixed-interest stocks as well as equities, because I think the need is every bit as great there as with ordinary stocks. On the subject of advice, I disagree a little with the noble Lord, Lord Nathan, as to the need for trustees to be required to take it. Far too often beneficiaries have seen heir income or capital or both steadily eroded through the failure of trustees to review the investments. I do not say it is necessarily their fault; it is sometimes the fault of their so-called advisers or the agents for these trusts. I can recall several cases where, as a trustee. I have had to stir up agents of my co-trustees to take some action about reviewing trust lists, particularly where they were all in gilt-edged stocks and the agents felt they were legally quite safe to leave things as they were.
I am not quite so sanguine as the noble Lord, Lord Nathan, as to trustees fulfilling their duties automatically. After all, at times all of us need to be reminded of our duties. Some of us do not have the professional competence to under-stand them in full and others of us are very busy. I am sure it has been the experience of others of your Lordships who have become professionally qualified that you are immediately surrounded by your friends or relations—or others who appear to think: they fall into one or other of those categories—and who come round like a swarm of bees and say, "Here is the very chap to make one of our trustees". Unless you are very strong-minded you soon find yourself trying to deal with more trusts than you would think it wise to do. I think it is a good thing to be reminded of the need for taking professional advice. I would query whether the provision fixing five
946
years is worth putting in the Bill at all. I believe it should be a shorter period at most two or three years, but preferably one year. I think that any trustee who does not have professional advice on the investments at least annually is almost culpably negligent.
Like the noble Lord, Lord Hawke, I doubt whether one or two of the provisions regarding companies in which a trustee may invest are very effective. They are somewhat inflexible. The provision requiring the company to have £1 million capital seems to me to be completely out of date; a nominal capital is no measure of the worth of the company. I agree with the noble Lord about the question of payment of dividends. Surely the question should be whether the dividends have been well earned and are covered, and we should take care to avoid companies paying dividends out of wasting assets.
There are two major points on which I may have been very stupid, but I should like the noble Earl to give an assurance in his reply. The first is this: a trustee divides his fund into two parts specified by the Bill and makes a handsome profit on the wider range, the equity portion. Presumably then he can re-invest it, if he thinks fit, in fixed-interest securities for the time being, without affecting the basic division of the two parts. In other words, the wider-range investments include the narrower range as well. I should like to be quite clear on that point. The second one applies to the trust where there is in the deed a special requirement of investment, as, for example, a statement that the trustees shall hold at least 40 per cent. of the funds in trustee securities and have a free power with the rest. Does this Bill mean that in future the 40 per cent. can be divided again in two, as it were, and therefore the trustees would effectively be able to put 80 per cent. in equities, or is that not the case? I am sorry if I have not followed those two points. But, let us face it, though the intention of the Bill is simple, I feel the noble Lord, Lord Conesford, expressed the view of most of us on its horrible complexity to the layman, and even to many of the professionals among us.
One consequence of this is that there is going to be more work for trustees and their advisers; the accounting and bookkeeping is going to be more complicated. The lot of a private trustee is not an easy

947
one to-day, however well advised he may be. There are many complications and pitfalls and singularly little thanks. I believe that today we are seeing a greater trend towards the use of professional trustees in the sense of banks and insurance companies and other bodies, and this Bill may well accelerate that trend. That may not, after all, be a bad thing; but it would be a pity if all the personal touch in these matters were to be lost behind the impersonality of these institutions. However, such criticisms as I have made are comparatively minor ones compared with the worth of the Bill as a whole. I believe it will remove some of the frustrations under which all three parties—the trustees, the advisors and the beneficiaries—who have to do with these trusts of older construction have laboured.
House adjourned during pleasure and resumed by the Lord Chancellor.
4.10 p.m.
LORD SPENS: My Lords, before the noble Earl replies, may I take up just a minute or two on Clause 4, which has not been mentioned by any noble Lords who have spoken, but which seems to me one of considerable importance? Clause 4 starts by stating that
"property' includes real or personal property…"
There are a vast number of trusts throughout this country where there is settled land together with settled investments, and what the effect of Clause 4 is going to be on a trust such as that is not easy to understand. It seems to be quite clear that if the trusts for beneficiaries are identical as regards an estate and a fund of settled investments, then the two make one and the same fund; and the question then arises, on what principles, and how, is the fund to be divided into the two moieties required by this Bill?
If you start by valuing the real estate, possibly an expensive business, apparently not answered by this Act, you add the settled fund, and you get a rather curious result. Assume that the settled estate is worth £200,000; that you have a settled fund of £100,000, and that the beneficiaries are not all the same, the
948
limitations are not all the same; you then get a total fund of £300,000, of which one-half is £150,000. The result of that, of course, is that the whole of the free investments can immediately be put into the wider-range investments. What happens after that is not very clear. Assume, on the other hand that the beneficiaries' limitations vary in some small respect, then the two have to be treated as two separate funds. The real estate is a separate fund and the investments are then a separate fund. I do not gather that, in those circumstances, a fund consisting solely of real estate, settled land, comes under this Bill at all. I think that it would have to be part of a mixed fund if the Bill is to be effective in that case.
I raise that point only because Lord Hawke has already noted that there is apparently no power in the Bill to invest in land. It seems to me that the question of land and how land comes into this Bill has been left, at any rate for the moment, vague. I should think it has been done quite deliberately. But it would appear that if you get a mixed fund of land and investments limited for the same beneficiaries, then you get one mixed fund and the land comes under the provisions of this Bill. Presumably then that gives a new power of sale over the land which has not existed before. I raise these points because it seems to me that this may be a most important clause. It has not been mentioned before, and I greatly doubt whether the noble Earl would care to reply straight away about it. It is rather more than a Committee point, and I therefore raise it as a matter of some considerable importance.
4.15 p.m.
EARL FORTESCUEMy Lords, as one who for many years has struggled with investment clauses and with charitable funds I should like to say that I welcome this Bill. We are all most grateful to the noble Lord, Lord Nathan, for what he has done in getting it to this stage. A number of criticisms have been made of the Bill from various quarters. I believe that that is absolutely inevitable when we all know from experience that no two trusts will be suited by the same clauses. As I see it, this Bill will not be applicable to all future trusts, many of which will have new trust clauses; but it is an alleviation of the

949
damage done by the wiseacres who drew up trust clauses in the past. Whether we are much better than our ancestors were at drawing up trust clauses for 50 or 100 years hence obviously remains to be seen, but I think it is doubtful.
In this debate so far we have been concentrating more on what I may call private trusts, rather than on charities. I think it is inevitable that the investment of charitable funds will have to be regulated by a Trustee Act; and, taking it all round, I think that this particular Bill is as good an omnibus solution as could be found. Quite obviously, the 50–50 division between the wider and the narrower will not suit everybody. In many instances there will be a good case for saying that the ratio ought to be 60–40; in others 33–66. In some cases, indeed, it may be right for the charitable fund to be invested wholly in equities. But that is not the point. What we are doing now, as I see it, is to produce something which will not do too much harm to people who are tied up already.
As many of your Lordships know, for years it has been the practice to give wider and wider powers to trustees. To my mind, it does not make any difference how wide those powers are, provided that the right trustees are chosen. As the noble Lord, Lord Polwarth has said, there will be an increasing tendency to use professional trustees, like banks and insurance companies. For many years I personally have advised family trusts and the like to adopt: a bank or an insurance company, with a member of the family as co-trustee to give the local picture. I feel that there is a danger at the moment that the powers resulting from this Bill may be taken as the guide for young solicitors drawing up trust clauses. That, I think, would be a tragedy. I regard it as only an alleviation of damage done in the past.
There is another minor matter which probably I should bring up on the Committee stage—namely, in the First Schedule, the limitation to equities on which dividends of 5 per cent, had been paid for five years. Far be it from me to guess what the forthcoming Report of the Jenkins Committee may advise, but I believe that in investment circles it is generally felt that sooner or later we shall have no-par value shares in this
950
country. There are arguments against that, I know, but I would suggest to the noble Earl the Minister that in Part IV, paragraph 3 (b) might be revised so as to allow for that. It was my experience some years ago to advise on a trust which could put money into any part of the British Empire in various types of investment provided they had paid 5 per cent, for five years. The trustees wanted to put part of the money into Canada, but there was great difficulty in finding investments which had paid 5 per cent, for five years, because nearly all the companies had no-par value shares and therefore did not pay on. a percentage basis. I am not going to attempt to suggest a form of wording to meet that, but I am sure that the draftsman could find some solution.
4.22 p.m.
THE EARL OF DUNDEE: My Lords, perhaps I might just mention the question asked by my noble friend Lord Spens while it is still fresh in my mind. If he wished me to give a full reply to his argument, I should have to have a little more time. But Clause 4 does not affect settled land; it applies only to the monies as a separate fund. I believe I am right in saying that for trustees to own land they must be given power to do so in the trust instrument; and that if trustees were to foe established only for the purpose of administering certain monies or investment entrusted to them, and later were bequeathed land, they would have to sell it where they did not have power in the original deed to own land. The answer to my noble friend's immediate question is that here Clause 4 would apply only to the settled monies as a separate fund.
I am very grateful to your Lordships not only for your general support for the Bill but also for the great number of useful and helpful suggestions which you have put forward. The noble Lord, Lord Nathan, was good enough to give notice of the matters which he proposed to raise in the form of Amendments on the Committee stage: that in the narrower-investment range it should be compulsory to put the money of the trust into securities with a fixed date of redemption, which he suggested might be not less than 15 nor more than 20 years. Perhaps we had better wait for Committee until we deal with that

