§ 2.53 p.m.
§ The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone)
My Lords, I rise to move that this Bill be now read a second time. This is, as your Lordships will be aware, a law reform Bill and I would like to remind noble Lords that in my speech on the Address I ventured to quote from two of my predecessors on the subject of law reform. The first quotation came from Lord Campbell, who said that law reform was either by consent or not at all. The second was from Lord Haldane, who said that it took three successive Lord Chancellors to effect any significant change in the law. To this I would add a third of my own which is that law reform should be continuous and evolutionary rather than abrupt and dramatic.
I hope that this little Bill will exemplify each of those three precepts. It would rather surprise me if my noble and learned predecessor Lord Elwyn-Jones were altogether astonished either at the appearance or the contents of the Bill. Indeed, with a little coaxing I trust that he may even be persuaded to take some modest credit for his own work in its preparation. As for the third Lord Chancellor, well, modesty forbids that I should identify him. I can only say that the Bill owes its origin to a reference by the then Lord Chancellor to the Law Reform Committee on 26th April 1971. Thus it 1218 only remains for me to justify the third principle. When I sought to introduce this Bill into the present Government's programme for legislation, one of my colleagues asked me: "What is the limitation of actions?" So, I had better begin by answering that question.
James I and VI (of blessed memory) had the happy idea of introducing into English Law in 1623 the first Statute of Limitations which had as its basic principle the thought that if you let your rights sleep for too long you had better not wake them up. The reasons which underlay this principle were many and various and I do not propose to trouble the House with them now. The purpose of some of them has evaporated with the passage of time, but the basic principle remains and is enshrined for the present in the Limitation Act 1939—passed within my own legal and legislative career. Perhaps I should say that that canny race the Scots had already provided themselves with a similar —but of course not identical—principle obtained, presumably, from the praetors edict in ancient Roman Law.
But I had better come immediately to the point and start explaining what the Bill is really about. It derives, as I have indicated, from the report of the Law Reform Committee which I initiated in 1971 and which delivered its report to my then successor—and present predecessor—significantly, just after the expiry of the statutory six years in September 1977. The Bill brings into effect almost all the recommendations of that committee.
Clause 1 of the Bill remedies what has for long been considered a minor injustice in the present law. Under the law as it stands, where a loan is made repayable on demand or without a specified time for repayment, the time of limitation begins to run from the making of the loan. That discourages indulgence on the part of the creditor. In future, if Clause 1 is passed, time will only begin to run against the creditor from the presentation of a written demand.
Clause 2 removes the immunity from suit at present available to a thief or to a receiver of stolen goods, after six years of unbroken unlawful possession. In future it will only be the innocent purchaser for value—if any—who will be immune. The thief will no longer be 1219 able to sit on his own ill-gotten gains. Clause 3(1) relates to what are called tenancies at will. Here the time will begin to run from the actual determination of the tenancy, and not as now from an arbitrary date fixed at the first anniversary of the date at which the tenancy began. Clause 3(2) amends Section 9(3) of the Limitation Act 1939. The lessor's title will be extinguished when rent is paid for a period of 12 years to a person other than the landlord. But there is a saving for small rents and, in future, to suit the change in money values, the limit is raised from £1 to £10.
Clause 4 abolishes a legal fiction about the time after which possession of land is deemed to be adverse to the true owner. In future the court will be able to look at the actual facts of the case instead of fictions. Clause 5 is for the protection of trustees when they are faced with a claim from an alleged beneficiary who turns up more than six years after the distribution of the estate. In future he will be liable only for the share of trust property which he would have had to pay to the late-corner had all the beneficiaries been sued in time, instead of as now for the whole of the late-comer's claim. Clause 6 provides that once a cause for action has been barred under the provisions of the principal Act it will be incapable of renewal.
Clause 7 is a restatement of old law in modern language. The committee found that the present and principal Act no longer reflects the principles on which the courts in practice act in case of fraud on the part of the defendant or mistake on the part of the plaintiff. The new provision confers an extension of time where there has been deliberate concealment which includes a deliberate breach of duty in circumstances in which it is unlikely to be discovered for some time. Clause 8 is procedural. It amends and re-enacts Section 28 of the principal Act and deals with the incorporation, by amendment, of new claims in pending actions. After the expiration of the relevant limitation period, amendments may be made only if they satisfy the conditions imposed by Clause 8(5) of the Bill, and any further limitations imposed by rule of court. It covers both set-offs and counterclaims and also proceedings made in third party 1220 proceedings as well as new causes of action.
