§ 5.30 p.m.
§ THE LORD CHANCELLOR
My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
§ Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The LORD STRANG in the Chair.]
§ Clauses 1 to 3 agreed to.
§ Clause 4 [Extension of power to dispense with holding of assizes]:
§ VISCOUNT COLVILLE OF CULROSS moved Amendment No. 1:
Page 4, line 44, at end insert—
(" ( ) for enabling assizes to be held specially at any place for the transaction of such class of business as may be specified;").
§ The noble Viscount said: It was the noble and learned Lord, Lord Morris of Borth-y-Gest, who raised this point on Second Reading. To be perfectly candid, such is the state of legislation about what are the powers of the court that I have not been able to discover whether or not there is already a power to do what my Amendment proposes. The noble and learned Lord suggested that if assizes are withdrawn from some of the towns, under the provisions in the clause as drafted, there might be occasions when it would still be convenient, because a large number of witnesses would have to come from that locality, or for some other reason, to try a case at one of the towns from which the normal assize had been withdrawn. As 870 I understand it, the Beeching Commission had much the same point of view in mind, and the last thing the Commission wished to have was inflexibility.
§ Although it may well be that an Order in Council is a clumsy method of achieving this aim. it would seem to me sensible to have a provision whereby occasionally cases could be tried at such towns. It may be that an Order in Council would be a clumsy method, because there would not be time to get such an Order passed after the news had come to the notice of the Lord Chancellor that a case of this sort was pending at, say, Builth Wells, or where-ever it might be. I feel sure that the subject is worthy of further consideration, and I have put down this Amendment to suggest that if there is not a power we should have one; and, if there is already power, to ask the noble and learned Lord, the Lord Chancellor, what it is. I beg to move.
§ THE LORD CHANCELLOR
I would agree that provision ought to be made for an exceptional case where it might be more convenient to take the court to a location where there were a large number of witnesses than not, though I think that if the Beeching proposals are to be implemented and to succeed, it would have to be a very rare case. In fact, the Amendment is unnecessary. To explain why it is unnecessary is a little involved, because there are rather complicated provisions.
Section 70(1) of the Supreme Court of Judicature (Consolidation) Act 1925 provides that:His Majesty may, by commission of assize or any other commission, either general or special, assign to such judges of the High Court or other persons as are named therein, the duty of trying and determining within any place or district specially fitted for that purpose by the commission any causes or matters, or any questions or issues of fact or of law or partly of fact and partly of law in any cause or matter, depending in the High Court, or the exercise of any civil or criminal jurisdiction capable of being exercised by the High Court, and any commission so granted by His Majesty shall have effect as if enacted in this Act.The power conferred by the above subsection to issue special commissions has rarely been used, and it has only proved necessary to issue about three or four special commissions of assize during the past twenty years or so. The power under 871 Section 70(1) is used in the case of divorce to appoint Special Commissioners to assist the High Court Judges. For this purpose two continuous commissions have been issued one covering London and the other the rest of England and Wales.
The Order in Council referred to in Clause 4 of the Bill is the Assizes Order which is issued from time to time under Section 72 of the Act of 1925. Section 72(1)(b) provides:For the appointment of the place or places at which assizes are to be held on any circuit and for directing that assizes or any special commissions shall be held at more than one place in the same county on the same circuit…For this purpose "assizes" has the meaning given by Section 13(5) of the Interpretation Act 1889 which provides that:The expression 'assizes', as respects England [and] Wales,… shall mean the courts of assize usually held in every year, and shall include the sessions of the Central Criminal Court, but shall not include any court of assize held by virtue of any special commission.The effect of the above statutory provisions, therefore, is that the Assizes Order issued under Section 72 of the Act of 1925 deals only with the courts of assize usually held in every year and does not touch the power conferred by Section 70(1) to issue special commissions. The noble Viscount may be assured that there is no intention of removing the existing power of issuing special commissions so that a court can sit to hear an occasional case wherever this may be needed. Paragraph 278 of the Royal Commission's Report makes it clear, however, that any visits to special places must be kept to the absolute minimum to avoid disrupting business in the busier centres. Therefore while I fully accept the object which the noble Viscount had in putting down the Amendment, it is in fact unnecessary to make any change in the law for that purpose.
VISCOUNT COLVILLE OF CULROSS
I am very much obliged to the noble and learned Lord. It may perhaps be a matter on which I can be forgiven for not having discovered the full details myself. I am sure that the noble and learned Lord, Lord Morris of Borth-y-Gest, will be equally glad to know that this is something that can be done under 872 the existing powers of the law; and one must leave it to the noble and learned Lord—after he has had the consultations with the local authorities that he has promised and withdrawn some of the assizes from towns where they now sit—to see whether he can devise machinery; because I think this will be necessary to try to discover whether there are such cases in those towns or counties in question.
When an assize is going round to each county, as is now the case, it is improbable that a special commission will be needed, because the judge will go there at least twice a year. But if he is not to go at all, I think some means will be required whereby the news can come through that a case is pending involving, for example, calling all the oldest inhabitants of a village as witnesses. It might be difficult to transport them, and they might be unwilling to be transported further away than their own county town. I am sure that the noble and learned Lord will think about the point and devise some method to meet it. I beg leave to withdraw the Amendment.
§ LORD MORRIS OF BORTH-Y-GEST
May I thank the noble and learned Lord the Lord Chancellor for his explanation which, if I may say so, fully meets the point which I raised.
§ Amendment, by leave, withdrawn.
§ Clause 4 agreed to.
§ Clauses 5 and 6 agreed to.
§ Clause 7 (Courts with power to attach earnings):
§ 5.38 p.m.
§ LORD DONALDSON OF KINGS-BRIDGE moved Amendment No. 2:
§ Page 7, line 18, at end insert—
§ ( ) Within a reasonable time after the passage of this Bill, the Lord Chancellor shall by statutory instrument, which shall be subject to affirmative resolution by both Houses of Parliament—
- (a) restrict the power of enforcing judgment debts, in whatever court they arise, to the county court of the locality in which the debtor resides or carries on business
- (b) establish within each county court an office, to be called the Enforcement Office, which shall have control of all the Court's enforcement duties and duties in relation to administration orders, and in particular,
873 when an application for enforcement is made, shall—
- (i) investigate the debtor's resources and needs
- (ii) Consolidate the debtor's judgment debts for the purpose of making any order for attachment of earnings
- (iii) apportion among judgment creditors the proceeds of any such orders in accordance with such rules as the Lord Chancellor may lay down.")
The noble Lord said: The object of this Amendment is fairly clear. I want to bring into the Bill some indication of the Government's intention to carry out the major and, in my opinion, the most important part of the Payne Report. In introducing the Bill, my noble and learned friend said that it would plainly be impracticable to give effect to all four of the Payne Committee's recommendations straight away. The Payne Report advocated that the recommendations should be carried out by stages, which is exactly what the Government are proposing to do. I want to make sure of this. I noticed that in his reply to the Second Reading debate my noble and learned friend spoke on the question of the enforcement offices, which is the major point I wish to speak about, and said:
I should very much like to have enforcement offices, but one has to be practical."—[OFFICIAL REPORT, 4/12/69, col. 256.]
Speaking again about the necessity for welfare officers, he said:
It would be nice to have a welfare officer in every court.
That is rather faint praise.
I think it is important to pin this Government and any future Government down to the vital need to start the enforcement offices at an agreed time. My noble and learned friend quoted the Minority Report of two members of the Payne Committee saying that enforcement offices could not be started immediately but he ignored the recommendation in the main body of the Report, where the recommendation is quite clear. Paragraph 35(1) says:
The enforcement offices could be established in the sense that the enforcement officer could be appointed and he could delegate from the present staff certain officers to carry out enforcement duties.
There are other indications in the paragraph which suggest that the Committee as a whole expected to see something done more immediately. I gave my
reasons for this in some detail on Second Reading and I do not propose to go through them again. I believe that my noble and learned friend and his colleagues are just as keen as I am to see these enforcement offices set up and to see this Bill transformed from what it is now, simply a change in method of protecting creditors, without any special attention to the social consequences, into a social measure of real importance of which a Labour Government can be proud.
§ The Amendment itself simply sets out what the Payne Committee thought that the enforcement offices ought to do. I do not propose to go through them, beyond saying that the power of enforcing judgment debts should be restricted to the court where the debtor goes, and the office should not have power to investigate, consolidate and apportion among judgment creditors. The importance of all these things was fully discussed on Second Reading. These are my reasons for wishing to see that the Government's intention to carry out the Payne Report as a whole instead of piecemeal is enshrined in the Bill. I beg to move.
§ BARONESS WOOTTON OF ABINGER
I should like to support my noble friend's Amendment. It seems to me that the two halves of the Payne Committee's Report are undoubtedly connected. If it is proposed to abolish imprisonment for debt, with only a number of specialised exceptions, it is essential that some improved method of enforcement should be added, otherwise we are going to have the position in which there is really no sanction for non-payment of civil debts. I think we are all of one mind. We want to abolish the sanction of imprisonment. But we shall be leaving a dangerous vacuum unless something on the lines of my noble friend's Amendment is added to the Bill.
§ LORD LLOYD OF HAMPSTEAD
On the debate on Second Reading, I ventured strongly to urge the Government not to disregard the central and basic recommendation of the Payne Committee—which is the new system of enforcement offices. Therefore I naturally have considerable sympathy for the object of the present Amendment. The scheme of giving merely general statutory powers and leaving the details to be worked out by a rule-making authority 875 is familiar enough in many spheres, but I regard it as probably not viable in the present instance. It would give rise to immense difficulties—for instance, in our consideration of the substantive rights involved, such as the right of the individual creditor at the present moment to obtain payment of his debt. With all deference to my noble friend, this is a matter which would require specific statutory provision. However, like my noble friend, I venture to urge the Government to recognise that there is a strong feeling among those closely connected with these problems that the main recommendation of the Payne Report is both sound and viable.
It may well be that the Government do not feel that they have had time enough to work out all the details, but I could have hoped that they would grasp this occasion to give rather more urgent priority than they have so far apparently done to this whole question. I hope that the Government will indicate their intentions more specifically, and, in particular, indicate that they are ready to accept the main recommendations and to give urgent priority to setting up machinery for implementing these proposals as soon as practicable. I should like to see a time scale for this purpose. This is not a controversial or Party matter in any way and therefore could not be affected by any calculation as to an approaching General Election. I think that my noble friend would be willing and, I should say, would be well advised, to withdraw his Amendment, if some assurance of that kind were given.
Lastly, I would emphasise that though the origin of this proposal is an elaborate and highly technical Report, this is not just a lawyers' area of reform; it involves a big social problem, which affects a vast number of people. There is incalculable social benefit in introducing a new enforcement system which will bring relief to the lives of a great many families whose problems at the moment are merely aggravated under the existing procedure, without any real hope of remedy. That is why I express great sympathy for my noble friend's proposed Amendment and my hope, which I have repeated several times, that the Government will give a more specific indication of their intention on this important matter.
