HL Deb 02 February 1967 vol 279 cc1073-86

4.20 p.m.

Report stage resumed.

THE LORD CHANCELLOR moved, after Clause 13, to insert the following new clause:

Civil rights in respect of maintenance and champerty

".—(1) No person shall, under the law of England and Wales, be liable in tort for any conduct on account of its being maintenance or champerty as known to the common law, except in the case of a cause of action accruing before this section has effect.

(2) The abolition of criminal and civil liability under the law of England and Wales for maintenance and champerty shall not affect any rule of that law as to the cases in which a contract is to be treated as contrary to public policy or otherwise illegal."

The noble and learned Lord said: My Lords, this Amendment abolishes maintenance and champerty as torts, while preserving the rule of law under which champertous agreements are unlawful as contrary to public policy. It is the second of the series of Amendments to give effect to the Law Commission's proposals on maintenance and champerty. The modern view of maintenance as a tort is that it consists of the procurement, by direct or indirect financial assistance, of another person to institute, or carry on or defend, civil proceedings, without lawful justification. The tort of champertyis that of maintaining a civil action in consideration of a promise of a share in the proceeds of the action, if successful.

In their Report, the Commission concluded that, owing to the difficulty for the plaintiff of showing that the defendant had no lawful justification for maintaining the action and that the plaintiff suffered damage as a result, the action for damages for maintenance is to-day "no more than an empty shell". They also pointed out that nowadays the great bulk of litigation is in fact financed by third parties, such as insurance companies, trade unions, trade associations, or by the State under legal aid. The Commission considered that maintenance and champerty as torts were now virtually useless, and that there was no point in retaining them. The Government agree.

In paragraphs 16 to 18 of their Report, the Commission referred, however, to one field in which champerty still plays an effective role—the body of case law to the effect that champertous agreements (including "contingency fee" agreements between solicitor and client) are unlawful as contrary to public policy. They thought that this rule of law should be maintained, pending further study in consultation with the Law Society of the question of "contingency fee" arrangements. The present Amendment gives effect to these proposals.

I should not like to move this Amendment without adding that it ought not to be considered that this Amendment does nothing. It is true that a few years ago the Court of Appeal liberalised the law of maintenance so far as they could, but before that, and most of the time that I have been in practice, if trade unions, as they always do, supported the action of a member financially, one had to tell them that this was not only illegal but a criminal offence. Of course they were very surprised, because I suppose this benefit of membership of a trade union may be more prized by the members than any of the other benefits of the trade union. They always replied, "We have been doing this for years", and I had to say, "Well, it is a criminal offence, but nobody has been prosecuted for certainly two centuries, so you need not worry about that. As to its being a tort, it is necessary for anybody who wants to sue you for damages for that tort to prove that he has suffered pecuniary loss. If your member wins the action, his opponent cannot say he has suffered pecuniary loss because he has been made to pay what is due, but if your member loses the action you must pay the other side's costs. If you pay the other side's costs, then in practice there would be no action of maintenance against you." This is the reason why all unions always pay the other side's costs if they lose. Then I had to add, "There is a third thing against which I cannot protect you. If some disgruntled member chooses to issue a writ in the Chancery Division for a declaration that the payment made by the union to the solicitors was ultra vires, you have not any answer to this, and that is a risk you must expect to run."

The law has always been that if a man brings an action it has to be brought on his own bottom, as the old cases used to say, and he cannot rely on any money provided by anybody else except for a very narrow range of exceptions: a father can maintain an action for a son, an employer can maintain an action for an employee, or anyone can maintain an action if he has a legal interest in it, but not if he has merely a common-sense interest in it. And even the Court of Appeal could not, of course, reverse a decision of your Lordships' House. A trade union general secretary had been badly libelled for things he was said to have done or not done as general secretary, and his union maintained an action for him paying his legal expenses. The House of Lords held that this payment was ultra vires, because although from the common-sense point of view the union had an interest in the case, a libel action is brought for a man's own reputation, for which he alone is concerned, and the union was held to have no legal interest in the case.

As the noble Viscount and other noble Lords know, a few years ago the Court of Appeal did their best in an action in which a number of riparian owners with fishing rights joined together to sue some trading concern which was polluting the river. That was held to be all right. Though the Court of Appeal could not interfere in the case of defamation because of decisions in your Lordships' House, they liberalised the law as far as they could. We are getting rid of something to-day which, in these days of legal aid and insurance companies, really is an anachronism. Before formally moving the Amendment, may I say that I am proposing, if your Lordships agree, and if none of your Lordships dissent, to move the next five Amendments together, because they all involve the same point. I beg to move.