At the Second Reading stage I do not think I need say any more, except to make two points. First, save in so far as Clause 7 deals with concealed fraud and mistake, there is no provision in the Bill relating to the thorny question of latent damage. I am told that this was the decision of the Government of which the noble and learned Lord, Lord Elwyn-Jones, was a member, and it is also the conclusion of Her Majesty's present Government. The second point is that as a result of the passing of this Bill—if it is passed, as I hope it will be—I hope that by 1980 I shall be in a position to introduce a Consolidation Bill, which is always a useful piece of legislation. I beg to move that this Bill be now read a second time.
§ Moved, That the Bill be now read 2a—(The Lord Chancellor.)
§ 3.1 p.m.
§ Lord ELWYN-JONES
My Lords, I am sure that the House will be grateful to the noble and learned Lord the Lord Chancellor for introducing and explaining the Bill—as he always does—so clearly to us. It is sometimes necessary to explain the apparently obvious. I remember that when I took one of the three original copies of Magna Carta to Congress—on loan I may say—I was a little confused to be told that an American schoolboy, on being asked "What is Magna Carta?", replied "Magna Carta is Jimmy Carter's mother". Therefore, there is always room for explanation about the apparently obvious.
I am certainly not surprised that the noble and learned Lord the Lord Chancellor has introduced this Bill. Indeed, it might be described as conceived by him, nurtured by me and now christened by him today. As he pointed out, it was he who, in 1971, invited the Law Reform Committee to consider what changes in the law regarding limitation of actions are, in the opinion of the committee, desirable. In 1974 that committee submitted a report on the limitation of actions in cases of personal injury; that report was substantially implemented by the Limitation Act, which I introduced in 1975, about which before the end of these proceedings 1221 we may hear a certain amount of questioning and, indeed, suggestion that some of the matters arising since then should be considered in this Bill. However, we shall see what happens when the Committee stage is reached.
Of course, on the dissolution of a Parliament, there is always a danger that law reform measures tend to get lost. I am glad that that has not happened on this occasion and that the labours of the Law Reform Committee of Lord Justice Orr and his colleagues—who so generously gave of their time and effort to produce, in 1977, their final report—have not been in vain, and that they should have the satisfaction of knowing that at any rate Parliament has taken up most of their recommendations, as it is now doing in considering the Second Reading of this Bill.
My noble and learned friend Lord Gardiner—ever watchful to see that Lord Chancellors are kept up to the mark (a process which I hope he will continue in the course of this Administration}—asked me what the previous Government's intentions were. In March this year lie asked me whether the Government accepted the recommendations of the Law Reform Committee on limitation of actions. I assured him then that we had decided to promote legislation for England and Wales, usimy, the well-known expression, "as soon as suitable opportunity arises". Unhappily, it did not arise owing to the fluxion of time and the course of events.
Therefore, I welcome the noble and learned Lord's introduction of the Bill today. It is a useful measure of law reform. As the noble and learned Lord the Lord Chancellor has indicated, several of its provisions will aim to achieve a wider measure of fairness and equity in the field of limitation with which the Bill deals. The noble and learned Lord has explained the Bill helpfully, as indeed has the admirable Explanatory and Financial Memorandum, which has certainly eased the task of noble Lords and myself who have sought to follow the Bill. I do not propose to comment on Second Reading on the details of the Bill's provisions. Happily, there is a great deal of expertise in your Lordships' House and no doubt we shall consider the matter carefully and in detail as we proceed.
1222 As the noble and learned Lord the Lord Chancellor has said, the Bill does not deal with the difficult matter which is raised in the final report of the committee —the problem of when the limitation period starts in the case of latent damage. We gave a good deal of thought to this difficult matter and some of us who considered it were as divided as was the committee itself. However, I certainly, and the majority of my colleagues, came down in favour of the view taken by the majority of the committee and favoured leaving the law as it is, certainly for the time being, so that the limitation period should start from the accrual of the cause of action. The minority of the committee favoured granting the court itself a residual discretion to override the limitation period in cases of latent damage, if the court thought it just to allow the litigation to proceed. That was the formula arrived at in considering limitation in relation to personal injuries.
