PROTECTION OF TRADING INTERESTS BILL

HL Deb 07 February 1980 vol 404 cc1501-49

3.19 p.m.

The LORD ADVOCATE (Lord Mackay of Clashfern)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Mackay of Clashfern.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [Overseas measures affecting United Kingdom trading interests]:

Lord LLOYD of KILGERRAN moved Amendment No. 1: Page 1, line 5, leave out ("it appears to the Secretary of State").

The noble Lord said: The purpose of this amendment is to remove from the Secretary of State his executive and discretionary power to decide, at least so far as subsection (1)(b) is concerned, whether as a matter of fact the measures of a foreign government will damage or are likely to damage a United Kingdom company's trading interests and therefore the trading interests of the United Kingdom. With the leave of the Committee, I should also like to consider Amendments Nos. 2 and 3, which are purely nominal in relation to the first amendment.

In my view, there should be an objective test in the Bill as to whether the legitimate economic and trading interests of United Kingdom companies are being damaged by the extraterritorial application of the laws of foreign countries. The Secretary of State for Industry at the Second Reading of the Bill in another place emphasised, as I should like to emphasise since I am having the privilege of introducing a number of amendments, that this Bill is not anti-American nor indeed anti-anybody. It is designed to protect and not to provoke, but it deals with matters where the law and legal practice of the United States have become a matter of international concern, not only to us but also to other nations, many of which have adopted their own means of looking after themselves. It is a legitimate exercise of our own sovereignty.

The Secretary of State went on to use very strong words in relation to the attempts by foreign governments to exercise their rights territorially against our interests and, as was said at the Second Reading before your Lordships, this Bill, if it is accepted, is long overdue. The Secretary of State said: I wish to leave no doubt that I will be prepared to use it in the defence of the legitimate economic and trading interests of our country. I do not rule out further legal provisions unless we can solve these long-standing problems in a more satisfactory way than we have been able to do up to now".—[Official Report, Commons, 15/11/79; col. 1546.]

Those are very strong words and the principle of this Bill has been widely welcomed, not only in your Lordships' House but in industry generally. But at present the Secretary of State has a complete discretion, which it would seem cannot be challenged, to decide whether the trading interests of this country have been threatened or damaged in any way. This amendment would turn it into an objective and not a subjective test. This question of fact should not be allowed to be completely at the discretion of the Secretary of State.

It would appear from what the noble and learned Lord, the Lord Advocate, said at Second Reading in your Lordships' House, that the Government wish to maintain a flexible position. There is nothing wrong in that, but it should not be a flexible position so as to enable this Bill to be used as a diplomatic weapon rather than to give it a legal framework.

I hope it is not inappropriate to say that Secretaries of State may change; their views may be different. Once again industry may be placed in an uncertain position, having to rely on the exercise of the discretion of a minister in relation to facts about trading interests in respect perhaps of the same law of a foreign government. This may introduce another parameter of uncertainty in the trading activities of United Kingdom companies abroad. May I therefore press the Government to reconsider whether a legal framework for Clause 1, particularly in relation to estimating whether trading interests have been damaged under subsection (1)(b), would be more satisfactory to a large body of industry if the Secretary of State did not have these full discretionary powers?

I fully realise from the very interesting speech of the noble Earl, Lord Inchcape, at the Second Reading of the Bill in your Lordships' House that, in regard to the shipping interests which are being attacked at the present time, he feels that this Bill is perfectly satisfactory. But there are many other smaller industries which endeavour to trade abroad in the interests of the British economy and come up against anti-trust and tax laws, particularly in the United States. In the field in which I have had the privilege of working for so long—that of patents, trademarks and know-how in designs, all of which are very important in this modern technocratic age—it would be possible to determine expeditiously as a fact whether there is damage or threatened damage to a United Kingdom company or to United Kingdom trading interests.

It is a simple point which I now present to the Committee. It is this: should the Secretary of State have an unchallenged, unfettered—in effect—jurisdiction to determine under Clause 1(1)(b) whether the trading interests of a company or of this country have been or are likely to be threatened in the factual circumstances which that company knows only too well? I beg to move.

3.27 p.m.

Lord RENTON

The amendment moved by the noble Lord, Lord Lloyd of Kilgerran, and the following amendments which he has tabled, really raise two separate issues. The first is, what interests are to be protected? And the second is, who is to be the judge of those interests? On the first issue I think we can probably take the view that used to be taken in the United States by General Motors when they said, "What is in the interests of General Motors is in the interests of the United States". I would very much hope that any British Government trying to protect the interests of British business people in any kind of business would take the view that if the interests of any business were affected that would be against the interests of the United Kingdom. I think it is upon that assumption that Clause 1 has been drafted, but having said that I think it is largely a question of drafting, for I agree in substance with what the noble Lord has said.

However, when it comes to the question of who shall be the judge of whether the interests have been, or might be, adversely affected, we cannot escape from the proposition that the Secretary of State must be the judge and it must inevitably be an objective test because it is he and only he who is going to be given the power to take the necessary protective measures.

That being so, we have to place not only the power but also the obligation firmly upon the Secretary of State, who, needless to say, will be answerable to Parliament in both Houses. Therefore, I would urge my noble and learned friend the Lord Advocate not to accept the first three amendments put forward by the noble Lord, Lord Lloyd of Kilgerran. However, as a matter of drafting and in order to see whether the intentions of the Government are fulfilled, the fourth amendment proposed by the noble Lord does deserve further consideration.

Lord ELWYN-JONES

My Lords, I support what the noble Lord, Lord Renton, has said and your Lordships will observe that in line 15 on page 1 the noble Lord, Lord Lloyd of Kilgerran, whether deliberately or by oversight, I do not know, has retained the power in the Secretary of State.

Lord LLOYD of KILGERRAN

My Lords, I am sorry to interrupt the noble and learned Lord, Lord Elwyn-Jones, but there is no question of any oversight. My amendment relates only to line 1, eliminating the Secretary of State from deciding on (a) and (b): thereafter he has discretion as to whether or not to order.

Lord ELWYN-JONES

I follow that, but it seems to be a little hard on the Secretary of State to give him the duty by order to put certain things in train without apparently giving him any discretion at all as to whether he should do anything of the kind. So I apologise for thinking that it was done by inadvertence, but if it was done deliberately it is even more surprising!

3.30 p.m.

Lord MACKAY of CLASHFERN

As noble Lords have pointed out, there are two questions here. The first is what are the interests designated to be protected? It is, of course, true that normally the interests of a particular trader will represent the interests of the United Kingdom as a whole. It is not absolutely essential that that should be so. There might be matters of judgment to be taken into account in that. What this clause seeks to protect, where there is any distinction, are the trading interests of the United Kingdom rather than those of any particular individual.

In that situation, it seems to us that the judgment which is required is essentially a judgment for a Minister, answerable, as my noble friend Lord Renton said, to both Houses of Parliament, and that is particularly so when, as here, the noble Lord, Lord Lloyd of Kilgerran, does not seek to remove from the Secretary of State the discretion about whether or not to act. It seems a pity to have two different judges for the purpose of reaching a conclusion upon what ultimately will give rise to one act. It seems to us that it is more appropriate that the Secretary of State should have the judgment on whether or not the interests of the United Kingdom are affected, and then, if he takes the view that they are, he should take action accordingly. While I am very grateful to the noble Lord, Lord Lloyd, for raising this matter, an important matter, in respect of the meaning and effect of the Bill, I would urge the noble Lord to be kind enough to withdraw these amendments.

Lord LLOYD of KILGERRAN

In view of the fact that two noble and learned Lords are against me as well as another noble Lord with such a distinguished career, if I may say so, associated with the law, chiefly in another place, may I say that I regret that I have not made the position as clear as I should have done. What are the interests that you are protecting? That is not a matter for the Secretary of State. He has not got all the facilities for determining those facts. When he has the facts, when he has the opinion of perhaps a court or a tribunal about the trading facts, then he would be in a position to decide whether an order should he made under the section. But in view of what the noble and learned Lord the Lord Advocate has indicated, I beg leave to withdraw this amendment. I reserve the right to raise it at another stage.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 and 3 not moved.]

Lord LLOYD of KILGERRAN moved Amendment No. 4: Page 1, line 13, leave out ("interests of the United Kingdom") and insert ("or other interests of the said persons").

The noble Lord said: This amendment raises an important point, adumbrated to some extent by the noble Lord, Lord Renton. Under Clause 1(1)(b), it has to be decided whether certain actions are damaging or threatening to damage the trading interests of the United Kingdom. I was not quite clear what the noble Lord the Lord Advocate indicated in his reply on the previous amendment, but I would ask him: Does he accept as a general rule that if the trading interests of a firm have been affected in the way the subsection refers to, then that is included in the trading interests of the United Kingdom? I am not sure that that position can be ascertained from the present facts. In the circumstances of damage to certain companies, I would find it difficult to decide whether that would necessarily be damaging the trading interests of the United Kingdom, which, as the noble Lord, Lord Renton, said, was the attitude adopted by General Motors.

Therefore, my intention is to ensure that if there has been damage or threat of damage to the trading or other interests of the persons concerned that is the test that should be applied. I therefore delete the reference to the United Kingdom. But where a firm is able to show that its trading interests have been seriously damaged or are seriously threatened, then this subsection should apply. I beg to move.