VISCOUNT COLVILLE OF CULROSS
I do not suppose that the noble Lord, Lord Donaldson of Kingsbridge, seriously means that a matter of this complexity should be dealt with by Statutory Instrument. Nevertheless, it is an extremely good way of getting the matter before the Committee, and I am glad that he has done so. If I do not go into the details at great length, it is for two reasons: first, I want to hear what the noble and learned Lord has to say about it, and, secondly, it seemed to me, from reading the Second Reading speeches, that the Government have made a policy decision that at the moment they are not going to have enforcement offices because they cannot staff them and cannot find the money. If that is so, I hope that the situation will change very soon and that we shall be able to have the enforcement offices, which, I agree with other noble Lords, are an integral and fundamental part of everything that Payne recommends. But if we cannot have them in this Bill, then I believe there are a number of things which Payne recommended we should do but for which this Bill provides no machinery at all.
Therefore my approach is rather, not to seek to force the noble and learned Lord the Lord Chancellor to set up the full panel of enforcement offices, but to get a full consideration of the practicalities—about the amendments which Payne recommended on administration orders, about the whole question of priorities, about how we are to deal with multiple debtors when they come in front of different courts and there are different assessment of earnings, and things of that nature; and, above all, to probe at some length as to how the registrars, county courts and magistrates are going to have time to go properly into the details of all the things that are required for the social justice side of this Bill. I do not for the life of me see how they are going to achieve it.
This is in no way meant to be a disparagement of the noble and learned Lord's Amendment, because I should have very much have liked to see that, too. He, and other noble Lords on that side of the House, will seek also to improve the Bill and try to put in it much more of the details and machinery that we should like to see. I know that the noble and learned Lord is as anxious 877 to help as anybody to get into the Bill more nuts and bolts which can be screwed up and made into operating machinery within the county court and magistrates' courts system—and, indeed, the High Court system, so far as it comes into it. It is for that reason that I do not enter into this debate in order to press this Amendment, although I shall be very interested indeed in any indications of the timetable that the noble and learned Lord may be able to give and any other assurances that he can give as well.
§ 5.52 p.m.
§ THE LORD CHANCELLOR
May I say, first of all, that I welcome any amount of discussion of this Bill. I entirely agree that there is nothing Party political about it in any way. Therefore the more we all put our heads together the better. Nothing is clearer than the fact that there would, as one of the members of the Committee put it, be administrative chaos if we tried to carry out all of these recommendations (I think there are 300 of them altogether) at once.
That is well illustrated by Lord Donaldson's Amendment, because he wants me to provide at once that all debt collecting should go to the county court. I quite agree that that is one of the main objects; but look what would happen if we tried to do this at once. In last year's Bill, it may be remembered, there was a provision channelling many of the small High Court debt cases into the county court. I think that when the Bill reached the other place I had to increase the bottom limit in question.
The reason I had to do that was because if I had taken any more cases from the High Court into the county court all the under-sheriffs would have gone out of business. They must have a certain level of work to be able to carry out the rest. If they had gone out of business there would have been no way of enforcing judgments for possession of land in the High Court, or judgments for possession of goods in the High Court, nor would any juries have been empanelled on assizes—because the under-sheriffs do all that work. Those tasks will have to remain under the under-sheriffs until Beeching gets under way, when other arrangements will be made, 878 presumably, for the circuit administrators to see to the calling of the juries. We cannot, I am afraid, afford to dispense with the sheriffs at this point. That only shows how one has to go forward by steps.
The Committee said that there were two things which were urgent and should be given priority. One was the abolition of imprisonment for debt, and the other was the attachment of earnings orders. That is why they have been given precedence. They said certain other things could be done at the same time, but they did not say that they should be done at the same time. One of the things one has to consider is the form which an enforcement office should take.
The Committee say in paragraph 356:The first consideration is whether the establishment of a new Enforcement Office will require the creation of a new organisation with new personnel and new accommodation. We do not think this will he necessary or desirable. The functions which the Enforcement Office will be called upon to discharge are to some extent already being performed under existing court machinery so that it will be necessary only to transfer powers and staff to the Enforcement Office. Throughout the country there exist county court offices, many of which arc also district registries of the high court, with staff familiar with the enforcement procedures of both courts.In these circumstances we think that the new Enforcement Office should be built on the foundation of the present county court system. The Enforcement Office should make full use of the existing staff and accommodation of the existing county court offices so far as may be necessary for the enforcement of judgment debts. In this way the Enforcement Office will utilise the skills of the existing staff; in particular, the local knowledge and experience of county court bailiffs will be employed.Then it says that the Enforcement Office in each district office should be presided over by the enforcement officer, and this should be filled by the registrar of the county court. It says:It would be undesirable and impracticable to introduce a new officer of equal rank with the county court registrar and fulfilling functions which would run parallel with his. Moreover, difficulties over the control and supervision of the staff, which in many offices would be common to both, would be inescapable.Then they say that it should not add materially to the work now performed by county court registrars,… bearing in mind particularly that they are already in charge of the enforcement processes passing through their registries.879 They say that the staff should be drawn from the staff of the county court in the district:Indeed we think that it will be unnecessary to draw any hard and fast line between the duties performed by the staff for the purposes of the high court or county court machinery and the Enforcement Office machinery, and that the same staff could be employed for both.The Report then says:The Enforcement Office should be open on the same date and during the same hours as the county court offices …If the registrar is in effect the enforcement office, and it is going to be his staff at the same premises, what do you gain by calling all this an enforcement office? If the same staff are to deal with debtors under the same registrar as now, whether you write over them in a particular part of the office, "Enforcement Office" is not very clear. We have gone into this and we calculate so far that we can do this work with the existing staff. They are going to be relieved of nearly 1½ million, or whatever the number is, of judgment summonses, their preparation and everything else. We believe we can do this work now with an additional 10 registrars and 100 staff. That is what we propose to do.
They will have the power of making administration orders, doing the sort of thing that the Committee recommended. The object which my noble friend wishes to achieve by the establishment of enforcement offices will, so far as I can see, be achieved. There is no actual magic in calling them enforcement offices. Every administration order will be under the conduct of an officer of the court. The court will have power, on an application for an attachment of earnings order, to call for a statement by the debtor of his resources and needs, and, if necessary, to order him to attend for them to be investigated. It will be possible to consolidate the debtor's judgment debts, as well as his other liabilities, by making an administration order coupled with an attachment of earnings order; and where an administration order is made payments under it will be apportioned among the creditors pro rata.
That is how I see the system working. The phrase "enforcement office" could cover a number of things. There are a number of dissenting reports or reservations 880 which envisage something rather different. So far as the office envisaged by the main body of the Report is concerned, the work could be done by the existing staff, and it would appear to me that whether you call a registrar a registrar or an enforcement officer does not really achieve any useful result. I hope, therefore, with that in mind—particularly in view of the impossibility of doing these matters by a Statutory Instrument—my noble friend will be satisfied and withdraw his Amendment.
§ LORD DONALDSON OF KINGS-BRIDGE
My noble and learned friend has done scant justice to the intentions of this Amendment, and to the various noble Lords who have supported it. I must say that his reply has been a considerable disappointment to me. In the first place, he spoke as though this Amendment demanded action at once. It states quite clearly "within a reasonable time". It seems to me that within a reasonable time a number of things have to be done if we are not going to be very unhappy about the arrangement. I do not know quite what more I can say. I do not really think the Amendment is viable as it stands, but the arguments that I detected in my noble and learned friend's speech is that the whole thing is perfectly all right as it is and that the enforcement officers and the registrars are the same thing with a different name. Nobody is being asked to do anything about it, and so nothing will be done; and that is exactly what I am afraid of.
I hope that at some stage we can be given some indication that the Government do not regard the change of name of registrar as implying fulfilment of the Payne Report's recommendations. That is not what the Payne Report says at all. The Payne Report says something much more elaborate; it suggests that there will be additional staff, social workers and all sorts of things. It seems to me that we cannot feel very happy if we are not to be given any indication that the Government even agree with this point of view and think it will eventually be done. However, in view of the fact that we have had a discussion—and that is as far as I can go—I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 7 shall stand part of the Bill?881
VISCOUNT COLVILLE OF CULROSS
There is a point that I should like to raise on Clause 7. It is one that I mentioned in my speech on the Second Reading. This Bill, under Clauses 5 and 6, restricts the power to commit debtors to prison, and the whole scheme of course is to replace such committals by attachment of earnings orders, keeping the imprisonment sanction for certain limited categories where the Government feel it necessary. But if one withdraws the sanction of imprisonment for civil debt of the ordinary sort, and replaces it in this way, there is one class of person who will no longer be subject to any sanction; that is, the self-employed. The self-employed, I think I am right in saying, has no earnings as defined in Clause 19(1)(a) and (b). Therefore there are no earnings to which an attachment order can be made. The provisions of Clauses 5 and 6 apply as much to him as to everybody else, but at the moment we are left with no sanctions.
It will no doubt be replied that there are still other methods, such as garnishment; and that there is always the law of distress, to which one can go back, and execution on people's goods. But I believe it is often found, when the bailiffs going to execute judgment on people's goods get inside the house, that all the goods belong to the man's wife, or to his son or daughter, or to some other member of the family. The man has literally only the clothes he stands up in, or the tools of his trade, or whatever it is that the bailiffs are not allowed to execute judgment upon. Therefore the effect of this part of the Bill is to remove all effective sanction on these people. Garnishment proceedings are neither very common nor very useful, because they are very complicated, particularly if they involve bank accounts. This is not a field with which I am very familiar, but their use, I think, when a comparatively small debt is involved, is like taking a sledgehammer to crack a nut.
Nor, of course, are self-employed people all that uncommon. There are the professional classes, who one would hope would not usually run into debt or get into this sort of difficulty; but there is always the one who may. There are all the people who are now self-employed so that their employers do not have to pay S.E.T.—and these are a growing class, not entirely confined to 882 the area which I had hitherto understood to be the case. There are also many other people who perhaps come into this category and whom one would not think of straightaway as being professionals—for instance, people who rua one-man businesses or have shops; people who are small traders running the business themselves, as opposed to being the director of a limited company.
What is the Government's answer to this problem? I cannot believe that we should be left without any sanction at all, or only the sanctions which suffer from these disabilities, particularly the one about execution. No word has been said about this aspect. I asked the noble and learned Lord in my Second Reading speech about this, but I fully appreciate that he had a lot to answer and this was not one of the questions to which he replied. I believe that, before we even start to try drafting Amendments to this Bill, the noble and learned Lord ought to tell us what is the attitude of the Government in this particular respect so that we can consider it.
If the explanation is satisfactory, the matter can be left, but if there are improvements which can be relatively easily inserted in the Bill—perhaps improvements suggested by the Payne Committee in some of these regards—then let us have them, because the last thing we want is that this Bill should be incomplete and should leave large holes. We cannot do everything the Payne Committee recommends, but we must tackle the problem overall, at any rate as a starter. This Bill deals with the preliminary and urgent matters, but I am very concerned that there should not be too many gaps round the edge of the net which will allow people to escape. I should like to return to this point at another stage, after I have heard what the noble and learned Lord has to say upon it.