The view that I certainly formed, and it was the view of most of my colleagues, was that in the absence of clear evidence that the current absence of that kind of judicial discretion outside the personal injury field causes serious hardship to a relatively small number of plaintiffs, it would not be sensible to put at risk the chance of obtaining insurance cover. I take the view—and it may well be that the noble and learned Lord takes the same view—that it would be preferable to await further judicial development of this matter before contemplating legislation in this particular field.
As I have said, it is not my intention to enter into the details of the Bill at this stage. The Law Society has criticised various aspects of it and it may well be that some of my colleagues who are members of the legal profession will take up its points and bring forward points of their own. Some also may be a little critical of the fact that the House has not been given enough time between publication of the Bill and Second Reading to consult interested persons or bodies on its contents. I have sympathy with that point of view, but it is right to say that, as in the case of reports of the Law Commission itself, the Law Reform Committee submitted a questionnaire in reply to which it received memoranda from a very large number of experts in the field; and interested bodies, 1223 including the Law Society itself, and a number of individuals, gave written evidence.
It is partly the wide nature of consultations of that kind—which is also the job of the Law Commission—which gives an assurance to Parliament when these measures come forward on the strength of its recommendations, that at any rate soundings have been taken carefully in the quarters which could have much to contribute and which would be most affected. Therefore, I hope that those who are not wholly happy about the immediate scene with which we are presented, nevertheless will join with me in welcoming the Bill.
§ 3.10 p.m.
§ Viscount DILHORNE
My Lords, I lack the temerity of being critical of a Bill which is sponsored by two Lord Chancellors. The noble and learned Lord, and I will not say the late but the former Lord Chancellor, share responsibility for this measure, and I would not wish to be critical of it in any respect, except that I do not think it deals with all the matters which it should. The noble and learned Lord on the Woolsack referred to his desire to introduce a consolidation measure. Before that is done, consideration ought to be given to another aspect of our statute law with regard to limitation of actions.
I think I am right in saying that over the years Parliament has reduced the period within which an action for personal injuries can ordinarily be brought from six years to three years, bearing in mind how necessary it is to have liability determined fairly soon after an accident has occurred. But, as the law now stands, to that rule there is an exception for persons suffering under a disability. One category of persons who in law suffer under a disability are infants. Recently there came before this House a case which illustrates quite clearly the situation which I do not myself think should be allowed to continue. In 1964 a child stepped off a pavement. She was three and a half years old, and she suffered brain damage. As your Lordships may well know, claims in respect of brain damage may lead to very large awards of damages. I think that last week this 1224 House decided that an award should be of a sum of about £250,000.
An action could be started in respect of that claim from the day it occurred when she was three and a half until three years after she reached the age of 18. So that from that time for about 17½ years the defendants had the possibility of an action being brought against them for damages. I may say that I do not know to what extent she suffered brain damage, but that can be a serious injury as one knows.
In respect of the accident in 1964 a writ was issued three years later in 1967. It was served a year later in 1968. Then there was notice in 1977 of an intention to proceed with the action by the solicitors then acting. This was in 1977, with the accident in 1964, 13 years afterwards. Not surprisingly there was an application to dismiss the action for want of prosecution. But that application failed in this House because it was held that it was pointless to dismiss that action when, immediately that action was dismissed, another one could have been started, and started, I think I am right in saying from recollection, at any time before some date in 1982.
May I quote from the speech of my noble and learned friend Lord Diplock in dealing with this case. He said:My Lords, it is not and cannot be disputed that by 1977 there had been inordinate and inexcusable delay in the prosecution of the action and that the delay has given rise to a substantial risk that it will not be possible to have a fair trial of the issue of liability in respect of a road accident which happened nearly 15 years ago. It is also likely to have caused prejudice to the defendants, whose insurer's files upon the matter have by now been destroyed; so have the police records and statements relating to the accident.In those circumstances, one may well wonder whether, if this claim ever does come to trial, there can be anything in the nature of a satisfactory trial of it. That is why I would ask the noble and learned Lord the Lord Chancellor to take steps to ensure that this problem is considered with some immediacy, with the hope that some amendment can be made to this Bill in the course of its passage through both Houses, so that the day may come when he can achieve his desire and introduce a satisfactory consolidation measure.
1225 I am not going to suggest, or take up time by suggesting, what is the right answer to the problem. Of course one does not want an infant to be deprived of his rights because of his infancy. At the same time, one must have regard to the interests of defendants. Before the law was changed to what it now is there was a more limited period extending beyond the ordinary period within which an action could be brought if the child was in the custody of a parent. That led to some difficulties, but it may be that some consideration and slight amendment of the former provisions would be better than the present situation, and lead to more fairness and better administration of justice.
