HL Deb 21 February 1980 vol 405 cc926-52

4.42 p.m.

Consideration on Report resumed.

Lord LLOYD of KILGERRAN moved Amendment No. 4: Page 3, line 31, after ("to") insert ("or in the possession of").

The noble Lord said: My Lords, I beg to move Amendment No. 4. This is a short and simple amendment intended further to protect the interests of British firms and their personnel, and thus increase or clarify the scope of the protection given in the Bill to United Kingdom firms.

At present the scope of the protection to be found in Clause 2(6) relates to: a document or information relating to a business of any description. The question is: what is the scope of "relating to a business of any description"?

My amendment seeks to extend the protection given not only to information relating to a business, but information in the possession of a business. There may be documents in the possession of a company which do not relate to any business of any description. During the Committee stage I gave the example of a patent specification. The patent may have lapsed and it will be just a piece of worthless paper, not likely ever to be used in any business. However, on that patent specification—which is in the possession of the firm, but not relating to its business—there may be the names of certain inventors and there may also be names in the body of the specification. If it is held that that is not a document relating to a business, then it would be possible—particularly in the very wide pre-trial discovery proceedings in America—to ask for some information relating to the matters in that document, which is in the possession of the company but does not relate to any business whatsoever. I beg to move.

Lord MACKAY of CLASHFERN

My Lords, I undertook during the Committee stage to consider this matter. I have tried to do so and the department has done so, in a sense, independently. The situation is that the kind of document that the noble Lord, Lord Lloyd of Kilgerran, has mentioned as an example would, I think, fall within the definition. Although it is not a document which may be currently used in the business, it is presumably kept by the business because of a possible connection with the business either in the past or in the future—for instance, we know that solicitors are notable for keeping matters that were connected with their past business.

However, "relating to a business" is a very wide expression. As I pointed out at the Committee stage, the amendment proposed by the noble Lord, Lord Lloyd, would have the effect of covering private documents which happened to be in the possession of a business—for example a solicitor's business—for purposes of safekeeping, or in connection with someone else's private affairs.

Therefore, I take the view—and I am confirmed in that view by the independent review which the department itself carried out—that the phrase in the Bill as drafted is sufficiently wide to cover all that we are likely to need to cover, and I hope the noble Lord will see his way to accept that point of view.

Lord LLOYD of K1LGERRAN

My Lords, if the noble and learned Lord had confined his reply to the last couple of sentences I should be much happier, because the reason that he gave in relation to patent specifications was, if I may say so, a little unrealistic to a practitioner like myself in this area. It often happens that patent specifications are kept in the possession of a company for no reason whatever: they just happen to be there. However, in view of the fact that the noble and learned Lord has indicated that he feels that my particular example does fall within the scope of the Bill as it is, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

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

Lord MACKAY of CLASHFERN moved Amendment No. 5: Page 5, line 4, leave out ("or").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 5. I should like to seek to explain Amendments Nos. 5 and 6 together. The purpose of these amendments is to deal with the point raised during the Committee stage by the noble Lord, Lord Hacking. These amendments introduced a third class of overseas judgment which shall be unenforceable in the United Kingdom—namely, a judgment on a claim for contribution in respect of damages awarded by a judgment which is currently unenforceable under Clause 5, apart from the amendment.

My view had been that such a judgment would probably be covered already by the terms of Clause 5. But, having considered the point again in the light of the noble Lord's support for his amendment, I agree that the matter is not entirely free from doubt and, to avoid doubt for the future, I now move the amendment to cover judgments of this character. I beg to move.

Lord HACKING

My Lords, I too should like to address the House on Amendments Nos. 5 and 6 and in so doing express my warm thanks to the noble and learned Lord the Lord Advocate for moving this amendment. I also express my gratitude that he has chosen to do so at this time, for he is just in time! On 27th February last year in the United States Eighth Circuit in a case called Professional Beauty Supply Inc. v. National Beauty Supply Inc. the Court of Appeals ruled that contribution was available in private anti-trust suits. And only today in a telex from New York I have received this message: A Bill (No. 1468) has recently been introduced into Congress for the purpose of permitting contribution and set off under certain conditions". I am very grateful to the noble and learned Lord.

On Question, amendment agreed to.

Lord MACKAY of CLASHFERN moved Amendment No. 6:

Page 5, line 7, at end insert ("; or (c) a judgment on a claim for contribution in respect of damages awarded by a judgment falling within paragraph (a) or (b) above.").