Lord MACKAY of CLASHFERN

As I said earlier, I accept the view that very often the trading interests of a particular firm, a particular company, will be the trading interests of the United Kingdom. But the question whether the trading interests of the United Kingdom are subject to a threat of damage is a larger question. One has to look broadly at the trading interests of the United Kingdom as a whole in considering whether individual damage would threaten to damage those trading interests. I submit to your Lordships that where we are seeking to take action, particularly against measures taken by a friendly nation, it is very important that we should have good grounds for doing so, and only where the interests of the United Kingdom as a whole are affected would measures of this sort be properly justified. Therefore, the Bill as it stands, based on the trading interests of the United Kingdom as the matter that must be the subject of a threat of damage, is correct. To substitute for that the individual trading interests of particular companies would not improve the Bill but would damage it. I would therefore invite the noble Lord to reconsider the amendment.

Lord LLOYD of KILGERRAN

I am very much obliged to the noble and learned Lord the Lord Advocate. In view of the very strong words he used, that this amendment might damage the Bill, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.38 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 5:

Page 1, line 17, at end insert— ("() Where the trading or other interests relate to intellectual property the Secretary of State shall on request refer the matter to the Court or the Comptroller General of Patents, Designs and Trade Marks; but no appeal shall he from any decision of the Court or of the Comptroller General.").

The noble Lord said: I come to a somewhat technical matter in regard to the way in which the Secretary of State can or should decide whether the trading interests of a company have been damaged or are being threatened in any way in the field of intellectual property, a rather grandiose term now used to cover patents, trade marks, know-how and designs. There are a large number of small and medium-sized firms which are engaged in trading activities abroad very successfully. They are often faced with threats of anti-trust actions in America and other threats in other countries, which of course inhibit their business. The facts will, of course, be put to the Secretary of State; and I ask rhetorically, how will the Secretary of State decide as a matter of fact, in his discretion, whether there has been damage to the trading interests of the firm concerned largely with patents, trade marks, know-how and design?

I would have said, with the greatest respect to the Secretary of State, that his department may not be fully equipped to deal with matters of that kind in coming to a subjective judgment in regard to trading interests. These matters of intellectual property are extremely complex, not only in science and technology but in law. My Amendment No. 5 is directed to suggesting to the noble and learned Lord that, where the interests are related to intellectual property, the Secretary of State should, on request of the parties, refer the matter to the Patents Court or to the Comptroller General of Patents, Designs and Trade Marks, both of which are great experts in this field. Your Lordships may not know that we have two patent judges who were most distinguished practitioners at the Patent Bar before they became Her Majesty's judges. The Comptroller General of Patents has on his staff people of great experience in these matters. In my experience both of those courts can act, very quickly. I then insert my amendment that there shall be no appeal from any decision of the court or of the Comptroller General of Patents. That would provide a very expeditious and helpful way for the Secretary of State to reach a conclusion under this clause.

With the leave of the Committee, I should like to mention Amendment No. 6. It is purely a definition Amendment, defining "Court" in the terms to be found in the Patents Act 1977. Amendment No. 6 is purely formal and subsequent to the substantive Amendment No. 5. I beg to move.

Lord MACKAY of CLASHFERN

The first question is whether the matter which the Secretary of State would require to have in mind, in deciding to exercise his discretion under the earlier part of the clause, is a matter upon which he could usefully refer to the court, in any sense of that expression. It seems to us that the question is a matter of judgment on fact, but not in the nature of a contest. It is difficult to picture a situation in which there would be a contest. If the difficulty concerns the Secretary of State making up his mind, because of the complexities of the situation, then obviously he would be the only person to contest the matter with the person seeking the order, and he would have to take up a position upon whether or not he was going to contest it. So, going to the court would not obviate that stage of the proceedings.

On the other hand, I perfectly accept that there are matters of technical complexity which may be involved. My right honourable friend the Secretary of State for Trade is fortunate, in that the Comptroller General of Patents, Designs and Trade Marks is responsible to him and is a member of his department. Therefore, as regards this particular aspect of matters, he will have available to him all the skill which I respectfully agree the Comptroller General has. In taking that line, I of course wish no disrespect whatever to the learned judges who deal with patents, both of whom I know are extremely distinguished and one of whom I have had the pleasure of meeting quite often. However, so far as committing this type of question to them is concerned, in our view it would not be appropriate, and any technical advice which the Secretary of State requires on this aspect he could obtain from the Comptroller without any specific statutory provision to that effect.

There are other matters which might arise and which might also require technical help. The Secretary of State would be able, of course, to invite the person applying, if there was such a situation, to give him information on the technical aspects, which would help the Secretary of State to reach a firm conclusion. I ask the noble Lord to be kind enough to reconsider his amendment.

Lord LLOYD of KILGERRAN

I am much obliged to the noble and learned Lord the Lord Advocate for the sympathetic approach that he has adopted towards this matter. I believe that he recognises that so much in the field of intellectual property is very difficult. As he has given me the assurance that the Comptroller General of Patents, who comes under his jurisdiction, can be consulted and will be consulted about these complicated matters, then I am quite happy to leave it at that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

On Question, Whether Clause 1 shall stand part of the Bill?

3.45 p.m.

Lord RENTON

There is one small point that requires further consideration by my noble and learned friend. Your Lordships will see that, under Clause 1(2), a person in the United Kingdom is required: to give notice to the Secretary of State of any requirement or prohibition imposed or threatened to be imposed upon him—of course, by a foreign authority— including any requirement to submit any contract or other document for approval". I understand that sometimes foreign authorities require documents not to be submitted for approval, but merely to be registered. That in itself, could be a somewhat oppressive request. I ask my noble and learned friend whether he would be so good as to consider between now and the Report stage adding to subsection (2) some words which would take in the point about registration.

Lord LLOYD of KILGERRAN

In. my submission, Clause 1 embodies a very cumbersome procedure for dealing with measures taken by overseas countries so as to affect international trade. I would be grateful if the noble and learned Lord the Lord Advocate could at some stage, not of course today, consider whether any general improvement of Clause 1 can be effected.

Under this clause the Secretary of State has first to specify by order the measures concerned; secondly, to require, again by order, to be notified of any requirements imposed; and, thirdly, to issue directions prohibiting compliance with any such requirements. It seems to some of us that a much simpler procedure for protecting United Kingdom companies would be to make measures taken under the law of an overseas country for controlling trade, inapplicable to the activities of the United Kingdom companies outside the territory of the country concerned, but with the provision that the Secretary of State makes exemptions.

The type of laws and the specific laws which are affecting the trading interests of the United Kingdom and many United Kingdom countries will soon become apparent. It seems to me that the Government should issue lists of such laws which they think may damage, or are damaging, the trading interests of the country, so that British industry can be apprised of those matters. Of course, under Clause 1 no application to the Secretary of State as regards this matter need be entertained, under any orders or regulations, until the United Kingdom company concerned has been subjected to the actions of a particular overseas law. However, the cumbersome procedure of Clause 1 puts industry in some uncertainty as to what are the laws that are likely to affect its trading interests.

Lord MACKAY of CLASHFERN

I am greatly obliged to both noble Lords who have spoken on the question, Whether Clause 1 shall stand part of the Bill?—and I am grateful for the matters that they have raised. In particular, we shall consider whether a requirement to submit a contract or other document for registration is covered. I venture to think that it probably is covered, but we shall be glad to consider the matter.

As regards the approach taken by the noble Lord, Lord Lloyd of Kilgerran, I certainly can see the advantage of proceeding in the way that he has suggested and we shall certainly consider the matter further. The advantage of the method proposed in the clause is that the amount of action required to be taken to interfere with the effect of foreign laws is reduced to a minimum in scope. That has certain advantages, as I am sure the noble Lord will recognise. However, I am certainly happy to consider these matters between now and the next stage, if your Lordships will agree to that.

Lord LLOYD of KILGERRAN

I am very much obliged to the noble and learned Lord.

Clause 1 agreed to.

Clause 2 [Documents and information required by overseas courts and authorities]:

3.51 p.m.

Lord RENTON moved Amendment No. 7: Page 2, line 30, leave out ("commercial").

The noble Lord said: I suggest that with this amendment we should consider Amendments Nos. 8 and 10. All three amendments are on Clause 2 and they stand or fall together. Clause 2 enables the Secretary of State to give directions for prohibiting compliance with the requirement of an overseas country, imposed upon people in the United Kingdom, to produce commercial documents or commercial information.

However, I suggest that by using the word "commercial" we limit the scope of the clause. Of course, a document or information demanded by an overseas government, court or authority could well relate to matters which are not considered in the ordinary way to be commercial; for example, the United Kingdom's contractual relationship or statutory relationship with our own Government; or such matters as the holding by our Government, whether through the National Enterprise Board or in some other way, of shares in a trading company. Documents relating to such matters might not be regarded as strictly commercial. My recollection—and my recent researches confirm it—is that our courts have never defined the expression "commercial document". Nor has it been defined in statute—of that I am sure. There are, of course, a number of documents with which we are all familiar which are clearly commercial: charter parties, bills of lading, insurance policies of all kinds, bills of exchange, and so on. Clearly, those are commercial documents.

However, I should have thought that it could be very tiresome if implementation of this Bill was held up by tiresome disputes as to whether a document or information was or was not commercial. I therefore suggest that it is better to avoid the uncertainty by leaving out those words which are in any event, as I say, words of limitation. I find it very strange that we should be using those words in Clause 2 when we have defined "trading interests" so very broadly in Subsection (6) of Clause 1, which reads as follows: In this section "trade" includes any activity carried on in the course of a business of any description and "trading interests" shall be construed accordingly". It seems to me, although it is not a matter on which I would wish to divide the Committee, that this is a very plain case indeed. I hope that my noble and learned friend will see the wisdom of omitting those references to "commercial". I beg to move.