§ LORD ROYLE
My Lords, I should like to say just a word or two in support of what the noble Viscount has said. This is a matter which causes deep anxiety and, whilst I am one of those people who believe that in no circumstances should people be imprisoned for debt, any of us who has had experience in magistrates' courts of dealing with separation orders knows that although attachment has worked quite well with regard 883 to the wage-earner, the problem has always arisen with regard to the professional classes and the self-employed. It has been a tremendous headache for justices ever since maintenance orders in separation proceedings could be attached to wages, and there does not seem to be a solution. I admit at once, having given a great deal of thought to that over very many years, that I have not found the answer. I support the noble Viscount in asking the Government to search for an answer, though I feel, in view of the fact that we are, in effect, abolishing imprisonment for debt, that we should have to search very hard and very long to find an alternative. I frankly admit that I do not know what it is, but I share the noble Viscount's worries about it.
§ THE LORD CHANCELLOR
There is not any answer to this problem. It will be very difficult to deal with the self-employed. The Payne Committee recognised this, and said so. They did not suggest any answer. It will in fact be limited to other forms of execution against goods, and so forth. But, of course, the same difficulty arises now over imprisonment for debt. I know that it is very unusual for a committal order to be made against someone who is self-employed, because one cannot get a committal order unless one can prove what means he has. And that is the difficulty. So perhaps such a person will not be so much better off than he is at present. But otherwise, in the case of a self-employed man, if one cannot attach his earnings because he has not got any earnings (though the definition of "earnings" is fairly wide) there can be only execution against any goods he has or against any source of income which can be attached. If the noble Viscount can think of any way in which we can improve that position I shall be happy to hear it.
VISCOUNT COLVILLE OF CULROSS
My Lords, I see no reason at the moment why I should be able to do better than the noble Lord, with his experience in the magistrates' court, or the Payne Committee, or the noble and learned Lord, with his Department to assist him in the research. But this is something which might be further considered—not at this 884 stage, plainly; but we have the Christmas Recess ahead and there will be time for a little thought on these subjects, though they may not be the most cheerful and jovial Christmas fare that one can have. One thought that occurs to me is that there are, perhaps, simplified methods of dealing with attachments of bank accounts. It may be that it ought to be considered whether one can go behind a claim that all the goods in the house belong to the wife, or to another member of the family, if the claim is plainly made in bad faith.
I simply throw out those two ideas as being obvious methods whereby the matter could be dealt with rather more simply. In the latter case, often it is obviously a subterfuge to prevent the creditor from getting his money, and subterfuges are not usually looked very kindly upon by the law. It may be that one ought to attack the problem at that end and see whether an Amendment can be devised which would require the man to prove that he had not had possesion of, or had not owned, these goods for some time. It might be possible to do something of the nature of the provision in, for example, the Bill we were just looking at, whereby if a man, in order to avoid a maintenance payment order, gave away all his property within a certain period beforehand, the court could undo what he had done. It seems to me that that is the kind of line that might be pursued. Certainly I take the view that, even if the self-employed and professional people do not go to prison, we ought not to leave this Bill without any sanction against them. I will certainly do my homework on this, if the noble and learned Lord would do a little of his.
§ Clause 7 agreed to.
§ Clause 8 [Application for order and conditions of court's power to make it]:
§ 6.12 p.m.
VISCOUNT COLVILLE OF CULROSS moved Amendment No. 3:
Page 7, line 46, leave out paragraphs (a) and (b) and insert ("it must appear to the court that the debtor has failed to make one or more payments under an order to secure maintenance payments or, as the case may be, required by the relevant adjudication and that the failure is due to his wilful refusal or culpable neglect.")
The noble Viscount said: This is only a probing Amendment and its purpose is to discover what is the reason for the distinction between subsections 3(a) and 3(b) of Clause 8. In the case of securing maintenance payments, as has always been the case under the 1958 Act, an attachment of earnings order under this Bill can be made only if the debtor has failed to pay one or more of the instalments and the failure is due
to his wilful refusal or culpable neglect".
That is singled out as being the one occasion when an attachment of earnings order cannot be made straight away under the Bill. It cannot be done when the magistrates or the county court or the High Court first make an Order for maintenance; one cannot, even at the payer's request. on that occasion get the matter dealt with by an attachment of earnings order. It can be done only if he has wilfully refused or culpably nelected to make these payments. That is simply a matter of old law.
§ The Bill then goes on to say that all the other types of debt which are under the Bill covered by an attachment of earnings order can be dealt with; an order can be made by the court without any such wilful refusal or culpable neglect. I do not understand the principle that underlies this distinction. It may well be that the second answer is right. Payne, I think, suggested that there should be no such criterion and that one should be able to make an attachment of earnings order the moment the debt is proved or the moment it is shown that the man has not paid his taxes, or whatever the circumstances may be. He may not pay his legal aid. All those things are really anti-social. Not paying your taxes may be very pleasant but it is anti-social. Not making payments under your legal aid contribution is very anti-social indeed. Those people will be attached at once, but with maintenance one has to come back again and have further proceedings, and probably very disagreeable proceedings, before it can be done.
§ The Amendment I have put down is the simple adoption of the 1958 Act criterion for everything. It would, incidentally, have this result. There would probably be fewer attachment of earnings orders; and it might well be that it is not a bad thing. It might be 886 that we ought to try this out under wording such as I have suggested, with power, as is often the case, to drop that criterion if it appears to be working well—again, this is just a suggestion—and allow it to be done not only for all the new types of debt that can be dealt with by attachment of earnings orders, but for maintenance as well, to be done in the first place as is now provided under Clause 8(3)(b). I do not know, but I should very much like the noble and learned Lord to justify this curious distinction. I understand its history, but its logic I am not so sure about. I beg to move.
§ THE LORD CHANCELLOR
There has always been a difference between maintenance and affiliation cases and business and other debts; and, as I have always understood it, the reason is that a maintenance order is much more serious because this is an indefinite order which is going on and on. These other debts, after all, are finite debts and usually very much smaller in proportion. It has always been the case, therefore, in maintenance cases, that one has to satisfy a court that it is a case of wilful refusal or culpable neglect. It would not be reasonable that a man's earnings should be attached for an indefinite time to secure maintenance payments where he has fallen into arrear through no fault of his own but through illness or other misfortune. This has never applied to ordinary debts. Even a committal order sending a man to prison can be made if it can be shown that he has had the money to pay and has not paid. There has never been any requirement on the creditor to prove that anything was culpable or wilful.
It would be difficult for an ordinary civil creditor to be able to establish that failure to pay is due to wilful refusal or culpable neglect, and it would be unreasonable to place this burden on him for the extraneous purpose of limiting the number of attachment orders so as to give employers less trouble. There is a clear distinction—there always has been—and it is logical and right; and it is right to follow it now, because if when there was imprisonment for debt one could be sent to prison on mere evidence that one had had the means to pay and not paid, it is difficult to see why the creditor's difficulties should be made greater when it 887 comes to an attachment order. I hope, therefore, that when the noble Viscount has had an opportunity of considering that, he will not press the point.
VISCOUNT COLVILLE OF CULROSS
I am grateful to the noble and learned Lord. To be perfectly honest, I was not as worried about the limitation of the numbers of orders for the benefit of employers as about the underlying philosophy of this matter. I suppose it is right that it is inherent in the first words of Clause 8(3) that the person against whom the maintenance order is made can himself apply to have that order attached to his wages straight away if he wants to; because the wording is that it cannot be madeon the application of any person other than the debtorunless there is wilful neglect. So he can, if he wishes, ask the court to do it straight away. Therefore, we have a certain amount of distinction here, I entirely appreciate. I should like to think about what the noble and learned Lord has said in answer to this Amendment and decide whether or not I want to come back to it. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
THE LORD CHANCELLOR moved Amendments Nos. 4 and 5:
Page 8, line 12, leave out from ("section") to end of line 13 and insert ("64 of the Act of 1952 (distress or committal)");
Page 8, line 19, leave out ("74") and insert ("64").
The noble and learned Lord said: With the leave of the Committee, I beg to move Amendments Nos. 4 and 5 together. These Amendments are linked and drafting Amendments. The words in lines 11 to 13
for the enforcement of a maintenance order under section 74 of the Act of 1952
are strictly speaking not accurate. Sums ordered to be paid by a magistrates' court (which include maintenance payments) are enforced under Section 64 of the 1952 Act. Section 74 only modifies the operation of that section in relation to maintenance orders. The correct reference therefore should be to Section 64. The corresponding provision in the 1958 Act (Section 7(b)), which is being repealed, does not refer to a particular section of
the 1952 Act. It is thought that such a reference is desirable here, in view of the way in which the latter part of this subsection is framed. I beg to move.
§ On Question, Amendments agreed to.
§ 6.19 p.m.
§ LORD DONALDSON OF KINGS-BRIDGE moved Amendment No. 6:
Page 9, line 6, at end insert—
(" ( ) The court shall not make an attachment of earnings order where—
§ The noble Lord said: Again, this Amendment is obvious in its intention. It is trying to do something which I think everybody agrees is very difficult, and I shall not be surprised if my noble and learned friend says that it will not do. But it is very important in legislation of this kind to look at the matter as a whole. I have not spoken to a single social worker (and I move among them a good deal), who is the person who looks after families who in the end are going to have this sanction applied to them, who has not said, "Well, the first thing to do is to put some onus on the lender". I am not going to stress this point. I expatiated on it at the Second Reading and I think your Lordships can all see what I am trying to do. It is worth noting that this attachment of earnings will bite much more widely than prison ever has done, so it is particularly important that the weak and feckless should be given all the protection the law can give them in order to protect them against borrowing things which they ought never to borrow.
§ The Amendment is in a mild enough form. It does not attempt to render the debts unenforceable, only to deprive the creditor of the sanction of attachment. My noble and learned friend may well object that the Payne Committee, among other people, thought that this was not possible. I think they said something to 889 that effect at paragraph 853. But as the Government have already rejected—or at least omitted—the most vital parts of the Payne Committee's recommendations I do not think they can logically quote the Committee against me in this particular case, which is the only point on which I diverge from them.
§ The Amendment demands that three conditions be fulfilled before it comes into operation: first, that the judgment debt shall be of the right kind, namely, concerned with contracts for goods or services; secondly, that there shall be already entered against the debtor a judgment debt in the Lord Chancellor's Register of Judgments; and, thirdly, that the count shall take the view that the credit ought never to have been issued. At present, the Register of Judgment Debts includes only county court judgments of £10 or over. The Payne Committee recommend that High Court and magistrates' courts judgments should be added, and my noble and learned friend has already said how difficult that would be. I dare say that it could not be done at once, but probably we should all agree that it is desirable in the end. Payne also recommended that the lower limit should be reduced to £5. Since 25 per cent. of all county court judgment debts are for sums of between £5 and £10 this seems to 132 a very important provision, though one which, like everything else in this whole legislation, will, if properly done, create a lot more work.
§ On the Second Reading I went into some detail on this point, but really all this Amendment is doing is to strengthen the hand of the judge. Already judgment is often given in derisory terms—perhaps a shilling a month for twenty years, or something of that sort—and I think this Bill should specifically recognise that there is an onus on the creditor, in his desire for business, to behave within certain limits. I do not put this Amendment forward necessarily as being a complete answer, but I feel that this Bill should make some effort to deal with this difficult part of the case as a whole. I beg to move.