Amendment moved—

After Clause 13, insert the said new clause.—(The Lord Chancellor.)


My Lords, the noble and learned Lord the Lord Chancellor has drawn attention to this most important Amendment—at least by comparison with the rest of the Amendments we are discussing this afternoon—and to the Report from the Law Commission which explains it. Although I have no doubt that noble Lords on this side of the House will be glad to see the matter tidied up, nevertheless there are two points I should like to raise.

First of all, this Bill purports to be a Bill on Criminal Law, and although I understand and appreciate the noble and learned Lord's enthusiasm to see these matters dealt with as and when he can, and that he has taken the opportunity to put this Amendment in Part II, it comes strangely into a Bill with the title of Criminal Law Bill. I wonder whether the noble and learned Lord would contemplate amending the Short Title, as he is proposing to amend the Long Title, so that there will be no doubt about it. Because although the noble and learned Lord has explained that most people will be glad that the two torts are to be abolished, nevertheless there is still in subsection(2) of this new clause a very important matter which is not being dealt with; in other words there is being maintained this matter of public policy largely concerned with solicitors, and people who may wish to know the up-to-date law on this subject will hardly look for it in the Criminal Law Act 1967. Therefore, when it comes to the consideration on Third Reading, I think there might be something to be said for turning this into the Criminal Law (Miscellaneous Provisions) Bill, or something of that nature.

The other point arises out of the continuation of the rule of public policy which is dealt with in subsection (2). Can the noble and learned Lord tell the House what is being done about this, because the Law Commission pointed out in paragraph 17(3) of their Report that the champerty arrangement into which a solicitor may, possibly unknowingly, enter, is a matter where the law in this country is very different from the law abroad. For instance, the Report draws attention to the possibility of an English solicitor being asked to act for parties resident in a jurisdiction where litigation on the contingency fee basis is lawful—for instance, in the United States and some of the Common Market countries. I have no idea what the complexities of this sort of situation might be, or where, if anywhere, the English courts might come in. But they might come in, otherwise this matter would not be dealt with by the Law Commission; and if we are going to face a situation internationally, where we hope that our solicitors and other people will be dealing more and more with countries in the rest of Europe and in the United States, then the sooner something is done about this little technicality, which still remains as the only left-over of the old tort of champerty, the better. I should be glad if the noble and learned Lord could tell us whether the Law Commission are getting on with their consultations on this, and whether we may expect another Report from them on this matter soon. Apart from those two points, I welcome this Amendment, and I hope that noble Lords on this side will do the same.


My Lords, I also welcome this Amendment and should like to say how fascinating I found the speech of the noble and learned Lord. He made me feel slightly guilty, because I still remember some workmen's compensation cases I did about forty years ago on the instructions of a trade union. I am afraid that I gave them none of the warnings which I see quite clearly from the Lord Chancellor's speech I ought to have given.


My Lords, I am much obliged for the observations that have been made. On the first point, of course the last Amendment proposes an alteration in the Title. This is something that cannot be done in another place, but your Lordships always can do it. So far as the Title is concerned, I will certainly consider that, and if the noble Viscount would care to let me have a line as to what he thinks it ought to be as amended, I should be most grateful.

On the second point, the question of "contingency fees" is, I know, under discussion. I do not know how far discussions have gone. It would be a great change in our law if contingency fees were allowed. At the same time, there is a good deal to be said for them. Most countries have them. You do at least know where you are. I remember a member of the Bar, who is now a High Court Judge, telling me that a friend of his had been left an interest in an American will, and when in New York he went to see a lawyer, because he understood that an action would have to be brought. The lawyer said, "If you leave the papers overnight, I will let you know in the morning". In the morning the lawyer said: Yes, he thought it was a good case. The Englishman asked what the costs would be, and he was told they would be 25 per cent. of anything recovered in the action. As the Englishman had already been told that that was the customary proportion in New York, he said: "I quite understand that if we win. But what happens if we lose?" The American lawyer said: "Sir, do you take us for shyster lawyers, charging clients if we lose?"