Lord LLOYD of KILGERRAN

I support the amendment so ably proposed by the noble Lord, Lord Renton. It certainly seems to me that the word "commercial" introduces very considerable uncertainties as to what is meant. For some reason the noble Lord, Lord Renton, did not refer to the definition of "commercial document", which is set out is subsection (6) of the clause, where it has a very wide connotation indeed because that subsection reads: In this section "commercial document" and "commercial information" mean respectively a document or information relating to a business of any description and "document" includes any record or device by means of which material is recorded or stored". I agree with the noble Lord, Lord Renton, that, particularly in view of the wide definition of trading activities in a further clause, the Government should consider deleting the word, "commercial" from this clause.

Lord RENTON

If the noble Lord will allow me, Amendment No. 10 proposes that the words in subsection (6) of Clause 2 should be omitted. Therefore, in fact, I have covered that point.

Lord ELWYN-JONES

I have a certain sympathy with this amendment. To leave it naked, as "any document", does make it look a little wide. I do not know whether any other form of words, sufficiently wide for the purposes which have been mentioned by the noble Lords who preceded me, can be devised. I can foresee a tedious amount of initial argument arising from the definition of "commercial document" in subsection (6). if we can invite the ingenuity of the draftsman to have another look at this, it may save a great deal of litigation. Our American colleagues are masters at the construction even of the English language.

Lord MACKAY of CLASHFERN

I think that the difficulty has been highlighted by the noble and learned Lord, Lord Elwyn-Jones. If one omits "commercial" and omits any definition at all, one would have an extremely wide power which would relate to documents of a purely private or personal nature and go rather beyond the protection which the Bill is designed to give.

We had hoped that the definition of "commercial document" included in this Bill was wide enough to cover everything which legitimately it should cover for the purpose of attaining the objects of the Bill. However, in view of the doubts upon that matter which have been expressed, we shall be glad to reconsider the matter. I am bound to say that so far the illustrations which have been given would seem to me to be covered by the definition, but, of course, I am well aware that ingenuity can give rise to tedium. We shall do our best to avoid both of these in this particular situation. In the meantime, I ask my noble friend to be kind enough to withdraw his Amendment.

Lord RENTON

I do indeed ask leave to withdraw Amendment No. 7, and I am grateful to my noble and learned friend. In his further consideration of this matter perhaps he would bear in mind that the first three clauses were, of course, borrowed from the 1964 Act, which dealt solely with shipping. Commercial documents in relation to shipping are of a restrictive character and well-known. However, here we are opening up a vast field; we are applying the first three clauses of the Bill to all kinds of trading interests. Therefore, if we use the expression "commercial", we may very well find that it is restrictive in the way that has been mentioned. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

3.58 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 9: Page 2, line 33, after ("authority") insert ("or to summon any person to give oral or written evidence relating to any such document or information").

The noble Lord said: As the noble and learned Lord, Lord Elwyn-Jones, has indicated, American lawyers are very thorough, particularly in their discovery activities. The purpose of Clause 2(1) is to give protection to companies over here as regards the discovery of documents. The purpose of my amendment is to extend the protection so that persons cannot be summoned to give oral or written evidence relating to any such document or information.

Let us take the example of a patent specification which may not relate in any way to the business of the company; it is in the possession of the United Kingdom company. If the patent specification has to be disclosed—and I hope that it would not have to be disclosed under the protection given by this Bill—to the American court, it will be apparent that on any United Kingdom patent specification the name of the inventor appears. It would therefore be very profitable in certain circumstances for the American court to summon that inventor who is named on the patent specification, and to issue the usual legal processes to get him to give either oral or written evidence. It is to deal with that kind of situation where a document is issued and there is a person associated with that document that I beg to move this amendment.

Lord HANKEY

What is the position under this amendment of the agent of foreign nationality of a British company, the agent living in the jurisdiction of the foreign country? This is a frequent problem which occurs in the diplomatic protection of British interests. The man may be of the nationality of the country he lives in, and certainly subject to the jurisdiction of their courts. Would he be prevented by this amendment from ever coming to the United Kingdom to get briefed by the parent company? It seems to me that we are putting him in a difficult situation. I appreciate the need for doing something.

Lord RENTON

I shall not endeavour to answer that question. It is better left to a greater expert than I. It is not merely on the principle that one good turn deserves another that I desire to support the noble Lord, Lord Lloyd of Kilgerran, on his amendment. Although Clause 2(1) has been fairly widely drawn it looks as though this question of the summoning of a person to give oral or written evidence has simply been assumed in the drafting. Rather than leaving it to chance, it might very well be spelt out in the way that the noble Lord, Lord Lloyd of Kilgerran, has suggested.

Lord ELWYN-JONES

I suppose the noble and learned Lord the Lord Advocate will rely on the words "to furnish" in Clause 2(1)(a). But that which is furnished is not quite the same as that which is extracted by oral testimony from a witness. It therefore may be prudent to extend the protection against this improper method of obtaining discovery by the sort of language that the noble Lord, Lord Lloyd of Kilgerran, has suggested. I am eager to say something in support of my noble friend, as he has helped me so much in the past in a very tight corner in that place.

Lord MACKAY of CLASHFERN

I suppose that one good turn does deserve another. In a sense, the two amendments are closely connected. I am going to rely on "commercial information" and say that as the clause is drafted "commercial information" will include the oral or written evidence relating to any document or other information. With regard to the point made by the noble and learned Lord, Lord Elwyn-Jones, the context of Clause 2(1)(a) is a requirement to furnish. I would venture to think that that would cover an obligation to disclose information such as is imposed on a witness who is required to answer questions of the kind that the noble Lord, Lord Lloyd of Kilgerran, mentioned.

So far as the objects to be attained are concerned I think we are all agreed that the intention is to cover the giving of oral or written evidence relating to "commercial documents" or "commercial information", and the only question is whether what we already have covers that. I think that it probably does, but I shall be happy to look at that again in the light of what has been said.

May I now come to the question posed by the noble Lord, Lord Hankey. The situation is that the requirement which is the subject of Clause 2(1)(a) is a requirement imposed on a person or persons in the United Kingdom. So long as a person is in the United Kingdom he is subject to the jurisdiction of the United Kingdom, and therefore it is within the power of our law to impose a requirement upon him in that connection. If he leaves the United Kingdom and has not breached the United Kingdom law before he leaves it, then we are not in a position to control by United Kingdom law what he does anywhere else. Indeed, that is the very matter from the United States that we are objecting to. I think that the drafting of Clause 2 as it stands meets the point, and meets it in an appropriate manner.

Lord LLOYD of KILGERRAN

I am deeply grateful for the almost unanimous support I have had at least for the general principle and the general mood behind my amendment. It is a different matter in the hurly-burly of an anti-trust suit to know what can hapen to you from discussing it so objectively and nicely in your Lordships' House. It seems to me that an amendment of this kind would be helpful as a matter of caution and prudence in the general jurisprudence. Having regard to the fact that the noble and learned Lord is kindly proposing to consider the matter, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

[Amendment No. 10 not moved.]

4.6 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 11: Page 3, line 31, after ("to") insert ("or in the possession of").

The noble Lord said: This is an amendment in relation to Clause 2(6). I shall assume that the text here dealing with a definition of "commercial document" and "commercial information" stands. According to this text it means: a document or information relating to a business of any description …". What is meant by "relating to a business"? There may be a number of documents which do not relate to a business and should have the protection of this definition.

I come again to my reference to a patent specification relating to an invention which is not used in the business in any way. I suggest in this amendment that the "information relating to or in the possession of a business" would be a happier and better phrase to use in these circumstances. A patent specification does not relate to a business. It may be in the possession of a company, and that is liable to be got at. As I indicated, the patent specification may have the names of inventors on it and they could be called to give evidence, and asked all kinds of difficult questions. Therefore, my amendment is to include in the definition of "commercial document" or "commercial information" a "document or information relating" not merely" to a business of any description" but which is also "in the possession of" that business. I beg to move.

Lord RENTON

Although it would be a rare occurrence we could find a situation in which somebody had a lien on documents belonging to somebody else. If that were so it would seem to be wrong that that possibility should be overlooked. That is the only point I would wish to add in support of the noble Lord.

Lord MACKAY of CLASHFERN

This comes back very much to the question we have already discussed. If one is giving power in relation to a particular class of document then it seems right that that class of document should be described by reference to its character rather than by reference to the possession in which it lies. As I said earlier, it is not proposed—and I do not suppose that anyone would think it right to propose—that this clause should apply to private or personal documents. If the noble Lord's amendment were to be accepted it would have the result that private or personal documents which happened to be in the possession of a person running a business would be covered.

For example, my personal documents in the hands of my solicitor, if I had one, would be covered by the clause, and that would seem, with respect, inappropriate. The mere fact that it happens to be in the possession of a business would not seem a very satisfactory criterion, and therefore I believe that the solution to this problem is in considering the appropriate description of the class of documents and then leaving, as a complete incidental, where the document happens to be, whether in the possession of the business, in the possession of someone connected with the business or whatever. I therefore invite the noble Lord to withdraw the amendment and leave the matter on the definition of "commercial document" itself.

Lord LLOYD of KILGERRAN

I understand that the definition of "commercial document" will be considered by the noble and learned Lord Advocate and I will await his further views as to that definition. In those circumstances, being grateful to the noble and learned Lord, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 2 shall stand part of the Bill?

4.12 p.m.

Lord MISHCON

On Second Reading I drew the attention of the House to the wording of Clause 2(3)(b), which relates to a requirement— wholly or mainly for the purpose of obtaining discovery of documents in any such proceedings —and "any such proceedings" relates back to Clause 2(3)(a), namely civil or criminal proceedings. I have not tabled an amendment at this stage, having given notice of the point I am now going to repeat, in the hope that I might be convinced by the noble and learned Lord the Lord Advocate that my point is covered in some way or is a bad one, and I will therefore listen to him with great respect and attention when he answers this point. Subject to that, I may then take the liberty of tabling an amendment on Report.

