§ 3.31 p.m.
§ Lord HARRIS of GREENWICH
My Lords, I beg to move that this Bill he now read a second time. The Bill results from the Criminal Law Revision Committee's Thirteenth Report, on Section 16 22 of the Theft Act 1968, which Was published last February. This is an intricate and complex area of the criminal law and I am sure the House will wish to join me in paying tribute to the noble and learned Lord, Lord Edmund-Davies, then chairman of the Committee, and the other members of the Committee, for the careful and painstaking way in which they have carried out their task. They have in fact reconstructed Section 16(2)(a) of the 1968 Act and provided us with an entirely new and I believe much improved set of clauses.
I suppose that in a way we should partly blame ourselves for having to give our attention after a span of only 10 years since the passing of the Theft Act to an offence of deception which the noble and learned Lord, Lord Edmund-Davies, when giving judgment in the Court of Appeal in the case of R v. Royle called a "judicial nightmare". As your Lordships are aware, Section 16, which is concerned with obtaining a pecuniary advantage by deception, came about as a result of amendments made to the Criminal Law Revision Committee's original draft clause—arising out of their Eighth Report—during the passage in 1968 of the Theft Bill through your Lordships' House and in another place. The particular wording of the section arose from the desire of your Lordships to qualify the original clause as introduced, which it was considered was too wide and made any kind of dishonesty criminal. Unfortunately, owing to the extreme difficulties of drafting such a provision, it has not introduced the certainty into the law which was expected of it, and quite soon after its introduction the interpretation of the section began to trouble the courts.
No less than three cases have been referred to your Lordships' House for decision. Two arose in 1973, Director of Public Prosecutions v. Turner and DPP v. Ray, both of which concerned the evasion of a debt. In the first case, as was pointed out by the noble and learned Lord, Lord Reid, the respondent evaded his obligation to pay immediately in legal tender for work done—in act by a couple of decorators—by giving a worthless cheque instead. The second case concerned a man who, after having eaten a meal in a restaurant, changed his mind and evaded his obligation to pay for the 23 meal by leaving without paying, having waited for some 10 minutes until the waiter was out of the room. The third case, the Metropolitan Police Commissioner v. Charles in 1976, related to the fraudulent use of cheques at a gaming club, backed by a cheque card, which the appellant had no funds to meet. Your Lordships found that a pecuniary advantage had been obtained by deception in that case also. I will not detain your Lordships by citing the numerous other relevant cases decided by the courts which have a bearing on the precise meaning of Section 16 of the 1968 Act, but, as I have indicated, a significant number have arisen.
In August 1972, therefore, the then Home Secretary asked the Criminal Law Revision Committee to look into the whole question of the working of Section 16 of the Theft Act and to consider whether any changes in the law were desirable. The Committee felt that their task ought not simply be to find a better way of stating the effect of the section, but that they should go further and fully reappraise the proper extent of the criminal law in this field. There are many views as to where the borders between criminal and civil liability for this type of conduct should lie, and, because of the difficult nature of the task, the Committee decided for the first time to publish an account of their provisional conclusions in a Working Paper in order to test public opinion. A wide range of comments were received from organisations and individuals whose views have been reflected in the recommendations of the final report.
In their report the Criminal Law Revision Committee have taken the view that a new provision is required to replace Section 16(2)(a), framed in such a way that it would broadly cover the same conduct, but re-stated in terms which more clearly define the scope of the offences in question. In one minor respect, however, they felt the law should be slightly narrower than at present, and in another that it should go wider than its current interpretation. I refer in the first case to the stalling debtor, and, in the second, to the new offence of making off without payment. I shall deal with both of these points in more detail when I come to discuss the individual clauses of 24 the Bill. The Criminal Law Revision Committee embodied their recommendations in a draft Bill which they appended to their report and the Bill as introduced into your Lordships' House is based, with only very minor changes, on that draft.
The Committee have thought it right to confine their proposals to subsection (2)(a) of Section 16, which has given rise to all the difficulties, since the Law Commission are reviewing the law on conspiracies to cheat or defraud and, in the course of their review, will have the opportunity to consider fraud offences generally. That review will also cover consideration of problems associated with the fraudulent use of cheque and credit cards. The Committee have been in close touch with the Law Commission throughout their deliberations and it has been agreed that the problem of subsection (2)(a) requires such urgent solution that it should be dealt with in advance of the Commission's review, which may inevitably take some time to complete.
I should now like to take the opportunity to explain the main clauses of this short Bill in some detail. It creates two separate offences, in Clauses 1 and 2, to cover conduct at present caught by Section 16(2)(a) and a third offence, in Clause 3, which extends the scope of the present offence to deal with people who, for example, make off from restaurants and similar places without paying their bills or run off at the end of a taxi journey without paying their fares. Clause 1 creates an offence of "deception as to prospect of payment "and covers the more common frauds to which Section 16 applies, where there is a deception at the outset of a transaction which causes a person to act on another's promise of payment. The deception in this case must be one which goes to the prospect of payment being duly made. The words "promise of payment" are given a wide meaning and include any promise, express or implied, whether legally enforceable or not, that payment will be made. Subsection (3)(c) ensures that deception involving the use of a worthless cheque is covered by providing that the giving of a cheque is to be treated not as payment but as the making of a promise of payment.
A simple example of an offence committed under this section would be that of 25 a man who deliberately gives the proprietor of a hotel a worthless cheque when he is asked to pay in advance for his room. Another would be where someone pretends to be a wealthy visitor and gets services—for example, theatre tickets—from a department store which he cannot afford, and for which he does not intend to pay. So much for Clause 1.
Clause 2 creates an offence of obtaining relief from liability by deception in cases which, for the most part, involve fraudulent conduct where a deception is practised after a transaction has been entered into. The clause covers three forms of deception. Subsection (1)(a) makes it an offence to practice a deception which dishonestly secures the remission of the whole or part of an existing liability to make payment. An example would be where a man has ordered goods for his business and after their arrival, disputes ever having received them and by lies persuades the seller to cancel the invoice. Subsection (1)(b) is concerned with the stalling debtor who, by deception, dishonestly induces his creditor to wait for payment or to forego payment. Under the Bill, conduct of this kind would only be an offence if the offender intends never to pay and, this is the one respect which I mentioned earlier in which the new Bill narrows the scope of the existing law.