VISCOUNT COLVILLE OF CULROSS
I should like to make a constructive suggestion about this, and I think it is one that may not be altogether outside the bounds of possibility. I do not know about the point raised by the 890 noble Lord, Lord Donaldson of Kings-bridge, but so far as I understand the subject of administration orders (which is, I confess, very little) I see in the existing law an opportunity of doing something along the lines requested by the noble Lord.
On pages 206 and 207 of the Report of the Payne Committee, the present law, about the deferment of subsequent creditors when an administration order applies to a debtor, is set out, and it makes it clear that the subsequent creditor who involves the debtor in a debt after the date of the administration order is deferred. Under the administration order, all those people who have already incurred credits with the debtor get their money first, and the subsequent man does not. At paragraph 795, the Payne Committee goes on to consider the question of whether the subsequent creditor who could not possibly have known about the administration order should have a few days' latitude to satisfy the court that he gave credit to the debtor without knowing about it. It says plainly that the latitude allowed should only be for a few days because the order, when made, will be registered in the central register, about which the noble Lord, Lord Donaldson, has spoken.
It seems to me that there are two things involved here. One is involved with people. Some are creditors who induce people to get far more indebted than would be wise. That is a class of creditor who, presumably, if he has made a valid contract in accordance with the hire purchase laws, has to be allowed to have his money at some time, so long as nothing has happened and the matter has never come before the courts, or the debtor has not got himself subject to attachment orders or administration orders, or anything of that type. It is too bad if he goes in for these extravagances which he cannot afford. But once the matter comes to the attention of the court by an application from somebody for an attachment order, or by an application from somebody for an administration order, it seems to me to be right that after that people should be at risk if they give further credit.
As I understand it, the difficulty about administration orders—which would have this effect, if I understand the position—is set out in paragraph 782: that is, that 891 the court itself cannot make an administration order of its own motion. I think the creditor can apply for one and the debtor can apply on one, but the court cannot. As I understand what is going to happen, it is this. The vast majority of judgment summonses and the attachment procedures will be dealt with by the local county court. I think the court are to get copies of all the other attachment orders which are made, anyway—and if they are not, I have an Amendment which makes sure that they will—and the registrar of the county court will then know in relation to the debtor what is the state of play.
I would suggest to the Committee that the moment may well come when the registrar will say to the county court judge (or perhaps he can do it himself): "The moment has arrived when we make an administration order against this person"—or in favour of this person, because often it is in the debtor's favour to have one of these orders. The registrar will then say, "As a result we shall be able to administer his property and deal with the creditors in the order of priority, and bring all those who have already involved themselves with this man into the administration order so that they may have their share pari passu. We shall give the rates and taxes to the responsible authorities first, and then deal with all the other orders". Moreover, the noble Lord's point will then be met. Once that order has been made, subsequent creditors will have to be deferred, because that is already law.
I think there is only one Amendment we need, and that is to give the court power, after giving due notice to the creditors and the debtor, to make an administration order of its own motion. If we did that, it would be a comparatively small Amendment, although I think there are other Amendments in regard to administration orders which the Payne Committee suggests and which perhaps could be incorporated in a new clause on this subject. At any rate, we should have gone some way towards meeting the noble Lord's point. That, I think, is at any rate a constructive suggestion, and it is one that I put forward for the consideration of the Committee.
§ LORD DONALDSON OF KINGS-BRIDGE
Before the noble Viscount 892 sits down, I should like to ask whether I misread Clause 8(8). Does this not already give the power to do exactly what the noble Lord has suggested?
§ 6.30 p.m.
§ THE LORD CHANCELLOR
I think we are all sympathetic to the objects which my noble friend Lord Donaldson wants to achieve. But I am afraid that there are a number of difficulties. The Payne Committee considered this point, and in paragraph 851 of their Report they said:If one starts upon the task of drafting provisions to cover the diverse circumstances in which the deferment of future creditors might be justified one finds two things: (i) that it is extremely difficult to specify the conditions in which it would be proper to impose a deferment, and that the result would in all probability lead to a flood of litigation, and (ii) that in so far as one can isolate a set of circumstances in which the deferment would be justifiable and practicable, one has reached a picture in which an administration order would be the obvious solution and the deferment is then adequately covered by Section 149"—that is, of the County Courts Act 1959.
The Amendment would prohibit the making of an attachment of earnings order in the circumstances specified. But I should have thought that if it is socially undesirable that a debt contracted in such circumstances should be enforced by the attachment of earnings, it is difficult to see why such a debt should be enforced at all. There seems no good reason for distinguishing between attachment of earnings and other forms of execution when the alleged vice of the transaction lies in the circumstances in which the debt was incurred.
In paragraph (a) of the Amendment reference is made to the judgment debt being "owed under a contract", but technically a judgment debt would be due by reason of the order of the court and not under a contract. The same paragraph refers to "a contract for the supply or hire of goods or services in the course of business." I am not quite clear about the phrase "in the course of business". Paragraph (b) mentions the "Register of Judgments kept in the Lord Chancellor's Department", and this is presumably a reference to the register kept under Section 101 of the County 893 Courts Act 1959 in respect of every judgment (other than a judgment in Admiralty proceedings) entered in a county court for £10 and upwards.
The principal difficulty—certainly one of the difficulties—arises over the interpretation and application of paragraph (c), which illustrates the difficulties which the Payne Committee anticipated. To limit the enforcement of contracts by reference to what a prudent and fair-minded person might do would place a very difficult burden on the courts and make it almost impossible for anyone to tell in advance what obligations would be enforced and what would be regarded as unenforceable by attachment of earnings. In a society where trade depends so greatly on the grant of credit this involves a very far-reaching change in the legal approach to contracts. But I think we might all consider this point further. I see very great difficulties in having large numbers of cases in which whether an attachment order can be made or not depends on what a prudent and fair-minded person might have done, and I am afraid that one would probably get very different decisions from different registrars in different courts.
So far as the £5 and £10 is concerned I am afraid that I cannot do now what is suggested. It means substantially more staff, more filing space and so forth. It would mean, I think, about another 180,000 judgments a year; and this clearly would take considerably more staff and filing. But I will certainly bear it in mind. The general experience, I think, of the European countries which have given up imprisonment for debt in favour of attachment of earnings orders is that creditors do exercise more care in the people to whom they give credit. If they always have imprisonment as the "big stick" at the back, that is one thing; but if they have not, I think they may take more care—I should hope so—in not granting to a person such credit as on his income he obviously cannot repay. I am sorry not to be more helpful. This particular Amendment would be very difficult to adopt, but I am certainly ready to think about it again.
§ Long DONALDSON OF KINGS-BRIDGE
I thank my noble and learned friend. I did not expect to get more 894 than this generous offer to think further. I was going to raise a point on the Question, That the Clause stand part, but as the noble Viscount, Lord Colville, has already raised the question of administration orders, I will raise it now. The Payne Committee recommend that the limit of £300 should be raised. I think that it should be removed altogether. I do not know whether my noble and learned friend has any views about that. I think it is desirable that the limit should be raised to some extent.
Secondly, if we take Clause 8(8) in its most obvious sense it is clearly an encouragement to county court judges to use administration orders of their own volition. If they do that, they are going to run into almost the same position—this is what worries me—as the enforcement officer, if he were simply a registrar, with the changed name and nothing else to help him, would run into. For the last three years, administration orders have totalled 1,360 in 1966, 1,874 in 1967 and 1,754 in 1968. Comparing those totals with the possible numbers, the numbers are very small indeed. These orders are not being used, and in my opinion they are not being used because the courts have not the staff to use them properly. So we are really back where we were. Having made that point, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 8, as amended, agreed to.
§ Clause 9 agreed to.
§ Clause 10 [Compliance with order by employer]:
§ 6.37 p.m.
VISCOUNT COLVILLE OF CULROSS moved Amendment No. 7:
Page 10, line 32, leave out subsection (3).
§ The noble Viscount said: I must admit that it is peculiarly dense of me not to have seen Clause 8(8), but I am very glad I have had it drawn to my attention and it seems to me of great significance. I apologise for wasting time with a prodigious speech on the subject. Perhaps I could save a little time now if, by leave of the Committee, I dealt with Amendment No. 7 together with my new clause, and also Amendment No. 13, to leave out Part II of Schedule 4. The 895 only disadvantage of doing this is that the OFFICIAL REPORT will not print my new clause, which is a great pity because I can never get a copy later when I want it. Perhaps I can move it formally for that purpose.
§ The problem that I am concerned with here is multiple debtors. As I understand the Payne Committee Report, they were also concerned with them, because they are a very large proportion of the hard core, whether of the wilful or the incapable who get involved in procedure of this sort. To be perfectly honest, I have to approach this, though I shall not necessarily be very popular, not so much from the point of view of the difficulty of the employer who has to deal with Part II of Schedule 4 but of seeing that the system works at all. Despite the fact that administration orders can be made, as I now find out, on the motion of the court, there is still an elaborate procedure in this Bill to deal with cases where they have not been made and where we have more than one attachment of earnings order against the same man. If that is so, then the first thing that happens is that the employer has to deal with them in the order of priority set out in Part II of Schedule 4. I think that is comparatively plain after one reads it several times.
§ The first thing to do is to discover whether any or all of the attachment of earnings orders are in relation to judgment debts or payments under administration orders. If all of them are, then they are dealt with in order of priority of the dates on which they were made. As I understand it, the employer disregards the second one altogether until he has paid off the former one. But if any attachment of earnings order is for another purpose—and I think these purposes include maintenance orders, orders for payment of costs or orders for payment of fines and the collection of legal aid contributions—then the moment one of those attachment of earnings orders comes in where there is already an ordinary judgment debt being dealt with in this way, the employer has instantly to drop the judgment debt which he has been dealing with so far and give priority to the new order that has come in. If there is then another of the excepted class—say, the man had a fine and a legal aid contribution 896 and for some reason it was dealt with by two attachment of earnings orders—the employer has to deal with both of those first, but in the order of their coming in, before he reverts to dealing with the old, long-standing ordinary civil debt that he had been paying.
§ It is also true—and one does not want to make too much of it because there are defences—that if he gets it wrong, it is a criminal offence. Of course there are defences, and they are fairly generous ones, but a fairly substantial burden is being imposed on the employer, and one which I am not certain he is going to find very easy to comply with because he just is not going to know the distinction between these things unless a copy of the Act is stuck up in every factory or office in the land, or at any rate in the pay office.
§ There is another very serious matter which I feel will go wrong on these occasions. The whole scheme of the Bill, apart from administration orders, is to let the courts, one after another, if this is what is going to happen, make these attachment of earnings orders against the same man. There is no machinery for providing that they are to know before they make such an order what other courts have done about him beforehand. There are three different sorts of courts here: the High Court, the county court and the magistrates' court, and certainly on the face of the Bill I cannot see anything which requires an interchange of information between them and a consideration of what has been done by another court already before they make any attachment of earnings orders.