My worry is that if one looks at subsection 1(a) and 1(b) one finds that the requirement in regard to the production or otherwise of a commercial document and the Secretary of State's powers to prohibit compliance with the requirement are limited to the exercise of the Secretary of State's discretion which is contained in subsections 2(a) and 2(b); in other words— if it infringes the jurisdiction of the United Kingdom or is otherwise prejudicial to the sovereignty of the United Kingdom; or … if compliance … would be prejudicial to the security of the United Kingdom or to the relations of the government of the United Kingdom with the government of any other country". I repeat, the discretion of the Secretary of State is defined and is limited in that way.

I can imagine perfectly plain, simple, uncomplicated civil proceedings taking place abroad where there is a request for discovery of documents made against an English defendant. The Secretary of State, it seems to me under this clause—without being limited in any way by the considerations which are mentioned elsewhere and which govern the considerations of subsections 2(a) and 2(b)—has completely unlimited power to say, "I direct that the discovery in these civil proceedings of this commercial document shall not be allowed". His discretion having been exercised, it appears to end there. It seems that however iniquitous was the way in which the discretion was exercised, it cannot be questioned. Why there is a limitation in respect of the requirements in Clause 2(1)(a) and (1)(b) without that limitation on the discretion in the case of Clause 2(3)(b) at all events is beyond me at the moment. I therefore await the noble and learned Lord's explanation of this, in the hope that I have either missed something or that my point is a bad one, before I can consider my position at a later stage of the Bill.

Lord MACKAY of CLASHFERN

The situation on this point is that subsection 3(b), indeed subsection (3) as a whole, is intended to provide the Secretary of State with a basis on which he can exercise his discretion under Clause 2(1) in order to prevent compliance; and the conditions so far as subsection (3) are concerned are, first, the conditions of paragraph (a), that the requirement— is made otherwise than for the purposes of civil or criminal proceedings and that is something to which I understand the noble Lord sees no objection.

Accordingly, the question is really whether paragraph (b) is not a proper extension of that. Paragraph (b) is intended to deal with the case, and only with the case, in which an order is made wholly or mainly for the purpose of obtaining discovery; that is to say, for fishing around for documents which are not likely to be required for the proceedings themselves. The purpose is that of obtaining discovery; the Secretary of State has to be satisfied that the purpose for which the requirement is made is wholly or mainly for the purpose of obtaining discovery. A document which was fundamental to the proceedings themselves would not be intended to be covered by this provision. Accordingly, I submit that this is a perfectly reasonable provision to be made to enable the Secretary of State to judge.

Of course, if a requirement was made for obtaining discovery of documents in proceedings abroad and it appeared to the Secertary of State appropriate that that order should be complied with, there is nothing to prevent it being complied with. But it seems perfectly appropriate that where the order of the foreign court, exercising jurisdiction outside its own territory, is made to people in this country purely or mainly for the purpose of obtaining discovery, the Secretary of State should have a right to say, "That jurisdiction will not be exercisable here. You are working outside your own jurisdiction and I am not prepared to allow your power to extend to this country".

4.17 p.m.

Lord MISHCON

The noble and learned Lord has spoken with his usual courtesy but, I say most respectfully not with his usual clarity. I do not see from his explanation how the wording of this clause is limited to "fishing expeditions". The description "discovery of documents" is well known in our courts and rules and relates of course to documents which are relevant to proceedings. This does not just affect the proceedings which, all of us know, we have in mind in the United States; this is a Bill which affects civil proceedings in this clause of any foreign country.

I fail to see the logic of why the Secretary of State's discretion is being limited in respect of the requirements—I hope I will be forgiven if I repeat the point. but the noble and learned Lord Advocate did not answer me on this—in Clause 2(1)(a) and (b), which are very serious requirements, and his discretion is limited to matters which infringe our sovereignty and which could do us harm commercially or otherwise; yet in ordinary civil proceedings taking place abroad the Secretary of State, without giving any reason whatever and without his discretion being limited in any way whatever, can decide that that requirement is inadmissible and that therefore he ought to forbid the discovery of that document.

I repeat the point only because it did not appear to me that it had been answered by what the noble and learned Lord said, but I shall again wait for any further explanation he wishes to give and, if I do not feel satisfied with it—and I say that most respectfully—reserve my right to deal with this matter at a further stage of the Bill.

Clause 2 agreed to.

Clause 3 [Offences under ss. 1 and 2]:

4.21 p.m.

Lord RENTON moved Amendment No. 12: Page 3, line 34, leave out from ("who") to ("knowingly") in line 36.

The noble Lord said: The amendment arises in the following way. At Second Reading I suggested to your Lordships that we did not need the heavy sanction of the criminal law to force people whom we are trying to help into taking those steps which were necessary to enable us to help them. Those steps, I may remind your Lordships, are set out in Clauses 1 and 2 which now stand as part of the Bill, but the criminal sanction is contained in Clause 3. I suggested at Second Reading—and gave some reasons for my view— that the criminal sanction should be replaced by the civil remedy of injunction, at any rate in England, and interdict in Scotland. However, I have since discovered that interdicts can be granted only to prevent people from doing certain things, and that there are not mandatory interdicts in Scotland. In Scotland it is necessary to follow procedure which is entirely unfamiliar to me as an English lawyer, and the less I say about it the better.

My noble and learned friend the Lord Advocate, as reported at columns 594–5 of the Official Report of 24th January, first pointed out to me that the criminal sanction had never been used under the 1964 Act. I think that the necessary comment to make on that is, as I said on an earlier amendment, that the 1964 Act referred only to shipping, whereas this Bill refers to all manner of trading and business. So when we are broadening the powers contained in the 1964 Act, we really should consider very carefully how far it is appropriate still to maintain the criminal sanction for enforcement of all the steps which under the Bill the Secretary of State is given power to enforce.

My noble and learned friend's second point in answer to what I said at Second Reading was that Clauses 1 and 2 are in the nature of a prohibition, and that in order to enforce a prohibition a criminal sanction is needed. But with deep respect to my noble and learned friend, it is not entirely so that Clauses 1 and 2 deal only with prohibition, because under Clause 1(2) all that is required is the giving of notice to the Secretary of State of any matters imposed or threatened to be imposed upon the person concerned by an overseas country. That this is so is confirmed by those words in Clause 3 which I propose should be left out. There is a reference to any person who without reasonable excuse fails to comply with any requirement.…". That is concerned with a person failing to do what he ought to have done, rather than his not doing what he ought not to have done. That involves a very considerable difference, I should have thought, when we are deciding whether or not to impose a criminal penalty upon people whom we are trying to help in the circumstances of the Bill.

I concede, however, that the rest of Clauses 1 and 2 deal with prohibitions and that the criminal sanction may be the correct method of enforcing them. Therefore, in view of what my noble and learned friend the Lord Advocate said on Second Reading, I am no longer suggesting that we should change that provision. But in regard to enforcing compliance with the requirement to give notice under Clause 1(2), I still maintain that the criminal sanction is unnecessarily cumbersome, slow, expensive and, in the circumstances, oppressive, and that a civil sanction by way of injunction in England, and whatever is the appropriate procedure in Scotland, would be best. So I propose that we leave out the words I have referred to in Clause 3(1).

It is arguable, I suggest, that no specific sanction needs to be written into the Bill because we are imposing a duty within the Bill, and when we impose a duty it is always possible, at any rate in England, to go to the High Court for a declaration and an injunction—or sometimes it is done by means of a writ of mandamus—to enforce our duty. So, strictly speaking, by leaving out these words we would not be doing without a sanction altogether. But if we need to spell out what the civil sanction should be, I say in all candour that they would be better done by the parliamentary counsel than by my poor attempts to draft a new clause. I in fact attempted to draft a new clause and it was included on the Marshalled List earlier in the week, but upon sleeping on the matter I decided that it would not stand up. So I have withdrawn the new clause and it is not on the Marshalled List today, I am thankful to say.

I wish to add only one point, and I feel obliged to do so, even though the noble Lord, Lord Mishcon, is not with us at the moment. At Second Reading he referred to the need for a criminal sanction to enable the litigant in the United States to plead the amendment. I do not understand what that meant. I do not know whether any of the—I think there are three—amendments to the United States Constitution could he what he was referring to. I simply do not know what the noble Lord meant, but he probably has the advantage of me in having some knowledge which I ought to have.

I conclude by referring to the 1964 Act, under which, by the way, my noble and learned friend told us at Second Reading, no prosecutions have so far been brought. With regard to that Act, whatever pleading the amendment might be, it does not seem to have helped our shipping companies, because even since the 1964 Act they have from time to time been troubled by the exercise of the extraterritorial jurisdiction of the United States. Therefore, unless something further is said to explain the point made by the noble Lord, Lord Mishcon, I shall still maintain that it would be better to have a civil sanction for the enforcement of this merely negative requirement. I beg to move.

4.30 p.m.

Lord MACKAY of CLASHFERN

Perhaps I could first mention the point that my noble friend Lord Renton made as to what the noble Lord, Lord Mishcon, said on Second Reading, since we have the benefit of Lord Mishcon's company now. My understanding of the point which he made, which I followed at the time, I think, was that in order for a person in the United States to protect himself in this connection it was necessary for him to be able to plead the amendment, and I suspect that he had in mind the amendment which prevents a person from being obliged to incriminate himself. The noble Lord's point of view as expressed at that time was that unless there was a criminal sanction in relation to the prohibition in our statute, that self-incrimination doctrine would not apply.