There is considerable merit in acting on the basis that you do not have to pay anything if you lose the action, but if you win, then you pay 25 per cent. of the damages, or whatever it is, to the lawyers. You know exactly where you are from the start. This will no doubt be considered, and perhaps particularly if we are to be more closely associated with Europe.

I remember a case in the High Court, a few years ago, in which a solicitor agreed to bring an action for a Frenchman against an English concern. It was a big and complicated action. Quite naturally, the Frenchman had agreed in France with another Frenchman to put up the money for the costs, provided that he got such-and-such a proportion of the proceeds. The English solicitor, being asked to do so by the clients, drew up for them an agreement putting it into a formal agreement. After a couple of years' hard work on the case the solicitor succeeded in recovering £40,000 for the Frenchman. Then, when he asked to be paid his costs, the Frenchman said, "Oh, I am told that in England the agreement which you drew up for us was a wholly illegal agreement, and the result of that is that you are not entitled to any costs at all".

The Court of Appeal said, "Yes, that is right". I said, "This is most serious, because if an American tourist is injured here, when he goes home he would ask his American lawyer to start an action here for damages through an English solicitor. The English solicitor may know that the probability is that the American lawyer is being paid a contingency fee; and, anyway, in modern conditions of insurance companies and legal aid, all this is out of date." They said: "But this is a criminal offence". I pointed out that there had been no prosecutions for at least 200 years. They said: "It is on the Statute Book. Parliament has not repealed it. How can we say that something is not a tort which is a criminal offence?" However, my Lords, I will find out from the Law Commission and let the noble Viscount know how far the negotiations have proceeded.

On Question, Amendment agreed to.

Schedule 3 [Repeals (general)]:

4.35 p.m.


My Lords, I beg to move Amendments Nos. 6. 7, 8, 9, and 10, which are all paving Amendments. They remove from Part I of Schedule 3, the repeals relating to maintenance and champerty. By later Amendments, these repeals are included in Schedule 4, together with the other repeals already contained in that Schedule to give effect to the Law Commission's proposals to abolish other obsolete crimes. The repeals in Schedule 3 were recommended by the Criminal Law Revision Committee in the draft Bill attached to their Report on felonies and misdemeanours, on the ground that the provisions duplicate the Common Law offences. Now that Common Law offences of maintenance and champerty are to be abolished as obsolete, the right place for all these repeals of the statutory provisions relating to maintenance the champerty is Schedule 4, "Repeals (Obsolete Crimes)". The present Amendments will avoid having repeals relative to maintenance and champerty in two different Schedules to the Bill. From what the noble Viscount said just now, I understood that that he would approve of this. I beg to move.

Amendments moved—

Page 17, line 47, column 3, leave out ("25").

Page 17, leave out lines 49 to 51.

Page 18, leave out lines 4 to 7.

Page 18, leave out lines 16 and 17.

Page 18, leave out lines 30 and 31.

—(The Lord Chancellor.)

On Question, Amendments agreed to.

THE LORD CHANCELLOR moved to add to the repeals of obsolete or unnecessary enactments:

Page 19 line 52, at end insert—

"3 & 4 Will.4. c. 74. The Fines and Recoveries Act 1833. In section 33 the words from 'or if any person, protector of a settlement,' to 'continuance of such estate', and the word 'other'.")

The noble and learned Lord said: My Lords, now we are in real trouble, but I beg to move the Amendment standing in my name on the Marshalled List. This Amendment repeals some obsolete or unnecessary provisions in Section 33 of the Fines and Recoveries Act 1833 concerning the consequences which follow if the protector of a settlement is convicted of treason or felony or in certain other events.

The 1833 Act set up a new method of barring entails in place of the old system of fines and recoveries. A lawyer could address your Lordships for a long time about fines and recoveries, but I hope that that will not be necessary. A recovery was a bogus action resulting in a bogus judgment; a fine was a bogus action resulting in a bogus settlement. Under it in certain cases the consent of the protector of a settlement (normally the person in possession) is required to enable a person entitled to settled property as tenant in tail (but not yet in possession) to bar the entail and all subsequent interests and thereby to obtain a fee simple in remainder. Under Section 33 of the Act, if the protector is convicted of treason or felony, the High Court becomes protector of the settlement. The reference to conviction of felony will become inoperative as a result of the Bill; and since entailed interests nowadays are of relatively little importance, and, moreover, persons convicted are in general free to manage their own affairs, there seems no reason to devise any new ground for disqualification to replace that of conviction of felony. If the disqualification on this ground is abolished, there is no practical reason for keeping alive the corresponding provision in the case of a convicted traitor. I beg to move.