§ The provisions in Clause 14, which is where the court is meant to get the information on which it bases the normal deduction rate and the protected earnings rate, do not include any provisions for the man to tell them about any other attachment of earnings orders. Perhaps he will automatically, but it is not one of the statutory duties, and therefore the courts may make different orders. I can envisage the court dealing with a judgment on behalf of a hire purchase company, which the court thinks ought not to have been enforced in that way, and making a very small normal deduction rate and setting a protected earnings rate fairly high because it considers there is not a great 897 deal of merit in the case. Then the same man, because he has already got into financial difficulty, cannot pay some extra bit of income tax—it is not dealt with by P.A.Y.E. On this occasion the magistrates' court—because it can be the magistrates' court and not the county court here—does not necessarily know that the county court has already made an order, and sets a different normal deduction rate and a different protected earnings order—because there is no reason why these things should coincide. That second order is, as I have already explained, enforced first by the employer. Therefore the man's contributions under these orders fluctuate wildly from week to week. At the same time very different considerations are being taken into account in fixing what is the normal deduction rate and what is the protected earnings rate.
§ That can also apply as between two judgment summons, or two judgment debts. The unmeritorious creditor comes first and gets a small amount paid off week by week. The employer has to pay that order, and he pays it first, because that is what Part II of Schedule 4 says, But then along comes the second, meritorious creditor, who certainly ought to be paid at a much quicker speed and, if necessary, at the expense of some hardship on the debtor's part. But the court cannot do anything about that because the unmeritorious creditor is preferred already.
§ I am very concerned about the way this scheme is going to work. I should have thought that it ought to be automatic that when there is more than one attachment of earnings order that comes to the notice of any court, there ought to be either an administration order or what, for the purposes of my new clause, I have called the "scheme". I do not mind what it is called. Its object is, I think, perfectly clear. It means that the moment there is more than one order, it is not the employer who has to decide on priorities according to whether or not he understands Schedule 4; it is the court—and that means the court officials, who know perfectly well what are the criteria under which these various orders have been made and who know which one gets the priority. They then consolidate the orders.898
§ The advantage of this is twofold. If, in the case I have already quoted, the prior attachment of earnings order involves a small payment spread over a long period of time, the court can, on consolidation, say, "This is absurd. We have now got a situation where the meritorious creditor has been put off for something like 20 years, and a shilling a week is going to be paid. The situation is such that we now wish to consolidate this order, and we want the employer to dock £3 a week off this man's pay. Then we will distribute it according to what the two courts have said; £2 19s. to the meritorious, and one shilling to the unmeritorious." The same applies when there are priorities for taxes, for legal aid, or whatever else it is.
§ There is a further advantage in this respect. If there is the power that I have put in subsection 3(b) of my new clause, then when the matter comes before the court the court can think again, not about the protected earnings rate—because I should have thought that that was a minimum below which nobody ought to go—but the normal deduction rate, which is a very different matter. There may have been a small deduction, and the court may think that the man is perfectly capable of bearing a much larger one without any diminution in his family's health or well-being, and one that he can very well afford to pay if he has been so foolish as to get himself into these debts. But apart from an administration order, the court has no such powers at the moment when there are multiple attachment orders against the same man.
§ The last point which I wish to stress, and I think it is the most important of all, occurs in subsection (1) of my new clause. There really must be an interchange of information between the courts who are empowered to make these orders. The obvious repository of the information is the county court, and the county court in the area where the man lives, because that is where the attachment of earnings orders are ordinarily going to be made. Certainly that court ought to have a copy of every other attachment of earnings order that is made by any other court, and it ought to be done by law. I suspect that there ought to be a requirement on any court, other than the debtor's own county court, to consult 899 with that court before it makes an attachment of earnings order, in order to see what the situation is. I do not think that need be made statutorily, because I think the courts would do it anyway. However, I think that the central file—and indeed a file is what the Payne Committee expected to be in existence on any debtor, and I think it would be in existence in the county court registry, whether it is called an enforcement office or not—ought to be kept there, and reference ought to be made to it.
§ I put forward these suggestions only because I honestly think they are better than the provisions of Clause 10(3) and Part II of Schedule 4 which, at the present moment, simply leave it to the employer to work out this order of priorities according to the type of attachment of earnings order. I genuinely think that this is a job that the court ought to do, and the court will do better and more fairly, and take more of the relevant circumstances into account, than the employer either can or ever will be allowed by law to do, because he has only to fulfil the orders of the court. My scheme allows a "rethink" when you get a multiple debt, and a "rethink" every time a new debt is proved and a new application for an attachment is made, or a new attachment of earnings order is made in some other court. That is the sort of system that ought to exist, and I very much hope that before this Bill finally becomes law we shall be able to do something like it. We should take the duty to deal with priorities off the employer and put it on to people who, I think, are much better suited to do it; namely, the registrar, primarily, of the county court. I beg to move.
§ LORD DONALDSON OF KINGS-BRIDGE
I should like briefly to support the noble Viscount, Lord Colville of Culross. He has raised a new point, I think, about the series of different levels of deduction, which I am sure my noble and learned friend will study. But otherwise, of course, he is really asking for enforcement offices. Consolidation and priorities are jobs which the Payne Commission certainly thought the enforcement offices would do; and obviously, having asked for them myself, I must get up and say that I entirely agree with him. I also fear that he will run into 900 the same difficulties that I ran into, which is that the courts will not have the staff to do it. That is why we feel so sad that there is no future indication of the Government's intentions in this direction. But I have much pleasure in supporting the Amendment.
§ 6.51 p.m.
§ THE LORD CHANCELLOR
Before replying to the noble Viscount, may I, somewhat irregularly, say, with reference to the observations made by my noble friend Lord Donaldson before he withdrew the last Amendment about the limit on administration orders, that we have had the sense before now to provide for the amount to be varied by Statutory Instrument; and I quite agree that there is a case to be made, which I am considering, for increasing the limit, or possibly even having none. To the noble Viscount I would just say that there cannot actually be an attachment for income tax in a magistrates' court, but only in a county court.
§ THE LORD CHANCELLOR
Here, the real answer is: Yes, we intend to do all this, and we intend to do it by rules; and it is really better to do it in this way, if possible, because then it is easier to alter.
I spent quite a part of this morning with a large deputation from the C.B.I. considering all this from the employers' point of view. The object which the noble Viscount has in mind can be achieved more simply and satisfactorily under the Bill as it stands. It is intended to invite the Rule Committees to provide that an application to a county court for an attachment of earnings order shall be made to the court for the district in which the debtor resides. If the High Court, or a magistrates' court, makes an attachment order to secure, for example, the payment of maintenance, it will be required to send a copy of the order to that county court; and that, we think, should be done either on the same day or the next day, because usually it will be the local county court or the local magistrates' court.
§ THE LORD CHANCELLOR
The High Court, no; but certainly so far as the two local courts are concerned.
Subsection (1) of the proposed new clause is therefore unnecessary because the provision which it seeks to make may be made by rules. Every county court will keep an index of debtors within its district against whom attachment orders have been made. A creditor will be required to search the index before applying to the county court for an attachment order. If he finds that an attachment order has already been made against his debtor to secure the payment of maintenance, it is unlikely that he will think it worth while applying for one in respect of his debt; and, if he does, it is even more unlikely that the court will make one. By virtue of Clause 8(8), however, the court will have power to make, instead, an administration order under Part VII of the County Courts Act. If the court decides to make an administration order, it will no doubt discharge the earlier attachment of earnings order and make a fresh one to secure the payments directed to be made under the administration order. Thus it will be possible to bring all the debtor's liabilities under one order, and the employer will have only one attachment order to comply with.
The advantages of an administration order over the scheme proposed by the noble Viscount are, I suggest, as follows. First, detailed provision for administration orders is already made by the County Courts Act, and the courts are well accustomed to them. Secondly, an administration order covers all the debtor's liabilities and not merely the debts owing to creditors who have applied for attachment of earnings orders. Under the proposed new clause there would have to be a fresh consolidation every time another creditor obtained an attachment of earnings order, and the employer might be faced with a series of different orders and schemes.
Thirdly, under an administration order the creditors rank pari passu. An officer of the court is appointed to have the conduct of the order, and he declares a dividend from time to time. Under the proposed new clause each scheme would apparently provide ad hoc for the priority to be accorded as between the creditors. This would impose a very 902 difficult burden on the court, and there might be great divergence in the priorities accorded by different courts. The Payne Committee considered that the individual deferment of creditors by order of the court was impracticable. That appears in paragraph 848. Plainly, as a class, creditors for maintenance should have priority because the money is needed for the support of their clependants, and if it is not provided they may have to fall on National Assistance. Fines and other pecuniary liabilities in criminal proceedings ought also to be satisfied before ordinary civil debts. Part II of Schedule 4 provides for this, and it would clearly be unsatisfactory to replace it by schemes making ad hoc provision for priority.
In the Second Reading debate the noble Viscount expressed concern about the difficulty which employers might have in operating fthe system of priorities in Part H of Schedule 4. There should, however, be no difficulty in practice. An attachment order to secure the payment of an ordinary judgment debt will be clearly distinguishable from an attachment order to secure the payment of maintenance and similar liabilities. The employer will be given clear instructions as to how to comply with any order served on him. As indicated above, it is very unlikely that he will ever be troubled with more than one order in respect of the same debtor.
After discussing this matter with the deputation from the C.B.I. this morning, I think I can say that they left feeling reasonably happy, though I promised to consider whether the shilling was enough (they did not think it was), and whether seven days was long enough. The sort of thing we were discussing was the case where there was a magistrates' order. They would send it both to the employer and to the county court, and it would then take the county court a day or two to act. The C.B.I. representatives expressed the view that seven days might be a little on the short side; but otherwise I think they were reasonably happy.
VISCOUNT COLVILLE OF CULROSS
Certainly this Amendment was not drafted for the benefit of the C.B.I. It was drafted for the benefit of the doubts that I myself felt on this matter. I can readily see the disadvantages of what I 903 call a scheme over the administration order, but the fact still remains that the Bill, if it is left as it is, is going to contain a provision whereby there can be two or more attachment of earnings orders in respect of the same man not consolidated by an administration order. It seems to me likely that, if this is going to be allowed to stay unchanged, one will get a situation in which the unmeritorious, ordinary judgment creditor will get in first. This is one of the things that Payne says: that so often the whole of this process is started by the people who are a bit sharp and who know the form. They know how to get these things in the county court, and they secure precedence. It is not until a little time afterwards that other creditors wake up and find that they have missed the boat because the unmeritorious creditor, if I may so call him, has already got his attachment of earnings order and that has got to be paid out before they get their share.
In these circumstances, I would suggest that it may be worth while amending the Bill to this extent. If there is an entirely different class of attachment of earnings order, such as the noble and learned Lord said in relation to tax or maintenance, or something like that, perhaps that can be given priority and can stay in Part II of the Schedule. But do not let us ever have more than one attachment order in relation to judgments for perfectly ordinary civil debts. If there is more than one order, let us have an automatic administration order, so that the question of priorities can be sorted out by the court and not simply be decided according to the timing of the creditor who happened to get in first. I do not know whether that is a good idea, but it seems to me to solve at least part of the problem. Incidentally—and I do put this incidentally—it is bound to make life easier for the employer because he will never have more than one of each. He may perhaps have more of the priority ones, the maintenance and the taxes, but he will never have more than one ordinary civil debt running at a time.