So far as civil proceedings are concerned, the difficulty I still feel is the one I previously expressed, and that is that the essential thing one is dealing with here is a matter which would have passed before you knew anything about it. You would not be aware that a person was going to comply until they had actually complied, and by that time even the great procedural efficiency of the law of England would have difficulty in coping with it. I think that the provisions for enforcement of a statutory duty which are available in Scotland would match those available in England up until the time the act was actually done, but once the act is done there is a difficulty, I think, about civil proceedings. In our view, it is therefore necessary to have some sanction, and criminal sanction seems appropriate. As I said on Second Reading, no such proceedings were required under the 1964 Act. Of course, that is not the reason why the 1964 Act was not completely effective in relation to shipping. The reason was the omission of clauses such as the later clauses of this Bill. I think we do not know of any case in which the provisions of the 1964 Act were breached. That is the reason for no criminal proceedings, rather than that these provisions were ineffective in the field in which they operated.

My noble friend is perfectly right that at Second Reading I said that Clauses 1 and 2 are in the nature of prohibitions, and he has pointed out that that is not accurate in that under subsection (2) of Clause 1 the Secretary of State has a power to order people to give notice. But the purpose of their giving notice is that he may consider whether to make a prohibition. So, although I apologise for not expressing the matter with complete accuracy, I seek to defend myself by saying that the effective thrust of both clauses is to prohibit certain activities which are there described.

With regard to the amendment which my noble friend has moved, it would have the effect (unless I have misunderstood it) of withdrawing the defence in the criminal proceedings of giving a reasonable excuse. The purpose of the words which my noble friend's amendment seeks to delete is to provide a defence if the person in question has accidentally, or in a situation in which there is a reasonable excuse, failed to comply with a prohibition. So in a way these words go some distance towards mitigating the criminal offence in question.

Lord RENTON

If my noble and learned friend would allow me to say so, leaving out the words which I propose should be deleted in fact means that you could not bring any proceedings at all against a person who failed to comply with Clause 1(2). So the question of a defence would not arise. There would not be proceedings brought against him.

Lord MISHCON

I wonder whether I may be permitted to apologise to the Committee, and especially to the noble Lord, Lord Renton, for veing absent when my name was mentioned in connection with something I had said on Second Reading. I was called out on something urgent, and I apologise to the Committee; but may I say that on this occasion the noble and learned Lord the Lord Advocate has spoken with his usual clarity and courtesy.

Lord RENTON

I heartily concur with what the noble Lord has said about my noble and learned friend, and I beg leave to withdraw my amendment. In doing so, however, may I say that I do it in a spirit of complete surrender and conviction. I think that the answers I have been given show convincingly that the criminal sanction is required. I only express the hope that it will never have to be used when this Bill becomes an Act, just as it has never been required under the 1964 Act. If it does have to be used, I think we shall have to be very careful indeed—and it will be the responsibility of my noble and learned friend so far as Scotland is concerned, and of the Secretary of State and the Attorney General elsewhere—to see that this criminal sanction is not used in any way wantonly. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clause 4 agreed to.

Clause 5 [Restriction on enforcement of certain overseas judgments]:

Lord RENTON moved Amendment No. 13:

Page 5, line 7, at end insert ("; or

1. (c) a judgment for punitive or exemplary damages; or
2. (d) a judgment given in proceedings in reliance upon a measure in respect of which the Secretary of State had given directions under section 1(3) above before the start of those proceedings.").

The noble Lord said: The purpose of this amendment is to extend the category of non-enforceable judgments under subsection (2) of Clause 5 by adding two things. The first is punitive damages, or, as they are sometimes called, exemplary damages. In fact, in the courts in England and Wales and Northern Ireland that is the more usual expression. I should point out that the circumstances in which punitive damages or exemplary damages are awarded in our courts are rare indeed, and when they are awarded they are not usually heavy. Indeed, for years the courts leaned against them altogether.

In the United States, on the other hand, especially in product liability actions, punitive damages are awarded in a very big way in addition to the ordinary compensatory damages. Of course, it is the juries in the United States who award the damages, and they certainly let themselves go sometimes. There is one case which has been brought to my notice in which the compensatory damages were 350,000 dollars but the punitive damages were 10 million dollars. A great many examples of an immense excess of punitive damages over compensatory damages are there on the records to be found, but that is perhaps the most vivid example that I have come across.

The punitive element in foreign judgments will nearly always be quite clearly ascertainable, and therefore I cannot accept the argument which was put forward by my right honourable and learned friend the Attorney General in another place that if we included punitive damages among the non-enforceable judgments in Clause 5, there would be confusion. He even went so far as to say that a separate trial would be necessary in order to decide which of the damages awarded by the overseas court were exemplary and which were compensatory. But that does not correspond with the practice, at any rate, of the courts in America and of other countries; so I should have thought that that argument against having exemplary damages excluded.

But there is another rather important argument we should not ignore. In a case in 1976, The Consortium General Textiles and The Sun Sand Agencies Limited, in the Court of Appeal here, the noble and learned Lord, Lord Denning, defined a penalty—and I may remind your Lordships that we do not enforce foreign judgments which are judgments by way of penalty, we do not enforce foreign fines, for example, or taxes and so on—or described a penalty as a sum payable to the State by way of punishment and not a sum payable to a private individual even though it is payable by way of exemplary damages. But then he went on to say—and, admittedly, this was not part of his reason for judgment; it was an obiter statement: Likewise, I see nothing contrary to English public policy in enforcing a claim for exemplary damages which is still considered to be in accordance with the public policy of the United States and many of the great countries of the Commonwealth".

That dictum of the noble and learned Lord, Lord Denning, raises a doubt in the context of this Bill. I suggest that it is a doubt which we ought to be anxious to remove. And it is easily removed if we accept the first part of my amendment which points out that a judgment for punitive or exemplary damages is excluded. So much for punitive orexemplary damages. May I move on to the second part of my amendment which deals with judgments of foreign courts based on measures mentioned in Clause 1.

I suggest that the logical outcome of Clause 1 should be that we ought not to enforce payments under Clause 5 for judgments which were made under measures which we are trying to counteract under Clause 1. It seems to be self-defeating on our part as well as illogical to be doing so. I suggest that the second part of my Amendment should be added to the Bill so that we say: a judgment given in proceedings in reliance upon a measure in respect of which the Secretary of State had given directions under section 1(3) above before the start of these proceedings should be excluded from enforceability. Again may I refer to my right honourable and learned friend the Attorney-General in another place: because he said that this raised questions of public policy. I quote the exact words that he used: It is improbable that a judgment could result that would not be criminal or penal and therefore not enforceable in the United Kingdom under the existing common law rule. If such a situation arose whereby a civil judgment was given in pursuance of such legislation, I believe that the mere existence of an order under Clause 1 would be sufficient to argue that such legislation was against the public policy of the United Kingdom and the judgment would not be enforceable". But I question whether it is, in fact, improbable that civil judgments might arise as a result of non-compliance with a foreign measure and, in any event, the concept of public policy when it comes to be interpreted by the courts is a disputatious matter, as we all know, and is notoriously vague, besides.

It is unfortunate that the Bill should leave it to companies to have to rely upon it in order to resist enforcement of a civil judgment given in clear defiance of the steps to be taken by the Secretary of State under Clause 1. For that reason, therefore, I submit that the second part of my amendment is well founded and, accordingly, I beg to move.

4.46 p.m.

Lord HACKING

I stand to support the noble Lord, Lord Renton, in the moving of Amendment No. 13. Before I do so, may I express my regret at having been unable to be in the House at the Second Reading of this Bill. I express regret for two reasons. First, I am in the unusual position of being a member of the Bar in the State of New York, although I disclaim all responsibility for any anti-trust law anywhere: and, second, particularly when in the United States, I have become closely involved in the debate on the extraterritorial application ofUnited States laws. I was bold enough or unwise enough to precede the Secretary of State by just over a year in addressing the International Section of the Los Angeles County Bar Association on this subject. The Secretary of State addressed the British-American Chamber of Commerce a year later in September of last year. At a later stage, being unable to persuade the noble and learned Lord, Lord Elwyn-Jones, to speak, I managed to persuade the then Attorney-General, Mr. Sam Silkin, to speak in a debate with the Head of the Anti-Trust Division of the Department of Justice, Mr. John Shenefield, on this topic. That was an agreeable occasion, but a less agreeable occasion was when I debated with Mr. John Shenefield in Dallas last August over the Antitrust Guide for International Operations, which represents the creed against which we are taking our stand.

Having expressed my regret at having been unable to take part in the Second Reading, may I turn to the amendment proposed by the noble Lord, Lord Renton. When I first came to consider the first of the two amendments, which proposes that judgment for punitive or exemplary damages be added to the unenforceable judgments under Clause 5, I had some hesitation, because, after all, in this country as the noble Lord recognised, we have punitive or exemplary damages included in damages awards of our courts. It is true that these are of a very restricted nature; but we have them. I was unhappy, therefore, about the proposition that our own exemplary or punitive damages were enforceable in this country and those from outside were not.

The noble Lord has wholly made out the case when he draws our attention to the product liability cases in the United States and the sheer enormity of the punitive element in those damaging awards. The one that he quoted of 35,000 dollars of compensation and 100 million dollars of punitive——

Lord RENTON

It was 350,000 dollars and 10 million dollars.

