§ 3.52 p.m.
§ Report received.
§ Clause 1 [Overseas measures affecting United Kingdom trading interests]:
Lord MACKAY of CLASHFERN moved Amendment No. 1:
Page 2, line 4, leave out from ("above") to end of line 6.
§ The noble and learned Lord said: My Lords, I beg to move this amendment, which is put forward in response to the point raised by the noble Lord, Lord Renton, as to whether a foreign law requiring registration of a contract was covered by the subsection. Rather than start listing examples of requirements which can be dealt with by this subsection, and thereby possibly limiting the scope of the clause by implication, we have, on consideration, decided that the best way of removing doubt would be to remove the examples that we have given. I am very grateful to the noble Lord, Lord Renton, who is unfortunately not here today, for I having raised this point. I beg to move.
§ Lord ELWYN-JONES
My Lords, I am sure that the House will indeed be 909 grateful to the noble and learned Lord for meeting the point made by the noble Lord, Lord Renton. I think it certainly improves the Bill and runs the risk of diminution rather than inclusion, as the Bill already stood.
§ On Question, amendment agreed to.
§ Clause 2 [Documents and information required by overseas courts and authorities]:
Lord LLOYD of KILGERRAN had given Notice of his intention to move Amendment No. 2.:
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: My Lords, in view of Amendment No. 3 put down by the Government and the very helpful discussions I have had with the legal advisers to the Secretary of State, Mr. Ayling and his team, this amendment is not moved.
§ 3.54 p.m.
§ Lord MACKAY of CLASH FERN moved Amendment No. 3:
Page 3, line 10, leave out paragraph (b) and insert—
("(b) if it requires a person to state what documents relevant to any such proccedings are or have been in his possession, custody or power or to produce for the purposes of any such proceedings any documents other than particular documents specified in the requirement.")'
§ The noble and learned Lord said: My Lords, this amendment deals among other matters with a point which was raised first on Second Reading and then in Committee by the noble Lord, Lord Mishcon, about this particular clause. We were also in doubt in considering the point that the noble Lord raised as to whether the provision adequately included persons in the United Kingdom who were the subject of a requirement from abroad but who were not parties to litigation in the overseas country. This amendment is a re-draft of the provisions and it now more closely reflects the wording used in Section 2(4) of the Evidence (Proceedings in other Jurisdictions) Act 1975. I hope it will satisfy the noble Lord. Lord Mishcon, but in any event I believe it clarifies the power we seek to confer on the Secretary of State. I beg to move.910
§ Lord MISHCON
My Lords, may I thank the noble and learned Lord not only for his courtesy but for the clarification which now appears, which I find eminently satisfactory.
§ Lord HACKING
My Lords, I stand to oppose this amendment, and I do so in what I hope will be a helpful stance. I stand also to ask the noble and learned Lord the Lord Advocate whether he would consider keeping the clause as it was originally drafted—the clause which, by means of this amendment, he now seeks to replace by the new clause. I do so because I am concerned that the amended clause opens the door to pre-trial discovery, which is known particularly in the United States of America and which is the subject of the greatest concern in this country. Indeed, US discovery procedures was a major factor in causing the Government to bring this Bill before Parliament.
I would ask your Lordships to look at the original draft of Clause 2(3) (b). Your Lordships will see that it is inadmissible. Perhaps I had better go a step further back, because the matter is somewhat complicated. The Secretary of State has power to prohibit the production of documents if they come into the admissible categories which are set out in subsections (2) and (3). In Clause 2(3) (b), as it is, the Bill provides that when a requirement from a foreign court ismade wholly or mainly for the purpose of obtaining discovery of documents in any such proceedingsand that refers to civil and criminal proceedings, there is an "inadmissible" requirement which will enable the Secretary of State to make the appropriate direction. As drafted, that covers, in its entirety, pretrial discovery, because it is not couched in the same language as paragraph (a) which concerns preceedings which have actually been instituted.
Your Lordships will see from the amendment that in the case of listed documents —and I will not develop the argument further in any detail—those documents can be required during the pre-trial discovery stage. The extent of United States pre-trial discovery is really quite mind-boggling to those who are familiar with the discovery procedures in our own country. There are rights 911 without identification—and I accept, of course, that the amendment makes reference to "particular documents"—to go into the files not only of another party but of persons or parties who are not connected with the action; and then the party under a United States discovery order has the right to open every drawer and every file, not only of other parties in the action but of third parties as well.
This amendment does seek to restrict that discovery to:particular documents specified in the requirement".I suggest that in fact is not going to be very much of a limitation upon discovery procedures, as used in the United States of America.
