SOLICITORS (AMENDMENT) BILL [H.L.] (Hansard, 16 March 1972)

HL Deb 16 March 1972 vol 329 cc522-41 522

§ 3.38 p.m.

§ LORD TANGLEY
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.—(Lord Tangley.)

§ On Question, Motion agreed to.

§ House in Committee accordingly.

§ [The EARL OF LISTOWEL in the Chair.]

§ Clauses 1 to 10 agreed to.

523

§ Clause 11 [Management of and grants from Compensation Fund]:

§ LORD GARDINER
I should like to raise a point on Clause 11 of the Bill. It is a point which could have been raised on the Second Reading, but unfortunately I had an engagement which would have precluded me from hearing the reply if I had raised it then, and that is not a situation in which one wants to find oneself. I have not put down an Amendment because I imagine that the matter is not in dispute with the Law Society, and I am merely asking for information. If I had put down an Amendment, it would have been to omit from subsections (2) and (3) of Clause 11 the words, "may if the Council think fit" and to substitute the word "shall" In other words, the question which I wanted to raise was whether, looking to the future rather than to this Bill, the Law Society think that this fund ought to be a guarantee or indemnity fund or a compensation fund. The difference of course is quite a simple one. If it is an indemnity or guarantee fund, then anybody who is defrauded of his money by his solicitor has a legal right to be indemnified out of that fund. If it is as now a compensation fund, a client has no legal right of any kind; it is a purely discretionary, ex gratia fund.
In raising this point I am doing so not for the first time. When the original Bill was before this House in 1940 the noble Lord, Lord Mancroft (the father of the present noble Lord), raised it himself on the Second Reading on July 4, 1940. At column 790 of Hansard he said this: With regard to Clause 1, which deals with what is called the Compensation Fund, I do not like the idea of the fund in the form of a Compensation Fund. I do not like the word 'Compensation'. It is not a guarantee fund; it is merely a Samaritan fund. I wish that the Law Society had not included this clause to set up a fund in the form in which it now appears in the Bill. It is a fund to be administered at the discretion of the Law Society. If there is going to be a fund, I think that it should be a guarantee fund with a cash deposit or a fidelity bond put in by every solicitor. A skeleton idea is to be found in Lloyd's Underwriters' Fund". He then discusses that, and goes on: … then I think that this clause ought to provide a regular guarantee fund. Whether there will be any discussion in the other House or whether Amendments will be put down here to deal with that point of view about the Compensation Fund, I do not know. I do 524 not like the word 'Compensation' at all, for reasons which I will give, and I think that the operation of that clause in its present form ought to be dropped. The answer was that the Bill was not prepared in this form and all that the Law Society had agreed to was that this method should be given a trial to see how it worked. That was a very natural answer, because as a country we are very good at trying out things, and I myself am a great believer in trying things out and seeing how they work. Since then thirty years have gone by and from time to time one has read statements by the Law Society which, though I am sure not so intended, might well be read by the ordinary layman as meaning that if there were a defalcation by one's solicitor one would have a right. The noble Lord, Lord Tangley, on the Second Reading on March 2, 1972, at column 1217 of Hansard said: The principle of the Compensation Fund is that the whole profession stands behind every solicitor, so that any client who suffers from dishonesty can make a claim on the Compensation Fund. We call it the Compensation Fund because that is what it is; but ever since it started it has operated as an indemnity fund. We do not dare call it that yet, but that is what it has been in the past, and in this sense no admitted claim has yet been rejected by the Fund. I am bound to say that in the course of a fairly long life in the law I have on a number of occasions been approached by clients who have said they have been defrauded of money by their solicitors but they cannot get anything from the Compensation Fund and the Law Society have declined to give any reason. I have not taken up those cases because I have usually referred them to their Member of Parliament: the last thing I want to do is to get involved in a dispute with the Law Society. However, may I take one example of a client for whom I appeared in the Divisional Court and who will be known to many of your Lordships in this House, at least by name—Mr. Hinds. Mr. Hinds was convicted of burglary of a safe at Maples and he ultimately persuaded a King's Bench jury in a libel action that he had been in the right throughout. When I say "throughout", I have in mind that he was refused bail for no reason that I could ever discover, and while in his prison cell he wrote to his Member of Parliament and said, "I am being 'framed' by Superintendent 525 Sparks and this man at Maples", and that is what he said ever since.
He had bad luck: he got bail eventually without sufficient time to prepare his defence, so his leading counsel returned the brief the night before the trial. He applied to Lord Goddard, who was to try the case, for an adjournment. This was refused, and a new counsel had to be found at the very last moment. The criticisms which have been made of the conduct of the trial by Lord Goddard are well known. On conviction, Hinds gave his last £1,500 to his solicitor to get him a really good Queen's Counsel for his appeal; and his solicitor promptly embezzled the money and then shot himself. So all he had for his appeal were two youngish junior counsel. I took the case up with the late Secretary of the Law Society, but I was told that they never give any reasons. Hinds applied for compensation both at the time and particularly after a Queen's Bench jury was satisfied that he had been so "framed" and that he had not in fact been in Maples that night, as I and a great many other people were firmly convinced.
Therefore the short question I want to raise is: is this kind of thing suitable to the reputation of a great profession? Would it not be very much better if an English solicitor could say what every New Zealand solicitor can say: "No one need ever fear giving his money to his solicitor, because in the very unlikely event of his going off with it there is an indemnity fund and you have a legal right to be indemnified from that fund"? I believe, too, that every solicitor in New South Wales can say this. Thirty years have now gone by, and I do not raise this question in any hostile spirit at all, but because I believe that the reputation of English solicitors would stand even higher than it already does if they could proudly say, "You need have no fear whatever of giving money to your solicitor because there is an indemnity fund from which you will have a legal right to draw." I raise this point, hoping that the noble Lord, Lord Tangley, may at some later stage of the Bill be able to tell us that the Law Society have reconsidered this point.