Amendment moved— Page 19, line 52, at end insert the said words.—(The Lord Chancellor.)


My Lords, I entirely understand Why we are proposing in this Bill to repeal the words which set out the consequence that shall follow If any person, protector of a settlement, shall be convicted of treason or felony". The Act says that certain things shall happen, and that the High Court of Chancery may deal with the matter in the way set out. What I do not understand is why, in a Bill which is entitled 'Criminal Law Bill', we go on to deal with circumstances which give a jurisdiction to the High Court of Chancery to do certain matters, if a certain person not being the owner of a prior estate under a settlement shall be protector of such a settlement and shall be an infant; or, if it shall be uncertain whether the last-mentioned person be living or dead". If this is going to be turned into a Criminal Law (Miscellaneous Provisions Bill) so be it. But I cannot see what justification there is for tacking on to the repeal, which clearly relates to treason or felony, all the rest of these matters, which patently do not. I have not drawn the line at doing away with amercements under Magna Carta on this stage of the Bill, but there is something to be said for trying to deal with this subject within the framework of the Bill itself.

This is a Schedule which appears to the Bill by virtue of Clause 10, which says: The enactments mentioned in Schedule 3 to this Act (which includes in Part I certain enactments connected with matters in this part of this Act but already spent, obsolete or redundant apart from this Act) arc hereby repealed … With what matters in this Part of the Bill does this part of the repeal connect? It does not seem to me that it has anything whatever to do with what is said in Clause 10. If we are to go as wide as this in the repeals, possibly we shall have to look again at Clause 10 and at the Short Title as well.


My Lords, I appreciate what the noble Viscount has said, but I do not think that this proposal goes further than it should. Some amendment had to be made because of the reference to felony, with which I have already dealt. It is right to say that the opportunity has been taken to include in the repeal two other provisions in Section 33 concerning protectors of a settlement which are also obsolete or unnecessary. The first is the provision that where a person appointed by the settlor as protector under Section 32 of the Act or his substitute as protector is an infant or cannot be found, the High Court shall be protector in his place. Section 32 was itself repealed by the Law of Property (Amendment) Act 1924, on the ground that it was useless and not used, and therefore the related provision in Section 33 can be treated as obsolete.

The second additional provision in Section 33 to be repealed is the provision that where the settlor declares in the settlement that the person who was owner of a prior estate under the settlement and would under the Act be the protector of the settlement is not to be so, and the settlement does not appoint anybody in his place, the High Court shall be the protector. This power of the settlor to exclude the person who would be protector under the Act in favour of the High Court seems useless now that the settlor's power under Section 32 to exclude that person in favour of his own nominee was abolished as useless in 1924. Therefore it was thought right and proper to deal with those two incidental matters, as this section had in any event to be amended.

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved to insert after the item relating to The Consular Salaries and Fees Act 1891:

"56 & 57 Vict.c. 71. The Sale of Goods Act 1893. Section 22(2)."

The noble and learned Lord said: My Lords, I beg to move this Amendment, which is to repeal Section 22(2) of the Sale of Goods Act 1893. It is consequential on the repeal (by Schedule 3, Part I, of the Bill) of the obsolete Sale of Horses Act 1555 and Sale of Horses Act 1588. The Acts of 1555 and 1588 provide for certain regulations to be observed in the sale of horses in markets, including the keeping of notes of sales, and for the recovery in certain circumstances of stolen horses sold in accordance with the regulations. The regulations have long since ceased to be observed, and the Acts no longer serve any purpose. The Bill repeals them in preference to making a verbal adaptation of a reference in the 1588 Act to the "fellonye" of stealing a horse.

Section 22(2) of the Sale of Goods Act 1893 provides that nothing in Section 22, which sets out the rule as to the passing of a good title to goods sold in market overt, shall affect the law relating to the sale of horses". The early Acts had the effect that a sale of a stolen horse in market overt but not in accordance with the regulations under the Acts did not give the buyer a good title. Subsection (2) of Section 22 preserved this rule. Although the subsection does not refer expressly to the 1555 and 1588 Acts, it was included in Section 22 only because of those Acts.