On Question, amendment agreed to.

4.49 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 7:

Page 5, line 7, at end insert ("; or (c) a judgment or order for recovery of any sum in so far as the said sum shall have been increased by allegations or claims relating to multiple damages pursued in the course of proceedings before the said court.").

The noble Lord said: My Lords, I beg to move Amendment No. 7. The purpose of this amendment is again to try to increase the protection for a United Kingdom firm against having to pay not only when there is a judgment for multiple damages issued against it but in, for example, proceedings in the United States of America, where the final judgment or order is for any sum, and where in the course of those proceedings claims have been pressed in relation to anti-trust although the final judgment does not say that there is a judgment in respect of multiple damages for anti-trust.

I should like to take a typical example. A patent action may be started in the United States and a counter-claim or separate proceedings in relation to this anti-trust proceedings may be taken by the American firm. Eventually—and sometimes these cases take years—the case may be settled or it may be lost by the United Kingdom company in the United States of America, and a large sum awarded by the courts or the authorities against the United Kingdom firm. There mayalso follow, as a direct result of the way in which those proceedings have been conducted—although there is no final judgment saying that there is anything contrary to the anti-trust law of the country—other expensive legal proceedings for example, involving the United Kingdom's other licensees in America, their Canadian licensees or even licensees in other countries who have read the transcripts of the proceedings in the United States of America. All that vast expense will have been put on the United Kingdom interests by the United States firms and, because of the tough line taken by Americans in relation to these anti-trust proceedings, it may follow that in awarding a sum against the United Kingdom firm, the court will have in mind all these matters of anti-trust, and that the sum awarded will have been very considerably increased as a result of the way in which the proceedings have been conducted by the United Kingdom firm.

Therefore, the intention behind my amendment is that protection should be given to the United Kingdom against having to pay not only in judgments which directly result in an order about anti-trust, but in: … a judgment or order for recovery of any sum in so far as the said sum shall have been increased by allegations or claims relating to multiple damages pursued in the course of proceedings before the said court or the said authority. I submit to your Lordships a realistic position for a United Kingdom firm when it is dealing with its intellectual property activities in the United States. In my submission, it would be very helpful to certain branches of industry if some help, in the discretion of the Secretary of State, could be given in those circumstances. I beg to move.

Lord MACKAY of CLASHFERN

My Lords, I am very much obliged to the noble Lord, Lord Lloyd of Kilgerran, for raising this matter again and also for the benefit of a discussion with him about the problem. The difficulty here is to identify in a way which is suitable for the purposes of such an enactment as we seek to produce, the situation with which he is dealing. As I think I mentioned in Committee, the difficulty of putting rights on allegations or claims which are not established is quite a real one. However, if this problem can be identified more closely as time develops, it may be that the discretion which the Secretary of State has under sub-section (2)(b) could be used to cover it, because the discretion there given is quite wide—it might be used to cover this situation. However, for the reasons which I have given, I do not think that the amendment as proposed is very satisfactory, and certainly we have been unable to identify with sufficient precision for this purpose the situations which the noble Lord has in mind. Therefore, I invite the noble Lord to withdraw this amendment.

Lord LLOYD of KILGERRAN

My Lords, I thank the noble and learned Lord in particular for allowing me to have a discussion with him about this broad matter. Frankly, I had not considered the position of the Secretary of State under Clause 2(1)(b)—I understand that that was the reference which the noble and learned Lord made.

Lord MACKAY of CLASHFERN

My Lords, Clause 5(2)(b).

Lord LLOYD of KILGERRAN

My Lords, I should like to consider the position arising under Clause 5(2)(b) and be allowed to raise this matter at a later stage. In those circumstances, while thanking the noble and learned Lord, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.55 p.m.

Lord HACKING moved Amendment No. 8:

Page 5, line 7, at end insert ("; or (c) a judgment for punitive or exemplary damages; or (d) a judgment given in proceedings in respect of which the Secretary of State had given directions under section 1(3) above or under section 2(1) above.").

The noble Lord said: My Lords, as your Lordships will remember, the noble Lord, Lord Renton, moved similar amendments at the Committee stage, and I have tabled the same amendments as he tabled, with a slight adjustment in what has been described in the Marshalled List as paragraph (d). That adjustment is to remove some of the words which the noble Lord, Lord Renton, had in his amendment, and to include reference to Section 2(1) as well as reference to Section 1(3).