§ 3.47 p.m.

§ LORD TANGLEY
If it is in order I should like to say a few words now 526 on what the noble and learned Lord, Lord Gardiner, has said, while the point is fresh in your Lordships' minds, rather than at a later stage of the Bill. I chose my words rather carefully on Second Reading and said that the Fund had in fact worked as an indemnity fund, in the sense that no admitted claim had been rejected. This proposal to convert the Compensation Fund into an indemnity fund has, if I may say so with great respect to the noble and learned Lord, a deceptive simplicity about it. It sounds magnificent to say, as he said, that everybody who is defrauded by a solicitor has a legal right, et cetera; but I am not sure that to amend the law in that way would be as useful to claimants as it looks at first sight. When the Law Society has a discretion, as it has to-day, it does not have to insist upon absolutely strict proof that the client has a claim against the solicitor. There are numerous cases where the benefit of the doubt has been given to the client.
If we are to lay down by Statute that there is to be an indemnity, it must be defined as an indemnity against something, and the indemnity presumably means that it is an indemnity against any legal claim the client might have against the solicitor. As the operators of the Fund, that would put the Law Society in the position that they would have to be satisfied that there was a legal claim. At the moment they do not have to be satisfied that there is a legal claim, and there are numerous cases where the client has obviously been defrauded but might not, for various technical reasons, have a legal claim. Therefore, in my belief, your Lordships can take it that many people get compensation to-day who might not get it if we went in for all the rigidity of an indemnity fund. Notwithstanding that, the Law Society are considering this matter. The noble and learned Lord admitted that this is not something that we can deal with in this Billf; but I can assure the Committee that if it were possible and satisfactory to the claimants to make it an indemnity fund and the fund could be advertised as such, nobody would be happier than the solicitors' profession. There are difficulties about this which the Law Society are considering and will continue to consider. I hope that that assurance will satisfy the noble and learned Lord.

527

§ LORD DOUGLAS OF BARLOCH
May I add one word to what my noble friend Lord Tangley has said? It is certainly very attractive that this should be made an insurance fund but it involves the consequences that he has mentioned, that it would have to be administered upon insurance lines. There is another difficulty about it: it is not entirely desirable to encourage people to believe that they ought not to take the slightest trouble in looking after their own affairs. Let us say that some foolish person had put into the hands of a solicitor who turned out to be fraudulent the sum of £1 million and the sum was embezzled. Under the proposal of my noble friend Lord Gardiner, that person would presumably be entitled to make a claim for £1 million. The result would be a levy upon the members of the solicitors' profession out of all proportion to any reason. There could be cases in which people behaved extremely foolishly and brought the consequences of their foolishness on themselves. That is another reason why it is not entirely desirable that the present principle, which so far as I know has worked perfectly well and which has saved a very large number of people from losses which they would otherwise have incurred, should be abandoned.