As the Criminal Law Revision Committee pointed out, Section 16(2)(a), as it has been interpreted, has the effect, for example, of making it an offence for a housewife to tell a milkman she cannot pay that week because her husband has been off work. The Committee considers that the offence should be limited to the person who, in order to escape altogether from his obligations to pay his debt, attempts to make use of his opportunity to delay repayment. An example of the kind of conduct caught by this offence would be where a tenant not only lied to the rent collector in order to postpone the payment of his rent, but also concealed his plans to move to a new flat, knowing that it was unlikely that he would be able to be traced.
Section 2(1)(c) makes it an offence to practice a deception in order to obtain exemption from or abatement of liability to make a payment. It differs from the two previous sub-paragraphs in that it can include frauds where the offender has 26 been acting dishonestly from the outset of the transaction. The most important function of this provision is to ensure that there continues to be available a penalty for fraudulently evading statutory charges or obtaining allowances or relief under statutory provisions.
Clause 3 deals with a matter which I think is of some importance. While, for the most part, comment on the deficiencies of Section 16 has bean confined to the courts and to academics, there is one respect in which the law has achieved some notoriety in the Press. That is the kind of conduct known as "bilking". In some cases there may be no offence under the present law where, without any deception being involved, a person has his car filled up by an attendant at a petrol station and leaves without paying, or after eating a meal in a restaurant changes his mind about paying and immediately runs out.
The Criminal Law Revision Committee considered that this was an unsatisfactory state of affairs, because, among other things, it created an anomaly whereby the man who, for example, distracted the attention of a waiter in a restaurant, so enabling him to make his escape, was guilty of an offence, while the man who simply ran out could, in sonic circumstances, get off scot free. Indeed, it seems artificial for a jury to have to consider whether the man who has not paid for his meal practised a deception on the waiter when he ordered the meal—in which case he obtained the food by deception—or after finishing the meal—in which case he obtained a pecuniary advantage by deception. Deception or not, the restaurant has lost the price of the meal with no practical means of recovering it by civil action. The Criminal Law Revision Committee, therefore, proposed a new offence, which is contained in Clause 3, of making off without payment in circumstances in which it is known that payment on the spot is expected or required, and with intent to make permanent default.
The clause will cover such things as garage frauds, where the petrol has to be paid for on the spot, restaurant frauds where everyone knows that the meal is supplied on the understanding that the bill will be paid before the diner leaves the restaurant, and other frauds, like being at 27 a hotel or boarding house and leaving without paying, and defaulting on taxi fares.
The penalties for the new offences are set out in Clause 4. In view of the general policy of reducing maximum sentences of imprisonment in appropriate cases and taking account of the comments made by Professor Glanville Williams and Sir Rupert Cross in the report and of others elsewhere, the maximum penalty for the offence in Clause 3 has been reduced from the three years proposed by the Criminal Law Revision Committee to two years. Otherwise, the penalties follow the Committee's recommendations. All offences under the Bill are triable on indictment or summarily, and when the relevant provisions of the Criminal Law Act 1977 are brought into force, will become 'either way' offences. The fines available on summary conviction are inflation proofed.
The remaining two clauses of the Bill deal with supplementary and formal matters: they follow the Criminal Law Revision Committee's draft Bill, with additional provisions securing that offences under the Bill (like those in the Theft Act itself) are made extraditable and are brought within the scope of the Fugitive Offenders Act.
I have drawn the attention of the House to the main points of this Bill which the Government consider will deal effectively and comprehensively with an extremely complicated aspect of the criminal law. When Lord Reid delivered judgment in one of the cases in this section which had to be decided in your Lordships' House, he expressed the hope that,ways can be found of drafting such provisions in a form which does not require elaborate and rarefied analysis to discover their meaning".We consider that, given the great complexity of the matters with which it deals, this Bill accords with the noble Lord's sentiments and presents an excellent opportunity to clear away many of the difficulties the courts have suffered in dealing with this area of the law.
I feel confident, therefore, that your Lordships, who will have had the opportunity to study the Criminal Law Revision Committee's detailed working paper and report, will accept the Committee's 28 valuable proposals for amending the law and will give this Bill a Second Reading. I beg to move.
Moved That the Bill be now read 2a.—.(Lord Harris of Greenwich.)
§ 3.49 p.m.
§ The Earl of MANSFIELD
My Lords, first, I should thank the noble Lord, Lord Harris of Greenwich, for his, as usual, clear and succinct exposition of this Bill. I suppose that Parliament every so often goes through the motions of an attempt to tidy up the law relating to what I may call small frauds and to the way in which people obtain goods and services in dishonest circumstances, or, if they have obtained them honestly, the way in which they try dishonestly to evade their monetary responsibilities. There has long been a desire to produce a series of simply understood and easily applied offences which cover every aspect of fraudulent behaviour in these connections. I suppose that the Larceny Act 1916 might at that time have been thought to be the solution, particularly when it was taken into account in conjunction with the various common law offences which existed at that time. Certainly, much was hoped of the Theft Act 1968; but, as the noble Lord, Lord Harris, has said, a number of cases have been thrown up since then which have shown that the Theft Act did not solve the problems and, indeed, set quite a number of new ones. It is fair to point out, as has been pointed out already, that Section 16 of that Act did not result from the draft Bill annexed to the Eighth Report of the Criminal Law Revision Committee, but was introduced on Report—I think, in this House—and no doubt received the blessing of the Government of the day. I believe it was the late Lord Stonham who was sitting where the noble Lord, Lord Harris, is sitting now.
I say all this because, although I yield to no one in my admiration of the Committee, of its report and of its labours generally, I think we must be very careful that we do not extricate ourselves, legally speaking, from one quagmire only to descend sharply into another one. I am not sure (although I shall try to make a Second Reading speech) that parts of this Bill do not in fact make the cure worse than the disease, but no doubt we shall 29 see in Committee. Section 16(2)(a) which this Bill seeks to replace is, as I think has been said, fairly narrow in scope, and I do not suppose that many of the offences with which it deals are of the greatest gravity. Nevertheless, offences of this nature frequently occupy the time of the courts; they all involve a measure of dishonesty which has to be sifted through by the court and by the bench of magistrates or the jury which is trying the case.