How are the documents to be described? Are they to be described by particular identification? That is far too onerous on the person who is seeking discovery and as, for example, in English notices to produce documents you are entitled to use a more general route in order to identify the documents. Then, using that more general route, a request for documents "relating to Subject X" or "Person Y" or "Board Minutes," for example, could quickly open the door widely to pre-trial discovery.
There are other considerations of concern. The next one, I suggest, is: what is the definition of civil proceedings? Does that cover foreign Government agency investigations? In the United States, as your Lordships will know, there are a number of very active, very large and very powerful Government agencies—the Federal Trade Commission, the Federal Maritime Commission, the Securities Exchange Commission and the Commodities Federal Trade Commission. Each of these agencies has the most extensive investigatory powers. They have the capacity, sometimes, almost to paralyse major corporations which are under the full thrust of their investigations.
Let me cite one example. The right of the Federal Trade Commission to carry out investigations is vested in Section 6 of the Federal Trade Commission Act, which reads in this manner:To gather and compile information concerning and to investigate from time to time the organisation, business conduct, practices and management of any corporation engaged in commerce, 912 excepting banks and common carriers, and its relation to other corporations and to individuals, associations and partnerships.If your Lordships pause for a moment at those words, you will realise quite how extensive these powers are. These investigations are carried on extensively throughout the United States of America and the size of each of these bodies is tremendous. The number of lawyers in the Anti-Trust Division alone of the Department of Justice is more than 300. If those proceedings fall into the category of civil proceedings, your Lordships will see the extent to which the Government are—and, I suggest, unwittingly—opening the door to the very worry that this Bill has been designed to deal with.
There is another point that I would make in passing, because I have addressed your Lordships for some time on this proposed amendment of the Government. This matter is more concerned with paragraph (a) than with paragraph (b). When do these investigations by foreign Government agencies begin? Is it when the resolution is passed, or when is it?
The only other matter to which I would draw your Lordships' attention, and which again is wholly germane to my argument, is another device that is used. It is set out in, I think, the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, but my source may not be accurate. Let me tell your Lordships what creature I am talking about. I am talking about civil investigative demands. These are issued by the Department of Justice. Once again, they are a means of discovery, a means of production of documents. It was the use of civil investigative demands by the Department of Justice, in the area of North Atlantic shipping, that caused Mr. Stanley Clinton Davis, who was then Under-Secretary of State for Trade in the former Government, to say in the House of Commons in November, 1978:The disclosure of documents sought under CIDs from British companies would constitute an infringement of the jurisdiction which under international law belongs to the United Kingdom.I apologise for speaking at length to your Lordships, but this is a matter of great concern. I shall be very grateful if the noble and learned Lord the Lord Advocate can consider more at leisure the points that I have made.
§ 4.4 p.m.
§ Lord MACKAY of CLASHFERN
My Lords, I am grateful for the opportunity of leisure to consider these matters, but my immediate answer is that I would think that the clause as amended is satisfactory to deal with the matters to which the noble Lord has referred. For example, I should have thought that a broad description such as "all documents relating to X or Y" or "board minutes" would not satisfy the terms of the amendment where it refers to,other than particular documents specified in the requirement.I should think that general descriptions, such as those the noble Lord quoted, are just the antithesis of what is there set out.
So far as what one might call preliminary proceedings are concerned, I would think that a good number of these—indeed, I believe all of these—are excluded in the terms of Clause 2(3)(a) already, and of course there is the more general power in subsection (2) with its very general discretion. So I believe that the points that the noble Lord has raised are adequately covered, although I am greatly obliged to him for bringing these to our attention.
§ Lord ELWYN-JONES
My Lords, I am bound to say that I, too, was pondering as to what thoughts the noble Lord, Lord Hacking, himself might have to deal with the mischiefs which he was describing. He has given us the benefit of his criticism. I wonder whether he, also, would use such leisure as he may possess to bring forward suggestions as to how these mischiefs which he so vividly painted, should be dealt with.
§ Lord LLOYD of KILGERRAN
My Lords, I also am familiar with pre-trial discovery proceedings in America, but not so familiar as the noble Lord, Lord Hacking. But having regard to what the noble and learned Lord the Lord Advocate has indicated, I should have thought that this amendment was an improvement in relation to the Bill. I myself have had this point in mind about giving greater protection to United Kingdom firms and persons from the really outrageous actions that happen in pre-trial discovery in America, and I thought that my Amendment No. 2, which suggested that there should be powers to prevent the person 914 involved from going out of the country, would be helpful. But as I indicated earlier, I had some help from the legal advisers of the Secretary of State that it would be very difficult, and perhaps unsatisfactory from a constitutional point of view, to stop a person from going out of jurisdiction so that he might not be dealt with in America. I support this amendment.
§ On Question, amendment agreed to.