These amendments seek to add to the categories of foreign judgments which under this Bill are to be unenforceable in England. There are, in fact, three parts to this amendment: first, foreign judgments which have a punitive or exemplary damages element; secondly, foreign judgments concerning which there have been in the United Kingdom directions from the Secretary of State for Trade under the powers of Clause 1(3) of the Bill; or, thirdly, under Clause 2(1). However, as a matter of convenience for drafting I have grouped them all together in one amendment. Therefore, if one of the three finds favour during the course of the Report stage in this House, I would move that one at Third Reading. If they all find favour before your Lordships at the Report stage, then I shall have the greatest of pleasure in pressing my amendment before your Lordships now during the Report stage!

Your Lordships may recall some of the arguments that were used by the noble Lord, Lord Renton, about punitive damages. Your Lordships may also recall how I had some hesitation about whether it was appropriate to make unenforceable a foreign punitive damage award when we, in this country, in certain circumstances have punitive damages. Having heard the noble Lord. Lord Renton, I came to the conclusion that it was not a case of like with like; that the award of punitive damages in this country is extremely rare and usually for the most moderate sums.

That is not so in the United States of America. Your Lordships may have heard, for example, of the famous, or perhaps I should say infamous, 1978 Ford Motor Car Company case—the Ford Pinto case—in which punitive damages of 125 million dollars were awarded. Your Lordships may also recall that in Committee the noble Lord, Lord Renton, drew attention to another case in which the plaintiff recovered 350,000 dollars as compensatory damages, but 10 million dollars in punitive damages.

The awarding of punitive damages in the United States of America is causing some concern. Recently a report was issued by the Department of Commerce in Washington which drew attention to some areas of concern. As your Lordships may know, the jury is used much more extensively in the United States of America than in this country, and it is the enthusiasm of some juries in the United States that has driven the awards to such high levels. It is causing concern on a number of fronts in the United States, and that is why it is not inappropriate for us to consider the matter in your Lordships' House. For example, the damages are so high that medical insurance is becoming a major problem; also many insurance companies will not now insure motorists because of the high punitive element of damages which have driven the damages awarded so high in motor-car injury cases. There is also concern about the element of combining both civil and criminal proceedings into one proceedings in which the defendant does not have the same safeguards as he would have if he was solely in criminal proceedings.

Therefore, I suggest to your Lordships that this is a matter of very serious concern. It is a matter that principally arises in the area of products liability, and is one that is causing British traders in the United States of America real worry. It is no good for anybody in your Lordships' House—I will not suggest that the Lord Advocate is going to produce this argument—to say, "Well, the problems are mainly in the anti-trust field, and therefore we need not concern ourselves about it". Of course punitive damages do not arise in the anti-trust field. Antitrust has its own system of damages; the triple damages which this Bill deals with in other parts. It follows therefore, that subsection (2)(a), which is the one which will protect us from the enforcement of the multiple damages anti-trust, will not be of any assistance.

But this is a matter for trade. This Bill is entitled the Protection of Trading Interests Bill, and this directly concerns trade because any manufacturer in England who either exports into the United States of America, because he has a manufacturing base by a subsidiary in the United States of America which produces goods, is exposed to product liability law in the United States of America, and is also exposed to these enormous punitive damages. For that reason I urge the noble and learned Lord to consider again this amendment, and to consider the argument that I have now added to the argument of the noble Lord, Lord Renton.

The level of United Kingdom trade into the United States of America is of colossal proportions. What is not commonly known the world round is that Britain has been the biggest investor into the United States of America for many years. Even in United States terms Britain is an important trader. There is one other argument as part of my submissions, and that is the public policy argument; the argument that foreign punitive damages awards would not be enforced in England because it is against public policy. I am not going to argue that out. I recognise that there is strength in that argument.

But there is another important aspect to look at, and that is the presentation of the Bill. As has been expressed, both in another place and in your Lordships' House, nobody really expects the provisions of the Bill to be used. This Bill is a stand by the United Kingdom; a statement almost in international law by the United Kingdom in protection of United Kingdom interests. It is therefore of supreme importance that we state our law and our position clearly on the face of the Act, rather than just leave it to the knowledge of English lawyers, "That will be all right. It falls under the field of public policy. It will not be enforced". I strongly urge on this House that the Bill states in terms that we will not enforce punitive damages if that is the decision of this House, and that is the decision that I am seeking from this House.