§ Clause 11 agreed to.

§ Clauses 12 to 15 agreed to.

§ 3.54 p.m.

§ THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE) moved Amendment No. 1:

§ After Clause 15 insert the following new clause:

§ ". After subsection (3) of section 29 of the principal Act (which requires the Council to make rules as to the keeping of accounts by solicitors) there shall be inserted— '(3A) The Council shall be at liberty to disclose a report on or information about a solicitor's accounts obtained in exercise of powers conferred by rules made under subsection (1) or subsection (2) above to the Director of Public Prosecutions or a member of his staff authorised by him, in connection with the prosecution or contemplated prosecution of the solicitor for a criminal offence.'

§ The noble and learned Lord said: I beg to move Amendment No. 1. This Amendment is largely declaratory. Whether it is declaratory or not, it cor- 528 responds to what is being done now. What is being done now has given rise to some question on technical legal grounds and it is thought proper to insert a clause to put the matter beyond reasonable doubt.

§ This clause gives statutory authority to the Law Society to forward to the Director of Public Prosecutions the report of the Society's investigating accountant where his inquiries have revealed the commission of criminal offences by a solicitor. The investigating accountant's inquiries are conducted under Rule 12 of the Solicitors Accounts Rules 1967, and Rule 11 of the Solicitors Trust Accounts Rules, 1967. Both sets of rules were made in accordance with the provisions of the Solicitors Act 1957, Section 29(1) and (2). The rule in each case enables the Council of the Law Society to require a solicitor to produce all the documents and information necessary to the inquiry.

§ The report is expressly prepared on the direction of the Council for their information as to whether the accounts rules have been complied with and may be used for proceedings under the Solicitors Acts 1957 and 1965. These Acts make provisions for proceedings relating to solicitors' accounts to be heard before the Disciplinary Committee constituted under Section 46 of the Solicitors Act 1957. There are no express provisions for criminal proceedings. The question therefore has arisen as to whether the accountant's report or other information obtained in the investigation could be disclosed to the Director of Public Prosecutions in connection with the prosecution or contemplated prosecution of a solicitor.

§ The noble and learned Lord, Lord Denning, in a case called Parry-Jones v. The Law Society, reported in 1969, said this: In my opinion that rule is a valid rule which overrides any privilege or confidence which otherwise might subsist between solicitor and client. It enables the Law Society for the public good to hold an investigation, even if it involves getting information as to clients' affairs. But they and their accountant must, of course, themselves respect the obligation of confidence. They must not use it for any purpose except the investigation, and"— these are the critical words— any consequential proceedings. If there should be subsequent application to the Disciplinary Committee, the information can be used for 529 that purpose. In all other respects the usual rules of legal professional privilege apply—see section 46(6) of the Act. The new clause I am proposing resolves any ambiguity inherent in the phrase, "and any consequential proceedings."

§ The new clause is clearly justifiable on the ground that it is important that the Director should bring defaulting solicitors to justice with a minimum of delay and difficulty. If the information is not available, the Director could experience considerable delay and expense and it would be particularly embarrassing for the Law Society to have the means of avoiding such delay and expense and not to be able to make it available to the Director. It has been the practice until very recently for the Law Society to make this information available to the Director of Public Prosecutions, but it was recently questioned, and therefore as the question has been raised it has become necessary to legislate. The purpose of the new clause that I now propose is to legislate. I am sorry that I did not notice my noble and learned friend Lord Denning was in his place. If I had I would have drawn attention to his presence because I was quoting from one of his famous judgments.

§ 3.59 p.m.