951
subject, but my first thought was to wonder why he should suggest "not less than 15 years". Supposing trustees had a chance of putting their money into a dated stock in five years' time, which is now available at 90, why should they not be allowed to take this certain profit of 10 per cent. in a fairly short time?
With regard to insisting upon dated stocks, of course we all know the arguments for that, but I should have thought that it was a rather unwise restriction to make that compulsory and to prohibit trustees from putting their money into undated stocks. There have been so many examples, of which we have all heard a great deal, of undated stocks which have fallen heavily in value, and there may be times when it would be a good thing to buy them when they have fallen so low that they are paying 6 or 7 per cent. It might then be the right thing to buy those for the sake of the yield alone, and the trustees might consider that those stocks could not go much lower—because, of course, they fluctuate in inverse proportion to the interest rate. Surely it would not be unjustifiable for a prudent trustee to buy such stocks when the rate of interest is very high and the capital value very low.
LORD NATHAN: My Lords, I should not care to interrupt the noble Earl, the Minister, in the middle of his argument, but I am not at all certain that this is not one of the traps into which trustees are very apt to fall: for they have to preserve a balance between capital and investment. It is not sufficient that they should see there is an investment standing at a low capital value producing a large income unless that is balanced somewhere by a capital investment which has improved in value. Because their responsibility is not only to provide income as it is commonly understood: their responsibility is to two classes of beneficiary—the life beneficiary, who is entitled to income, and those who come after, who are entitled to capital. It would be contrary to their duty if the trustees invested the money in stocks producing a high rate of interest unless that was compensated elsewhere by a high return on capital.
THE EARL OF DUNDEE: My Lords, I should have thought that that showed it was unwise to interfere too rigidly with the discretion of trustees.
The noble Lord also said that he was not certain about the need for written advice, and my noble friend Lord Cones-ford dealt with the same point in his criticisms of Clause 5, which lays down the duty of the trustee to obtain written advice, although he need not accept it. I feel that because a trustee does not have to accept the advice—and my noble friend Lord Conesford admitted that it would be wrong Ito insist that he should do so—it is not necessarily a bad thing, even from the point of view of his own protection, to insist that he should seek it. In practice, of course, most trustees who ask for advice do take it; and if a trustee had asked for advice and taken it, dearly that would be important to his defence in the event of his being sued. Even if he had not taken it, the fact that he had considered it and had a written record of having done so, and of his reasons for not taking the advice, might still be very relevant to his defence.
The noble Lord, Lord Nathan, also raised the question which has just been raised by my noble friend behind me, about five years being too long a period. I should like to look into that point. I admit that in any trust with which I had anything to do I should certainly insist on the investments being reviewed much more frequently than every five years. The noble Lord thought that perhaps a better alternative would be not to insist on having them reviewed at all; but no doubt we have all had experience of old-fashioned trusts run by some dear old family lawyer, in a beautiful, sleepy office, who never thinks of looking at investments for 20 years. Although that may not necessarily be a bad thing—because if the investments had been reviewed mistaken action might have been taken which would not have been to the benefit of the trust—probably on the whole it is a good thing for the generality of trusts to provide that they should be reviewed with some frequency. I will not say at the moment exactly how many years is the ideal number.
My noble friend Lord Hawke had two criticisms of this Bill: one that its freedom was inadequate, the other that it was incomprehensible; and my noble

953
friend, Lord Conesford, was also inclined to think that parts of it were incomprehensible. Both my noble friends concentrated on Clause 3 as the most outstanding example of incomprehensibility. That is the clause which deals with special powers which already exist under trusts. Under the clause the trustees will have three different courses which they will be able to pursue. They can continue to act under their special powers and ignore the Bill, or they can act under the Bill and ignore their special powers; or they can combine the two. And the last passages in Clause 3 describe how they can combine them. I would be willing to admit that when I first looked at Clause 3 I thought to myself, with some relief, "There are not three incomprehensibles but one incomprehensible". I must say, though, that the particular question which my noble friend Lord Hawke asked about Clause 3 was the one part of it which I thought was entirely comprehensible and, indeed, lucid. He said that he wanted to be assured that if the trustees choose to operate their special powers those powers will not be affected by this Bill. I really think that that is very clearly stated in the opening sentence of Clause 3:
"The powers conferred by Section 1 of this Act are in addition to and not in derogation from any power conferred otherwise than by this Act."
I should like to assure my noble friend that the special powers which already exist are not removed or in any way diminished by this slightly complicated clause.
My noble friend Lord Conesford thought it was a fault of the Bill that a trust fund should be divided into two equal parts, and I agree that it is difficult to find a solution which will be equally right in respect of all the numerous different kinds of trust which exist in this country. My noble friend, I think, rather implied that good trustees ought to be given freedom to put the whole thing into equities. I have heard that argued in debates in your Lordships' House. I have heard some noble Lords go even further than that and suggest that, in modern conditions, trustees should be prohibited by law from ever having any money in trustee investments at all. I think that was put forward, in some irony, perhaps, by my noble friend Lord
954
Brand a year or two ago. As my noble friend Lord Hawke pointed out, you cannot always be sure that equities will go up, and (especially, I think, in the case of small trusts with trustees who are not perhaps always very conversant with businesses, or who perhaps have a great deal to do and a great many small trusts to look after, and may not have a great deal of time to devote to each of them individually) I think it is some protection that part of the trust should be in trustee investments, even though they are a fixed-interest-bearing security.
After all, the range of possible rise and fall in equities is very great indeed; and even in the recent booms in equity shares you can say that there have been some stocks which were formerly thought to be quite sound equities which have gone down a great deal while other things were going up; and in the case of fixed-interest-bearing stocks, which for understandable reasons are so unpopular now, after all, the range of the movement is more or less limited by the variations of interest rates. If bank rate goes up, if interest rates on borrowing go up, then the gilt-edged correspondingly go down; but when interest rates go down to 4 or 3 per cent., then fixed-interest-bearing stocks go up. And that range of rise and fall, although it may be considerable, is not so violent in its possible extremes as the range of appreciation and depreciation to which a great many equity stocks may be subject.
My noble friend, I thought, was very kind in saying that he was not going to ask me any of his conundrums because I was not the Lord Chancellor. My Lords, I am nevertheless very sorry that he did not ask me the conundrums he had in mind, because I am sure that your Lordships would not have expected me to reply to them but it would have given me most enormous pleasure to hear them, and I am sure it would have delighted your Lordships, too. He asked whether the definition of diversification in this Bill could really justify a trustee in putting all the money in the wider range of moiety of the trust into a unit trust. I did not actually recommend that, my Lords, in my speech. I think that if a trustee was considering putting half a fund into a unit trust he would have to consider not only the diversification of investments provided by that trust but also how far it was right to