After that strong peroration on punitive damages, let me come to the other two categories of foreign judgment that I am asking your Lordships to bring into the unenforceable group. Both of these refer back to directions that the Secretary of State will have discretionary power to give directions under Clause 1(3) and Clause 2(1). Under Clause 1(3) the Secretary of State has power to give directions to persons in the United Kingdom against complying with foreign measures which are damaging to British trading interests. Under Clause 2(1) the Secretary of State has power to give directions to persons in the United Kingdom concerning complying with unacceptable foreign discovery orders. What the latter two parts of my amendment do is to say that if a foreign judgment has been obtained either by the route of unacceptable foreign measures because they are damaging to the interests of British trading, or because unacceptable foreign discovery procedures have been used, then the judgment itself should be unenforceable.

At the Committee stage I cited an example. I shall cite the same example briefly now. In the early 1970s the English company, Beechams, was concerned in an anti-trust litigation which was tried in Washington under Judge Sirica. During the course of the trial there was an order to Beechams to produce a large number of documents. Beechams objected to producing those documents and sought protection under the Shipping Contracts and Commercial Documents Act 1964. They were given protection by the Secretary of State, who ordered that they should not be compelled to produce a large number of documents that they had been ordered to produce by the court in Washington.

What Judge Sirica then did was to make findings of fact against Beechams in all areas where they had not produced the documents. If that had gone through—it did not in this particular case—as a foreign judgment, then the foreign judgment would have been obtained adverse to directions made by the Secretary of State. It is for that reason that I have urged on your Lordships that these two further categories of foreign judgments should not be enforceable under Clause 5.

5.7 p.m.

Lord MACKAY of CLASHFERN

My Lords, I perfectly understand and sympathise with the noble Lord's desire to ensure that punitive or exemplary damages given by foreign courts should not be enforceable in the United Kingdom. However, although it is true that that might well affect the trading interests of the United Kingdom, it would go beyond that. It would affect the rights of people who had obtained such awards, for example, who might not be traders at all. The situation therefore appears to be one which should be covered, if it is to be covered, in a statute dealing with the enforcement of foreign judgments generally rather than in a statute of this sort.

Accordingly, this is a matter for consideration by the noble and learned Lord the Lord Chancellor, who has responsibility in England and Wales for this matter, and the Lord Advocate has that responsibility in relation to the law of Scotland. While understanding the noble Lord's desire in the matter, I would suggest that this is not an appropriate place in which to give effect to it.

With regard to the second matter, again I accept the logic of the argument which has been forcefully put. However, as I said in Committee—and I shall not repeat the arguments now—this amendment could only apply to civil monetary judgments, and these currently only exist, so far as we are aware, under the United States anti-trust legislation, and that is already covered. We would therefore prefer to stay with the situation as it exists, with powers of course for the Secretary of State under the provision I referred to earlier in this clause, subsection (2)(b), to deal with any development. I would therefore invite the noble Lord to withdraw this amendment.

Lord HACKING

My Lords, it is my intention to withdraw the amendment. There is nothing to be gained by dividing the House. Your Lordships have heard the arguments; the Lord Advocate has heard the arguments. May I leave it on the pages of Hansard—and there is always the Third Reading.

Amendment, by leave, withdrawn.

5.10 p.m.

Lord MACKAY of CLASHFERN moved Amendment No' 9: Page 5, line 17, after ("restrain") insert (",distort").

The noble and learned Lord said: My Lords, this amendment gives effect to a point raised by the noble Lord, Lord Lloyd of Kilgerran, in Committee, and, as he pointed out then, the definition in the amendment is recognised by Article 85 of the Treaty of Rome and conforms with the definition in the current Competition Bill which your Lordships were considering in Committee so recently. I am extremely grateful to the noble Lord for raising the point and happy to be able to accede to his suggestion.

Lord LLOYD of KILGERRAN

My Lords, I take it as a great tribute to myself that I find my name so closely associated with that of such a distinguished noble and learned Lord. It seems this afternoon that the Celtic fringe is in harmony not only between themselves but in the context of the Treaty of Rome, from parts of which many of us have suffered in the last few years.