§ LORD STOW HILL
I should like to raise one or two points from these Benches on the Amendment which the noble and learned Lord has just moved. When I first looked at the Amendment I was rather puzzled as to the need for it. Anybody can engage an accountant to produce a report, and if a report is produced anybody may show that report to the Director of Public Prosecutions. But the noble and learned Lord has explained—and I am grateful to him for so doing—how it is that a doubt has arisen in view of the reasoning of the noble and learned Lord, Lord Denning, as to whether it is permissible so to do. If I may respectfully say so I should have thought that amply justified the case for proposing this Amendment.
The object of the Amendment, namely, to remove a doubt, is one which I should have thought the whole Committee would readily support, and I certainly do so. I should like to raise one or two points on the language in which the Amendment is couched. I am quite certain that the noble and learned Lord would agree 530 with me in this: the language chosen should specify as clearly as possible the circumstances in which the report may or may not be shown to the Director. After all, there are really two parties to this and there is a civil liberties aspect to it. There is the Law Society acting through its Council, on the one hand, in the protection of the public; and, on the other hand, there is after all the solicitor whose behaviour is suspect. I am sure that the whole Committee and the profession would wish to be perfectly fair to that solicitor. It is in that context that I should like to draw attention to the words: in connection with the prosecution or contemplated prosecution of the solicitor for a criminal offence". The Amendment allows the report or the information in question to be disclosed to the Director only if that disclosure is in connection with the prosecution or contemplated prosecution of the solicitor for a criminal offence". The first limb of those words, "in connection with the prosecution", clearly posits, I should have thought, that a prosecution has already been undertaken and is in progress. Unless there is a prosecution pending, I should have thought those words were not satisfied and would not justify the Council of the Law Society showing the report to the Director. One then goes on and looks to the second limb of the wording; namely, the words "or contemplated prosecution of the solicitor". I would have respectfully submitted to the noble and learned Lord that they would give rise to some doubt which he might like to examine a little further. Contemplated by whom? Has the prosecution to be contemplated by the Council of the Law Society or by the Director of Public Prosecutions? One does not know: the language is ambiguous.
Secondly, at what stage can it be said that a prosecution is contemplated? Supposing that all that has happened is that the Law Society has had the report from its accountant which discloses matters extremely suspicious in themselves and seeming to point to the fact that there has been a criminal offence committed, or at any rate establishing a strong likelihood that there has been such an offence. I should have thought 531 that the objective of the Amendment would be that in those circumstances the Council of the Law Society could certainly forward the report to the Director for him to examine to see whether in fact there are materials upon which to found a prosecution. But the prosecution has got to be a contemplated prosecution. The Director at that moment does not contemplate any prosecution. He has not seen the report. If one looks at the mind of the Council, they do not contemplate a prosecution. All that they do is to say to themselves: "The report discloses very suspicious circumstances. Perhaps there has been an offence committed here. It ought to be investigated to see whether there is an offence." I should have thought it could not possibly be said that at that stage a prosecution is contemplated. Nobody knows whether there will be one or whether there will not be one. It is simply a possibility. There may be a "Yes" or there may be a "No" to the question whether a prosecution is at that stage "contemplated". If that interpretation of the language which I venture to put before the Committee is correct, it would follow that the Law Society at that stage could not forward the report to the Director of Public Prosecutions. Clearly that, I should have thought, was not what is intended, and I should be most grateful, speaking for myself, if the noble and learned Lord were able to say that he would consider that language a little further to see whether the doubts I have raised are well-founded or not. If he says that he has already considered it, I shall be perfectly content, but I thought it right to raise the matter.
The next point is this. The new clause authorises the forwarding of the report to the Director. Supposing that report is defamatory of the solicitor concerned—and, as I say, one must in fairness to him consider his side of the matter. Sometimes of course the report will be defamatory. It will be mistaken, perhaps, in putting an adverse view upon things that have happened which are capable of perfectly innocent explanation. It will be defamatory, and when it is forwarded to the Director of Public Prosecutions there will be a publication in every sense. What is the position to be if the report is defamatory? Speaking for myself, I should have thought that the Council of 532 the Law Society should then have—as I should have thought it would probably have—a defence of qualified privilege. It would not be liable in damages for making that defamatory publication unless it could be shown that the publication was made with malice; and I should have thought that that was what the law should provide. I hope the language of this clause so provides.
I simply raise the doubt, however, as to whether the contrary could not be argued on these lines. It could be said, "After all, what is it that the new clause allows? The new clause authorises us, the Council, to forward the report to the Director of Public Prosecutions. That is all we have done. We did not prepare a defamatory report. We did precisely what the new clause authorises us to do and nothing else besides." Perhaps the answer to that could be, "Well, there is something else besides. You not only forwarded a report but you made a defamatory publication." Again, I should be perfectly content if the noble and learned Lord were able to tell us that he had considered that, and if he is in agreement with me that the Law Society should have a qualified defence that the language chosen only gives them that defence. I think he probably would agree with me that if the language per incuriam does have the result of giving the Law Society an absolute privilege in the case of the publication of a defamatory report, then some change should be introduced in it. But the noble and learned Lord always considers these matters with the greatest care, in spite of the many responsibilities he has, and if he tells me that he is satisfied on the advice of his advisers that there would be only qualified privilege, I certainly shall be satisfied.
The final point is this. I notice that in paragraph 21 of Schedule 1 to this Bill, on page 18, the Council of the Law Society and its servants are given an express right of indemnity out of the Indemnity Fund in the event of a claim being made against the Council or its servants in respect of something done in the execution of the powers or the implement of the responsibilities conferred by Schedule 1. The forwarding of the report under this new clause would not come within the scope of that indemnity. It would not be something done in pursuance of Schedule 1; it is something 533 completely extraneous and outside Schedule 1. It would be done under Section 29 of the 1957 Act, which is something different. I am wondering whether it would not be desirable, in the event of the involuntary publication by the Council of a defamatory report, that they should have some indemnity at least in respect of the costs that they may be put to in defending what perhaps may be a wholly unjustified action brought in the courts by the delinquent solicitor, which may put them to a very considerable amount of expense. I have been through the 1957 Act and the 1965 Act to see whether I could find any section in either of those Acts which would grant such a general indemnity. I have not found one; maybe I have missed it. But I would just raise the point for consideration.
Those are points I simply raise. I would not advise your Lordships to seek to vote against the clause. Personally, I would certainly support it, but I should do so the more readily and with greater peace of mind if the noble and learned Lord were able to tell me either that he has considered those points or, if he feels that they require further consideration, that he will have a further look at them between now and the Report stage.