955
entrust all the funds to one set of managers.
The reason why I said what I did was this. I was giving the reasons for not following that particular part of the White Paper which laid down that not more than one-tenth of the fund or £250, whichever was the greater, should be placed in one investment. I gave one reason why we had not implemented that part of the White Paper, which was that it had been represented to us that a number of unit trusts—one particularly, "Charifund"—might give all the diversification that was required.
LORD CONESFORD: My Lords, I am in complete agreement with what my noble friend is now saying, and I entirely approve of the change made in this Bill from what was said in the White Paper. My point on this matter, if I may express it, was this: that, if it were a very small trust, an investment in a couple of investment trusts would give far more diversification than a diversified list of ordinary shares. Nevertheless, I suggest to him—perhaps he would inquire of his advisers whether this is not the fact—that even a couple of investment trusts would not be a diversification within the meaning of Clause 5 (1).
THE EARL OF DUNDEE: My Lords, on my noble friend's first point, I agree with him that probably most good investment trusts would provide a better diversification, and I am glad that he has given me the opportunity to say that. With regard to the point of definition, I think we must leave that until later.
I am very grateful to my noble friend Lord Fortescue for his support of the Bill and also to my noble friend Lord Polwarth, whose qualifications, I am sure, are as well known to those of your Lordships who live in England as they are to his own countrymen. He has perhaps at least as great, if not more, knowledge of the subjects which are relevant to this Bill as any of your Lordships. There were only two questions which he asked me. One was: if you make a profit on your wider-range moiety can you invest it in gilt-edged? Yes, my Lords, you certainly can. Part III of the First Schedule defines "wider-range investments", and it may be that
956
my noble friend has been puzzled by the last phrase in paragraph 1:
"not being securities falling within Part II of this Schedule."
That is simply a part of a definition of the first kind of securities which are being described here. It does not mean that it is impossible to invest in such securities with part of the wider-range fund. Of course, if a large profit was made on some equity share, and if the trustees thought it right to sell out and to put it into some early-dated stock while they were waiting to find a good alternative, that would be a very good thing to do. There is nothing to prevent them from doing that. And if they preferred to have it for a longer period in some gilt-edged stock, that again would not prejudice their rights to keep it in the wider-range half, and later on to sell it out again and put it in an equity once more.
The noble Lord's other question was with regard to special powers. He asked: supposing there was a trust which had to invest 40 per cent. of its funds in trustee stocks and which could do what it liked with the other 60 per cent., would it be affected by this Bill? Would the 40 per cent. be divided up? I am afraid the answer is that it would not. We cannot go beyond 50 per cent. If it was 25 per cent, that the trust was allowed to invest in equities, then that could be raised under this Bill to 50 per cent.; but if, as in the case given by my noble friend, the trustees were already allowed to invest 60 per cent. in equities, then it would be better, from their point of view, to continue to exercise their special powers and not to take advantage of the Bill—that is, so far as equities are concerned. There might possibly be other, more complex, advantages which might be derived from combining their special powers in some other way with the Bill, but perhaps we could leave that to a later stage.
My Lords, I am very grateful to your Lordships for having made so many constructive suggestions. They are too many for me to acknowledge individually now, but they will all be considered most carefully, and I hope not always unfavourably, before the Committee stage of the Bill is reached.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ADMINISTRATION OF JUSTICE (JUDGES AND PENSIONS) BILL
4.43 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I rise to move that this Bill be now read a second time. Before I pass to the business now before your Lordships, I should like to lake this opportunity of drawing attention to the loss which this House has suffered in the death of Lord Somervell of Harrow. At the sitting of the Appellate Committee I said something of his legal qualities, which I shall not repeat except to say that they were of a very high order.
I wish to remind your Lordships of a very great legislative achievement of which he was not the least of the architects. Organising a strong and freedom-loving democracy for war is no easy task. There must be a legal basis for the thousand-and-one administrative decisions at home which must be taken at once. The complications and consequent labour enormously increase when that democracy is the centre and mainspring of a far-flung Commonwealth composed of both independent realms and dependent territories. Yet a very high proportion of the necessary powers were so well thought out that they were brought into legal operation by the Emergency Powers (Defence) Act within a matter of hours at the beginning of the last war. Moreover, even in the initial clash ca arms the laws were not entirely silent, because it was possible throughout the ever-increasing pressure of war to invite the courts to say that the Defence Regulations or the Orders made under them were ultra vires or not made in good faith, and were so void.
In this formidable piece of legislation Lord Somervell of Harrow played a great part—as always, quietly, but with that unruffled but unbreakable deter-ruination of purpose which was Characteristic. When I joined him eighteen months after the beginning of the war, the machinery was working well, and took the strain of being geared to the increasing tempo of the conflict. Even after twenty years, I do not think that we should let his work pass without a shaft of memory. Time does not let
958
me recall the many duties which he undercook—for art and for his old school, for example—outside his judicial life, the store of unexpected reading which made his conversation a delight as, indeed, the charm of his friendship. It is enough to say that many will always remember them. My noble friend the Leader of the House has asked me to say that he associates himself with what it has fallen to me to say, and regrets that he cannot be present.
My Lords, this Bill is, in its way, an important one, but it is happily free from the technicalities so often associated with the words "Administration of Justice". Unlike the Bill with a similar title which I had to commend to your Lordships last Session, this Bill is not concerned with the mysteries of procedural law, but with two readily understood questions of administration. Its main object is to allow for an increase in the number of Judges, both of the Court of Appeal and of the High Court. Secondly, it makes some modifications in the pension provisions applicable to the metropolitan magistrates, Masters of the Supreme Court and certain other judicial officers.
Clause 1 of the Bill authorises the appointment of six more puisne Judges of the High Court and three more Lords Justices of Appeal. For very good reasons, Parliament always looks closely at any proposal to increase the numbers of our higher Judiciary; and, as the Minister principally responsible, I share the anxiety of Parliament that no such increase should be made unless it can be shown to be necessary. Your Lordships may be assured that I would not now be moving the Second Reading of this Bill unless I were convinced that the increases for which the Bill provides are really required.
I start with the Judges of the High Court. Under the present law, the maximum number of High Court Judges is forty-two, and there are in fact forty-two Judges now in office. Of these forty-two six are assigned to the Chancery Division, twenty-seven to the Queen's Bench Division and nine to the Probate, Divorce and Admiralty Division. It is mainly in the latter two Divisions that there is need for more Judges; and, in particular, the pressure on the Queen's Bench Division has

959
become such that recently my noble and learned friend the Lord Chief Justice has represented to me the need for an immediate addition to its strength. As your Lordships are aware, the Judges of the Queen's Bench Division try not only Common Law civil actions, but also many serious criminal cases at Assizes and in London. The volume of crime has, as we all know, increased enormously, but it is not only because there are more cases to try that the time of the Judges is more and more occupied by crime. In the last few years there has been a higher proportion of complicated and involved trials. Your Lordships will have no difficulty in remembering a number of recent trials for fraud, each one of which has occupied the court for several weeks.
Within the last year, the volume of criminal work at Assizes has been such that I have found it necessary to appoint Commissioners of Assize, who are not Judges, on many more occasions than I consider desirable. For example, during this year I have already had to make eleven such appointments, and there was an equal number in 1959. These Commissioners are in nearly all cases leading members of the Bar, in heavy practice, and their appointment as Commissioners, often at short notice, must of necessity be prejudicial, both to the interests of their clients and to the smooth running of the courts before whom they were due to appear. Besides—and this is really of greater importance—a criminal trial which is of sufficient gravity to be heard at Assizes ought to be tried by one of Her Majesty's Judges and not by a, barrister. Where possible, additional Judges have been sent out from London, and in fact during both the autumn and the winter Assizes of last year faux such Judges were sent to help with the despatch of business at Assizes. But, as I am sure your Lordships will realise, this is only robbing Peter to pay Paul, because Judges can be absent from London only at the expense of business in the High Court there. What is more, the greater number of criminal trials is reflected in more appeals to the Court of Criminal Appeal and these appeals are heard by Queen's Bench Judges in London. Obviously, the greater the time that is occupied by their duties in the
960
Court of Criminal Appeal, the less time the Judges can devote to the ordinary civil business of the High Court.
In fact the volume of civil business is also increasing. At the beginning of this term the number of actions for trial in the Queen's Bench Division in London was 90 more than it was at the corresponding time last year—the figures are 828 and 738. On circuit, the Judges (even with the assistance which I have mentioned) have on too many occasions found themselves unable to dispose of the civil cases in their lists, which have had to go over from one Assize to the next. I should not like your Lordships to think that no efforts have been made to stop this happening; on the contrary, my noble and learned friend the Lord Chief Justice has done all that he can. For example, a special spring Assize was held at Durham this year. Nevertheless, the delays in the despatch of civil business have been such that I have received a number of complaints from litigants, the legal profession and the Trades Union Congress. I hope that what I have said has satisfied your Lordships that there is a pressing need for more Judges in the Queen's Bench Division.
I now turn to the Probate, Divorce and Admiralty Division. Here, there has been no sudden increase in business. In fact, the number of divorce suits is now reasonably constant at between 26,000 and 28,000 a year; but there was a startling increase in the years after the war and, as I am sure your Lordships will remember, my predecessors found themselves compelled to deal with that increase by appointing a number of Special Commissioners who sit more or less permanently to try defended cases. I have managed to reduce the numbers of Commissioners to some extent, but the present divorce rate is still such that the Judges of the Probate, Divorce and Admiralty Division could not cope with their lists without some assistance, and in fact there are four Special Divorce Commissioners who still sit regularly. The use of Commissioners was never intended to be a permanent institution and their retention was severely criticised in the Report of the Royal Commission on Marriage and Divorce, of which my noble and learned friend, Lord Morton of Henryton, was Chairman. I apprehend that your Lordships will agree with me