Lord ELWYN-JONES

My Lords, it also adds a superfluity of verbs, which is also characteristic of the race of my noble friend and myself.

On Question, amendment agreed to.

Clause 6 [Recovery of awards of multiple damages]:

Lord MACKAY of CLASHFERN moved Amendment No. 10: Page 5, line 43, leave out ("by virtue of any enactment or rule of law").

The noble and learned Lord said: Perhaps I could explain at the same time this amendment and Amendment No. 19. The purpose of these amendments is to ensure that any right of contribution that might arise from a contractual relationship would not be covered by the provisions of Clauses 5 and 6, and they are consequential on amendments which we made to Clause 6 to cover contributions. It seems right that anyone who freely enters into a contract which contains provisions relating to a right of contribution would not need protection such as is afforded here, and therefore the effect of these amendments is to exclude such contractual rights of contribution from the protection.

On Question, amendment agreed to.

5.12 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 11: Page 6, line 3, after ("given") insert ("or from any associate or subsidiary or permitted user of trade marks or exclusive licensee of any intellectual property of that party carrying on business of any description in the United Kingdom").

The noble Lord said: May I, my Lords, in speaking to this amendment, speak at the same time to Amendment No. 18 relating to the definition clause? The purpose of this amendment is to strengthen the hand of a United Kingdom firm which has been subjected to an order of, say, the American courts to pay large sums—to assist the firm in trying to recover some of that money which they have been forced to pay in multiple damages proceedings concluded against them—and it seems to me important that industry should feel that this Bill will work, particularly in regard to this matter.

If the United States company has no assets in this country, then the Bill is entirely nugatory, as it seems to me; it is no help whatever to the United Kingdom firm. Often the American company has over here, as a United Kingdom company, an associated company or a subsidiary company or a licensee under its patents or trade marks or designs, and the purpose of the amendment is to submit that the United Kingdom firm could claim first of all against the American associated company or its subsidiary company in the United Kingdom, provided the shareholding of the American company in the United Kingdom company is 50 per cent. or more.

I am fully aware that this matter came up in the other place, and the Attorney-General dealing with the matter on 6th December in Standing Committee F indicated that he had great sympathy for putting the United Kingdom firm into the position of being able to claim against a subsidiary or associated company of the United States firm which was in this country. He went on to give his reasons why he did not feel the matter should be pressed in so far as a subsidiary or associated company of the American company was concerned.

My amendment goes a little further than the amendment which was considered in the other place because I am limiting the associated company and subsidiary companies of the American company to a company in the United Kingdom which has 50 per cent. or more of its shares owned by the American company. If I may be permitted to take up a little of your Lordships' time, the argument of the Attorney-General was: In this country we require that a company carrying on business within the jurisdiction has itself to carry on business. It will not be enough that it has an ownership of shares in a subsidiary. That exactly was the point made by the honourable and learned Member for Abertillery. I have great sympathy for it, but it is a matter of how far down the line we shall go. We do not like what the United States courts are doing".

Perhaps I might interpose here that under United States law they find that interference and claims can be made against subsidiary companies with only 25 per cent. of the shareholding by the main company. The Attorney-General continued: Are we ourselves then going to do exactly the same because we think that it is unfair? The United States will claim jurisdiction on these grounds. We do not think that it is something that we ought to do here. It is a question of balance. Although I have the greatest sympathy for it, I think that the argument against two blacks is one that one should bear in mind".—(Official Report, Commons, Standing Committee F, 6/12/79, col. 68.) My amendment relates to specific kinds of subsidiaries where the shareholding of the American company is 50 per cent. or more. That is one aspect of the amendment.

The second aspect of the amendment relates to where the subsidiary company or associated company is, say, the exclusive licensee of the American company in respect of certain intellectual property rights; that is to say, patent rights, design rights and copyright rights. Under British law, the exclusive licensee of a patent—and I apologise for being so technical, but these are extremely important and realistic matters in modern industry—is for certain circumstances considered to be the owner of that patent. He can sue as the owner, and therefore in my submission, if the subsidiary company in the United Kingdom is not only one which is owned as to over 50 per cent. by the American company and is an exclusive licensee of the patent, then the British company should be allowed to claim against that subsidiary of the American company. That is the second limb of my case.