Lord HACKING

Thank you. I thought that the compensation was on the rather low side. That is a good example and having heard the noble Lord's arguments, I find myself now able to support him on his first amendment. Before I came to the Committee, I was already in the position of wanting to support him in the second of his two extensions to Clause 5: I refer to the reference back to Section 1(3). I urge the Committee to consider and encourage the noble Lord, Lord Renton, to extend this other category of judgment to judgments which arise out of proceedings in which directions have been made by the Secretary of State under Section 2(l) of the Act. I have on a scrappy piece of paper in my hand my suggested amendment in order that we may have some record of it. Perhaps it can he considered at some later stage. I will read it. It follows the final words that are in my noble friend's amendment: or given in proceedings in relation to which the Secretary of State has given directions under Section 2(1)". In suggesting this extension, I draw the Committee's attention to the requirement in Section 2(1); that is, if it appears to the Secretary of State that a requirement has been, or may be, imposed on a person or persons in the United Kingdom to produce to any court—and I am paraphrasing—any commercial document which is not within the territorial jurisdiction of that country, or to furnish any commercial information to any such court, the Secretary of State can make an order. The purpose of that, which is in the earlier Act, the Shipping Contracts and Commercial Documents Act 1964, is to protect certain commercial documents from being used in court proceedings in other countries.

It so happens that there was a case heard by Judge Sirica (who later became better known for presiding over the Watergate trials) at the beginning in the early 1970s. It concerned the English company Beecham's. Briefly, certain documents in the ever-seeking discovery process of American litigation were sought from Beecham's. Beecham's objected to the production of the documents and sought protection under the Shipping Contracts and Commercial Documents Act of 1964. They came back to Judge Sirica and said, "We are unable to produce those documents because we have now been prohibited from so doing under the direction from the English Secretary of State". Judge Sirica then proceeded to find against Beecham on all matters which were covered by the documents that Beecham's were refusing to produce. It is precisely to that situation that assistance should be given. That is why I have suggested to the noble Lord, Lord Renton—and I hope he will not be offended—that there will be improvement to the amendment he has proposed to have that extension placed upon it.

4.53 p.m.

Lord MACKAY of CLASHFERN

It appears to be the case that the noble and learned Lord, Lord Denning, has expressed the view that punitive or exemplary damages might be enforceable in this country: but whether or not it is wise to prevent that, it is plain that that question could well go much wider than the trading interests of the United Kingdom, because damages of that sort might well be ordered in cases which have little or nothing to do with the trading interests of the United Kingdom. Accordingly, this would appear to be a wider question than falls within the scope of the Bill. If one is to seek to prevent the enforcement of judgments of that character under the provisions which apply here, this is a matter for consideration in relation to a more general provision affecting the enforcement of judgments.

Regarding the second matter, the amendment, as proposed and as enlarged by the noble Lord, Lord Hacking, would have the effect of applying only to civil judgments for money. So far as we know, up to now these exist only under the United States' anti-trust legislation. I would speculate that the Beecham's case, to which the noble Lord, Lord Hacking, referred, was litigation of that type, and accordingly would be affected by the provisions of the Bill already because the damages would be of the multiple damage type. The clause as presently framed, I would remind your Lordships, provides for the Secretary of State enlarging the scope of the judgments that may not be enforced here by reference to what one might call anti-competition legislation. I refer to subsection (4).

In this area it seems wise—and I commend this course to the Committee—not to proceed into the unknown but to deal with the difficulties that we know exist. As I said, these seem to appear in the existing law which provides for multiple damages in the United States, and possibly other places, and also in the field which is generally mapped out in subsection (4), but not otherwise. Accordingly, it would appear to me that the present provisions adequately cover the existing problem. I would also adopt the arguments that my right honourable friend the Attorney-General used in another place to which the noble Lord, Lord Renton, referred—without wearying the Committee by repeating them.

4.58 p.m.

Lord RENTON

My noble and learned friend has said in effect that the two parts of my amendment are unnecessary to fulfil the purpose which I described. He has referred to Clause 5(4). I assume in the background he has in mind also Clause 4 which extends the 1975 Act. If that is so, well and good; I would then have to apologise for having troubled the Committee. However, we were told at Second Reading that Clause 5 is largely declaratory. It seems to me to be almost declaratory of the existing law. If we are declaring the existing law at all, I think that it behoves us to do so with some thoroughness. However, on the assurance that my noble and learned friend has given—and I hope to goodness that he is right about this—I wish to withdraw my Amendment.

Lord MACKAY of CLASHFERN

Before my noble friend sits down I should like to make it clear that I did not intend to say—and I hope that I did not say—that the first part of his amendment, paragraph (c), was unnecessary; on the contrary, I appreciate the problem, but I say that it is not one to be dealt with here. I did not mean to convey that it was covered by the present Bill.

Lord RENTON

I am very much. obliged for that clarification. I must confess that with one's knowledge of the 1975 Act and the practice which has grown up under it, I had assumed that my noble and learned friend was asking the Committee to accept that a British court would not normally award punitive damages. If it be the fact that, for example, the kind of case that I mentioned from the United States, and the product liability cases where the punitive damages can be so enormous, are going to be enforced by judgments in our courts, then I regard that as an intolerable situation. It is one which Parliament should not accept especially when we are trying to legislate in this way. I hope, therefore, that my noble and learned friend will give further thought to this matter because it will he a serious gap in the Bill if we leave it that punitive damages can be so enforced in spite of what we are trying to do in Clause 5. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.1 p.m.

Lord HACKING moved Amendment No. 14:

Page 5, line 7, at end insert ("; or (c) a judgment given in proceedings based on a claim for contribution pursuant to a judgment as defined in paragraph (a) above:).

The noble Lord said: This is another amendment under Clause 5 which might be conveniently described as the "non-enforceable foreign judgments clause". The purpose of the amendment is to prevent foreign judgments otherwise unenforceable under Section 5(2)(a), because they have a multiple damages element, from being enforced by a co-defendant under a contribution claim.

I should like very briefly to explain what a contribution claim is. It arises between defendants and occurs when one defendant is ordered to contribute in part or in whole to the judgment debt which another defendant is under order to pay the plaintiff. Let me give an example of the operation of a contribution claim. Suppose a plaintiff, having succeeded in an action against more than one defendant, seeks to enforce and does enforce a judgment of 100,000 dollars—a modest sum for the noble Lord, Lord Renton—against Defendant A, which is a United States domiciled company, because the plaintiff cannot proceed or enforce against Defendant B because it is a United Kingdom domiciled company and hence protected under Section 5(2)(a). Then, taking the example further, Defendant A, by way of a contribution claim, proceeds against Defendant B, which is the United Kingdom domiciled company, and, because there is no prohibition in this Act, can then succeed in getting the full 100,000 dollars, or a lesser sum if that is the right figure for computation of the contribution from Defendant B. In short, the purpose of this amendment is to lock a back door when the front door has already been locked by Clause 5(2)(a). I beg to move this amendment.

Lord MACKAY of CLASH FERN

Perhaps I may take just a moment to express my regret that the noble Lord, Lord Hacking, was not able to be here on the Second Reading. However, I am very glad he is here now—better late than never—because he has drawn attention to an important matter which I am very happy to consider for a later stage of the Bill. I believe this is a matter which we ought to cover.

Lord HACKING

In view of that undertaking, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The DEPUTY CHAIRMAN of COMMITTEES (Lord Airedale)

I understand there is a mistake on the Marshalled List in the numbering of the next two amendments. I think I should next call No. 16, followed by No. 15.

Lord HACKING had given Notice of his intention to move Amendment No. 16: Page 5, line 12, at end insert ("(hereinafter referred to as" the judgment creditor")").

The noble Lord said: With regard to this amendment, I am proposing that the person described in this clause of the Bill as "the person in whose favour the judgment is given"—that is, the foreign judgment creditor—should be defined as" the judgment creditor."The purpose of the Amendment is to facilitate the drafting of my Amendments Nos. 20 and 23 which I shall be moving later and, since I intend to withdraw those two amendments after debate has taken place, it would seem appropriate not to move this one, unless any of your Lordships wishes now to address the Committee on this elegant phrase "the judgment creditor." I thought the noble and learned Lord was rising to his feet, but I think I am mistaken.

5.7 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 15: Page 5, line 12, at end insert ("and includes any order for any payment made in any proceedings in the course of which it is alleged or claimed that multiple damages are payable under the laws of an overseas country.").

The noble Lord said: As the noble Lords, Lord Renton and Lord Hacking, have explained to your Lordships, Clause 5 is concerned with restricting the enforcement of certain overseas judgments where damages or other fines or other orders have been made against some United Kingdom company. The clause goes on to define that one of the judgments that cannot be enforced is a judgment from abroad for multiple damages. It then proceeds to define in subsection (3) what is meant by "judgment for multiple damages."

I apologise once again for introducing one's experience of practice, certainly in relation to American jurisprudence, into this matter, but there may be a case in the course of which it has been alleged that multiple damages are payable. The case goes on on the basis that there is an allegation as to anti-trust which involves multiple damages being claimed and then, at some time or other, that aspect of the case is withdrawn. Therefore, the British company, or its subsidiary in America, has been fighting a case which they thought involved anti-trust and have taken all the steps to defeat that; and then the case is withdrawn.

In those circumstances, an order will be made and the question then arises: should such an order be enforceable in the United Kingdom by the United States company, as against the United Kingdom company? In my view, this is a lacuna in the definition of judgments which are not enforceable in Clause 5. My amendment is that the judgment, as defined here as being a judgment for multiple damages, should include any order for any payment made in any proceedings—those will be proceedings in the foreign country—in the course of which it was alleged or claimed the multiple damages are payable under the laws of the overseas country.

The words themselves are quite simple and the circumstances are quite common where this anti-trust claim against a British company or its subsidiary is raised and then dropped in the course of a very long case, which may last several years. Therefore, I beg to move that the definition of a judgment for multiple damages under Clause (5)(2)(a) should be extended in the way I have submitted.