§ 4.8 p.m.

§ LORD DENNING
I would support this Amendment. Of course it is a strong power which the Law Society have by which they send an accountant down to a solicitor's office to go through his books to see whether they are in order or not, or to see whether the monies are properly accounted, and so forth. But that is a very necessary power for the discipline of the profession and for the protection of the public. In order that that may be effective it must be necessary for the Law Society to use such information when the matter is put before the Solicitors' Disciplinary Tribunal. In the case which my noble and learned friend the Lord Chancellor has mentioned, a solicitor, Mr. Parry Jones, objected very much to accounts being used without his being told about it and to what he thought was a further breach of privilege. But it was held, and rightly, I submit to your Lordships, that it is right that they should be placed before the Disciplinary Tribunal. But, if that is so, it is only a logical consequence that if it is a very serious 534 case, such as to merit proceedings not merely before the Disciplinary Tribunal but before the criminal courts, then the material should be placed before the Director of Public Prosecutions. So I would suggest that this Amendment is desirable in order to clear up doubts. As to what my noble friend Lord Stow Hill said, I should have thought that a "contemplated" prosecution was probably a prosecution contemplated by the Professional Purposes Committee of the Law Society on the one hand. As to privilege, I should imagine that this would be clearly qualified privilege, but I support the Amendment.

§ LORD TANGLEY
With a certain amount of hesitation and reluctance I am prepared to accept this Amendment. My hesitation and reluctance are entirely due to these facts. It may well be that a complaint dealt with before the disciplinary committee of the Law Society has no criminal element in it whatever, and it is perhaps going a little far to mix up a criminal and a non-criminal proceeding. The second thing that makes me hesitate a little is that the question of client's privilege may enter into this. After all, the accountants' report may make remarks about a client's affairs or dealings with a solicitor, which would normally be privileged; and of course your Lordships all know that this is not a privilege on the part of a solicitor, but a privilege on the part of the client; and the client's privilege has to be preserved.
There are points also which have been raised by the noble Lord, Lord Stow Hill, but I think the answer to my own hesitations and doubts is that this new clause does not make it compulsory upon the Law Society to make available to the Director of Public Prosecutions any document. It will be entirely within the discretion of the Law Society whether or not they act on an invitation by the prosecution. In those circumstances, I think it is reasonable to leave it to the discretion of a rather expert body to decide whether it is safe from the point of view of defamation, or whether it is proper from the point of view of client's privilege, or for any other reason, to make these documents available. I notice that the noble and learned Lord the Lord Chancellor has expressly refrained from introducing any element of compulsion into this. It is a matter resting 535 entirely at the discretion of the Law Society and that being so, on second thoughts I feel that it must be safe to accept this Amendment.
I myself think there is no doubt that it would be a case of qualified privilege in an action for defamation, and I do not quite see why there should be any indemnity for the Law Society or for any member of its staff if the Law Society itself exercises the discretion (for under this new clause it will still be its own discretion) to produce some documents to the Director of Public Prosecutions. So, on balance, I am prepared to accept this new clause, which I believe is a safe clause to accept, even taking into account the points raised by the noble Lord, Lord Stow Hill.