As far as trade marks are concerned, a very special circumstance arises under British law in that regard, and that is that if company A is the owner of a trade mark, it can licence another company, company B, under the trade mark, but you do not refer to that company as the licensee; you refer to it as the registered user or permitted user because that kind of licence must be approved by a limb of the Secretary of State for Industry, the Patent Office. The Registrar of Trade Marks must approve the licence granted, and called the registered user agreement, between firms A and B.

Therefore it can often happen that in this country there is a British company over 50 per cent. owned by the American company and the British company is the registered user or permitted user, having the permission of the Secretary of State to use that trade mark. But another unique factor, arising only because we are dealing with trade marks, is that use by the British company—because it is the permitted user or registered user—is to be considered use by the parent American company for all purposes including purposes at common law.

The third limb of my submission to your Lordships is that where the American company has in the United Kingdom a subsidiary company of which it owns over 50 per cent. of the shares, and has made arrangements by permission of the Registrar of Trade Marks—it comes under the control of the Secretary of State—the British company that has paid these vast sums of money should have the right to claim against that company. I apologise for the technicailties involved. As the noble and learned Lord, Lord Elwyn-Jones, indicated when he interrupted me in the flow of my speech at the Committee stage, there is nothing simple about any matters in relation to intellectual property. However, the instance that I have given is a commonplace for those of us in industry who are concerned with these important matters of trade marks. I beg to move.

Lord HACKING

My Lords, I rise to support the noble Lord, Lord Lloyd of Kilgerran, on the amendment that he has just put before your Lordships. I will not follow him in his detailed argument on intellectual property. May I put it to your Lordships that he presented the matter persuasively, and I am absolutely sure that his argument is right. I want to turn to the larger point that the noble Lord raised in his submissions to the House; namely, regarding the effectiveness of Clause 6 of the Bill. Indeed, if my recollection is right—I was not present in your Lordships' House, but I have read Hansard—the noble and learned Lord, Lord Elwyn-Jones, raised this point during the Second Reading debate. The fact at the moment is that the clawback—to use that rather unattractive phrase—provision of Clause 6 is a clawback only to the foreign judgment creditor. I know that the noble and learned Lord the Lord Advocate has an amendment to widen the scope, but at this point it is a clawback only to the foreign judgment creditor. After the noble and learned Lord the Lord Advocate has moved his amendment it will be extended only to the assignee of the original foreign judgment creditor.

Since, (as the noble Lord, Lord Lloyd of Kilgerran, said) the foreign judgment creditor is most likely to be outside the jurisdiction of the United Kingdom—or to put it the other way round, is most unlikely to be inside the jurisdiction of the United Kingdom—then as currently drafted, the clause will have little effect. Since this is a novel Bill which in Clause 6 sets out new provisions which have never been used before, and sets out the stand of the United Kingdom on matters of international law concerning its trading rights, one is troubled that Clause 6 is left in its present form. For that reason, even though it may be a very late stage in the Bill, I ask the noble and learned Lord the Lord Advocate to consider this matter again. With great respect to the argument of the Attorney-General, it is not a question of two blacks; it is a question of one force meeting another. At the moment Clause 6 is not a substantial force, a balancing force from the United Kingdom, and as such I submit that the clause is too weak and hence not sufficiently effective. It is for that reason that I support the noble Lord, Lord Lloyd of Kilgerran.

5.24 p.m.

Lord MACKAY of CLASHFERN

My Lords, like my right honourable friend the Attorney-General, I have every sympathy with the arguments which have been put forward. In justifying this Bill not only to your Lordships but internationally, we have sought to take our stand on principle, and it is therefore necessary to be sure that what we put forward is in accordance with principle as we understand it. Clause 6 as it stands is a novel clause—I do not think that anyone has before tried this particular method of recovery—and it may be wise to proceed with caution. So at present our view is that, while there is much substance in the arguments which have been put forward, it is wise not to give effect to them.

This is of course a developing situation. As the Bill becomes law—as we hope it will shortly—the situation may well develop, and I think that I can give your Lordships an assurance that Her Majesty's Government will be paying very close attention to how the situation develops and will consider bringing forward in future further legisaltion in this field, if it should prove to be necessary. But at the moment our view is that it is wise to be cautious and to proceed within the principles which we sought to set out and which have international validity. So while I sympathise very much with what the noble Lord is seeking to do, I invite him to withdraw his amendment.