Clause 1 of the Bill can be seen as being labelled,Deception as to prospect of payment",which may be described as rather quaint English. In any event, as I understand it, the offence has two ingredients: first, the victim of the fraud performs some sort of act; secondly, the victim is induced to do that act by a deception which goes to "the prospect of payment being duly made." It is that second element of the offence which I think will cause some little difficulty in the future. On page 12 of its report the Committee cites examples of when it thinks the offence may be committed. The deposit on hiring a car is a prime example. As I understand the situation, if somebody seeks to hire a car, gives a worthless cheque by way of a deposit and does so in a dishonest frame of mind, then the offence is complete and he is liable to be prosecuted. It matters not, for those purposes, whether he thinks that, although there are no funds to meet the cheque in the bank at the moment, funds may well flow in within a few days, of whether he believes that circumstances will be different in the future so that he will be able to meet the cheque.
I say that because when one takes Clause 2 into account a very different situation obtains. Clause 2 deals with existing liabilities and what I might term dishonest measures on the part of the debtor to gain some sort of advantage, whether by way of time or by way of the amount to be paid. I do not suppose that there would be much quarrel with Clause 2(1)(a), but it is Clause 2(1)(b) which I believe can and probably will cause some little difficulty, because there the provision is prefaced by the words,with intent to make permanent default".By that, as I understand the situation—and, indeed, the Committee says so in 30 terms on page 14 of its report—if our car hirer hires his car (whether or not he pays a deposit at the inception of the period of hire and, if so, by whatever means that deposit is paid) and, at the conclusion of the rental period, pays for the hire of the car with what I might term a dud cheque, but does so not with intent to make permanent default but in the hope, if not the belief, that he will be able to pay later on, then, under Clause 2(3), a cheque or other security is treated as being an inducement for the creditor to wait for payment. No offence will, at that stage, at any rate, have been completed unless the debtor has the intent to make permanent default.
I regard this as really standing the criminal law on its head. The justification which the Committee uses is that it does not wish to bring the criminal law to the aid of the civil creditor; but it is really very odd that, should somebody, at the inception of the hiring period, give a cheque which is worthless and do so dishonestly, he will be guilty of an offence, whereas, should he do so at the end of the hiring period and do so just as dishonestly but with intent to gain time, he will not be guilty of any offence at all. That, I think, is one part of the Bill which is less than satisfactory.
We also have the creation of a new offence; that is, "making off without payment". Here, again, one must inquire what "making off" means. I suppose it is intended to cover the way of escape rather than the actual refusal to pay if the goods and services are regarded as being deficient. For instance, if one goes to an expensive restaurant with very slow service and there is a large service charge attached to the bill, before the VAT at the end, and one says, "I am not going to pay the service charge because you have been so slow", and walks out, I hope—and I see the noble Lord nodding—that no court would say that that was "making off". But one wonders.
If I may introduce a personal note into this, it concerns Clause 3(4). Those of us who conduct business and have to travel, very often stay in concrete hotels which render some sort of bill in the morning, usually, if it is at London Airport, when one is trying to catch an aeroplane. They have a vary slow method of receiving payment, and one 31 sometimes finds oneself at the end of a queue after a good many airline personnel who want to pay first. It has certainly been my habit in the past to write my name and address on a piece of paper, to put it in an envelope with a £10 note and an invitation to the hotel to send me a bill for the balance, and thereafter to put the envelope into one of the little slots where the keys go. That saves my time and probably, I hope, teaches the hotel to give a better service in the future; but I have a horrible suspicion that I may be liable to arrest without warrant under Clause 4. "Arrest" I say; I hope not conviction. I think that that is something which needs to be looked at by this House, if only because it gives a power of arrest which may not be warranted.
I think the noble Lord, Lord Harris, certainly believed that we were going to enter a new era of certainty in the law with the passing of this little Bill. I myself think that those who frame the questions for the Bar exams are going to have their wits—and their imagination, too—stretched just as much as they have been in the past. Nevertheless, we wish the Bill well, if only for the fact that it gives this House an agreeable moment or two to discuss our criminal law before we get down to the much less pleasant and more serious study of the Scotland Bill, on which the noble Lord, Lord Harris, and I will face each other across this Dispatch Box in a few weeks' time.
§ 4 p.m.
§ Lord WIGODER
My Lords, ever since the noble and learned Lord, Lord Edmund-Davies, described Section 16 of the 1968 Theft Act as being a judicial nightmare, the time has been ripe for its reform and improvement. That, I think, is so even though in 1973, in the case of Turner, the law was considerably clarified and there have been very many less confusions since that date. The difficulty arises because we are dealing with a rather grey area where criminal law and civil law overlap. If I may give a simple illustration, it appears from this Bill, as I understand it, that, if a motorist has a credit account at a garage and obtains petrol intending to pay at the end of the month and then at the end of the month finds that he has no money and changes his address and does not pay, he commits no 32 offence under this Bill. On the other hand, if a motorist goes into a garage intending to pay in cash but finds after he has been served that he has left his wallet at home and simply drives off, he is committing a criminal offence under this Bill. Why there should be in the one case civil liability only and, in the other, criminal liability would perhaps be not entirely easy to explain.
Because one is moving in that rather grey area, when one conies to look at the terms of this Bill, one cannot help feeling very grave anxieties. I rather venture to agree with the noble Earl, Lord Mansfield, that what one is in danger of doing here is replacing judicial nightmare by a recipe for judicial insomnia. I say that because one must look at the realities of the situation as they are going to affect juries in listening to cases. The kind of case that arises under this Bill will be, for the most part, fairly small cases and substantial fraud that may exist under this Bill will also be substantial fraud under other sections of the Theft Act. They are cases which will be dealt with by junior recorders, junior circuit judges, having to direct the jury as to what the law means.
Perhaps one has had something of an illustration of that difficulty this afternoon, because one might perhaps put the noble Lord, Lord Harris, in the position of being the judge directing the jury as to what the law means. He has had all the advantages of having the report of the Criminal Law Revision Committee and the whole of the departmental resources at his disposal in explaining to us what Clauses 1 and 2 mean. May I ask, rhetorically, what those of your Lordships who are not lawyers, and who might put themselves in the position of being intelligent members of a jury, would think on listening to an explanation of the law as it emerged this afternoon? I mean that not in any way as a criticism of the noble Lord—of course not—but as a criticism of the complexity of this piece of legislation.