However that may be, I plead with the noble and learned Lord the Lord Chancellor—and I am supported in this by my noble and learned friend Lord Diplock—to take steps to secure, if he can, that the law in this respect is improved by this Bill, and the Bill itself contains some amendment of the existing law in relation to disabilities before it reaches the statute book.
§ 3.8 p.m.
§ Lord MISHCON
My Lords, if ever, while your Lordships are tolerant of me, I am displaced in the list of speakers by anybody, I would always hope that it would be by somebody of the calibre and charm of the noble and learned Viscount.
§ Lord MISHCON
My Lords, even to receive the noble and learned Viscount's apology at the start of my speech is a privilege. May I first join in the congratulations extended by my noble and learned friend Lord Elwyn-Jones to the noble and learned Lord the Lord Chancellor for the lucidity and clarity with which he introduced the Second Reading. My observations—quite a deal of them inspired by the Law Society, of which I am proud to be a member—will be limited to points that should be raised on Second Reading in order to perhaps make the Committee stage of this Bill more intelligible to this House.
This is a matter of law reform which, rather peculiarly from the point of view of 1226 my learned profession, is not an esoteric topic. It is one which all your Lordships would be interested in because it deals with a balance of rights and a balance of equities as between a defendant over whom the sword of a prospective action should not dangle for too long, with all the attendant difficulties in obtaining evidence at a late stage and of lack of recollection, and the justice that is due to a plaintiff in the exercise of remedies that he may have because of rights of his which have been impinged. It is a delicate balance, but is one on which very often the layman has as clear a judgment as the lawyer, and it may be at times a better judgment. It is against that background that I beg leave to bring to the House the following matters which are relevant at this stage. I do so on the principle which should be enunciaated quite clearly, namely, that it is not the right which is expunged but purely the remedy as the result of a period of time having elapsed.
I wish to deal with four categories of matters arising out of the Bill which are relevant on Second Reading. The first category is some recommendations made by the Law Reform Committee but which are not followed in the Bill; the second category is a recommendtion which is followed but which I respectfully suggest should not have been followed in the Bill; the third category is a subject matter of the report already referred to by my noble and learned friend which is ignored by the Bill —indeed, the noble and learned Lord the Lord Chancellor referred to it—and that is the question of latent damage; and the fourth category concerns a case which was decided after this report appeared and therefore is not mentioned in the 21st Report of the Law Reform Committee with which we are dealing, but which is ignored by the Bill as though the case had not occurred.
On the first category—the recommendations made but not followed in the Bill—I am delighted that the noble and learned Viscount preceded me because he mentioned a certain case where there was a mental disability. The first point I wish to make is that the committee recommended—this is not the first time it has been recommended—that mental disability, mental disorder, should be defined. There is no clear definition until you get to protection order cases as dealt with in the Mental Health Act 1959, and the committee 1227 recommended that in this Bill or in any enactment following on their recommendations the definition in the 1959 Act of mental disorder, a very good one, should be followed. It does not appear in this Bill.
Secondly, the committee recommended that what seemed to be a rather illogical preservation, of a 12-year period after judgment had been obtained in cases for actions on the judgment, should be abolished. This Bill does not abolish. Thirdly —and in view of the dry-as-dust remarks which I have to make, I hope your Lordships will forgive an attempt at some light relief—I observed on reading the report that there is a heading dealing with the matter of landlord and tenant which is called "The Saint Marylebone case". Bearing in mind the title which the noble and learned Lord the Lord Chancellor enhances, I was intrigued at that heading, but I was intrigued further when I went on to read, and I do not know whether this is a subtle reference by way of prescience to the hoped for continuity of the Lord Chancellor's office:Reversal of the Saint Marylebone decision might prejudice the lessor"—and it goes on to say—who could find himself saddled with a tenant whom he had never wanted".Whether that is a hoped for prayer for the continutiy of the present Lord Chancellor I know not, but I revert to the heading of that chapter of the report which deals with landlord and tenant and I bring to your Lordships' attention the fact that Clause 3(1) of the Bill deals with the question of tenants at will and the change that was recommended by the report, but for some reason which escapes me does not make a similar change in respect of periodical tenancies where there is no written lease.