Lord ELWYN-JONES

My Lords, that gives me the impression that in this matter the Government—to coin a phrase—are willing to wound, yet afraid to strike, if in present conditions I dare mention the last verb. I see the anxiety that we do not want to build up a protective Bill into a great diplomatic issue between ourselves and the United States. However, I was a little disturbed to hear the noble Lord, Lord Hacking, say a few minutes ago that there was really no serious intention of enforcing the Bill. I do not know whether he meant that. I am sure that the noble and learned Lord the Lord Advocate would not like that message to emerge from our proceedings in this House. I confess that I share the concern of the noble Lords, Lord Lloyd of Kilgerran and Lord Hacking, that as the Bill will stand it will anchor a good deal of the effectiveness, but I understand the anxiety of the Government in this situation. In view of the assurance we have had that this is not going to be the end of the matter, but that it will be under the watchful eye of those who are responsible in this field, perhaps it may not be desirable to press the matter to a Division.

Lord LLOYD of KILGERRAN

My Lords, the noble and learned Lord the Lord Advocate said that the Bill was prepared in order to stand on principle. He then went on to say—and I agree with him—that this clause is a novel clause. However, I should like to urge upon the noble and learned Lord and his department that a little more commercial realism should be put into the clause. I am grateful to the noble Lord, Lord Hacking, for supporting the amendment. It seems to me that the whole intention of the Government in relation to the Bill is to have a diplomatic flag called an Act of Parliament, which they can wave at some kind of convention or meeting, and that in so far as British industry is concerned, Clause 6 has no effect whatsoever from the point of view of realistic commercial sense.

I was disappointed that the noble and learned Lord did not make any reply whatsoever to my specific submissions in relation to a United States company having a United Kingdom subsidiary in circumstances where the subsidiary was a registered user of the trade marks. Not many people know how valuable trade marks are in the commercial life of so many companies. Some of the trade marks with which one is concerned are worth £50 million or £100 million. They are not simple, everyday chattels that are worthless. The value of trade marks to British industry is extremely great. Therefore, where a British company has been subjected to multiple damages in the United States of America and has had to pay vast sums, it should be entitled to a greater scope in its attempts to collect something back from those vast sums. Although, as the noble Lord, Lord Hacking, said a few minutes ago, it is hardly worth while dividing the House on this matter, I should like to have heard more from the noble and learned Lord in regard to the specific matter involving trade marks which I mentioned. Subject to the fact that I may raise this at a later stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.30 p.m.

Lord MACKAY of CLASHFERN moved Amendment No. 12: Page 6, line 4, leave out ("which") and insert ("attributable to compensation; and that part shall be taken to be such part of the amount as").

The noble and learned Lord said: My Lords, some comment was made upon the drafting of this clause when the amendment which I proposed in Committee was under consideration. I think that the noble and learned Lord, Lord Elwyn-Jones, particularly, criticised the drafting, or at least called for us to consider whether we could improve it. This amendment is designed to break the clause and to make it clear what is proposed as the clause proceeds. I hope your Lordships will find it clarifying, and that it meets, at least to some extent, the point which was made by the noble and learned Lord. I beg to move.

Lord ELWYN-JONES

My Lords, the amendment allows a breathing space in the breathless process of reading this subsection, and to that extent I think it is a slight improvement. I welcome it, and am grateful to the draftsman for having applied his ingenious mind to improving the matter, as I think he has done.

On Question, amendment agreed to.

Lord HACKING had given Notice of his intention to move Amendment No. 13:

Page 6, line 8, at end insert— ("( ) In subsection (2) above where the party is a body corporate, the qualifying defendant shall be entitled to recover so much of the amount, to which the said subsection (2) refers, from any associated, affiliated or subsidiary body corporate of the party.").

The noble Lord said: My Lords, in a moment I intend to withdraw this amendment because the noble and learned Lord the Lord Advocate spoke on the principle of it when he was speaking on the principle of the amendment moved by the noble Lord, Lord Lloyd of Kilgerran, No. 11. But I rise to my feet chiefly because this is a convenient moment at which to make a comment, again on Clause 6, and to comment in the light of the remarks made by the noble and learned Lord, Lord Elwyn-Jones. What I said to your Lordships earlier in the Report stage was that I did not expect this Bill to be enforced, in the sense that I did not expect the Bill to be challenged in many areas by those from overseas. I had in mind, for example, that there are several powers in the Shipping Contracts and Commercial Documents Act 1964 which have never been exercised by the Secretary of State. It was in that sense that I was intimating that I did not expect it to be enforced, not in the sense that I anticipated any lack of willingness on behalf of Her Majesty's Government, of whatever political complexion.