The jury would have to be told, if the offence was an offence under Clause 1, first of all that there has to be a deception. A deception, the jury will have to be told, must be a deception about existing fact; a deception about the future would not suffice. That is the existing law and it is already the law in Section 15 of the Theft 33 Act and is reiterated and re-enacted in Clause 5 of this Bill. Clause 5(1) says:deception' has the same meaning as in section 15 … any deception' … by words or conduct as to fact or as to law …".That means a deception as to existing fact. Of course, one knows that an intention can be an existing fact. There are observations not unknown to your Lordships about the state of a man's mind being as much a fact as the state of his digestion. But it is a concept that I think juries find not entirely easy to understand. However, that will have to be explained to them.
They will then have to be told that the deception must be relevant to the prospect of payment. That clearly emerges by virtue of subsection (1) of the new clause. They would then have to be told that a cheque is not in itself a payment; it is to be regarded simply as a promise of payment under subsection 3(c) of Clause 1. They will then have to be told—and their minds will be beginning to boggle by this stage—that inducing somebody to act includes the concept of inducing somebody to refrain from acting. That, again, is specifically set out by Clause 1(3)(a):'act' includes refraining from action:They will then have to be told that the deception (assuming that they find there is one as to existing fact, and assuming that they find it is relevant as to the prospect of payment being made) must be one which induces the act or, alternatively, the refraining from action. They will then have to be told—and this arises from Clause 1(4)—that an agreement to act does not amount to an act; and they will then have to be told, finally, under Clause 5, that inducing someone to refrain from taking steps to enforce a liability is not an offence under this section.
This is not an exaggeration. These are the ingredients of the offence under Clause 1 as it is created by Clause 1. One knows only too well that where the law is enshrined in Statute in this way, recorders and circuit judges will, in fact, repeat the whole of the clause to the jury adding a few comments, as the noble Lord, Lord Harris, did, and hoping that the jury will understand it. They know perfectly well, judges in that position, that providing they take that course they are safe from any criticism in a higher court 34 for having failed to direct the jury adequately. Therefore, I must confess, I find that Clause 1 is extraordinarily complex and really rather unrealistic in its attempt to set out what is a perfectly simple criminal offence to define; and I shall come back to that in a moment.
I want to add one other comment about Clause 1 as it stands. I find it very difficult to understand what is the relationship of Clause 1, as at present drafted, to the ordinary common law situation where there is an attempt to commit a criminal offence. Under various other sections of the Theft Act - Section 15, which is obtaining property by deception or Section 20(2) which is procuring the execution of a valuable security by deception—if the villain makes a deception and succeeds because the victim acts on it, the offence is committed; if the villian makes the deception but fails because the victim fails to act on it, then there is the common law offence of attempting to commit the offence in question. But under Clause 1, as drafted, it is difficult to see how the offence of attempt to commit an offence under Clause 1 can ever arise.
I would explain it in this way. As I understand Clause 1, if "A" asks "B", for example, to build him a garage and tenders a "dud" cheque in payment and "B" agrees to build a garage, then it may be that in certain circumstances Clause 1 will operate. If "B" starts off by stacking some bricks in order to build the garage, Clause 1 will operate and there will be an offence because there will be part performance under subsection (2) of Clause 1. If "B" does not stick any bricks but simply cancels another contract that he had on hand in order that he might begin work for "A" the next day, there will be an offence under Clause 1 because "B" has then refrained from taking some action as a result of the "dud" cheque being tendered to him.
If "B" does nothing at all, then although "A" has made the deception, although the dishonesty is there and although the promise of payment by means of the cheque is there, no offence of any sort is committed. The reason is because of this proviso in Clause 1(4):A person does not for purposes of this section act on a promise if he only agrees to act".35 As I understand the clause, in those circumstances this will give rise to what I think is an unprecedented situation in the criminal law in which whether an offence is committed in fact depends not upon what the villain does, but upon what the victim does, if anything, when the villain has completed his villainy. This again appears to me to be a wholly unhappy situation.
It is easy of course in a matter of this complexity to stand up and be critical. I entirely accept that. Perhaps I ought to indicate that what I propose to have the temerity to do is this: I have discussed the matter with a number of my learned friends at the criminal bar. We believe that Clause 1 can be covered in a wholly different way so simply that the ordinary member of the public might actually be able to read it and understand what it was about. The report of the Criminal Law Revision Committee makes it quite clear in paragraph 9 when, dealing in effect with Clause 1, that the offence of deception… as to prospect of payment is essentially an offence of dishonestly obtaining by deception services on which a monetary value is placed".Similarly in paragraph 12, where the Committee give examples of what they are dealing with, they say:We think that it will be helpful to follow this account of the detail of Clause 1 with examples of frauds which could be prosecuted under the clause. The typical offence under the clause involves obtaining services by deception".I believe that it is not difficult so to redraft Clause 1 as to make it not a deception as to prospect of payment, but the dishonest obtaining of services by deception. I propose to table an Amendment which is a complete redraft and invite the noble Lord to look at it—as I am sure he will—with an open mind. I also invite other noble Lords—particularly any noble and learned Lords who may be taking part in this debate—to see whether that may offer a simpler approach to this somewhat difficult problem.
The other clause about which I have to make some observations is Clause 2, because here again it appears that there are unnecessary complexities. Clause 2, "Obtaining relief from liability by deception", divides subsection (1) into three paragraphs. First, there is dishonestly securing the remission of a 36 liability to make payment whether or not, apparently, there is an intention of making a permanent default. Paragraph (c) consists of dishonestly obtaining any exemption from liability to make payment, whether or not there is any intent to make a permanent default.
The second paragraph, paragraph (b), where delay is concerned, makes it obligatory that there should be as an ingredient of the offence the intent to make permanent default. I pass over the fact that, as a matter of proof that will be almost impossible to demonstrate and the clause may therefore become a dead letter almost as soon as it is enacted. What I venture to ask Lord Harris of Greenwich—without expecting an immediate reply—is this: Clause 2 (1) (a) does not require an intention to make permanent default, and consists of dishonestly securing the remission of a liability. Clause 2 (1) (b) requires intention to make permanent default and includes the dishonest inducing of the creditor to forego payment. There may be a rather esoteric distinction between securing the remission of a liability and inducing the creditor to forego payment. If it is, again, I find it difficult to see how that will be explained to a jury. Yet, although the words—to the lay mind certainly—will mean exactly the same thing, there is in fact a totally different intent in the two subsections: the intent to make permanent default on the second occasion and no such intention being required on the first occasion. In those circum stances, I hope that it may be possible to put forward a redraft of Clause 2 which would simplify the matter very materially.