I come to the second category, the case where the recommendation has been followed but where, in my respectful submission, it should not have been, and here I deal with Clause 6 of the Bill. I believe it would be in your Lordships' knowledge that where, after the expiration of a period of limitation, an acknowledgement is made by the proposed defendant, or he makes a part payment, the time begins to run again and, in spite of the fact that the period of limitation has expired, 1228 a plaintiff can bring an action. The Bill follows the recommendation of the committee in that respect and does not revive that time-barred remedy. If I may say so respectfully, I cannot see the logic behind that because, to re-enunciate the principle, it is that it is not the right that goes but the remedy, and there can surely be no hardship on a defendant where indeed an acknowledgement of the indebtedness has been made, and a part payment has been made. I therefore respectfully observe that I cannot see why that recommendation has been accepted.
The third category—the example of an important issue which has apparently been ignored—brings me to the observations made by Lord Elwyn-Jones and to the question of latent damage. To put it in simple terms, most of us recognise it in a building case, where you suddenly find that the building that was built for you, a house perhaps, throws up a latent defect. The courts, as I am sure the Lord Chancellor will agree, have tended in recent times to take the point of the accrual of the cause of action as the discoverability of the damage, and that seems to be extrememly logical. This Bill ignores the question of latent damage, and does not deal with the recommendations made by the minority of the committee, who said that the proper course here is to give the court discretion to allow a case to be brought on consideration of its merits and the facts, even though prima facie the limitation period has gone. This would appear to be such a sensible recommendation, and in view of the fact that one cannot get certainty—which was the real reason for the majority decision to which Lord Elwyn-Jones referred—when one must go into the whole issue of when it could have been discovered by a reasonable person, I should have thought makes the majority decision unacceptable and that at least we ought to have had this difficult matter, and it is a difficult one, dealt with in the Bill, but it is not.
The last category to which I come is a category where a case has been decided since the committee sat and the Bill, as I see it, does not take any cognisance of it. The case was that of Batty v. Metropolitan Property Realisations [2 Weekly Law Reports, 1978; p. 500.] That case dealt with the following issue, which I should like to put to your Lordships very briefly and very simply. When 1229 there is a breach of contract, the period of limitation starts as from the date of breach. When there is a tort, which is a civil wrong (such as negligence), it dates as from the date of damage. There is a type of case (as this one was) in which there is an option either to go on contract—that is normal in a breach of duty case; for example, against a professional man—or to go on negligence, with different dates from which the date of accrual of the cause of action arises. The court decided in the 1978 case that the plaintiff could go for the one that suits him the better; in other words, the one which gives him a longer period by way of limitation. To have, in fact, under two roots of law, contract and tort, different periods from which the accrual of a right of action starts, when indeed in so many cases it may flow from both, seems to me to be an illogicality and an untidiness which obviously ought to be relieved under the Bill.
My Lords, I have spoken for long enough and your Lordships have listened with your usual tolerance. I have raised these points in order possibly to save time at the Committee stage by seeing how—if I may say this respectfully—the noble and learned Lord the Lord Chancellor deals with them, and by seeing whether or not he would welcome amendments at the Committee stage relating to the matters to which I have referred.
§ 3.31 p.m.
§ The LORD CHANCELLOR
My Lords, it is clear from the way in which the Bill has been courteously and helpfully treated by those who have played a useful part in the debate, first, that this is a highly technical and difficult matter, and, secondly, that it is nothing more nor less than a bundle of Committee points. That it is a bundle of Committee points does not involve myself in any criticism of any of the points which have been made. As the noble Lord, Lord Mishcon, has said, it can help the Committee stage of the Bill if, on Second Reading, in effect public notice has been given by way of the banns read out in church (as it were), so that we have notice of what may be raised, and those who wish to raise them are able to know the kind of points which can be said against them.
May I deal, not necessarily in order, with the various points that have been 1230 made, but before doing so I should like to thank the noble and learned Lord my predecessor for the kindly welcome which he gave to the Bill. He acknowledged that law reform of this kind is a continuous process and that Lord Chancellors have the civilised habit of picking up the threads of law reform where their immediate predecessors have left them. indeed, I do not consider that with a technical matter of this kind it would be possible to have law reform and not to act in this nonpolitical way. Of all the offices under the Government, probably that of Lord Chancellor has the greatest degree of continuity. We usually know, though we do not always disclose, exactly what our predecessors, and indeed our successors, think about particular subjects, because we often discuss matters in an informal way. I am very grateful to the noble and learned Lord for the welcome that he has given to the Bill. The noble and learned Viscount on the Cross-Benches raised an interesting and important point, but while the questions are fresh in my mind—and they are quite numerous—I want to come first to the points raised by the noble Lord, Lord Mishcon, from the Labour Back-Benches. I believe that the noble Lord represents in broad terms the views of the Law Society, of which he is not only a member, but of which he is quite rightly proud to be a member.