I think this has been a very valuable discussion—it has certainly cleared my mind a great deal—but I do not think we have quite finished with this subject 904 yet. However, I should like to consider it before the next stage and perhaps return to it then. Meanwhile, I beg leave to withdraw this Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 10 shall stand part of the Bill?
VISCOUNT COLVILLE OF CULROSS
I do not know that there is any particularly good moment to deal with this last point of general substance that I want to put to the noble and learned Lord the Lord Chancellor. Perhaps it would be better done on Clause 14. This is the question of how the court is going to have time to go into the examination of the debtor's means and the proper amount that he ought to be asked to pay under any attachment order or administration order.
As I understand the situation, judgment summonses are at the present time dealt with pretty quickly. I think they go through in some places in one minute or less; and this is quite proper, because they involve no examination of the sort we are talking about, and there is nothing the court need do. But if the figure mentioned by the noble Lord, Lord Lloyd of Hampstead, of 100,000 attachment orders a year (it is also referred to at the end of the Explanatory Memorandum) is right, there are going to be a substantial number of these matters which come before the courts.
I think the main proposal that the Government have in mind in order to provide the court with the necessary information is the form that is required under Clause 14. That form will have to be considered, together with the type of the debt and the circumstances in which the debt was incurred, and it may be that the court will require more information—and this they can always ask for. There will also be occasions when there are applications to vary attachment of earnings orders and the same process will have to be gone through all again. From the little that I know about attachment orders in magistrates' courts, which almost always relate to maintenance, at any rate in the area I have asked, these matters are gone into thoroughly; and very properly so. The magistrates do seek out the information and make what they think is a fair order in all the circumstances.
905 Is the noble and learned Lord satisfied, first of all, that the courts will get the information they require through Clause 14, and the form that the debtor has to fill up, without follow-up from social workers who are not included in this Bill? Secondly, will the registrars have time to give proper consideration to the matters which are so important under this new procedure? We are extending the social service under this Bill. That is part of what Payne said, and the consideration that will be given by the courts amounts to almost the same thing (although perhaps this is an unfortunate analogy) as the consideration that is given in passing sentence on a criminal charge. The courts will have to consider all the circumstances of the family and the debtor himself; how he got into debt, and from my little experience of criminal courts, I know that this takes time. In criminal cases there are probation reports to read; the police officer knows about the man and has made inquiries. Here there is nothing except what the debtor himself says. On the question of the fullness of information, and the time taken by the registrars, I am not happy, and I should be glad if the noble and learned Lord the Lord Chancellor could say something to the Committee at this stage.
§ THE LORD CHANCELLOR
It will of course be necessary that steps should be taken to ascertain fully both the assets and the liabilities of the debtor, as in maintenance cases. But I rely on the fact that this Committee, including a High Court Judge, a county court judge and a registrar, and so on, were right when they said that there should be no difficulty, subject only to numbers and extent, in having the county court staff deal with the matter, because it is something which they are used to doing. It is merely a matter of judging how far the staffs will have to be increased.
Our estimate is that there will need to be 10 additional registrars with, probably, a saving of seven county court judges; additional clerical staff of 90, with a saving, I think, of about 90 county court places. So there is a saving again, and it should be possible to do what the Committee said was to be done. After all, every administration order at the moment which they are now being encouraged to make involves that procedure. 906 I believe that in real life the staff are very helpful to debtors, even helping them to fill out forms, and so on; and if that works in relation to orders of that kind, there is no reason why it should not work in the future on a bigger scale.
§ Clause 10 agreed to.
§ Clauses 11 to 22 agreed to.
§ 7.6 p.m.
§ LORD LLOYD OF HAMPSTEAD moved Amendment No. 9:
§ After Clause 22 insert the following new clause:
§ Harassment of debtor
§ ".—(1) If any person does any act calculated to cause harassment to or to interfere with the peace or comfort of any debtor or any member of his household and which is not reasonably necessary for the protection of the interests of the creditor or for the purpose of obtaining payment of the debt by due process of law, he shall be guilty of an offence.
§ (2) A person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeding six months or to both and, on a second or subsequent conviction, to a fine not exceeding five hundred pounds or to imprisonment for a term not exceeding six months or both.
§ (3) Nothing in this section shall be taken to prejudice any liability or remedy to which a person guilty of an offence thereunder may be subject in civil proceedings.
§ The noble Lord said: The Payne Report discussed in some detail the problem of unreasonable harassment of debtors. It is pointed out that while a creditor is of course entitled to use all lawful and reasonable measures to obtain payment, such as sending reminders or solicitors' letters threatening proceedings and so on, at the present time under the existing law there is a whole repertory of what they describe as reprehensible forms of pressure which are brought to bear on debtors by unscrupulous classes of creditors. The Committee received a good deal of evidence about this which enabled them to identify the nature of the problem, and in the Report they give many examples of the kinds of pressure sometimes employed. These are set out in some detail in page 320 of the Report, and I do not want to take up a lot of 907 time at this late hour by repeating them. Suffice to give as examples, apart from the so-called "blue and red frighteners", as they are referred to in the Report, are the cases where neighbours or local shopkeepers are informed about an indebtedness under the guise of seeking information and various kinds of disagreeable intimidation.
The conclusion of the Committee, which I would emphasise is unanimous on this point, is this. They say:
After all allowances have been made the conclusion is inescapable that some practices are employed with the object of instilling fear and panic in debtors, causing them anguish and driving them to desperation in trying to pay off their debts. Such creditors disdain the law and endeavour to bypass it by using strong-arm tactics or cunning devices. In our view it cannot be tolerated that just claims be pursued by unjust methods. It must not be forgotten the debtor class includes many, who by misfortune or mischance, have drifted into debt and are peculiarly exposed and vulnerable to the methods which we condemn.
There is no doubt that, as in the case of harassment between landlord and tenant—though no doubt some of these improper pressures which arc employed may give rise to some possible kind of liability or responsibility, criminal or civil—in practice unless some new kind of summary offence is created both the courts and the police are powerless to deal with this kind of problem. Accordingly, the Committee recommends the creation of a new offence, the offence of harassment of debtors on lines similar to those introduced with, I think, salutary effect in the sphere of landlord and tenant by the Rent Act 1965. Your Lordships will no doubt recall that that provision in the 1965 Act was introduced as a result of the many disclosures of what was called "Rachmanism", which were discussed in considerable detail in the Milner-Holland Report.
In the debate on the Second Reading, I suggested that this problem, having been identified by the Committee, ought not to be disregarded. My noble and learned friend the Lord Chancellor indicated that he had a good deal of sympathy with the point but that difficulties had been felt about definition and enforcement. But he went on to say that if I were to put down an Amendment he would be happy to consider it. Accordingly, I have put down this Amendment and I have followed,
broadly speaking, the lines indicated by the Committee in paragraph 1238 of their Report. The Committee were against classifying particular disreputable methods which they found to be used, but they suggested that the methods which should be treated as unlawful could be defined in general terms
as any harassment of the debtor which is not reasonably necessary for the protection of the interests of the creditor.
They also pointed out that in their considered opinion they did not think that this would cause any difficulty to magistrates who, after all, are able to apply standards of this kind when dealing with other offences of a similar character. After all, the courts have to consider every day in assessing legal responsibility what is reasonable in the circumstances; and there seems no reason at all why they should be unable to administer a law of this kind.
§ I will say a few words in regard to the actual provisions of my Amendment. So far as subsection (1) of the new clause is concerned, I have here followed the general pattern indicated in the Report, and I have supplemented it with something which has already been found acceptable in Section 30 of the Rent Act 1965; that is to say, the words referring to any act "calculated to interfere with the peace or comfort" of the debtor or any member of his household, a concept, it seems to me, which is doubtless borrowed from our law of nuisance. With regard to subsections (2) and (3) of the new clause, again these follow very closely the pattern of Section 30(3) and (4) of the 1965 Act. With regard to subsection (4) of the new clause, this follows the pattern of Section 108 of the Rent Act 1968 which gives local authorities power to institute proceedings in regard to harassment under the 1965 Act and also sets out the meaning of a "local authority" for this purpose.
§ I do not claim any special virtue or merit in this particular drafting. I have little doubt that it is capable of improvement, and for my part I should gladly accept any improvements which may be suggested. But I venture to suggest that this is a practical solution to what has been identified as a serious social problem and one that is likely to become a good deal more serious with the abolition of 909 imprisonment for debt, as the Payne Committee themselves point out. Therefore, I would suggest that it is a problem that should be dealt with and which ought not to be disregarded. I beg to move.
LORD DONALDSON op KINGSBRIDGE
I should like briefly to support my noble friend. If further evidence were required—and I do not think it is after the Payne Committee Report could produce plenty from the files of the family service units, from the Consumer Council and, doubtless, from the Citizens' Advice Bureaux. This is something which does happen, and I think it is important that it should be dealt with; for it will tie in very well with the Inertia-selling Bill, which has some provisions tending in this direction, and which Mr. Arthur Davidson is bringing in in another place. If we could get it in here it would give strength to his arm. I warmly support the Amendment.
§ THE LORD CHANCELLOR
As I intimated on Second Reading I approach this matter most sympathetically and I think my noble friend's drafting is a very good effort. If I mention one or two difficulties, it is simply to get them on the Record. The new clause adopts the word "harassment" but does not define it. The words "interfere with the peace or comfort" are borrowed from the Rent Acts and are understandable in the context of a Rent Act tenancy; but it is a little difficult to say what they mean here. So far as "not reasonably necessary" is concerned, what would be reasonable in the case of someone who systematically avoids paying his debts might be unreasonable in another case. Again, that we could consider.
The subsection does not make it an offence for a person to do something which is reasonably necessary for the purpose of obtaining payment of the debt by due process of law. One would have carefully to consider this and particularly so far as the work of the county court bailiffs are concerned. I am told that it would be against current policy to provide for a six months' term of imprisonment as an alternative to a fine. Subsection (4) provides that proceedings under the clause may be instituted by a local authority. There has been no opportunity to consult with the Local Authority Associations, but it is thought that most 910 local authorities would be reluctant to take on this additional responsibility. In any case, that provision would need further consideration, because it suggests that any local authorities may institute proceedings. I make these points only to serve to show that we have gone into the matter and I am not giving it up. The Home Office is interested, the draftsmen are interested. Though some of them say that they cannot make a job of it, I say that we must. I encourage my noble friend to hope for another stage of the Bill when between us we can work out something that will work.
§ LORD LLOYD OF HAMPSTEAD
I am grateful to my noble and learned friend for his very generous gesture towards my somewhat lame effort to deal with this problem. I appreciate that some of the phrasing is of a general character; but I share the view of the Payne Committee that this is the sort of thing which can be left to the common sense of magistrates, provided they are presented with general, common sense concepts. I should have thought, with great respect, that such ideas as "harassment" and "interference with peace and comfort" are ideas which the courts can deal with without a great deal of difficulty.