I hope that your Lordships will agree that it is important that, where the criminal law is being defined by Statute, it should be in terms which the ordinary, intelligent layman can read and get some glimmering as to what it is all about. I mean it as no disrespect whatsoever to the invaluable work of the Criminal Law Revision Committee—they were bound somewhat by their terms of reference on this particular matter—if I venture to suggest that there are complexities in this Bill that are unnecessary. We welcome the Bill in principle; and I hope that it might be possible in Committee to effect some sub stantial improvements.
§ 4.17 p.m.
§ Lord GARDINER
My Lords, I rise to ask mainly one short question. It is a question on which a layman's opinion is just as useful as a lawyer's. It is this: What is the justification for Clause 6 (2) of this Bill? This is a clause which reads as follows:This Act shall come into force on a day appointed by the Secretary of State by order in a statutory instrument".We have once or twice briefly discussed in this House in recent times the change which has taken place from the days when Parliament decided when an Act was to come into force, to modern times when more and more Ministers instruct Parliamentary draftsmen to put in a clause leaving it entirely to the Executive to decide when, if ever, an Act of Parliament shall be brought into force.
We discussed this in relation to the Road Traffic Act, one section of which, in relation to parking vehicles on pavements, was carried against the Government, but it was approved by the other House and received the Royal Assent. But, after all this time, the Minister still will not make an order bringing it into force. Secondly, we also briefly touched on it in relation to the Bail Act of the year before last.
When my noble friend Lord Harris of Greenwich moved the Second Reading of that Bill on 22nd March 1976, at column 500 of Hansard he said:I beg to move that this Bill be now read a second time. My Lords, this Bill emphasises the Government's concern over the size of our prison population, and their desire to see that bail is given in all cases where this is reasonable".At column 507 of Hansard he said:This Bill is of very considerable importance, both as an additional protection for our country's liberties and because of the beneficial effects which we hope will flow from it, not least on the size of the prison population".That hope has not been realised because no section of the Act has yet been brought into force, although it received the Royal Assent on 15th November of the year before last. The explanation given was that rules have to be made, and when we touched on this on 14th November of last year at column 410 I said this to my noble friend:… may I ask him whether I am right in saying that the only reference in the whole Act, including 38 the Schedules, to rules to be made is it Section 8, which says—rules will be made as to the form which recognisances are to take?When he came to reply, my noble friend did not answer that question, and perhaps I might respectfully repeat it today.
It is really sad to think that the high hopes we all entertained of this having a real effect on the prison population—that being an urgent matter—have got been realised and that, getting on for two years later, no section of the Act is in force. Here is a Bill, the object of which, as I understand it, is to replace certain provisions of an Act relating to the criminal law by words which will work better than the present ones do If and when Parliament as a whole has finished with it, it is to be hoped, of course, that that object will have been achieved. But if it is achieved and it receives the Royal Assent, I cannot understand why it cannot be made law unless a Minister chooses to make an order, leaving it to the bureaucracy to decide.
I hope I shall not be understood to be saying that I think all Bills ought to come into force on the day they receive the Royal Assent; I do not think that. I think, prima facie, they should come into force one month after the date of the Royal Assent. I say that because all the lawyers I know are overworked. They have to read their weekly legal papers to see what new Acts are coming into force and to decide whether or not they are Acts with which they ought, in relation to their practice, to familiarise themselves. If the anser is "Yes", they have to send a boy to the Stationery Office to get copies and then they must read, mark, learn and inwardly digest the contents. To do that is very difficult when it is not even easy to get hold of the Act itself, but broadly speaking that should be the general principle.
Nor do I in the least suggest that there are not cases in which, for one reason or another, it would be advantageous that the Act should not be brought into force for a certain period of time. To say that is one thing, but to say that every Bill is now to have a clause of this character is a different thing, particularly when no time limit of any kind is set. If, on reflection, my noble friend agrees with that view, perhaps the Government would 39 introduce an Amendment at the Committee stage of the Bill, at least to have some maximum—not later than three months, six months, 12 months, two years or three years. But I suggest that we ought not to pass Acts, leaving it to the Minister to decide when, if ever, an Act is to be brought forward.
§ 4.23 p.m.
§ Lord MORRIS of BORTH-Y-GEST
My Lords, I hope that your Lordships will give your approval to this Bill by according it a Second Reading. I am sure that in the administration of the law Section 16 of the Theft Act was giving rise to considerable difficulty. Therefore, if I may respectfully say so, it was so eminently reasonable for the then Home Secretary, who is now the noble Lord, Lord Carr of Hadley, to refer to a Committee the question whether changes in Section 16 were desirable. To what better Committee could he have referred the problems than to the Criminal Law Revision Committee?
When one considers the composition of that Committee and sees the names of the 14 members, all of whom signed this report, and when from a reading of that report it is clear that all the problems were very carefully considered, I think one's first instinct is to say, "Well, we can have such confidence in this Committee that we are prepared to accept their recommendations". That is certainly my first approach, and on a reading and re-reading of the report it continues to be my view that we should follow the advice of this Committee.
The result is that we have the present Bill, the Long Title of which is:An Act to replace section 16(2)(a) of the Theft Act 1968 with other provision against fraudulent conduct".In the result—and I do not say this in any way by way of criticism—we have three lines replaced by three pages. But I think it was inevitable that this would happen. It was the view of the Committee that the effect of Section 16(2)(a), as interpreted by the courts, was to punish conduct which Parliament did not intend to bring within the scope of the criminal law. The Committee expressed that view in paragraph 5 of their report. I am not 40 so sure about that, because Parliament expresses its intention in the words that Parliament uses, in the words that Parliament enacts; and the wording of Section 16(2)(a) received consideration in your Lordships' House. It is quite clear that the Committee felt that the mere giving of a worthless cheque should not in all circumstances be automatically a criminal offence. May I just refer to what they said on page 8 of their report, at the end of paragraph 6:Accordingly, we recommend that where a debtor intends never to pay a debt and by deception induces his creditor to wait for payment, this should be an offence. Subject to this, we think it right that most of the conduct within Section 16(2)(a) should continue to be an offence and our aim has been to find the most satisfactory restatement of the effect of that provision".It seems to me that here is the central feature of this Bill; here lies the change that is proposed in this Bill. It seems to follow from the recommendations of this Committee that if ail the facts in Turner's case, to which the noble Lord, Lord Harris of Greenwich, referred, had occurred after the passing of this Bill, if it is passed, the prosecution would have to prove more than they had to prove in Turner's case. They would have to prove the question of intent not to pay.