961
that the time has now come for their gradual replacement. I emphasise the word "gradual", because I would not wish your Lordships to receive the impression that as soon as the Bill is passed I shall recommend to Her Majesty the immediate appointment of four more Judges to that Division. My intention is to make these appointments over a period of time.
Finally, there is the Chancery Division. Although at present the six Judges assigned to the Chancery Division are able lo dispose of the business coming before them, I feel it my duty to point out to the House that there are signs of an increase in this business, that one of these six Judges is fully engaged in patent work, and another is a Judge of the Restrictive Practices Court, to which he has to devote much of his time. It is, therefore, within the bounds of possibility that before very long there will be a need for another Judge in this Division.
I now come to the position in the Court of Appeal. Under the present law the number of ordinary Judges of that Court—whom we usually call "Lords Justices of Appeal"—is fixed at eight. My learned and noble friend Lord Evershed, the Master of the Rolls, sits regularly in the Court of Appeal as its President, so there are in practice nine Judges available, and this enables the Court to sit in three Divisions of three Judges each. Subsection (2) of Clause 1 of the Bill provides that the number of ordinary Judges is in future to be not less than eight nor more than eleven, and the object of this provision is to enable the Court of Appeal to sit regularly in four Divisions.
May I explain to your Lordships why I consider that this provision is urgently needed? For some years the Court of Appeal has not been able to dispose of appeals at the rate at which they have been set down. The result has been that there has been a steady increase in the number of cases pending at the end of each year and this tendency has been apparent since 1954. For example, there were 96 cases pending at the end of that year; at the end of 1958, there were 180, and a year later the figure was 285. By July of this year it had grown to 351. Your Lordships will readily appreciate that the longer the list of pending appeals,
962
the longer the interval between the decision at first instance and the hearing before the Court of Appeal. In fact, to-day that interval is often twelve months or more, and I am sure the House will agree with me when I say that an interval of this length is intolerable and productive of real injustice both to appellants and to respondents.
The position is unsatisfactory not only because of the delays to which it leads. The present state of affairs means that the Court of Appeal is under constant pressure to get through its cases as speedily as possible. This is particularly undesirable in a Court which is, for the great majority of litigants, the final appellate tribunal and, as such, one which plays a most important part in the development of the law. It is essential to avoid giving any impression that the Court is more concerned with the state of the lists than with the full and mature consideration of the appeals which come before it.
The position would be oven worse than it is were it not for the fact that it has, from time to time, during the Last year been possible to convene a fourth Division of the Court of Appeal with the aid of noble and learned Lords from this House, of High Court Judges, and of retired members of the judiciary. But it is only in exceptional circumstances that this can be done and usually at, the expense of business in this House or in the High Court. For these reasons I submit to your Lordships that it is urgently necessary for provision to be made for a fourth Division of the Court of Appeal Which can sit regularly. The increase authorised by subsection (2) of Clause 1 will enable this to be done. Your Lordships will no doubt observe that the subsection does not require the strength of the Court of Appeal to be maintained at eleven ordinary Judges, so that if in the future the volume of business decreases and the fourth Division becomes unnecessary, it will always be possible to reduce the membership of the Court by leaving vacancies unfilled
My Lords, I have dwelt at some length on Clause 1 of the Bill because of its intrinsic importance. The remaining provisions of the Bill, although important to those principally concerned, are such that I can deal with them shortly.

963
Broadly speaking, they adjust the pensions provisions of certain members of the lower judiciary and other judicial officers so as to make the pension structure more equitable and more consistent. Clause 2 provides that the pension payable to a stipendiary magistrate shall be calculated on his final salary instead of his average salary over the last three years of his service. An averaging provision is suitable for a profession with a career-ladder structure such as the Civil Service, but appointment to the stipendiary bench is normally the final step in a forensic career and carries little prospect of promotion. Other comparable judicial offices carry pensions calculated on final salaries and there is no reason why stipendiary magistrates should not be treated in the same way.
Clause 3 modifies the pensions provisions applicable to Masters in the Supreme Court and certain other judicial officers who at present can earn their full pensions only after 25 years service. These officers are required by Statute to retire at the age of 72, though there is power to extend to 75 in exceptional cases. This means that to earn their full salaries they must have been appointed at the latest at the age of 47. But in practice, as I am sure my legal colleagues will agree, it is not often easy to find suitable candidates of that age, and the result has been that many of them are unable to qualify for full pensions before reaching retiring age. Moreover, they are worse off than any other judicial officers in this respect. The clause accordingly reduces their pension span to 20 years, which is the span applicable to stipendiary magistrates. The detailed provisions are contained in the First Schedule to the Bill.
Clause 4 modifies the pension provisions applicable to future holders of the office of Judge Advocate General. Under the clause, they will be able to elect between a Civil Service pension (as the present Judge Advocate General has done) and a pension on the same terms as are available to an Official Referee. The remaining clauses of the Bill contain the necessary financial and consequential provisions and I do not propose to trouble your Lordships with them.
My Lords, I hope, from what I have said, that I have made it clear to your
964
Lordships that the Bill is not only a useful but a necessary measure. The administration of justice, both civil and criminal, is always of importance, and I am very conscious of the old saying that justice delayed is justice denied. It is apparent that at present justice is being delayed, and I am sure that your Lordships will agree with me that we shall be doing no less than our duty in taking, as a matter of urgency, the steps which are necessary to bring this situation to an end. As to the remaining provisions of the Bill, I hope that I have shown to your Lordships that they cure some not altogether unimportant anomalies and injustices. I beg to move the Bill be now read a second time.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
5.3 p.m.
LORD SILKIN: My Lords, I should like to begin by associating myself and my friends with the tribute which the noble and learned Viscount the Lord Chancellor has paid to the late Lord Somervell of Harrow. I remember him when I first entered another place, in 1935, as a very junior Member. He was then the Attorney General and all of us, on both sides of the House, regarded him with affection, as a charming, courteous and friendly gentleman. He was always accessible to the humblest Member in another place and always most courteous in dealing with any intervention that any of us made. In your Lordships House he was true to character, although he was not in the same position of taking an active part in our deliberations. I am sure that he must be a loss to his colleagues and I associate myself with the tribute that has been paid to him.
As the noble and learned Viscount has explained, this Bill is an urgent and vital measure for the administration of justice. In the view of litigants and practitioners, the position has become desperate. The delay in the hearing of actions is such that real hardship is being caused to many litigants, particularly to those—and they constitute a large proportion of the total number; something like 40 to 45 per cent. at the present time—who are involved in actions for personal injuries. They are the people who can least afford the delay yet they are serious victims of it. The noble and learned Viscount

965
gave some instances of the number of cases that are pending hearing. I should like to refer broadly to the time it takes at the present moment to get an action heard. From such information as I have been able to gather, in a normal, simple case it takes, from the time of issue of a writ to the time of bearing, anything from eighteen months to two years. If, unhappily, an appeal becomes necessary, I have been told that it may well be another twelve months before that appeal can be heard. So it may well turn out that from the date of the issue of the writ to the date when an appeal is heard and decided, three years might elapse. That is a complete denial of justice. And I am very glad that action is being taken along the lines which the noble and learned Viscount has set out.
I presume that the appointment of two additional Judges will make a difference. I wonder how much difference the noble and learned Viscount thinks it is going to make. Will it curtail the period by two months or three months? Is it possible to give some estimate? I have had inquiries made to see how this period of about two years which elapses before an action can be heard is broadly constituted. I am told that the period from the date of the issue of a writ to the setting down of the action for hearing may be anything from nine months to a year, and that from the date of setting down to the date of hearing may be another nine or twelve months. As the noble and learned Viscount knows, it is now possible to get a date fixed, once an action has been set down: and a date is normally given for the hearing anything from nine to twelve months ahead. I imagine that by the appointment of additional Judges that particular period can be curtailed, and, as I say, I should be interested to know what the estimate is of the curtailment.
As I have indicated, however, at least half the period between the issue of a writ and the date of hearing is taken up by the preliminary or interlocutory proceedings. If we are to reduce the period in which actions can be heard, it is important to look at that period as well. This matter has been the subject of examination from time to time. The last time it was examined was by a Committee which was appointed in April, 1947, presided over by the noble and learned
966
Lord, Lord Evershed. They sat for six years and presented three Interim Reports, followed by a Final Report in 1953. This Committee performed a colossal task. I need only mention that, apart from the three Interim Reports, the Final Report contained 923 paragraphs, with 13 Appendices and a summary of recommendations of 223 paragraphs. So far as I know, this Report has never been discussed by your Lordships House, and the noble and learned Lord has never been formally thanked by your Lordships. I should like to take this opportunity of being the first to thank him and his Committee for the extraordinary job that they have done. Six years is, on any calculation, a big slice of one's life, and for them to have devoted six years of their lives to this question of Supreme Court practice and procedure is something for which we all ought to be extremely grateful.
This Committee took a good deal of evidence. I think that among the witnesses who appeared before the Committee was the noble and learned Viscount the Lord Chancellor, and his predecessor, the noble and learned Viscount, Lord Simonds, many others who are famous in the world of law, and others, again, outside the law. A good many of the Committee's recommendations have been considered and accepted. I may say, in passing, that the main purpose of the Committee was to consider how the cost of litigation, could be reduced. But I think they would be the first to agree that costs and the time which an action takes to be heard go more or less together, and that if you can reduce the costs you ipso facto reduce the period in which a case is heard: because the only way to reduce the costs, short of reducing the remuneration of practitioners, which at the present time is quite unthinkable, is to simplify the procedure.
There were a good many recommendations made by the Committee for the simplification of procedure and for the general speeding up of processes connected with litigation. I am not going into details of the work of this Committee or their recommendations—indeed, it would be quite inappropriate under this measure—but there are one or two that I think are worth mentioning. One is their recommendation that there is considerable delay in connection with