I do not attach any special significance to this, but so far as penalty clauses are concerned I thought I was following the precise form of Section 30(3) of the 1965 Act which provides:A person guilty of an office under this section shall be liable on summary conviction to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeding six months or to both …That is the precise wording of my Amendment. For my own part, I do not pretend to have any special expertise in criminal law or of penalty clauses in penal Statutes.
I do not wish to take up more time of the Committee since my noble and learned friend has made this proposal, which I am very happy to accept, that further consideration should be given to this point. If the drafting skill and experience of his office can either rephrase where necessary or find suitable formulae I should strongly welcome it. Therefore I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.911
§ 7.20 p.m.
§ LORD DONALDSON OF KINGS-BRIDGE moved Amendment No. 10:
§ After Clause 22 insert the following new clause:
Expenses of whole-time or part-time social workers
. The Lord Chancellor's Department shall authorise every county court to pay the reasonable expenses of any person employed whole-time or part-time to assist the court in the capacity of a social welfare worker.
§ The noble Lord said: My Amendment is, I think, quite obvious in its intention. We have accepted reluctantly my noble and learned friend's view that it is quite impossible at this stage to implement at all quickly the major recommendation of the Payne Report, which is the establishment of enforcement offices with the assistance of social workers. When one considers that there are 600 county courts, clearly 600 social workers alone would be an enormous affair. However, there would be some mitigation of this omission, it seems to me, if we pursued something which, as my noble and learned friend knows very well, has already begun; namely, the finding of voluntary workers to sit in county courts and to assist families and the registrar, in just the sort of way that the Payne Committee considered that the enforcement officer and his professional would do.
§ As my noble and learned friend knows, Mr. Vertsheimer, in conjunction with Judge Leon of Brent, has been doing this for some time, and he has a number of colleagues doing the same. All I want is that this work, which I shall be happy to do what I can to assist, should not stop for want of payment of reasonable expenses. I want to be sure that my noble and learned friend has power to pay reasonable expenses to volunteers. We can then perhaps try to develop the thing further. I beg to move.
§ THE LORD CHANCELLOR
I am afraid that at the moment I have not any money for social workers, though, as my noble friend knows, nobody is a greater admirer of the work they do than I. If, by saying that the Lord Chancellor's Department is to pay somebody something, the House of Lords could give me some money with which to pay them, that would be an admirable 912 arrangement; but I am afraid that we are not recognised by the Treasury. I think that we shall have to see how we go on. The registrar's court officials already give great help to judgment debtors. There are these voluntary social welfare workers attached to some county courts. I am not in the least against having professional social workers and employing them, but I am afraid that at the moment Government funds do not extend to it.
§ LORD DONALDSON OF KINGS-BRIDGE
I would only say that this is done throughout the Home Office and there is no reason why the Lord Chancellor's Department should not get similar treatment. Volunteers working in the Probation Service get it and I think, with respect, that my noble and learned friend ought to insist on it. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clauses 23 to 27 agreed to.
§ Clause 28 [Courts to have power in action by mortgagee for possession of dwelling-house to adjourn proceedings, etc.]:
LORD ILFORD moved Amendment No. 11:
Page 23, line 10, after ("dwelling-house") insert ("to which the Rent and Mortgage Interest Restrictions Acts 1920 to 1939 apply")
§ The noble Lord said: The purpose of this Amendment is to introduce into the Bill a recommendation of the Payne Committee which has not been adopted for reasons which no doubt will be explained to us later. The recommendation deals with mortgages for house purchases. The Payne Committee made a detailed examination of house purchase mortgages and came to the conclusion that there were certain classes of mortgage which presented very undesirable features and were capable of being made very onerous on the mortgagors. Accordingly the Committee recommended that the courts should be given powers, which they do not possess now, to enable them to check abuses of this type. They recommended, first, that the courts should have the general power to adjourn proceedings in which possession of a dwelling house was claimed and no judgment had been given; that the court should have power to stay or suspend 913 any judgment which had been given or order made, and that they should have the general power to postpone the date on which a mortgagor was liable to give up possession.
§ The Committee intended that these additional powers should be restricted to smaller dwellings, and they chose as a definition dwelling houses with a rateable value bringing them within the Rent Acts. The effect of that recommendation would have been that all the houses with a rateable value above that to which the Rent Acts apply would not have been affected by the recommendations. There was no reason why they should be affected, because one does not encounter the same type of abuse in respect of that class of property. The recommendation also had an important effect for local authorities to whose houses the Rent Acts does not apply. Accordingly, houses of local authorities, both above and below the limits of the Rents Acts, would not have been affected at all.
The recommendation has not been adopted in the Bill. I think it is clear that the Committee intended to recommend that local authority houses should not be subjected to these extended powers. The matter is dealt with in paragraph 1391 of the Committee's Report where it states:
The Committee does not propose that the discretion to adjourn an application for possession or to stay or suspend execution should be applicable where the mortgagee is a local authority seeking possession of a dwelling-house, since the tenant of such a property does not enjoy the protection of the Rent Acts.
I submit that the Committee intended that these extended powers should not apply in the case of local authority houses. There is no reason why the additional powers which the courts would possess should be extended to cover local authority houses. After all, local authorities are responsible public bodies. They do not act in the way in which mortgagees in this type of mortgage with which the Commission are dealing sometimes act. They act with a sense of responsibility and with a sense of fairness and justice towards their tenants. It is unnecessary to extend these additional powers to that type of house.
§ It is frequently urged that the local authorities should be given more discretion 914 in matters which fall within their purview and ought not to be interfered with by the central Government; that local authorities ought to be allowed to conduct their functions without interference and undue restriction. The noble Lord, Lord Radcliffe-Maud, is the latest authority to urge that course, and I thought that it was by now pretty generally accepted. Here is an instance where the relations of local authorities with their tenants are going to be subject to powers that are really of no importance to the tenants. We are not dealing with the type of mortgage to which the Commission alluded. I think we should assume that the local authorities will act fairly and reasonably with their tenants.
§ I hope that the Committee will take that view and will say that, however necessary it may be that these extended powers should be given to the courts to restrict the abuse of the smaller mortgages, they do not in the least apply to local authorities, who should be left free to deal with their tenants in the way they think just and proper. If the local authorities do not behave properly towards their tenants, there are a great many people who arc always ready to tell them about it, and it will not be long before they know. I hope that the Committee will adopt the recommendation of the Payne Committee and put back the situation to what it was when the Payne Committee made their Report. I beg to move.
§ LORD ROYLE
I have been released from another duty just in time to say a few words in support of the noble Lord, Lord Ilford. When I considered this question, I realised that there are two views on it, but I am a little concerned from the point of view of the local authorities. When it comes to granting new mortgages, a building society has more opportunity of refusing a doubtful application than a local authority has. Many people obviously use local authorities as a long-stop, and because of that it seems to me that local authorities perhaps have a right to a protection which is not granted to other people.
I am thinking in terms of, say, a poulterer at Covent Garden, who cannot possibly live in a house which is many miles from his place of employment and is concerned with finding accommodation which permits him to be at his work 915 at four or five o'clock in the morning. The type of property he may find is an apartment somewhere in the vicinity of his work, and this is the type of property that is invariably thrown back to the local authority, because the building societies do not feel able to grant a mortgage on property of that character. It seems to me that there should be greater protection for the local authority than for other institutions lending for mortgages and I therefore support what the noble Lord, Lord Ilford, has said. It would be ridiculous for me to go into details, in view of the lucid way in which the noble Lord explained what is in his mind, and I hope that my noble and learned friend may consider it in this light.
§ LORD MILVERTON
There is little that I can add, after listening to the noble Lords who have already spoken, but there are one or two things that I should like to emphasise. I lay no claim to being a lawyer but I have some knowledge of administration, and it is difficult for me to reconcile the reasons—if there are cogent reasons, as I suppose there must be—why the recommendation of the Payne Committee was added to in this Bill. I feel that if it is right to exempt local authorities from the sanctions of the Rent Acts, it is surely right also to exempt them from the jurisdiction of the courts under Clause 28. And from the recommendation in their Report it is obvious that the Payne Committee seemed to think on those lines. It would be a pity if, for the sake of what for want of a better word I would call the legal niceties, local authorities were to be classified with the other authorities who come under this clause. It seems to me possible that that sort of change in their position might be misinterpreted as in some way a distrust of the power which they formerly had.
I suggest that there is here an important point of principle—that is, the substitution of the court's discretion for that of the local authority, without, if I may be allowed to say so, any reason of substance being given and against the view of a Committee under the chairmanship of a learned judge and comprising members of the legal profession. I hope that the noble and learned Lord will be able to give favourable consideration 916 to the Amendment so ably moved by the noble Lord, Lord Ilford.
§ 7.36 p.m.
§ THE LORD CHANCELLOR
As the Committee know, I am ordinarily in favour of local authorities, but it seems to the Government that this analogy of the Committee in relation to the Rent Acts was perhaps carried too far. The scheme of the Rent Acts is to extend protection not so much to the dwelling-house as to the tenancy under which it is occupied; and the recommendation made by the Payne Committee must be read as if it referred to houses having a rateable value which would bring them, if let, under the protection of the Rent Acts. As the mortgage protection Acts are not concerned with the relationship of landlord and tenant but with that of mortgagor and mortgagee, there is no relevant connection between them and the proposal in the Bill to protect mortgagors under mortgages which are given by the local authorities to the tenants in certain circumstances.
Under Part I of the Rent Act 1968, there is a number of types of protected tenancy which are not given the protection of the Act and which are completely irrelevant to mortgage cases—for example, furnished houses and agricultural holdings. The exceptions which Part I of the Act and the Royal Commission have in mind is presumably that created by Section 5 of the 1968 Act, which provides that a tenancy shall not be a protected tenancy where the interests of the landlord belongs to a local authority, a New Town commission, a housing corporation or a housing trust which comes within the meaning of the Charities Act 1960. To attempt to apply these provisions to property which is not let is bound to lead to confusion and difficulty. Apart from the legal complications, the argument advanced in favour of the Amendment is that as the local authorities are responsible bodies it is not necessary to make them subject to the sanctions contained in Clause 61. The same perhaps could be said for building societies, which do not relish the application of these provisions to their activities any more than the local authorities do.
Like building societies, local authorities vary a great deal in their standards and 917 outlook, and in rejecting, in paragraph 1386 of their Report, the building societies' claim for exemption, the Payne Committee said:…we have to recommend a procedure which will ensure that justice is done in every class of case. We cannot avoid the conclusion that the final decision as to the enforcement of an order made by the court should rest with the court itself.Consultations with local authority associations undertaken by the Ministry of Housing and Local Government indicate that by no means all local authorities wish to be excluded from the operation of the clause. If, as one would expect, a local authority acts reasonably towards its debtor, and gives him opportunity to pay, it should have no difficulty in convincing the court that there is no scope for any further delay through applying the powers in Clause 28. This, however, is no argument for excluding local authorities entirely, as not all authorities may act in the same way. Local authority tenancies are excluded from the distinction of the Rent Act 1968, because the functions and responsibilities of local authorities in providing and managing rented accommodation are not comparable with those of a private landlord. No similar distinction can be drawn between local authorities as mortgagees and other mortgagees.