In this country we have not had, and we do not now have, any general offence of passing a worthless cheque. In some systems of law, I understand that there is the penalising of the issue of a cheque without belief that it would be honoured. Here, I think, is one of the chief topics for debate in regard to this Bill. Should it, or should it not, be an offence to pass a worthless cheque? Suppose that money is owed to a creditor. Suppose that there is no doubt at all as to liability, that the creditor wants payment and that the debtor says, "Well, I will put him off for a bit. I will give him a cheque. I am afraid that it is a worthless cheque. I know that it won't be honoured, but it will give me some time". Would that, or would that not, come within the wording of Section 16(2)(a)? The wording is,any debt … is reduced or in whole or in part evaded or deferred".If, knowing that there is an admitted liability, you give a cheque that is a worthless cheque, are you evading payment of your liability? I should have thought that you were. Indeed, that is 41 the decision of your Lordships' House in Turner's case.
The question now raised is whether it is desirable to change that liability. Do we in this country want an offence of merely passing a worthless cheque? If money is owed in the circumstances that I have mentioned, if there is no doubt as to liability and if a cheque is given which is worthless, and the intention is to gain time so that the liability may at least be postponed or deferred, that is an offence, at present and I think that the main recommendation of this Committee is that that should be changed. If somebody passes a worthless cheque, it being acknowledged that he owes money, he still owes the money after the worthless cheque is passed. Indeed, the creditor has additional proof if he chooses to sue. He can sue on the cheque. He has the admission that the cheque gives. So it seems to me that this is one of the central issues raised in this Bill. Do we want to make it an offence, in the circumstances that I have mentioned, to pass the worthless cheque, or, as the Committee proposes and as is provided in Clause 2(1)(b), should there be an intention to avoid payment altogether?
Undoubtedly, there is, as Sir Roger de Coverley would have said, a great deal to be said on both sides. I, for my part, have come to the conclusion that the recommendation of the Committee should be accepted. I think that it is very reasonable to say that, unless there was a desire permanently to avoid payment in the circumstances that I have mentioned, the matter should be left to the civil courts and should not be the subject of criminal prosecution. I believe that the Committee performed a very useful function in devising its three classifications, which are most helpful. The first covers deception as to prospect of payment; the second, obtaining relief from liability by deception; and the third, making off without payment. It is in regard to the second of these that a change is to be made by this Bill, for, as has been pointed out—and I believe that the noble Earl, Lord Mansfield, read out the words—the words in Clause 2(1)(b) are:with intent to make permanent default in whole or in part".As I have said, having, more than once, read this report with care and great 42 interest, I think that the change proposed by this Committee is a reasonable one. It must, however, be recognised that it may be very difficult for the prosecution to prove an intent to make permanent default. I agree with all that the noble Lord, Lord Wigoder, said in regard to that matter. But that is recognised by the Committee, and, in paragraph 14, it sets out that it had that consideration fully in mind. The Committee stated:We recognise that the practical difficulties of proving an intention never to pay will have the consequence that there will be few prosecutions under this head, but this is consistent with our view that the criminal law should no: apply to the debtor who is merely trying to delay making a payment".Therein lies the chief Change and I entirely agree with what the Committee said. It will be very difficult for the prosecution to prove that there was this intention never to pay. Equally I think the result may be that there will not be many prosecutions under Clause 2(1)(b), but that is reasonable if one thinks that the criminal law should not apply to the debtor who is merely trying to delay making a payment. All members of the Committee signed this report, though one member wrote a note of reservation. He stated in the note that he had signed the report because its implementation would effect a great improvement in the law. I think that we should accept the recommendations of this high-powered Committee.
Perhaps, having quoted those last few words, I ought to remind your Lordships that the concluding part of that paragraph of the report sets out that two members of the Committee were opposed to the inclusion of Clause 2(1)(b) in the draft Bill, and in the note of reservation the reason of one of them was set out. For the reasons that I have given, I believe that this Bill brings about a real change in the law as it exists now and, on the whole, I think that it is one which is desirable.
I would offer just one reflection before I sit down. As I mentioned before, we have here a case of three lines being replaced by three pages. I have no doubt that codification of our criminal law is necessary in regard to some—indeed, many offences. In the case of stealing, larceny or theft—whatever word we use—we have for a long time recognised that we need codification there. But I venture 43 to suggest that we should pause before we decide upon a complete codification of all our criminal law. So many offences are still common law offences. Common law has the merit of flexibility. Once an offence is defined in an Act of Parliament, that flexibility is lost. The rigidity of the statutory words is imposed and, as we now see, three lines of difficulty are shown to need very many lines of alteration and clarification. That is by the way in regard to this Bill. For my part, I think that an improvement in the law will be effected if this Bill is passed and I hope that your Lordships will take that view.
§ 4.40 p.m.
§ Lord HALE
My Lords, I came down today to try to perform a useful function. Having no committee work to do, because I have not been put on one, and having very little knowledge of any particular subject to rival that of the Members of your Lordships' House, and certainly not having practised law for many years—although people think that at one time in the past I may have gained some knowledge of the law, which is flattering—I thought that on occasion I might be able to put the view of the uninformed and simple man, who obviously is a very rare figure in this House. Indeed, it may be that there is nobody in this House who attains the full degree of incapacity, lack of organisation, lack of co-ordination and lack of any genuine knowledge that I attain. So when I looked at this Bill it seemed to me to be an admirable opportunity for the exercise of that function.
Let me say at once that I venture respectfully to disagree with the basic philosophy enunciated by the very distinguished noble Lord who has all my admiration and, in so far as it is not an impertinence or disrespectful, my affection. Unconsciously, what he is really saying is that we have got to catch in the bag every small fish in order to make the law equal, which of course it never can be. When this Committee move on, as we are told they will, to the question of conspiracy, which is a very grave and serious matter, they will come up against the privilege of limited liability companies, of multiple companies and multiple directors, of cross-country doings, of tax evasion and so on, all of which, generally speaking, have completely succeeded in 44 establishing prosperous millionaires in Jersey who rarely get tackled by the law; and when they are, the law is so complicated that there has to be a Board of Trade inquiry and the Attorney General has to be called in.