967
vacations. At the present time any proceeding which overlaps the long vacation completely dies for a period of nine or ten weeks. You may say that, to all intents and purposes, all litigation dies during that period of nine or ten weeks, from the time the courts rise at the end of July until they resume in October. lf, for instance (I hope the House will pardon me for going into these small details, but I think they are important) a person is required to deliver a pleading within fourteen days from July 18, in practice he need not deliver it until some time in October, because time does not run during the whole of August and September. It is true that the Committee recommended that only the month of August should not count and that a person should be required to deliver pleadings or take other steps in the month of September. But this has not been acted upon, although it is one of the recommendations.
Incidentally, although I am sure this would be a most unpopular thing to suggest to members of the legal profession and to judges, I see no reason why the courts should not sit in the month of September. Judges are entitled to have a holiday in the month of August. But why cannot the courts sit in September, even if only on an attenuated scale, so that judges could take longer holidays one year and sit on a sort of rota system from one year to another? If they worked at three-quarters or two-thirds pressure, at least the courts would be sitting during the month of September. I know there is a vacation court to deal with emergency matters. If anything unforeseen happens, such as the requirement to get an injunction, you can go to the vacation court and get it. But that is not quite what I have in mind. I think it is worth considering whether it would not be possible for the courts to sit more as a matter of regularity in the month of September, even if only a limited amount of work is done.
The Committee also recommended the extention of the county court jurisdiction. That has been done, and I hope that the result has been successful. County courts can now deal with cases involving up to a maximum of £400. But would it not be possible to increase that limit once more? There has been considerable experience of the workings of county courts; they
968
are working extremely satisfactorily. You enter your summons and you are given a date eight to ten weeks ahead. The parties are expected to be ready for trial within that period; and they are, and the case is dealt with. Noble and learned Lords who have to deal with appeals from the county courts will be able to judge for themselves whether the work of the county courts is satisfactory or not, but my own impression, from what I have been able to gather from my practitioner friends, is that the county courts are working extremely well. If we could extend the jurisdiction of the county court, we could relieve the High Court of a great deal of work. And I may say, incidentally, that since the remuneration of a county court judge is only half that of a High Court Judge, we can afford to increase the number of county court judges far more readily than the number of High Court Judges; and if by extending the jurisdiction we needed more county court judges, the problem would be much simpler.
I feel that this Report on Supreme Court Practice and Procedure is of the utmost importance, and but for the fact that it is now seven and a half years old it would be worthy of a full debate in this House. The Government have had this Report before them for this long period—I do not suggest for one moment that it has been put on the shelf, because a great many of the recommendations, presumably, have been acted upon—and it would interesting if we could be informed as to which of the recommendations have been acted upon; which have not been acted upon, and the reasons for that; and whether it would not be timely now, in the light of changed circumstances since the Committee was in session from 1947 to 1953, to have another look at the proceedings of the High Court and see whether the particular aspect to which I am referring could be further improved.
I have already mentioned the possibility of increasing the number of county courts and the question of the vacations, and there are numerous other points referred to in the Report. If the noble and learned Viscount thought it right, I think it would be well worth while having another look at the whole of High Court procedure to-day to see whether we can carry this matter a stage further. In my own view, the maximum

969
period from the date of the issue of the writ to the time when an action is laid should not be more than nine months. I think nine months is quite long enough. At the present time it might be anything up to two years. As I have said, in the county court you get a return day of eight to ten weeks and the cases are disposed of. Perhaps it would be asking too much to suggest that the High Court should be as expeditious as that, but we still have a long way to go before we can get the time down even to the nine months I have suggested. We shall have to do far more than appoint two High Court Judges. Certainly that is a step in the right direction, and I strongly support it. But I do not think it goes anything like far enough to deal with the evil to which the noble and learned Viscount has himself referred, and that, I am sure, every Member of this House who has any experience of litigation will support.
Finally, on the question of the pensions to which the noble and learned Viscount referred in his speech, I would say that any improvement in the conditions of Masters of the High Court and others will always find a ready echo in my own heart, and I welcome them as far as they go. I believe there has been some criticism in another place that in certain respects they do not go far enough. I think the position of the Masters of the Supreme Court has been referred to. I should like to leave that until a later stage, when we might have a further discussion on the Bill. In the meantime, my own position is that I welcome this Bill. It does not go anything like far enough to deal with the evil, and I hope the noble and learned Viscount will agree that the whole question of High Court procedure should be looked at again, and also tell us whether we can, in the meantime, have an interim Report, possibly in the form of a White Paper, on the steps we have taken since 1953 to improve the procedure.
5.23 p.m.
LORD OGMORE: My Lords, I should like to join with the noble and learned Viscount on the Woolsack, and the noble Lord, Lord Silkin, and express my regret at the sad death of Lord Somervell of Harrow. I first came into contact with him some 23 years ago, when I was a member of a deputation to him pressing
970
for the institution by the then Conservative Government of a reform which we thought was both urgent and pressing. Needless to say, he did not accede to our request; in fact, it has not been acceded to yet. But he treated us with the utmost charm and courtesy. I have always remembered it as a very good example of how to turn down an embarrassing request in the happiest possible manner. He was in every way a most delightful man, so far as I was able to judge.
The noble and learned Viscount on the Woolsack has indicated that civil work may increase. I think that is very likely, because there is an old saying that good times are bad for lawyers. There is something in that, because when times are good people do not want to waste time on litigation, and it may well be that if we are running into bad times—and there are indications that this is the case—then the law will become very active indeed. This Bill gives rise to certain reflections. I welcome it within the limits by which it is proscribed. The Lord Chancellor has been making a number of quiet reforms. He has extended legal aid right up to the House of Lords, and he has developed a scheme for the retirement of Judges of the House of Lords, the Court of Appeal and the High Court. Those appointed after the date of the Bill now retire at a certain age. He has for the first time in history—and this is a considerable step forward—appointed a solicitor to be a Metropolitan Magistrate. I hope that the noble and learned Viscount will not stop there, and that he will go on with the good work, because there are quite a number of legal reforms yet to be made.
The noble Lord, Lord Silkin, has referred to the Long Vacation. I, too, fail to see why, in modern conditions, the Long Vacation is necessary. So far as I am aware, no other profession except Parliament and Parliamentarians (if we are a profession), and universities, have a Long Vacation. I can assure your Lordships that it is most difficult to explain to lay clients why the High Court should shut down for the long holiday in the summer. I quite understand that many years ago this was probably necessary. Travelling was difficult, and life was more leisurely. But that is not the case to-day, and I think this is

971
the sort of thing we ought to look at again in the light of modern conditions.
I myself have little experience of the Court of Chancery, but recently there has been some criticism in the legal papers of its procedure. It seems to have got into a very involved and intricate state. To laymen who are not able to appreciate the fine distinctions of the courts, it sometimes seems that they are engaged in a sort of legal square dance, where the music goes round and round but nothing much else happens. We know that this is not so, but I feel that a court like the Court of Chancery, which attracts very fine brains indeed, both of the Bar and of the Bench, rather tends, if it is not careful, to go into abstruse definitions and exact precedents, forgetting sometimes that the object of the exercise is justice—and speedy justice, as has been said both by the Lord Chancellor and the noble Lord, Lord Silkin.
I should like to say a word about the Court of Criminal Appeal, because this is affected by this Bill, although I believe that the noble and learned Viscount has not actually mentioned it. The Court of Criminal Appeal is also staffed, except for the noble and learned Lord, the Lord Chief Justice, by puisne Judges. I have never yet been able to see why this is so. It may have been, of course, because when the Court was first instituted there was a good deal of objection to it in some quarters; and it may be that it was done in this way so as not to involve great expense or to arouse any great hostility to it, as might have been the case if a separate Court had been set up. But I do not see why it is more necessary to have a separate Court of Appeal, with its own staff of Judges, in the case of civil actions than it is in criminal actions, where, after all, not merely property but life itself, or liberty, may be at stake. If there was a Court of Criminal Appeal with its own appellate Judges, it would release quite a number of puisne Judges for their work in courts of first instance.
I come to the question of ate field of selection of Judges. There are in this country some 20,000 practising lawyers. A little over 18,000 practise in the solicitors branch, and some 1,800 practise as barristers. All the Judges
972
and stipendiary magistrates, with the exception of one who has just been appointed, are, in fact, taken from the Bar. It seems to me—as I think it would do to a layman—a little odd that, of the 20,000 practising lawyers, many of great experience, the only Judges who are appointed come from 1,800; and, except for one Metropolitan Magistrate, the 18,000 have no chance, or have not yet had a chance, of exercising their undoubted abilities on the Bench. I did not think at one time, having practised at the Bar abroad where the professions are fused, that there was any need for separate professions, but I have now come to the conclusion that there is a case for separate professions—but only at a certain stage; and that stage should be after qualification, not before. I think there is every reason that we should institute in this country a system by which all lawyers are trained—as indeed are all doctors, dentists and veterinary surgeons—in a common way, with common examinations. They should then be able to decide, when they have passed and perhaps had some general experience, that they would like to become members of the specialist branch, members of the Bar. If this were so, I feel that the noble and learned Viscount the Lord Chancellor would have a very much wider field of selection to choose from than he has at the moment.
I frequently have cause—I have done so only to-day—to meet some of the great firms of City solicitors, and I assure your Lordships that there are men practising in the City of London, in the great City firms, who are the equal of any lawyers anywhere; and I think the work they do, and the contribution they make to the City's expertise, has never been sufficiently recognised. When we think of the City we think of bullion merchants, stockbrokers and so on; but we never think of those great firms of solicitors. Yet I myself know—and I can say this because I am not one of them—that many people, many businessmen, come from all over the world and have their agreements drawn in London because of the great expertise of some of those firms in the City. Yet those men have no chance even of being county court judges—I say "even" but I have great respect for the county court judges. All they can hope