As the noble Viscount will agree, our standard work on sale of goods is Chalmers, because Chalmers was himself the draftsman of the Act, so he knows what the Act was supposed to do. He makes it quite clear in his notes that the sole reason for the existence of subsection (2) is as follows: The Sale of Horses Act 1555 and the Sale of Horses Act 1588 lay down complicated regulations for the sale of horses in fairs or markets. These regulations are never observed in practice. He makes it clear that the sole point of subsection (2) relates to those two Acts, and if those two Acts are going, therefore this subsection of the Sale of Goods Act ought to go too. I beg to move.

Amendment moved— Page 26, line 18, at end insert the said words.—(The Lord Chancellor.)


My Lords, all I would say is that it speaks volumes for the erudition both of Chalmers and of the Parliamentary draftsmen.

On Question, Amendment agreed to.


My Lords, this Amendment repeals the entry relating to Section 2 of the Forfeiture Act 1870 in Schedule 9 to the Criminal Justice Act 1948. There is no purpose in retaining this entry because the words which it amends are being repealed by the entry, already in Schedule 3, Part III, Page 25 of the Criminal Law Bill, relating to Section 2 of the Forfeiture Act 1870. I beg to move.

Amendment moved— Page 28, line 16, column 3, at end insert ("In Schedule 9 the entry relating to the Forfeiture Act 1870.")—(The Lord Chancellor.)

On Question, Amendment agreed to.


My Lords, on this Amendment, Amendment No. 14, we find ourselves in the ecclesiastical field. Section 55(1)(a) of the Ecclesiastical Jurisdiction Measure 1963 at present provides that a priest or deacon shall be deprived of his preferment if he is convicted of treason or felony, or on indictment for misdemeanour, and is sentenced to imprisonment (or to death in the case of treason). Some amendment to this provision is necessary, consequentially on the abolition of felony, and the Church authorities have been consulted about what this should. be. They have agreed to the Amendment now proposed. If they obviously think it is right, 1 hope your Lordships will also. I beg to move.

Amendment moved—

Page 29, line 15, at end insert—

(" Church Assembly Measure

1963 No. 1. The Ecclesiastical Jurisdiction Measure 1963. In section 55(1)(a) the words' is convicted of treason or felony, or' and the words of a misdemeanour'.")

—(The Lord Chancellor.


My Lords, this meets the point raised by the right reverend Prelate, the Lord Bishop of Chichester, at the very beginning of the Committee stage of this Bill, and I am sure the House is grateful to the Government for this Amendment.

On Question, Amendment agreed to.

Schedule 4 [Repeals (Obsolete Crimes)]:


My Lords, I beg leave to move Amendments Nos. 15, 16 and 17 together, if your Lordships do not object, for they deal with the same point. They add to Schedule 4 the repeals of enactments concerning maintenance and champerty which the earlier Amendment removed from Schedule 3, Part I. One new repeal is included. This is in the Ordinance of Conspirators. This contains a definition of conspirators which relates mostly to maintenance, and is in any event now wholly obsolete, and also a definition of champertors. I beg to move.

Amendments moved—

Page 29, line 21, at beginning insert—

("3 Edw. 1 The Statute of West-minster the First. Chapter 25.
(Statutes of uncertain date—20 Edw. 1). Statutum de Conspiratoribus The whole Act.
28 Edw. 1. c. 11. (Champerty). The whole Chapter.
1 Edw. 3. Stat. 2 c. 14. (Maintenance). The whole Chapter.
1 Ric. 2. C. 4. (Maintenance). The whole Chapter.")

Line 36, column 3, leave out ("Section 3") and insert ("The whole Act")

Page 30, line 31, at beginning insert—

("33 Edw. 1. Ordinacio de Conspiratoribus. The whole Act.
7 Ric. 2. c. 15. (Maintenance). The whole Chapter.")

—(The Lord Chancellor.)


My Lords, I again thank the noble and learned Lord for his explanation, and also for having put in the Statute "the 33rd year of Edward I", to which I drew attention on Second Reading.

On Question, Amendments agreed to.


My Lords, this is an Amendment to extend the Long Title. It is consequential, to give effect to the Law Commission's proposal to abolish the torts of maintenance and champerty.

May I thank noble Lords who have taken part in this debate on the Report stage of this Bill, and particularly the noble Viscount, Lord Colville of Culross. I beg to move.

Amendment moved—

Line 7, after ("crimes") insert ("together with the torts of maintenance and champerty").—(The Lord Chancellor.)

On Question, Amendment agreed to.