First, the noble Lord took a series of recommendations of the Law Reform Committee which he claimed have not been followed in the Bill. In this regard he said that I have left undone those things which I ought to have done. The noble Lord wanted to find in the Bill—and said that he could not—a definition from the Mental Health Act of disability. I think that the noble Lord is perhaps mistaken in thinking that that is not in the Bill. I do not in the least blame him for missing this because I should have missed it myself in similar circumstances. I ask the noble Lord to look at paragraph 11 of Schedule 1 where he will probably find what he is seeking. Schedule 1 deals with the amendments to the principal Act, and it contains the usual gobbledygook involved in such legislation. Paragraph 11 states:In Section 31(3)—that is of the principal Act—for the words from 'but' to 'presumed' there shall be substituted the words 'a person is of unsound mind if he is a person who, by reason 1231 of mental disorder within the meaning of the Mental Health Act 1959, is incapable of managing and administering his property and affairs; and, without prejudice to the generality of the foregoing provision, a person shall be conclusively presumed for the purposes of that subsection'".I am advised that the noble Lord will find that that deals with the first of the points that he raised.
Then he complained that there was no reduction in the period for an action on a judgment from 12 to six years. Again I ask him to look at Schedule 1, and this time in particular at paragraph 2(d). He will see that it states that in Section 2 (that is of the principal Act):in subsection (4), for the word 'twelve' there shall be substituted the word 'six' …".So I think that I have probably successfully defended myself against the category of those things which I have not done but ought to have done.
§ Lord MISHCON
My Lords, may I thank the noble and learned Lord the Lord Chancellor who, with characteristic mercy, has dealt with those first two points. Furthermore, may I offer merely the excuse that I am afraid that I had not had time properly to study the schedule in view of the brief period that elapsed between the printing of the Bill on 14th June and this Second Reading debate. That is my only excuse.
§ The LORD CHANCELLOR
My Lords, I believe that the noble Lord has a very good point there. Indeed, earlier the noble and learned Lord referred to the shortness of the period, and of course he is quite right. He knows as well as I do—or probably better—the difficulties of slotting these items into the legislative programme. A technical Bill of this kind is not particularly contentious and we have to find something for the Lords to do in the early part of the Session; if we do not, they will not do it. We know what happens at the end of a Session if we do not. Thus one struggles very hard to provide provender in order for the hungry mouths to be fed. One is in that kind of difficulty, but I also understand the noble Lord's difficulty.
I turn now to the third point which he said I had left undone, and he is right in saying that I have not done it, although whether I ought to have done it is another 1232 matter. I refer to the absence of the recommendation with regard to periodical tenancies. I suppose that that means that subsection (2) of Section 9 of the principal Act should be repealed along with subsection (1).
The effect of this would be that a periodical tenancy would no longer be deemed, for limitation purposes, to be determined at the end of the first year or other period, but would be determined only when actually determined by the lessor. The reason for retaining this subsection is that it would be more in the general interest than would its repeal. If a periodical tenant could never prescribe against his landlord when the latter vanished, he would be disinclined to improve or maintain the property and would have difficulty in making title for the purposes of a mortgage for improvement, and so on. The policy was discussed between departments—and here I am supposed to say pompously that I have discussed it with the Secretary of State for the Environment, although of course I have done nothing of the kind; in fact it has been discussed at an official level—and the position is that we decided as a matter of policy, and for the reason I have given, to omit that particular thing.
In passing, I should like to say that my general approach to these committee and commission reports on law reform is that I tend to back the committee or commission where I can, but if my view is defeated in Committee by those who think they know better then, having made a valiant fight, I shall not resign immediately but will consider that perhaps the Committee may be right and I may be wrong. On the other hand, we think that as a matter of policy this is better left out of the Bill.
§ Lord ELWYN-JONES
My Lords, I do not know whether it will comfort the noble and learned Lord to know that I discussed this matter with the then Secretary of State for the Environment, and that I am inclined to agree with the noble and learned Lord. That may give him a certain amount of assurance; I do not know.