Lord MACKAY of CLASHFERN

I am not absolutely clear that I have grasped the lacuna which the noble Lord, Lord Lloyd of Kilgerran, has identified to your Lordships. So far as I understand the position, it would hardly be sufficient to define proceedings by reference to what is alleged or claimed in them, because I think most of us who have had experience of litigation in any place have had experience of false allegations or allegations being made which were not substantiated. It seems a rather unwise test to apply to consider only what is alleged or claimed. So if the intention is to enlarge the scope of judgments which are unenforceable under this clause beyond the field of true multiple damages into fields where that is alleged about the basis of the claim but it never turns out whether or not that claim is true, then, with respect, I think that would be unwise.

Lord LLOYD of KILGERRAN

Before the noble and learned Lord sits down, may I put a specific matter to him? If you try to take a patent action in the United States, it is very common that by way of defence an action for multiple damages for anti-trust is introduced into the hearing. That is not usually just an allegation; it is often pressed very hard. Therefore, while I fully realise that the drafting of this amendment may require further attention, what I am trying to direct the Government's attention to is the fact that a United Kingdom company or its subsidiary may be precipitated into very considerable damages and costs, because a claim for anti-trust—and, therefore multiple damages—is pressed in the United States courts, and then afterwards withdrawn.

The final order often reflects the fact that it is an anti-trust suit and, therefore, that the damages assessed in the case are not ordinary damages but have been clouded by the multiple damages aspect of the case in the anti-trust circumstances. This is not a case where it has merely been alleged. It is a case where it has been prosecuted and has therefore precipitated the company into very considerable costs. I hope that the noble and learned Lord understands the general principle behind the amendment. He has far better facilities for drafting than I have, and it may be that these words do not quite cover the general principle which I have in mind and which is a common position to be found in cases in America.

Lord MACKAY of CLASHFERN

Certainly, I shall endeavour to consider the matter and perhaps I can enlist the help of the noble Lord in that consideration between now and the next stage.

Lord LLOYD of KILGERRAN

I am very much obliged to the noble and learned Lord. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.13 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 17: Page 5, line 17, after ("restrain") insert (", distort").

The noble Lord said: I am very happy to inform your Lordships that I am now able to introduce an atmosphere in relation to the European Economic Community, and I am sure your Lordships will be pleased to consider at least one point in this Bill in that context. Under subsection (4) of Clause 5, The Secretary of State may for the purposes of subsection (2)(b) above make an order", if it appears to him to be concerned with—and these are the material words— arrangements or practices designed to restrain or restrict competition in the carrying on of business". My amendment would modify that phrase by the introduction of the word "distort", so that this subsection would be dealing with, arrangements or practices designed to restrain, distort or restrict competition". In practice, competition can be restrained and restricted, but competition in the carrying out of business can also be distorted in a way which is well recognised in the competition laws of the EEC.

Your Lordships may be familiar with Article 85 of the Rome Treaty, which deals with competition matters. That states that the following shall be prohibited as incompatible with the Common Market— all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member States"— and I now come to the important words— and which have as their object or effect the prevention, restriction or distortion of competition". Those of us who have been concerned with Article 85 for many years are very familiar with this aspect of competition which is being prevented, restricted or distorted. Therefore, my suggestion is that perhaps the Government would consider amplifying—if that is the correct word—the words in subsection (4) by including the word "distort". There is an increasing amount of jurisprudence in relation to Article 85 of the Rome Treaty. I beg to move.

Lord MACKAY of CLASHFERN

It appears to me that the suggestion which the noble Lord has made would be an improvement. If he will be kind enough to withdraw his amendment, we shall consider bringing forward an improved definition at the next stage. I am very much obliged to the noble Lord.

Lord LLOYD of KILGERRAN

I am very much obliged to the noble and learned Lord. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6 [Recovery of awards of multiple damages]:

5.16 p.m.

Lord MACKAY of CLASHFERN moved Amendment No. 18: Page 5, line 31, leave out ("Subject to subsection (2) and (3) below") and insert ("This section applies").

The noble and learned Lord said: If it is convenient to your Lordships, perhaps I may address myself both to this amendment and to Amendment No. 19. The problem to which this amendment is directed is that of contribution, which the noble Lord, Lord Hacking, raised in another connection. The Bill as it stands provides that the recovery is limited to so much of the damages paid to or obtained by the judgment creditor under the judgment as exceeds the compensation, if I may put it shortly.

Let me just illustrate the matter. Judgment is for 600,000 dollars and the compensatory element in that is 200,000 dollars, the balance being the penalty. If you have three United Kingdom defendants in that action, each having to pay 200,000 dollars, this clause as drafted would prevent any of them from recovering anything, because the 200,000 dollars would limit their claim. The result would be that the United States judgment creditor—to use the phrase of the noble Lord, Lord Hacking—would be able to keep the whole of the award and that is not what we have in mind. So the clause is defective as drafted.

I regret to say that in seeking to remedy that we have a fairly complicated formula. What it comes to is this: the payment which any person in this country makes under the judgment will be divided into two parts; a part which represents the compensatory proportion and a part which represents the penal proportion, and he will be entitled to recover the penal proportion but not the compensatory proportion of what he has paid.

There are other problems under this clause. One of them, to which the noble Lord, Lord Mishcon, drew attention on Second Reading, and which we have it in mind to deal with, is the question of avoidance of the whole clause by reference to assignment or assignation. We intend to bring forward an amendment in due course for dealing with that problem. It is quite a difficult problem to deal with effectively, because one has to take account of all the various possibilities by which the right of the judgment could pass from the judgment creditor to other people. This amendment does not seek to deal with that problem, but since we have reached the stage of dealing with "contribution" we thought that we should bring it to your Lordships now. I beg to move.

5.20 p.m.

Lord HACKING

My Lords, since the noble and learned Lord, the Lord Advocate has addressed the Committee also on Amendment No. 19 and has introduced this topic by means of a very lucid introduction, I should like, with the leave of the Committee, to widen the discussion to include Amendment No. 26 of the noble and learned Lord the Lord Advocate and also my own Amendments Nos. 20 and 23. In short, I should like at this stage to address the Committee on all four amendments.

These amendments concern the novel but ingeniously bold Clause 6 of the Bill. Before dealing with the detail of this matter, may I say that I firmly support the powers proposed in this clause as a weapon of protection against the excesses of United States anti-trust law, and as an assistance towards the settlement of United States anti-trust cases, most of which are settled—after they have been in being for 20 years or more!

The starting point for my remarks to the Committee is the drafting in the Bill of Clause 6(1). I submit that this drafting has three deficiencies. Firstly, it does not cover the multiple party suit. Nearly all anti-trust cases are multiple party suits. Secondly, it does not enable recovery when property is seized, as opposed to execution upon money. Thirdly, it does not cover the assignment of judgment debts, and this has been recognised by the noble and learned Lord the Lord Advocate in his comments to your Lordships.

I should like to take those three categories in turn and deal first with the multiple-party suits. If your Lordships read the draft of Clause 6 as it is proposed to be amended by the noble and learned Lord the Lord Advocate, your Lordships will see that its wording does not cover multiple suits. To paraphrase, it says that the qualifying defendant is entitled to recover back from the judgment creditor so much of the damages as—and I read the rest of the text— exceeds the sum assessed by that court as compensation for the loss or damage sustained by him". I was misleading your Lordships, and I apologise. At this stage I am addressing the Committee on the original Clause 6(1). It was a slip of the tongue to refer your Lordships to the form of the amendment. As I said just now, the starting point is to consider Clause 6 and to note the deficiencies. As I illustrated just now by reading from Clause 6(1), it does not cover multiple-party suits. As an example, if a judgment creditor obtains a sum equivalent to compensation damage from each defendant, the plaintiff will have got the lot—that is, the compensation damages and the multiple—but no individual defendant will be able to demonstrate that he has paid the multiple proportion of the damages. Because of that difficulty, a simple arithmetical formula was needed and my Clause 20 adopts the same arithmetical formula as has been used by the noble and learned Lord the Lord Advocate. My clause states that the same fraction (that is, between one-third and two-thirds: the compensation part of the damages against the multiple part) is applied on the amount being extracted from the qualifying defendant as was applied to the total damages in the judgment. That is the best way that I can explain it at this stage. If your Lordships find my explanation difficult to follow, the only thing that I ask is that I should be allowed at Report stage to bring in a blackboard and chalk; I would then try again to demonstrate how the arithmetical formula works.

The second lacuna in Clause 6(1) as it is now drafted is that it does not cover the recovery of money representing property seized. The noble and learned Lord the Lord Advocate has not addressed us on Clause 26, but may I say simply yes, his Clause 26 does cover that problem. I would venture to make only two comments upon that. They are two drafting points and nothing more, but still I believe of substance. My first comment is that the word used in Amendment No. 26—"amount"—is, I suggest, stretching the meaning of that word beyond its normal use. Secondly, I suggest that the word "execution" as opposed to the word "obtain", which I use in my amendment, is too restrictive. I make those two drafting comments in the hope that one day the parliamentary draftsmen will harken to my humble suggestions.

The third lacuna is the assignment lacuna. That arises when a judgment debt is assigned from the original judgment creditor to another party. Then the other party is in a position in England to sue on that judgment debt. My suggestion is that it should be covered, and the noble and learned Lord the Lord Advocate has already intimated that it is the intention of the Government to bring in an amendment at Report to cover it.

The final comment which I make upon these four amendments—because they are all, as I have tried to illustrate to your Lordships, "tie-able" up into one parcel—is this: there is a certain difficulty in the clause as drafted. I am referring to Clause 19, as drafted in the Marshalled List. The difficulty is that there is no sentence in that clause. The noble and learned Lord the Lord Advocate is shaking his head. I do not want to get into a dispute about grammar with the noble and learned Lord——

Lord MACKAY of CLASHFERN

If you take account of Amendment No. 18 as well, I do not think I accept that.