At the moment we are, in the main, dealing with small matters. Sixty-one years ago, Parliament in its widsom, at a time when battles were raging in France and elsewhere, passed the Larceny Act 1916 which was supposed to be, and which was believed to be—and for a good many years was—the last word on the definition of theft and burglaries, with a Clause 1 so designed as to cover what appeared to be everything. As I was just about to take my law examinations, I learned that clause off by heart. I can still remember it and, even though it has long since been repealed, am still indignant about its repeal. Indeed, if it had not been for my lecturer's suggestion that I might devote special attention to this subject I might never have become a solicitor, in which case I should be, in my view, an extremely prosperous financier, piling up money in millions.
Is it really necessary that we should I search for the minor offender? The people who commit large frauds on hotels are perfectly easily and regularly dealt with and are among the simplest of criminals to catch. May I mention quite briefly what is the position about theft today when we consider the reform of the law. In the area in which I live, theft from the household is a regular occupation. There have been about six or seven burglaries in my house in the last 10 or dozen years, although there is practically nothing in my house worth pinching. Sometimes I feel that the thieves should sue me for damages: for inviting them in by implication, by occupying a house which looks worth burgling. None of the thieves was ever caught. The police say quite frankly that they do not have the resources to try to catch them.
Thefts are happening in my area of South London by the thousand. In my area we have an extraordinarily nice type of burglar who wipes his feet on the mat and who never mugs anybody unless somebody puts him into difficulties—I do not think he would do so then. A Royal Academician friend of mine and his wife, also a distinguished lady, who live 45 down the street were tied up some months ago. The burglars said that they had come for the Rembrandts and the Picassos. My friend said it marked an electric taste, but he certainly does not possess paintings of that kind. However, the thieves ransacked the house very carefully. The three of them came in wearing masks and looking very ferocious, but they asked my friend whether he had been tied up too tight. As it was Christmastime the lady of the house explained, although tied up, that the cake was cooking in the oven and they asked her whether they should turn off the oven. She could just see her wrist-watch so she said, "No, not for 20 minutes". When they left and were five or six miles away they rang up the police and said, "We've tied up some people and you had better go and untie them". That is the method, and it is dealt with in a reasonably prosperous area, in this way.
My insurance company, for which I have respect and which treats me very well, writes to say that in view of the increased cost of goods perhaps I should consider doubling my insurance. I write back to the insurance company and say that I am not sure which of the articles which have been pinched are worthwhile but that they are entitled to more money and that therefore I will double the insurance. Then they send a notice to say that they have also doubled the rates for all of the houses in that area. Indeed, the insurance premium has gone up four times for a large proportion of the metropolis. I feel very happy that I have not been mugged.
It is literally true—one can look at the figures—that in these circumstances nobody ever gets pinched for theft. If a man takes out an expensive girl to a much advertised restaurant and sits her down and asks her to order what she would like, he hopes to God that she will not. Somerset Maugham has described this scene much more clearly than can I. If she says she would not mind just a spot of asparagus and perhaps a little bit of lobster and a single glass, or a couple of glasses of Mouton Rothschild, no doubt he is counting over the money in his pocket, but he has to bid her goodbye with an air of flamboyance. If he then has to say that he cannot pay the bill for the moment, he is coming very near to the criminal law. If instead he gives some document, he may well get over 46 it. All this has been ably dealt with by the noble Lord, Lord Wigoder, and with great clarity and force.
I never expected this. I thought that I was going to be one of the simple souls who said, "Really, I don't know". I do not doubt that the Committee have done their best to make this point clear. It is unfortunately true that in the past many of these Committees have led to a very considerable amount of litigation. The noble Lord, Lord Wigoder, mentioned one occasion. The clarity of the law is not exemplified completely by the number of times the House of Lords overrules the Court of Appeal. It is not easy for the law to be clear. It is very satisfactory at least that the Bill itself is clearer than the Explanatory Memorandum, which is, I find, almost incomprehensible.
Is it necessary for us to sit in judgment almost—if I may say so respectfully—in the position of the final judge watching each sparrow fall and examining carefully how it falls? Is it really necessary and, what is more, can we afford it? The prisons are full now, anyhow. But in the main will a juror be able to do clear justice?
I ask for some consideration to be given to decent people who may suffer from a little absence of mind. I used to spend my happiest days in secondhand book shops and a very large number of books bought at prices ranging from as little as threepence to as much as sixpence testify now to the pleasure and rewards I got. But I am terrified to go into a bookshop now. If I go to the best known bookshop I have to deposit my bag while I am being helped by the girl. I am taken to the shelves; I am then directed to go upstairs and to pay upstairs. If I meet anyone on the way and they say, "Good morning", I am distracted. It is so easy to be distracted: three days ago I walked to the House carrying a wireless set instead of my bag. I had been talking to someone on the telephone after I had packed my bag and that is the sort of thing that happens to people. When I was a Member of another place, how many Members of the House of Commons did I see dragged up and prosecuted for pinching a couple of books from a stall? I do not want to see more criminal law, at any rate not to deal with the "sparrows". There are quite enough "eagles" about to whom we are giving far too little attention and we 47 have not devised a system which will beat the complex cases.
The point has been put by the noble Earl, Lord Mansfield, and the noble Lord, Lord Wigoder—and I never thought we should hear criticisms of that kind—much more forcefully than I can put it. I hope that this Bill will be reconsidered and that we shall wonder whether all the expertise and all the gifts are being devoted to things of relatively minor importance, minor effect, increasing costs, increase in prosecutions, and certainly without reforming the community or making much difference, but on the basis of the curious idea that that is how it is.
I should like to add a single sentence which I had forgotten. In earlier days, fraud was not an offence. In those days people said, "If you are defrauded, it is your own fault". That was very tough, although not so tough in those times when poor people practically could not be defrauded because they had nothing of which they could be defrauded; but the general principle was that if a chap did not know the three card trick he ought to know it, and if he was fool enough not to know that the other chap had an ace up his sleeve and played without putting two aces up his own sleeve, it was his own fault. We should not run to judges to protect people against petty fraud.
For the last few years of my wife's life we had a joint bank account. Many people do, and we regarded it as a very civilised thing. My wife used to sign 10 cheques out of 11; she was much more to be trusted with a cheque book and with figures than I am. If this Bill had been on the Statute Book then what would have happened if I had signed a cheque in Nigeria because someone said that I had breached the Customs regulations, and she was signing one for the rates at home, and therefore our account would have been overdrawn. What happens if and when people really are faced with an emergency which demands that they shall pay money although they have done no wrong?