§ The LORD CHANCELLOR
That is all the more encouraging, my Lords. At 1233 any rate, it may be that the noble Lord, Lord Mishcon, having heard my explanation of the matter, may on balance think that there is something in it. Now a much more substantial question—and this is a matter upon which the committee was divided—was the question of the effect of acknowledgment or part-payment on a claim which is statute barred. Following extreme legal accuracy and traditional legal learning, the noble Lord, Lord Mishcon, and the Law Society represented to us that the cause of action is not destroyed by the time bar; it is only, as it were, buried but not dead, and disinterment by acknowledgment or part-payment will set time running again. This is of course absolutely accurate legal learning, but I happen to take the other view, as did a bare majority of the committee and, I believe, the previous Government. One can be too learned about these things, but I am going to try to be a little pedantic myself.
When the original limitation period of 1623 was introduced during the reign of James I, of course the mischief which was then aimed at was different from the mischief which is aimed at now, although the period happens to be the same. In those days, after six years a wicked and cunning plaintiff would get a lot of perjured witnesses to allege the existence of a contract or a cause of action and put up a false case against a defendant which he could not answer, and the reason why he could not answer it, as students of Dickens will remember, is that until comparatively recently neither the plaintiff nor a defendant could give evidence at all. Therefore, the mischief was that of a trumped-up, false case. Nowadays, the mischief you are aiming at is not that but the absence of certainty in dealing with insurance claims and in dealing with the carrying on of business.
The view of the majority of the committee—I will not read it all, but it is Part II, paragraphs 2.70 and 2.71, of the little blue report—was in favour of certainty after six years. It is quite true that there is an element of illogicality if you pursue the strict, legally accurate, view that what happens when an action is statute barred is that the remedy is removed but not the right. But the committee came to the conclusion that this was basically—and I use the word without offence—gobbledygook, and that 1234 what was wanted was certainty. On balance, I agree with this view. I quite acknowledge that other people may differ, and the question is on which side you come down, the majority or the minority view. I am with the majority on this occasion. We can try it out, if we want to try it out, in Committee. I shall not take it ill if the the Committee takes an opposite view, but I shall still vote for the position as I have argued that it should be.
The next point which the noble Lord raised concerned latent damage, and I think I can perhaps deal with that at the same time as I deal with the case with the rather unpromising name of Batty, to which he referred, which undoubtedly was decided after the committee reported. The first point about that—and, again, it is one about which opinions may differ —is my conclusion that the law is better left for the judges to develop at this stage, and it is better not to try to impose an artificial certainty by statute. The committee divided itself on the subject of latent damage, some members coming down on the side of discoverability and some coming down on the side of certainty. Here again, on the whole, I come down on the side of certainty but subject to the kind of case which Anns v. London Borough of Merton and Batty were really discussing. For myself, I do not think it is a bad thing for the judges to be left to develop the law on the lines upon which it appears to be developing. The law relating to negligence has been developed a very great deal in recent years. The point of departure was the Scottish case about the snail and the ginger-beer bottle. There, nobody ever discovered whether there was a snail or whether there was a ginger-beer bottle to contain it, but it formed a point of departure for the law of negligence which has been developing ever since. What has been happening in some of the fields is that, of their own motion, the courts seem to be developing, in relation to negligence, but not in relation to other causes of action, a doctrine of discoverability of their own; and that is what happened in Batty.
I can understand the interest of the Law Society in this matter, because I suppose the Law Society, being interested in the practice of the solicitors' profession, have hitherto thought themselves immune from actions for negligence after six years on the basis of the fact that they have a contract with 1235 their clients, and it was thought until recently that the cause of action arising on the contract protected them absolutely. They are quite right in thinking that the effect of Batty is to put that degree of certainty in jeopardy. I am quite willing to pursue this matter at a later stage in Committee if the noble Lord wants to revert to it, but my present inclination is to let the thing develop a little further before we try to legislate, and I believe that is the prudent decision. But it is a matter of judgment. It is not a question of politics: it is a question of weighing one particular point against another. I am afraid I am being very dull, but this is a rather technical subject.