Lord HACKING

That is a linkage which does not appear on the Marshalled List. If the noble and learned Lord the Lord Advocate is linking the two together and stretching the words from one clause to another, then we do find a sentence; but certainly we do not find a sentence in the first portion of the clause in Amendment No. 19.

I should like to do this. If he would be generous enough to take this course, I ask the noble and learned Lord the Lord Advocate to consider all four of these amendments to see whether they can now be tied together into one composite clause. If one looks at the Marshalled List, at the moment one has Amendment No. 19, then Amendment No. 26, which covers recovery concerning property; then one has also the helpful undertaking of the noble and learned Lord the Lord Advocate to consider assignment. So we have one amendment, then an amendment to an amendment, and then a proposed amendment to an amendment. I suggest to the Committee that it would be helpful if they could be all drawn together into one clause. That is why I am asking the noble and learned Lord the Lord Advocate to be kind enough to approach it in this way.

Lord ELWYN-JONES

I intervene only briefly so as to get in before the noble Lord, Lord Renton, because he, being the Chairman of the Renton Committee on Drafting, would probably say what I am about to say; namely, that the drafting in subsection (1)(a) is breathtaking in its complexity. I wonder whether I may read it out to the Committee. Subject to subsections (2) and (3) below the qualifying defendant shall be entitled to recover from the party in whose favour the judgment was given"— that is fairly easy so far— so much of the amount referred to in sub-section (1) above as exceeds the part which bears to the whole of it the same proportion as the sum assessed by the court that gave the judgment as compensation for the loss of damage sustained by that party as bears to the whole of the damages awarded to that party". I wonder whether that could be reduced to a little fraction. I have seen it done in a Bill. Your Lordships will know the sort of thing that one used to see on the famous blackboard that we have had referred to, in a class at school. It is really extremely difficult.

Lord RENTON

May I say how grateful I am to the noble and learned Lord, Lord Elwyn-Jones. I think there is still a strong case for reminding parliamentary counsel, who do such a magnificent job for us, that even they are capable of still further improvement, perhaps on the lines recommended by the Committee on the preparation of legislation, to which the noble and learned Lord referred. He has given us another example of what is sometimes called an arcane art, which leaves us with long sentences of great complexity, whereas shorter sentences and more subsections would make things more easy.

With regard to the substance of the amendments proposed by my noble and learned friend the Lord Advocate, I welcome them, and I do so even though it clearly means that my Amendment No. 22 would fall because it could not be fitted into the drafting (which your Lordships will no doubt accept) of the amendment of my noble and learned friend the Lord Advocate, Amendment No. 19.

I think it is right that when we are trying to introduce these very adventurous claw-back provisions we should do so with great precision, and indeed draw them as widely as possible, because to the extent that we know the claw-back provisions, those who are adversely affected by them—and of course they are over-seas—will take full advantage of the narrowing.

If it is not out of order for me to do so, I should perhaps mention that had it been possible to consider my Amendment No. 22 it would have had the purpose of probing the Government on a matter raised in another place, where the Attorney-General undertook to consider it further. The effect of the amendment was to draw attention to the fact that the clause as drafted and still in the Bill (although it will not be there for long) operates where the overseas authority has legitimately according to its own eyes, but wrongly according to British eyes, exceeded its jurisdiction. So we really must make quite sure that this Clause 6 is widely enough drawn.

I should like to support what the noble Lord, Lord Hacking, said, especially about the position of multiple defendants. Even now that does not appear to be adequately covered by the Bill, and I hope that by Report stage that matter may be dealt with. I should like to make a personal apology to your Lordships. I have a very compelling engagement of long standing outside the House and I shall not be able to remain very much longer.

Lord MACKAY of CLASHFERN

So far as the amendment is concerned, I would invite your Lordships to agree it. I certainly undertake to consider the matters which have been raised, and I am sorry that not even the mellifluous Welsh accent of the noble and learned Lord, Lord Elwyn-Jones, makes this entirely happy. We will see whether we can improve it.

On Question, amendment agreed to.

The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger)

I have to call your Lordships' attention to the fact that if Amendment No. 19 or Amendment No. 20 is agreed to I shall not be able to call Amendment No. 21.

Lord MACKAY of CLASHFERN moved Amendment No. 19: Page 5, leave out lines 40 to 44 and insert ("(in this section referred to as a "qualifying defendant") and an amount on account of the damages has been paid by the qualifying defendant either to the party in whose favour the judgment was given or to another party who by virtue of any enactment or rule of law is entitled as against the qualifying defendant to contribution in respect of the damages. (1A) Subject to subsections (2) and (3) below, the qualifying defendant shall be entitled to recover from the party in whose favour the judgment was given so much of the amount referred to in subsection (1) above as exceeds the part which bears to the whole of it the same proportion as the sum assessed by the court that gave the judgment as compensation for the loss or damage sustained by that party bears to the whole of the damages awarded to that party.").

The noble and learned Lord said: I have already explained this amendment. I beg to move.

Lord HACKING

I am a little troubled that this amendment is being moved at this stage in view of the remarks that I have made to the Committee and the difficulty of proceeding forward on this amendment when the noble and learned Lord, Lord Mackay of Clashfern, has down Amendment No. 26. He has also undertaken to deal with the assignment matter, which again is something which should be incorporated in Amendment No. 19. In those circumstances, would it not be more satisfactory if Amendment No. 19 was not carried?

Lord LLOYD of KILGERRAN

I support the noble Lord, Lord Hacking, in his submission to the noble and learned Lord the Lord Advocate. I have an amendment tabled, No. 21, which I am sure would appeal to the noble Lord, Lord Renton, on account of its clarity, its brevity and its conciseness. If Amendment No. 19 is accepted by the Committee, then my little amendment will fall.

Lord ELWYN-JONES

Will the noble Lord allow me to say that nothing dealing with intellectual property is clear or understandable?

Lord MACKAY of CLASHFERN

I would prefer to have this amendment agreed to, subject to the undertaking which I have given; and in that case we would try to improve the clause as a whole, if that is convenient to the Committee.

Lord LLOYD of KILGERRAN

I am not quite sure of the scope of the undertaking given by the noble and learned Lord the Lord Advocate, but will he consider my Amendment No. 21 in that general undertaking?

Lord MACKAY of CLASHFERN

Yes, indeed, I shall be happy to do that.

On Question, amendment agreed to.

5.38 p.m.

Lord HACKING moved Amendment No. 20: Page 5, leave out lines 40 to 44 and insert ("(in this section referred to as a "qualifying defendant") and the judgment creditor or any assignee thereof or any other person or any assignee thereof who by virtue of any enactment or rule of law is entitled as against the qualifying defendant to contribution in respect of the damages, has been paid or obtained from the qualifying defendant, or from any company which is (directly or indirectly) wholly owned by him, money or property on account of the damages, the qualifying defendant, subject to subsections (3) and (4) below, shall be entitled to an order under subsection (1A) below.").

The noble Lord said: In view of the position taken by the noble and learned Lord the Lord Advocate on Amendment No. 19, I formally move Amendment No. 20. I have already addressed the Committee on this and I have no further argument to put forward. I beg to move.

Lord MACKAY of CLASHFERN

As I said earlier, this raises the question of the assignee—a rather difficult question which we are hoping to solve in due course. I would ask the noble Lord to be so good as to withdraw this amendment, on the undertaking that we shall endeavour to cover this matter and possibly some related matters in an amendment to be brought forward at a later stage.

Lord MISHCON

May I try to help by saying that as one who dealt with the question of assignment on Second Reading I consider that the noble and learned Lord has dealt with that suggestion very generously today, and I certainly have no objection to this matter waiting until the Report stage, so that we may see the clause.

Lord HACKING

If I may say so to the Committee, that is entirely satisfactory. The Committee has already heard me express more than once my concern as to how these clauses should be joined together; the noble and learned Lord the Lord Advocate has made his response, and in those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.40 p.m.

Lord MACKAY of CLASHFERN moved Amendment No. 24: Page 6, line 1, leave out from ("(2)") to ("is") in line 2 and insert ("Subsection (1A) above does not apply where the qualifying defendant").

The noble and learned Lord said: This amendment is consequential, and the same applies to Amendments Nos. 25 and 26. I beg to move.

On Question, amendment agreed to.

Lord MACKAY of CLASHFERN moved Amendment No. 25: Page 6, line 7, leave out from ("(3)") to ("carried") in line 8 and insert ("Subsection (1A) above does not apply where the qualifying defendant").

On Question, amendment agreed to.

Lord MACKAY of CLASHFERN moved Amendment No. 26:

Page 6, line 15, at end insert— ("() The reference in subsection (1) above to an amount paid by the qualifying defendant includes a reference to an amount obtained by execution against his property or against the property of a company which (directly or indirectly) is wholly owned by him.")

On Question, amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 [Short title, interpretation, repeals and extent]:

Lord LLOYD of KILGERRAN

had given Notice of his intention to move Amendment No. 27: Page 6, line 20, after ("Act") insert ("except so far as the context otherwise requires"). The noble Lord said: In view of the undertaking given by the noble and learned Lord the Lord Advocate in regard to amendments to Clause 6, I do not propose to move Amendment No. 27.

[Amendments Nos. 27 and 28 not moved.]

Lord MACKAY of CLASHFERN moved Amendment No. 29:

Page 6, line 32, at end insert— ("() Subsection (4) above shall not affect the operation of the said Act of 1964 in relation to any directions given under that Act before the passing of this Act.")

The noble and learned Lord said: The purpose of this amendment is simply to keep in being action taken under the earlier Act, although this Bill will repeal it. I beg to move.

On Question, amendment agreed to.

Clause 7, as amended, agreed to.

Title agreed to.

House resumed: Bill reported with the amendments.