973
to be is to be Metropolitan Magistrates, and that only during the last few months. It was only then that the noble and the learned Viscount the Lord Chancellor decided to extend that Bench to the solicitors.
Finally, I should like to say a word about legal advancement. As your Lordships know, on the Continent young man goes in either to be a member of the Bar, an avocat, or he goes in to be a judge, and he starts on the lowest judicial rung of the ladder and he climbs until, when he is 60 or something like that, he gets to the Court of Cassation, one of the great final courts in his particular country, the court of appeal. I do not suggest that system here, because I do not think it is a good system at all. I believe that it is essential that a man has a good many years practice at the Bar or in the Solicitor's field before he becomes a Judge. I think it is bad to have a man a sort of professional Judge from his earliest professional youth. But there is something to be said for giving judges in the county court, or stipendiary magistrates, the hope of getting on, as it were, in the judicial world—not in every case, (of course, but occasionally. I myself have known some excellent county court judges, first-class men who would have made, I am quite sure, brilliant Judges of the High Court. Yet they have remained as county court judges. I feel that this is a point the noble and learned Viscount might look into; whether it is possible to give those judges of the lesser courts, if we may call them that, an opportunity of advancement to higher places. I know that there have been a few cases in which over the years that has been done, but they are very much the exceptional case, and I should like to feel that such cases were more common and usual than they have been in the past.
I should like just to add this. I have not had the experience in the law that some of your Lordships have had—I suppose that I have been in it now for something like 36 years—but one thing I do notice. I occasionally go into the courts, for old time's sake, to look at the Judges, and it seems to me (perhaps I am getting older) that they are very much more human than they used to be. In the old days there were some terrors
974
—many of us remember who they were—especially in the country court. But the Judges to-day seem to possess not only more wisdom but also a lot of common sense combined with great patience and courtesy. I feel that the judicial system in this country is something of which we can be justly proud. A foreigner said to me the other day, "You know, the great bulwark of your Constitution is your Judges: everybody on the Continent knows that". He said that the great bulwark of the British Constitution is the independent Judges of this country, and I myself believe that in these days, when freedom is being attacked almost everywhere, a free Parliament, a free Press and an independent Judiciary are indeed the very bulwarks of our civilisation.
5.37 p.m.
LORD CHORLEY: My Lords, I am sure that the noble and learned Viscount has made out his case for the Bill which is before your Lordships this afternoon. I feel that he has done so, however, in rather a conventional way. I hope he will not mind my saying this. He knows that, equally with the noble Lord, Lord Ogmore, I pay a sincere tribute to the work he has done for law reform during his occupancy of his high office. I have had the opportunity of paying tribute to that more than once before in your Lordships House. But it seems to me—and I think this has been reflected in the speeches which have been made—that there is a certain lack of flexibility about the approach of the present Bill to handling the tight situation in regard to litigation to which he and everybody else has borne witness.
The noble Lord, Lord Silkin, has made various suggestions, to which I am sure the noble and learned Viscount will give attention, and in particular has suggested that the jurisdiction of the county court should be extended. I should very much like to support that. The depreciation in the value of money since the last extension to county court jurisdiction took place has been so great that we are back pretty nearly at the position in which we were when I was practising at the Bar 30 years and more ago. The county court bench during that time has improved enormously in calibre, so far as I am able to judge, and that I think is the general view, and

975
the judges there are certainly capable of handling satisfactorily problems involving much larger sums than the present jurisdiction confers upon them.
I have always felt that we are altogether too centralised in our administration of justice in this country— very much more highly centralised than any other country with whose administration of the law I am acquainted. Here and there, it is true, experiments have been made, and I think successful ones. There are two Crown courts, as the noble and learned Viscount knows very well, which work on his old circuit and my circuit, Liverpool and Manchester, and as far as I understand from counsel who practise on those circuits before those courts they are working very well and have made a considerable contribution to the solution of this problem of congestion. I have suggested this before, I think more than once, that similar courts should be established in other provincial capitals, such as Birmingham, Leeds, Newcastle and Bristol. They are just suggestions. Even if they were not all given similar courts at once, I am sure that two further experiments of the same kind could lead only to a considerable alleviation of the difficult situation in regard to criminal justice in, and in the neighbourhood of, those great towns.
I entirely agree with what the noble Lord, Lord Ogmore, has said about looking more widely for recruits to the judicial part of the legal profession. Lord Ogmore speaks as a solicitor, and I, as a member of the Bar, should like to endorse his suggestion. Surely, in the twentieth century it is rather out of date to draw this hard and fast distinction between the two branches of the profession in regard to the highest offices which are open to lawyers practising in this country. Solicitors are eligible for scarcely any jobs apart from masters in the Chancery Division and, I think, registrars in the county courts. We know now that one has been made a metropolitan magistrate. I am sure we are all glad to hear that. But everybody who has practised at all in the law must have come across many a solicitor who he knew perfectly well would have adorned the bench— certainly the county court bench, and quite a number of them the
976
High Court bench as well. The noble and learned Viscount himself in his practice must, I am sure, have known quite a number.
When I was practising in county courts there were several registrars whose work was so admirable that we always made an effort to get our cases on before Mr. Registrar So-and-so rather than the county court judge himself. I always felt that the Lord Chancellor of the day could not have done better than elevate Mr. Registrar So-and-so when the next vacancy occurred on the county court bench. No doubt it is rather more difficult to make a wise choice from the solicitors' profession than from the barristers' profession, because one knows that the Lord Chancellor and those with whom he consults on these occasions are so much more closely in touch with the work done by learned counsel, but I think that if the inquiries were pushed a little further there would not be any difficulty in finding out those men— not only in the City of London but in some of the great provincial capitals, and also working in other parts of London— who are admirably equipped. Often the solicitor has a more practical feeling for the party than has the barrister. I do not say that that occurs mare than just here and there, but certainly I have found it on a number of occasions. I should like to see the present occupant of the Woolsack go down in history as the Lord Chancellor who introduced this most valuable reform.
After all, it is not so long ago that in some of the High Courts an ordinary barrister was not eligible for appointment to the bench— he had to be a serjeant-at-law. It is true that he became a serjeant-at-law without any particular difficulty, because the Inn of the Serjeants was open to receive him on payment of a suitable fee. That shows that there was a time further back in our legal history when even a barrister as such was not regarded as suitably qualified to hold the highest judicial offices, at any rate in certain of the High Courts. That was overcome in Victorian times when law reform was very much to the fore. Is it not possible for disqualification of solicitors to be overcome at the present time, when again we are going through a period of considerable law reform?
There is one other point. I notice that the noble and learned Viscount said

977
in regard to the Commissioners of Divorce who have done such good work over the last few years that it was the intention gradually to appoint High Court Judges to take their place. I am glad to hear that. Some of these gentlemen have, in effect, sacrificed the possibilities of their advancement at the Bar to do this work. As the noble and learned Viscount knows, some of them are men who have held judicial positions in parts of the Commonwealth; but others are men who, in the ordinary way, were practising at our awn Bar. Obviously, a man who has for a number of years been giving the greater part of his time to work of that kind can hardly expect to step straight back into a busy practice in the Temple. Presumably, no arrangements for pensions exist. I am not quite sure about that; perhaps the noble and learned Viscount will enlighten us on it. It would be rather unfair if suddenly they were to find themselves back without any pension rights, again struggling in the profession. Therefore I was glad to hear the noble and learned Viscount say that this change would be gradual. I hope that that will be borne in mind when these appointments come to be made.
5.46 p.m.
LORD CONESFORD: My Lords, in supporting this Bill I would add only a few words, if I may, about Lord Somervell of Harrow. For some forty years he was perhaps my closest personal friend. When he became Attorney-General in 1936 he invited me to be his Parliamentary Private Secretary, and for the next six years I enjoyed his company and intercourse with that delightful mind almost daily. For over a quarter of a century he enriched both politics and the law, yet no one, I think, of his friends thinks of him either as a politician or as a lawyer, great though his services were in both those capacities. He had a mind so rich and varied, and was so cultivated, that his companionship was unforgettable. He was a lover of the arts, architecture, literature, painting and sculpture. He was as well loved in his clubs and in the village in Oxfordshire where he made his home, as he was in the spheres where he performed his public work. He had, I think, the best mind and was the most civilised man I ever knew. He was also, I think, the best.
5.48 p.m.
LORD PARKER OF WADDINGTON: My Lords, I had not intended to intervene in this debate, but there are three matters to which I Should like to refer. First, I should like to associate myself with the tributes that have been paid to the late Lord Somervell of Harrow. I had the great honour and privilege of being one of his pupils, staying on with him as a devil, and for all those years thereafter until he became a Law Officer of the Crown I had the real privilege of sharing a room with him, day in, day out, and seeing the workings of his mind —and what little I know of the law is entirely due to him. I find it difficult to believe that someone so vital is no longer with us.
My Lords, I support this Bill and welcome it. I think the case for it is overwhelming. It is needed as a matter of urgency, and as a matter of urgency the Government have dealt with it; and I think our thanks are particularly due to my noble and learned friend the Lord Chancellor. The only other matter I would mention arises out of what the noble Lord, Lord Silkin, said in the matter of delays, because I think it was directed, among others, to accident cases and indeed to the state of the Lists in the Queen's Bench Division generally. There are three periods which are daily my constant concern in that Division. The first is the period between setting down and trial; the second, the period between the issue of the writ and trial, and the third, the period between the accident, the tort or whatever it may be, and the time of trial, The first of those —that between the setting down and the trial— is entirely the responsibility of the Court, and there I venture to think my noble friend has the figures a little wrong.
So far as the present position is concerned (and I went into the matter this afternoon) in the General List the period between setting down and trial is between six and seven months. I believe we should all agree that if that period could be shortened, so much the better; but experience has shown that if the period is reduced too far there are complaints the other way. In October only a year ago the General List gap between setting down and trial was reduced to three months, and immediately the solicitors were up in arms, saying they could