My Lords, I come back to the very interesting and very important point which was raised by the noble and learned Viscount on the Cross-Benches. This is a personal injuries point. It relates to the disability, probably by way of minority, but not I think necessarily by way of minority, and the effect of the Statute of Limitations on a person suffering from a disability—and I shall deal with the child as typical even if he is not the only case. It is true that after 1939, when the principal Act was passed, it was thought by Parliament, rightly or wrongly—and I think that it is still open to question which view is the better—that six years was far too long within which to bar an accident case, which is the main personal injuries category; so three years was chosen as the definitive period. I have forgotten the exact date on which this was done. Then it was discovered that three years was too short and a great deal of argument was expounded on various anomalies which were then thrown up. I am glad to see the noble Lord, Lord Wedderburn, in his place. It is a matter in which the trade unions have taken a close and absolutely legitimate interest because injuries by employees are very closely affected by this. It was discovered very soon that injuries by employees became apparent or definitively serious at a date after the three-year period had expired.
The result was that there was quite a series of amending Acts. Indeed, the last one was introduced by the noble and learned Lord, Lord Elwyn-Jones, only a year or two back. I forget whether it was 1975 or 1976, but he made a brief passing reference to it in his own speech on this 1236 particular Bill. That was designed to remedy a misunderstanding by the Appellate Committee of your Lordships' House of what had been intended in one of the amending Acts. I myself wonder whether the original decision to reduce the period from six years to three years has not been more trouble than it was worth. That is a matter on which opinions may differ.
I want to say this to my noble and learned friend on the Cross-Benches. He will be aware of it, but as the point is raised in public I should remind him of it in order to put it on the record that the very point which he mentioned was closely argued in the earlier and interim reports of the committee. They put the case forcefully the other way, in paragraphs 107 and 108 of the 20th Report. So that the other side of the matter may be seen by the House, I think that I might quote at any rate parts of those paragraphs because they state the contrary case quite clearly.
They were discussing the very point of what the effect of disability and, particularly, minority should be in the case of an accident where a child or a person under some other disability was injured. This is what they say. I begin with paragraph 107:In view of his wide experience of accidents to persons under disability we also asked Mr. Turner, the Official Solicitor, to deal specifically with this subject and we are grateful to him for the trouble he took in answering our inquiries. Mr. Turner's opinion was that the rule must give rise to hardship"—that is, the rule that there was an absolute bar in that some minors' claims for personal injuries have been and will be lost through the ignorance or indifference of a parent.
The noble and learned Viscount on the Cross-Benches rightly stated that the previous rule had been that where a child was effectively represented by a parent in custody of him the disability did not stop the running of the period. The report goes on:He gave us particulars of 18 cases between July 1968 and August 1971 selected at random from his records in which he had been asked by solicitors in private practice to act as next friend to minors whose claims would not otherwise have been prosecuted. On these he makes the comment that since there is no legal obligation on anyone to seek his intervention it is fair to infer that there must be many cases in which infants suffer loss by default.1237 This is the conclusion that the committee then arrived at:We think that the Official Solicitor's comment quoted above is justified. His evidence does call in question the validity of the assumption underlying the rule"—that is, the rule which, as I understand it, my noble and learned friend would wish to introduce; namely that if minors—
§ Viscount DILHORNE
My Lords, may I interrupt at this point? I did not suggest going back to the old rule. I am fully aware of the difficulties that arose from that. What I am suggesting is that the present rule which allows a situation to arise when an action can no longer be tried properly be looked at, with possibly a reduction of the period during which a person suffering disability can start proceedings.
§ The LORD CHANCELLOR
My Lords, I quite see that. If I may say so, in relation to this point, it is the sort of point which will be looked at since it comes from a very exalted source and it may be publicly argued at the Committee stage.
I shall refer the House to paragraph 108 of the report, and I shall not read it for it might be that I am wearying the House about it; but I want the House to realise that, if the noble and learned Viscount's suggestions were embodied in this statute, a certain number of disability cases would be barred through the negligence of somebody else; namely, a parent or guardian who had failed to prosecute the case with due diligence. It may be that the House will think that the balance of advantage is in the retention of the present position.
As a kind of trustee for the Law Reform Committee I must say that I rather deliberately chose not to embark on the treacherous quicksands of personal injuries in this Bill. I have got to see, if I can, that this Bill gets through, and I am wondering myself whether that particular quicksand is not one into which it might become engulfed if we use this Bill as a vehicle for improving the law in that field, if indeed it requires improvement. I will look at what the noble and learned Viscount has said about it. What he says is not only accurate but weighty and it might be that we can think of something better. We are only at Second Reading now. I am afraid that we shall 1238 never get on if I do not sit down. I think that concludes it.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.