§ LORD CONESFORD
After the very distinguished noble Lords who have spoken I hesitate to intervene and I do so only because I share to some extent the doubts on the actual wording raised by the noble Lord, Lord Stow Hill. I should have thought that, for the reasons given by the noble and learned Lord the Master of the Rolls, the words in the Amendment as it stands would probably just do and would be construed as I am sure the noble and learned Lord the Lord Chancellor wishes. But I thought that the noble Lord, Lord Stow Hill, raised a point of some substance when he asked, in connection with the prosecution, at what point it can be said there is a prosecution in connection with which these documents are forwarded. I also thought there was some substance in what he said to the effect that when they were forwarded some further investigation might be necessary in the office of the Director of Public Prosecutions. I could not suggest with any confidence alternative words that would do, but I would ask my noble and learned friend the Lord Chancellor, unless he is completely satisfied that there is no substance in the criticisms of the noble Lord, Lord Stow Hill, to consider some alternative words to the conclusion of his Amendment, such as for investigation and possible prosecution of the solicitor for a criminal offence". It seems to me that some words such as those would get rid of all the difficulties as to who is contemplating the prosecution within the meaning of the Amend- 536 ment. Simply looking at the words in their natural sense I cannot help sharing the doubts expressed by the noble Lord, Lord Stow Hill.

§ LORD TANGLEY
I should like to deal with one or two remarks made by the noble Lord, Lord Conesford. I think the practical situation is this. The Law Society is not going to volunteer any documents or statements. Such documents or statements will be given to the D.P.P. only if he asks for them, and it is within the discretion of the Law Society whether it gives effect to that request or not. Therefore it is perfectly easy for the Law Society to say to the D.P.P., "What are you going to do with these things? Are you going to prosecute?" If he says "Yes", there will plainly be a prosecution in contemplation. Of course anybody can contemplate a prosecution, just as I can contemplate the heavens, but I do not think that is what this new clause means. The practical position is surely this: that the D.P.P. will say, "Please, Law Society, you have something that I very much want to see for the purposes of looking into this case and possible prosecution." That would bring it straight within the clause as almost nothing else would.

LORD JANNER
I rise for a moment as a practising solicitor to say that what we are concerned about is that the public should realise that if there is a transgression against the law that transgression will be dealt with. The profession itself is a very honourable profession, very often misrepresented, as I have said dozens of times in the other place, and I repeat it here, and I think it is highly important that the public should realise that if there happens to be a "black sheep" in the profession (and there are very few) that "black sheep" will be dealt with adequately.
As a lawyer I am not over-happy with the words "0contemplated prosecution" and I am not sure that they can be easily defined because I think the noble Lord, Lord Stow Hill, was right: it is a question of contemplation by whom and how. I am not altogether satisfied; but as the noble Lord, Lord Tangley, has said, any doubt of that nature is outweighed by the fact that eventually it rests in the hands of the Law Society, which is a most honourable Society, the members of 537 which are careful about the image of the profession and about the correctness of the profession, and in those circumstances I do not think it would be unsafe to accept the new clause as it has been proposed.

§ 4.20 p.m.