An innocent man may drive up to the Irish Customs—as I have done—and be told that he must deposit £100 in cash or present a cashable cheque for £100. What happens if that means that I have overdrawn my account? This would create 48 unnecessary complexity and unnecessary legislation. There is far too much legislation today. It costs too much, it takes up too much time, it complicates matters, it adds to the labour of those who are striving to administer the law and nearly always it creates some sort of offence which takes half the police away from their normal duties.
§ 4.57 p.m.
§ Lord HARRIS of GREENWICH
My Lords, I should like to begin by saying that I very much welcome the number of kind things that have been said about this Bill. I think the only person who has spoken in the course of this debate, who has had what I might describe as reservations in principle, is my noble friend Lord Hale. I think it is right to say that all those who have spoken, apart from him, have come to the conclusion that the Bill, broadly speaking, is on the right lines.
I think it would have been wrong for us to leave this matter on one side. As I indicated when I moved the Second Reading of this Bill, a number of cases came before the courts following the passage of the 1968 Act. There was a high degree of uncertainty about the state of the law, and the then Home Secretary, now the noble Lord, Lord Carr of Hadley, came to the conclusion that it was right to refer this matter to the Criminal Law Revision Committee. He did so, and today we are considering the recommendations of that Committee as to how we can improve the state of the law in this important area.
I should like to deal briefly with a number of the points which have been made in this debate because inevitably we shall go over a great deal of this ground again during the Committee stage of this Bill. However, I think it would be right for me to make one or two observations on points which have been made by speakers on both sides of the House. I began the debate with some degree of anxiety, following the speech made by the noble Earl, Lord Mansfield, who put to us the rather serious situation which could arise if, when paying his hotel bill outside London Airport, he put his £10 on the counter in the place where keys are normally placed, simply because he did not want to wait in a queue and his choice was between paying his Bill fully 49 and catching his aircraft. I am assured that the practice—and I think this will reassure the noble Earl—is that if this Bill is carried into effect as drafted at the moment, he would not be committing an offence because there would be no dishonest motive on his part. Therefore he would not be caught by the Bill and I can reassure him that therefore he will not be troubling the criminal courts in this matter.
§ The Earl of MANSFIELD
My Lords, the noble Lord has missed the point. What I was interested in was subsection (4). The hall porter sees me making off in what is called the courtesy bus. He then takes advantage of that subsection and arrests me.
§ Lord HARRIS of GREENWICH
My Lords, certainly I would be anxious to prevent the hall porter arresting the noble Earl, and I will look carefully into that point to ensure that the hall porter is not being given that opportunity if we can avoid it, as I am quite sure we can. The noble Lord, Lord Wigoder, indicated that he was going to put down what would be really a new clause in substitution for Clause 1 of the Bill. Obviously we will look at this with great care, and certainly if he can deal with this matter in a wholly satisfactory way and perhaps with more economic use of language I am sure we would all be very grateful. Certainly I can assure him that we will go into the matter with great care. If he would like to discuss it with me at any time, I would be glad to meet him and discuss any particular points he would wish to put to us.
My noble and learned friend Lord Gardiner raised two points on the commencement order. Why was it necessary to give the Secretary of State the power to make the order, and why did we not state a particular date? Well, there is no particular mystery in this; there is certainly no intention on the Government's part to delay enacting this piece of legislation; indeed we want it to come into effect as soon as possible. I will gladly look into this point before the Committee stage of the Bill to see whether there is any way in which we can satisfy my noble and learned friend. Although this argument does not apply on this Bill, I would put it to him that it would be going altogether 50 too far to say that the date of a commencement order must always be contained in a Bill. If I may give one particular example of why I think this would be very difficult. The Criminal Law Act came on to the Statute Book to wards the end of last year; already some parts of that Act have had commencement orders made, and other sections have not. It is not in fact possible, as my noble and learned friend will recognise from his far greater ministerial experience than my own, simply to have one particular date in an Act of Parliament. In this Bill it might well be possible, but in a more substantial piece of legislation it would be far more difficult.
On the question of the Bail Act, which my noble and learned friend and I have discussed on a number of occasions in the past, it is true that a commencement order has not been made, and I regret that. As I replied to him, I think in answer to a question that he put to me, the fact is that the Act cannot be brought into force until the rules of court for the High Court, the Crown Court, the magistrates courts and others are made. However, I can give him this piece of news. The rules will be made shortly and the Act is likely to be brought into force in the spring of this year. Certainly the Government are anxious to have this matter proceeded with as swiftly as possible for the very reason he gave; namely, that the number of people remanded in custody is still formidably high and we are anxious to take any action which brings those numbers under a greater degree of control. That deals with the particular point referred to by my noble and learned friend so far as the Bail Act is concerned and so far as the commencement order in relation to this Bill is concerned. I will look into the particular point, but there is no sinister intent in the form of words used in this Bill. Certainly I can reassure my noble friend on that point.
I think the debate we have had this afternoon demonstrates one thing; that is, that this is a field in which there are many differing views about the proper extent of the criminal law and the way in which it can most effectively be expressed in statutory form. In its review of Section 16 of the 1968 Theft Act the Criminal Law Revision Committee was conscious of the wide range of opinion 51 on the questions under its consideration, the comments which it received from a variety of organisations and individuals reflected undoubtedly some diversity of opinion, and that indeed has been reproduced in the debate we have had this afternoon. In putting forward in its final report the recommendations in this Bill which is now before the House it attempted so far as was possible to mediate between the sometimes conflicting views which were expressed; we are confident that its proposals represent a sound and reasonable middle course. I am glad to say that that view has, generally speaking, been supported in the House, not least by the noble and learned Lord, Lord Morris of Borth-y-Gest, in his speech. As I have indicated already in respect of the remarks made by the noble Lord, Lord Wigoder, certainly we will consider the points which he and others have made about the Bill, and about the details particularly of Clauses 1 and 2. That clearly will be done and can be done at the Committee stage.
I would, if I may, conclude by thanking all those who have spoken today for the general welcome they have given to this Bill, which attempts to remedy the existing defects in the law on fraudulent conduct. We will consider the various points which have been made and look at these more closely when we get to the Committee stage on this Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.