979
not deal with it. I believe experience has shown that something about six months is the happy mean.
So far as the Fixture List is concerned, naturally if a fixture is wanted for a long and complicated case which justifies a fixture, the period may be slightly longer. As the noble Lord has said, it has been as long as eleven months. I am happy to say that it is now seven to eight months. Cases which are asking for a fixture to-day can get on in June or July next. There is a third category of case which I would describe as a "near-miss" to a fixture. In other words, if somebody wants to come on, not necessarily on a fixed day but within a range of three or four days or a week, he can be put in after a fixture. Those cases have been remarkably successful in reducing the gap in that type of case to some four to five months. That period is the responsibility of the law.
The moment one gets down to the period between the issue of the writ and date of trial, one is largely in the hands of the solicitor and the client. True, interlocutory work may take up a little period, but any solicitor and client who wants to get on with a case can do so. Equally, the same is true of the period between the date of accident and the trial. There the delay may occur with the litigant himself, before he goes to the solicitor. That it can be done speedily under our present system is shown, I think, by the fact that only a few weeks ago I myself tried an accident case in which the accident had occurred less than 18 months ago. The result was astounding; it could not be coincidence: all the five witnesses saw the same accident in exactly the same way. That is how it should be done. I mention that only because it is not the fault of the courts that delay occurs between the accident and the time of setting down. For the period of setting down the courts must take full responsibility, but I venture to think that, despite the shortage of Judges, the period is not excessive.
5.56 p.m.
LORD LUCAS OF CHILWORTH: My Lords, my intervention in this debate will be brief and very much to the point. As the only layman among this galaxy
980
of lawyers, I would not dare to speak on the aspects of the law with which this Bill is concerned. I was impressed by the words of the noble Lord, Lord Ogmore, when he related to your Lordships the impression that the majesty of British law had upon the foreigner. But I am concerned with the dignity of the law, and I wonder what his foreign friend would have said if he had been taken to the Law Courts in this great city of ours and shown the top back rooms where some of Her Majesty's Judges have to work, or the huts in the quadrangle of the Law Courts.
I believe I am right in saying that about 18 new Judges have been added to the List in this last ten years, but we have not had one court. Why is it that some of the courts in the Provinces provided for magistrates would make a High Court Judge in London green with envy? Why do we have to lag so far behind? I cannot imagine that it would not make some contribution in respect of the plea which my noble friend, Lord Silkin, has made in regard to the law's delays. How can the law operate smoothly, efficiently and speedily under some of the conditions under which our Judges have to work? There are exceptions in the Provinces—in Manchester and Liverpool, for example; but look at some of the other Assize courts in the Provinces. They have not even had a coat of paint for 50 years. Why is that? Is it because of money and the fact that in the Provinces it is the ratepayer who has to pay for new buildings, while in London it is the taxpayer who has to pay?
I would ask the noble and learned Viscount on the Woolsack whether he does not think it would be correct and proper, and money well spent, if the Law Courts in London were rebuilt on modern lines. Would it not help to ease the burden with which the law has to contend at the present time, with facilities which no business firm would ever tolerate? When we look at the buildings which are going up in the City of London for the efficiency of industry and commerce and then look at our Law Courts in the Strand, we realise that there must be something wrong. That is my plea as a layman who is concerned with what the noble Lord, Lord Ogmore, has mentioned—the great tradition of the British judiciary system.
5.58 p.m.
LORD EVERSHED: My Lords, I should like, with so many of your Lordships, to associate myself with the tribute paid to the late Lord Somervell of Harrow. When I became Master of the Rolls, nearly twelve years ago, he was then a member of my Court, and for many years I had the enormous advantage of his loyalty and support.
At this time of the evening, I shall not long delay your Lordships, but I should like to say first, as the President of the Court of Appeal, how thankful I am to the noble and learned Viscount on the Woolsack for having brought this matter before us. The pressure of the business in my Court has for lone caused me and my colleagues very great anxiety. The noble and learned Viscount mentioned figures. This morning the number of cases awaiting trial in the Court of Appeal was 374. I will not add to what the noble and learned Viscount has said as to the reasons, save to remind your Lordships that when the number of Lords Justices was increased to 8, in 1938, there were 26 Judges of the High Court, whereas there are now 42. And your Lordships will have in mind, in addition to the county court appeals, the work that comes to us from such bodies as the Lands Tribunal. If your Lordships are interested in comparing figures you will find that the number of Supreme Court Judges, or their equivalent, in England is extremely low compared, for example, to that in New Zealand, in Australia, and. if I may say so, even in Scotland.
I should like also to express to the noble Lord, Lord Silkin, my appreciation for the kind things he said about the work of the Committee over six years—as he said, a long time; and it was all what is called "spare time"—and the Report of that Committee. I should like also to say how greatly indebted I was to my colleagues. Your Lordships will have in mind that there were 23 of them, by no means all from the legal profession, and our recommendations were reached unanimously.
I do not think it right that I should say anything about the matters which the noble Lords, Lord Silkin and Lord Ogmore, have raised, save perhaps this. These noble Lords have suggested that perhaps the courts might sit in September. I hope that your Lordships will
982
not think that the only reason they do not do so is that Her Majesty's Judges will not then sit. As a fact, my Committee considered this matter. At the time, the Long Vacation went on until October 10. As a result of our suggestion, it was reduced, so that the Term now begins on October 1. Although we heard a great deal of evidence, there was no support whatever for any further reduction in the Vacation, and no body was more opposed to any further reduction than the Law Society, representing the solicitors, which pointed out that if they were to give proper holidays to their staffs it would be quite impossible, in the absence of vacations, to prepare properly the cases for their clients.
The only other matter I should like to mention is the question of jurisdiction of county courts. That matter was also put to my Committee, and the figure which now expresses the limit was arrived at after careful consideration of the many problems, which include this one. It is a great virtue of the county court that it is available at a small cost to the small man with a small case. If we increase the jurisdiction too much, we shall put that advantage at risk, because if county court judges tend to take more and more big cases the general standard as regards costs inevitably will increase; and particularly if the cases are such that they require the attendance of leading counsel, who may have to come long distances to the county court. I express no view, of course, on the right conclusion in this matter, but I venture to put that consideration in your Lordships' minds. I say no more, except to express my gratitude to the noble and learned Viscount for bringing this matter on so quickly, and also the hope that your Lordships may feel pleased to give the Bill a Second Reading.
6.4 p.m.
VISCOUNT BLEDISLOE: My Lords, I shall take up very little of your Lordships' time. But I should like, if I may, as a member of the Bar, to add my tribute to the memory of the late Lord Somervell of Harrow. I have been interested particularly in the work of the Court of Appeal. My noble and learned friend Lord Evershed has explained the matter to your Lordships. What has perfectly clearly been happening is that since three Courts of Appeal were

983
formed in the year 1938 the work of the Court of Appeal has been going up and up, and the Court itself has been overwhelmed with work. That is clearly no fault of the Court of Appeal, because, as my noble and learned friend Lord Evershed has explained to your Lordships, the number of Judges has been increased; the Court have been given work from the Lands Tribunal and other Tribunals; and they have become over-whelmed, with the result that the position is becoming a very serious one indeed. I should like to add my gratitude to Her Majesty's Government, and particularly to the noble and learned Viscount on the Woolsack, for the expedition with which this matter has been treated. The matter was raised a comparatively short time ago, and now we have a Bill before your Lordships' House. Speaking as a member of the Bar, I am extremely grateful.
LORD SILKIN: My Lords, may I just ask the noble Viscount this question? Was not the question of an increase in the number of Judges one of the recommendations of the Evershed Committee? That was seven and a half years ago.
VISCOUNT BLEDISLOE: My Lords, the noble and learned Lord, Lord Evershed, could probably answer that point better than I could.
LORD SILKIN: It was a definite recommendation.
LORD EVERSHED: My Lords, I do not think we went so far as to recommend an increase in the number of Judges. But I may be wrong. Am I?
LORD SILKIN: My Lords, I am afraid so. I am loth to correct the noble Lord.
VISCOUNT BLEDISLOE: My Lords, I do not think the Committee recommended increases in the number of Lords Justices in the Court of Appeal.
6.7 p.m.
THE LORD CHANCELLOR: My Lords, I am grateful to your Lordships for the mood and generous words with which you have approached this Bill. I have been most interested in the fact that the Bill has produced wider debate than its contents might have appeared to justify and I am very interested in the line that has been taken. Therefore I
984
should like to say one or two words about the many matters that have been raised. But of course I shall not be able to deal with them all, and I hope that noble Lords will just send me a short note to remind me of any point I have missed in which they are particularly interested. I shall try to deal with them, but I should be grateful if noble Lords would do that.
With regard to the first major point of the noble Lord, Lord Silkin, about delay, the position has been clarified by the figures which my noble and learned friend the Lord Chief Justice has produced. But may I just deal with them in the same three categories: first of all, the period between writ and setting down; secondly, the period between setting down and trial; and, thirdly, the problem of fixed dates. With regard to the first period, I think that the noble Lord will agree, and that all noble Lords who have had practice in the law will agree, that that depends largely on the lawyers in charge of the case. But there were two points that I think emerged from the noble Lord's speech. One is the question: Have we a procedure which will enable the case to be taken in hand? Without going into details—it would take some time to develop the point—I would say that we have adopted the Evershed recommendation (if I may put it informally in that way) about the robust summons for directions. It is only on the one point that, on reflection, we did not think there should be automatic discovery in every case; and the noble Lord will see that that is a relatively small point because the Evershed Committee themselves did not suggest it in personal injuries cases. So I think that that is all right.
My noble and learned friend Lord Evershed himself dealt with the question of the vacations. I have turned up paragraph 134, which begins with these words:
"The general opinion of the witnesses heard by us, however, was that the long vacation should be reduced to eight weeks—that is to say, that it should begin, as now, in the beginning of August and end in the last week in September."
And, of course, action was taken on that line. I must say that all the information which has been given to me from the solicitors' branch of the profession is that it would be very difficult if the