§ THE LORD CHANCELLOR
I am grateful to the various noble Lords who have played a part in this debate. I think the logical way to reply to them would be to start with the first intervention of the noble Lord, Lord Tangley, because he came back to the point about what this clause is all about, and I think I can answer the other points in relation to that rather than vice versa.
This is a clause in the public interest but to protect the Law Society. It is not a clause to cause the Law Society to do something they do not want to do, or indeed to cause the Law Society to do something they have not in fact been doing. There is co-operation, or has been until very recently indeed, between the Law Society and the Director of Public Prosecutions in cases of this kind. In his second intervention the noble Lord, Lord Tangley, really explained the sort of thing that happens. I do not know, not being very familiar with this ground, certainly not so familiar as either the noble and learned Lord, Lord Denning, or Lord Tangley, whether the Law Society ever in fact volunteers information. The ordinary straightforward case is that the Director wants to get the information from the Law Society, and he wants to get it for the reason that Directors of Public Prosecutions do want to get information, because they have in contemplation a prosecution.
By "contemplation" I do not mean (this brings me back to the noble Lord, Lord Stow Hill) that they have already made up their minds to prosecute; because Directors of Public Prosecution are cautious people, with a certain discretion as to whether to prosecute or not, and the degree of probability of conviction and the seriousness of the offence are matters which necessarily they have in mind before they decide to prosecute. But they ordinarily have it in contemplation to prosecute when they invite the Law Society to let them see the documents in relation to their investigation. This is the reason why the word "con- 538 templated" and not "intended" was used. I dare say that some form of words revolving round the words "investigate with a view to prosecution" might well have been substituted. Although I am not at all uneasy about the word "contemplated" in my Amendment, I will, at the invitation of the noble Lord, Lord Stow Hill, undertake that this shall be examined again by my advisers to consider whether the form of words used is the most appropriate for the purpose in mind, because obviously one does not want to do anything other than the best.
In the same breath, may I go back to my noble friend Lord Conesford (I think it was he, but certainly one noble Lord) who asked me when a prosecution actually begins. There is legal learning about this; there are cases. I would not like to say without notice what the result of them is. My recollection is that a prosecution begins when a charge is laid; not before and not after, but when an actual charge is made in the formal sense. If I should turn out to be wrong about that, I will take steps to try to correct myself to anybody who may be sufficiently interested to want to know. So much for the first question which the noble Lord, Lord Stow Hill, raised.
Then comes the question of privilege in case the report is defamatory. Again this is something which, at the invitation of the noble Lord, Lord Stow Hill, I must have looked at again, and I promise to ask my advisers to give a report on it. I personally have no doubt—and I am reinforced in this by the opinion of my noble and learned friend Lord Denning from the Cross-Benches—that it gives rise to qualified privilege and not either to no privilege or to absolute privilege. But it is obviously a point that we must get right, and so I will, if this Amendment is agreed to, refer it back.
The third point that Lord Stow Hill raised is not really a question for me, but I will say what I can about the disposal of the compensation fund under Schedule 1 to which he referred. Paragraph 21 is, in effect, a direction about the disposal of the compensation fund, by way of indemnity, to the committee which has in fact carried out the investigation. But this is a matter for the Law Society, not for the Government, and they no 539 doubt will take into account what Lord Stow Hill has said. It is not strictly a matter for me to tell them what to do or how to do it.
I should like to thank my noble and learned friend Lord Denning for coming here to give us the benefit of his experience. Not merely is he President of the Court of Appeal with a long and distinguished contribution to English law as such, but, of course, as Master of the Rolls he is also in a special relationship with the solicitors' profession, which gives him particular authority upon this point.
I am grateful to the noble Lord, Lord Tangley, for expressing one of the points I had intended to raise to the noble Lord, Lord Stow Hill. This is not purely a question of the civil rights of solicitors who may be under suspicion, but client's privilege is of necessity also involved in any examination of a solicitor's accounts or the report in relation to them. I had intended to say that myself. I am also grateful to him for making it easier for me to reply to the first point, by indicating what I began by endorsing; namely, that the purpose of this Amendment is in fact the protection of the Law Society in pursuing a practice which is already familiar to them but the legality of which has been called in question. Therefore legislation is necessary, for which the present Bill affords an admirable opportunity. Having said that, I hope that the Committee will now feel able to accept the Amendment.

§ LORD STOW HILL
I rise only to thank the noble and learned Lord for what he has said. I am very content. I should have thought probably the answer in each case is satisfactory as it is, but it was I think right to raise it because two sides are involved.