As I ventured to say on Second Reading, of course the local authorities, under a duty to provide housing, are not under any duty to provide loans. I should welcome any other views by any other members of the Committee, and I will certainly take into account what has been said. After all, what is one doing here? One is merely ensuring that somebody who is not a tenant but is in the process of buying a house and who owes some money on mortgage, is treated fairly. While most building societies are very reputable and behave perfectly, there are a few, unfortunately, who sometimes do not; and there are some strange local authorities in some places, too. Their conduct varies, and if it is right to protect the mortgagor in relation to the building society, why not in relation to the local authority? I hope, therefore, in considering those matters, the noble Lord will withdraw his Amendment.
§ LORD ILFORD
In the light of what the noble and learned Lord has said 918 ask leave to withdraw the Amendment. I find it difficult to follow his explanation. What the Payne Committee had to do was to select a certain class, which could be defined, which would be excepted from the extended powers that they recommended should be given to the courts. It does not seem to me that it makes any difference that there may be certain classes of tenants under the Rent Acts who are protected as tenants, and not premises which are protected as premises. However, I am very grateful to the noble Lord for what he has said—not for what he has said about the local authorities, but for what he has said about my Amendment. If I may be of any further assistance by suggesting something to him, I will do my best. I ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 8.44 p.m.
VISCOUNT COLVILLE OF CULROSS moved Amendment No. 12:
Page 23, line 11, leave out from ("property") to second ("the") in line 13.
§ The noble Viscount said: I asked the noble and learned Lord on Second Reading whether he would he so good as to explain why foreclosure had been dealt with in Clause 28 by excluding it, contrary to the recommendations of the Payne Committee, in paragraph 1360. He very courteously said that he would write and explain why he had done so, and indeed he did. I now understand it, but I think it is a matter of importance and ought to go on the record so that everybody can see why it is that the Government have not followed this recommendation in full. I should therefore be very glad if the noble and learned Lord would kindly explain again what he said to me in the letter so that it may appear in the OFFICIAL REPORT for everybody to read. I beg to move.
§ THE LORD CHANCELLOR
I will certainly explain it for the record. The powers given by Clause 28 will be exercisable inter alia forthe purpose of giving the mortgagor an opportunity to pay any sums due under the mortgage…This purpose is already achieved under the present procedure relating to foreclosure of mortgages which is designed to give the borrower every opportunity of redeeming the mortgage. When the date 919 fixed for repayment of the loan has passed and the contractual right to redeem has become an equitable right, the mortgagee can bring proceedings requiring that the mortgagor shall either pay or be foreclosed, that is to say, deprived of his right to redeem. If the mortgagor does not pay, an order for foreclosure nisi is made, the effect of which is that the mortgagor will lose his property if he does not pay upon a date, usually some six months later, which is specified in the master's certificate. The judgment orders an account to be taken of what is due to the plaintiff for principal, interest and costs and provides that if this amount is not paid on the appointed date the defendant shall be debarred from all interest in the mortgage property. If the mortgagor fails to pay, an order for foreclosure absolute is made; but even this may be reopened in certain circumstances if such relief appears to be due to the mortgagor in the special circumstances of the case. At best, the whole process cannot take less than eight months and a more common period is about a year.
In paragraph 1360 of their Report, the Payne Committee said:Foreclosure, although formerly very rarely used by mortgagees, appears to be reviving and, in our opinion, the restrictions which we are recommending in relation to claims for possession should equally be applied to foreclosure proceedings".Despite this, it appears that the interests of a mortgagor are adequately protected in a foreclosure action and it would be superfluous to add the further protection which will be afforded by Clause 28. I said in a letter to the noble Viscount, Lord Colville:The Court of Chancery has, of course, always done its best to protect the mortgagor's equity of redemption and the foreclosure procedure is designed to give him every opportunity of redeeming the mortgage. If the mortgagor does not pay, the court makes an order for foreclosure nisi under which the mortgagor loses his property unless he pays …",Then I explained about the six months and what happened after default. I went on:,…it seems to me that the mortgagor is very adequately protected in so far as proceedings for foreclosure are concerned and that it would be superfluous to extend the protection provided by the Bill in relation to applications for possession to proceedings for foreclosure.
VISCOUNT COLVILLE OF CULROSS
I am very much obliged to the noble and learned Lord. I think it is important that that should be explained. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 28 agreed to.
§ Remaining clauses agreed to.
§ Schedules 1 to 5 agreed to.
§ Schedule 6 [Provisions of Maintenance Orders Act 1958 as amended]:
§ 7.50 p.m.
§ THE LORD CHANCELLOR moved Amendments Nos. 14 to 17:
§ Page 40, line 30, after ("determination") insert ("(but subject to subsection (1)(ii) of this section)").
§ Page 44, line 7, after ("determination") insert ("(but subject to subsection (1)(ii) of this section)").
§ The noble and learned Lord said: I beg to move Amendments Nos. 14, 15, 16 and 17 together because they are linked Amendments which provide that where an application is made under Clause 16(1) for the court to determine whether particular payments to a debtor are earnings for the purposes of an attachment of earnings order and the clerk of a magistrates' court applies under Clause 16(2)(d), he shall apply only if he is requested to do so in writing by the beneficiary under the related maintenance order and, where he makes such application, the person who requested him to do so shall be liable for any costs arising out of the proceedings relating to the application.
§ The Amendments on page 40 amend Section 20 of the 1958 Act, which makes special provisions for procedure in magistrates' courts with respect to attachment of earnings orders. The Amendments on pages 42 and 44 amend the Keeling Schedule in which Section 20 of the 1958 Act is set out as amended. Where an attachment of earnings order has been made by a magistrates' court to secure 921 payments under a maintenance order, the beneficiary is to have the assistance of the collecting officer of the court in getting the order effectively enforced. This accords with the principle that in magistrates' courts the clerk to the court can take enforcement proceedings with respect to a maintenance order on behalf of the beneficiary.
§ Clause 16(2)(d) therefore provides that the clerk who was receiving payments under the related maintenance order for transmission to the beneficiary will be able to make an application for a determination under Clause 16(1). As drafted, however, he would be able to do this of his own motion and would be liable for costs incurred in the proceedings relating to it. This is contrary to the general principle that the clerk acts on behalf of the beneficiary only at his or her request and that the beneficiary is liable for the costs of proceedings taken on his or her behalf. The principle applies to the enforcement of a maintenance order by any means and, in particular, to an application for the making, variation, or discharge of an attachment of earnings order—see Clause 8(1)(c) and Schedule 6, Part 11, paragraph 20(1)(b) and (ii) of the 1958 Act as amended. The proposed Amendments therefore apply it to an application by the clerk for a determination under Clause 16. I beg to move.
VISCOUNT COLVILLE OF CULROSS
Would I not be right in saying that Amendments Nos. 16 and 17 ought to be printed in black print because they are amendments and would go in the Keeling Schedule dark as being new, as opposed to pale, being old? If that is so, ought we not to have a manuscript Amendment to that effect?
§ On Question, Amendments agreed to.
§ Schedule 6, as amended, agreed to.
§ Schedule 7 agreed to.
§ Schedule 8 [Enforcement by Magistrates' Court of Legal Aid Contribution Order]:
THE LORD CHANCELLOR moved Amendment No. 18:
Page 45, leave out lines 38 to 41.
The noble and learned Lord said: Paragraph 4 of Schedule 8 is no longer considered to be necessary. The corresponding provision in Section 45 of the Magistrates' Courts Act 1952 enables a magistrates' court to make an order with the consent of the defendant without hearing evidence
where a complaint is for an order for the payment of a sum recoverable summarily as a civil debt, or for the variation of the rate of any periodical payments ordered by a magistrates' court to be paid, or for such other matter as may be prescribed.
If it is found that this power is needed by the magistrates' courts for the enforcement of legal aid contributions in criminal cases, it will be possible to prescribe, by magistrates' courts rules, that the appropriate provisions of Section 45 of the Magistrates' Courts Act 1952 should apply to a complaint for the enforcement of a legal aid contribution. Since there is this power to apply Section 45 to legal aid contributions, the paragraph in the Schedule is not needed. I beg to move.
§ On Question, Amendment agreed to.
THE LORD CHANCELLOR moved Amendment No. 19:
Page 46, line 1, leave out ("(except subsection (6))").
§ The noble and learned Lord said: The purpose of this Amendment is to make it possible, on an application by a person who has defaulted in paying a legal aid contribution ordered by a criminal court for an order by a magistrates' court committing him to prison for nonpayment to be reviewed, for the magistrates' court to, remit the' legal aid contribution in whole or in part. As paragraph 6 of the Schedule is at present worded, the magistrates' court does not have this power to remit on an application by the defaulter for the order of committal to be reviewed. It only has the power to remit under Section 76 of the Magistrates' Courts Act 1952 (referred to in paragraph 3 of the Schedule) on the hearing of a complaint for enforcement. Section 18(6) of the Maintenance Orders Act 1958 gives the power to remit on an application by the defaulter for the committal to be reviewed, and although it was at first considered inappropriate to apply that subsection to legal aid contribution orders since it refers expressly to affiliation orders or orders enforceable as affiliation orders, it is now considered that 923 the subsection should be applied to legal aid contribution orders as well, since otherwise there would be no power to remit the whole or part of the contribution except on a complaint for its enforcement.
§ On Question, Amendment agreed to.
§ Schedule 8, as amended, agreed to.
§ Schedule 9 [Enactments repealed]:
THE LORD CHANCELLOR moved Amendment No. 20:
Page 46, line 47, at end insert—
|(" 15 & 16 Geo 6. & 1 Eliz. 2. c.55.||The Magistrates' Courts Act 1952.||In section 74(6)(a) the words "Under the Maintenance Orders Act 1958")|
§ The noble and learned Lord said: This drafting Amendment repeals a reference to the Maintenance Orders Act 1958 which is made in Section 74(6)(a) of the Magistrates' Courts Act 1952. The subsection (which relates to a magistrates' court's power to commit a maintenance defaulter to prison) provides that it shall exercise this power only if it has considered, among other things, whether as an alternative to imprisonment it would be appropriate to make an attachment of earnings order under the Maintenance Orders Act 1958. The part of the 1958 Act which relates to the making of attachment of earnings orders is being repealed by the Bill. It is therefore necessary to remove the reference to that Act.
§ As attachment of earnings orders will only be made by virtue of powers given by this Bill and courts are now familiar with the principle of attaching earnings, it is thought to be unnecessary to substitute a reference to the Administration of Justice Act 1969.
VISCOUNT COLVILLE OF CULROSS
I want to say only two things. First of all, the mind boggles as to how the reference in a 1958 Act could have got into one dated 1952, but I think I can see how it happened. Secondly, the noble and learned Lord has given many explanations in the course of the Committee stage which I believe will be of the greatest assistance in further discussions on this Bill both outside and inside the House, and I should like to thank him very much for this.
§ THE LORD CHANCELLOR
If I may say so, I am very grateful to the noble Viscount and to all those who have been good enough to assist with the Amendments. We have a number of things to think about and to get straight.
§ On Question, Amendment agreed to.
§ Schedule 9, as amended, agreed to.
§ House resumed: Bill reported, with the Amendments.