985
courts sat in September. It is a difficult matter to stagger the holidays of their staff, and so on. I am always prepared to look at these points again, but I do not think I have had any pressure on this point until to-day's debate.
On the next point, with regard to the period between setting down and trial, the noble Lord, Lord Silkin, heard what the Lord Chief Justice said. It is difficult to estimate the effect of the appointment of Judges. I am hopeful, and I think my noble and learned friend the Lord Chief Justice is hopeful, that we shall get a period of something about six months. As the noble Lord knows, the Law Society has said four months. I do not put that out of the possibilities, but my noble and learned friend Lord Parker of Waddington was more doubtful as to whether that was not getting too low a period, and I shall take that into account.
On the question of the Evershed Report, I would point out that we have not discussed it, but the noble Lord, Lord Silk in. once asked me about it rather informally in the course of a debate on, I think, one of our earlier Administration of Justice Bills. May I put the position very shortly: that effect has been given to their recommendations about the extension of county court jurisdiction and appeals on fact from county courts by the County Courts Act, 1955. Several other recommendations about official referees, the procedure for execution against land and other matters requiring legislation, were dealt with by the Administration of Justice Act, 1956. Recommendations for procedural changes, dealt with by the Rules of the Court, include those relating to summons direction, Admiralty, Chancery procedure, notices of appeal and the like. These matters have either been dealt with or are still under consideration; because, as the noble Lord knows, this is not a static matter: it is a matter as to which you must go on making improvements. Fourthly, as to the recommendations for the improvement of Appendix F relating to costs, that has been implemented by the Supreme Court Rules of this year; and, fifthly, I can tell him that there is a review of the whole of the Rules of the Court going on.
I think I can put it more easily, for once, by saying what we have not done.
986
We have not adopted the leap-frogging procedure: that is, of going in some cases from the High Court to the House of Lords without going to the Court of Appeal. The noble Lord will remember that, in regard to criminal matters, there is now an appeal from the Divisional Court, as well as from the Court of Appeal, to the House of Lords, because he took an interest in that Bill. We have not dealt with appeals at the public expense, and we have not abolished the two-thirds rule for junior counsel. But, apart from that, I think we have really tackled the recommendations. I told the noble Lord when he asked me before that, apart from the leap-frogging provisions, which would require legislation, practically everything else had been done, so this is not one of the cases where the matter has been allowed to rot in a pigeon-hole. It has been very much in my mind.
The third major point which the noble Lord put to me was as to the increase of county court jurisdiction. I will consider that again. I am sure that he, in turn, will consider what my noble and learned friend Lord Evershed said. It is always the difficulty about these matters that it is our pride that the county court is the poor man's court, and one does not want that side of it to be swamped by their taking too many large cases. It is a question of balance, but I will willingly look at it.
The noble Lord, Lord Ogmore, must take it that I do not accept his sombre suggestion that we are sliding into bad times; but I want to deal with the more important of his points. He suggested that the Court of Criminal Appeal should be a separate court. My Lords, I find that very difficult. We have had 52 years of working it in this way. I think it has kept the staffing of the Court of Criminal Appeal of a high order, and there have been Judges who have been dealing with the questions themselves and dealing with the points raised on problems. It is curious that when we had the Bill to which Royal Assent was given at the end of last Session, nobody quarrelled with the composition of the Court of Criminal Appeal as that Bill was going through. So, although I am always willing to look at anything Lord Ogmore suggests, it is not a problem that I have found to be acute up to now.
LORD OGMORE: My Lords, would the noble and learned Viscount allow me to interrupt? I was really expressing a genuine wonder, as it were, as to why this distinction had been made. I really did not understand it; and I still do not understand why it is less necessary to have a separate court for those who deal with life and liberty than it is for those who deal with property.
THE LORD CHANCELLOR: I think it was rather the other way. Of course, as the noble Lord knows, the Court of Appeal is a comparatively recent development in its present form, because it includes Judges from the Chancery Division and from the Probate, Divorce and Admiralty Division who, during their years as puisne Judges, have not had to deal with crime; and them obviously, there is something to be said for the two courts. But I was rather considering the point that I thought the noble Lord might have had in mind as to why you had separate people who are stamped as appellant in the one case and not in the other. I think there are really two reasons. One is that it grew out of the older courts, and the second is that it has worked well. I have not checked this, but up to the war it would not have provided a full-time court, and I am doubtful if it would even now, although the amount of work has increased. I think they are the reasons, which are largely historical and based on the growth of the courts.
The noble Lord then asked me generally about selection. This is an interesting point, and it is difficult to keep it distinct from the question of the fusion of the two parts of the profession. At the moment the solicitors' branch have not the right of audience in the High Court, and the Courts above it to the House of Lords; and therefore, in the ordinary way, they have not the experience of advocacy in court work from the point of view of someone actually conducting a case. I know that there are exceptions in the field of commercial arbitrations; and there is the other exception of people who work in the inferior courts, like the county courts and the magistrates' courts. But the members, to whom the noble Lord referred, with proper reverence, if may say so, of the solicitors' branch of the profession are not engaged in advocacy themselves, and therefore they have not that training.
988
The argument against fusion that is usually put forward by the solicitors' branch is that it is a good thing to have another kind of lawyer who will give a more detached, objective and independent view of a case than the person who is closely connected with the client. I think that, so long as there is that distinction, it is difficult to fit in the solicitors' branch to the High Court. The noble Lord has said that I have recently made some appointments to the lower courts in London, and before that I had made one in the Provinces. The question of education is, I think, an entirely different one. What the noble Lord has suggested is most interesting; and, indeed, this question is being examined by a lot of wide-awake minds in the profession to-day.
On the other point, that of promotion, broadly I am not against it. I think that since the war more county court judges have been appointed to the High Court Bench than in the rest of our legal history. The noble Lord may remember that only recently I appointed the Recorder of Manchester to the High Court Bench after he had proved himself by five years' excellent work in his former position. So I am not against the noble Lord in principle. I think it is one of the matters which have always to be considered. On the other hand, one of the reasons why this is so important in our system of administration of justice is because of the position of the Judiciary, as the noble Lord has himself said. That, in turn, depends on our being able to take mature and distinguished figures who have made their names at the Bar and have all the independent attitude of mind which the Bar is, I think, admitted to possess. So again one has to keep the balance, but I have nothing against this point.
The noble Lord, Lord Chorley, asked me about more Crown Courts. Actually, my right honourable friend the Home Secretary and I (I helped him with it) have a Committee called the Streatfeild Committee, dealing with arrangements at assizes and quarter sessions, and it is the intention to try to improve the position of work and to avoid delays in the Provinces. Therefore, before I consider any further step, I should like to get their report, which I hope will be out in a few months' time. I think that at Liverpool and Manchester the Crown Courts have

989
worked well; but we have a general problem in the country, and I want to look at the question as a whole.
My noble and learned friend Lord Conesford expressed, if I may say so, in very moving words what we all feel about the loss of Lord Somervell of Harrow; and many others of your Lordships referred to him in very touching ways.
Then we have heard from my noble and learned friend the Lord Chief Justice, as I have already reminded your Lordships, some useful figures; and the noble Lord, Lord Lucas of Chilworth, has dealt with the question of court buildings. I cannot pretend that I have been near the head of the queue with regard to court buildings in my own time. I have got some up, but we are always trying to improve, and the noble Lords who have been Ministers know the intense competition to which one is subjected on that point. But I will bear what the noble Lord said very much in mind. I am very glad to hear what my
990
noble and learned friend Lord Evershed said, and I am glad that he feels that I have helped him. I know also that my noble and learned friend Lord Bledisloe has felt very strongly on this point for some time, and I know he feels that the step will be taken as early as it can.
My Lords, if there are any other points, I hope your Lordships will not hesitate to write me. I shall be delighted to deal with them. In the meantime, I hope that your Lordships will give the Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NATIONAL INSURANCE BILL
Brought from the Commons; read 1a, and to be printed.
House adjourned at twenty-nine minutes past six o'clock.