Having made that observation, I would merely add that this is a matter of serious concern—so serious a concern, of course, that the Secretary of State thought it right in the first place to introduce the Bill in Parliament. The noble and learned Lord the Lord Advocate has stated, if I heard him correctly, that the Government will keep the position under review, and that if British companies continue to find themselves at a grave disadvantage under multiple damages awards (or possibly punitive damages awards, if I ever persuade the Government to include that provision in the Bill) then, if I heard the noble and learned Lord correctly, at the first opportunity the Government will bring provisions before Parliament in order to strengthen the Bill. Those provisions, I would anticipate, will be in Clause 6, because there lies the weak area.

Your Lordships should know—and I state this—that in the United States of America, as referred to by the noble Lord, Lord Lloyd, there are considerable powers to exercise rights against subsidiary companies when there is only a very small holding by the parent company in that subsidiary company. One has to go only to recent legislation in the United States of America to find how extensive those powers are. For example, the foreign boycott amendment, which was another one, in 1977. I have not got the chapter and verse before me, so I will not waste your Lordships' time searching for it in my papers; but there is another example where proceedings can be taken against a foreign subsidiary in the search for information needed for the enforcement of the foreign boycott provisions. Having addressed your Lordships to this extent, will resume my place and hear whether the noble and learned Lord the Lord Advocate wishes to say anything.

The DEPUTY SPEAKER. (Baroness Wootton of Abinger) s

My Lords, do I understand that the noble Lord does not wish to move this amendment?

Lord HACKING

My Lords, I have intimated my intention to withdraw it.

Baroness WOOTTON of ABINGER

My Lords, the noble Lord cannot withdraw a Motion which is not before the House. He must now move it and then subsequently withdraw it.

Lord HACKING

Then I will indeed move it formally, my Lords. I beg to move.

Lord MACKAY of CLASHFERN

My Lords, I have already endeavoured to explain the Government's position with regard to the principle of this, as the noble Lord, Lord Hacking, has said. This gives me an opportunity, which I should like to take, to make some reference to the trade marks position. I did not mean to pass that over as something of no importance; I meant to deal with it as part of the general principle on which we stood. We certainly appreciate the importance of these matters, and certainly it looks an area to which legislation could possibly at some stage properly extend. But at present, as I have said, we have tried to take our stand on the principle of the matter.

So far as enforcement is concerned, I had understood the noble Lord, Lord Hacking, at the earlier stage, to refer to enforcement in the way that he has done. The intention of Her Majesty's Government, of course, is that this Bill should be enforced on all appropriate occasions. Of course, the very existence of the Bill as an Act, when it comes to be legislation, may well make it unnecessary to take formal action under the provisions in some cases, as has happened under the older Act, to which the noble Lord, Lord Hacking, referred. But it is certainly the intention of the Government to use these powers to the full, and to hope that industry also, where appropriate, will use the powers of Clause 6 to protect their interests; because although I agree it is possible to extend Clause 6, we must not forget that it goes quite a long distance already, and I believe that that is an effective initial attack on the problem.

Lord LLOYD of KILGERRAN

My Lords, perhaps I may quite shortly thank the noble and learned Lord for coming back to the trade mark question, which he omitted to refer to earlier.

Lord HACKING

My Lords, at this stage may I formally withdraw the amendent.

Amendment, by leave, withdrawn.

Lord MACKAY of CLASHFERN moved Amendment No. 14: Page 6, line 26, at end insert ("; and references in that subsection and subsection (2) above to the party in whose favour the judgment was given or to a party entitled to contribution include references to any person in whom the rights of any such party have become vested by succession or assignment or otherwsie.").

The noble and learned Lord said: The purpose of this amendment is to cover the situation where a judgment has been assigned to another party. This point was raised by the noble Lord, Lord Mishcon, on Second Reading, and again, I think, by the noble Lord, Lord Hacking, when the Bill was before your Lordships in Committee. We undertook to consider the situation and I hope that this amendment deals with the matter satisfactorily and covers the situation where the judgment creditor assigns his rights. I beg to move.

Lord ELWYN-JONES

My Lords, we are grateful to the noble and learned Lord the Lord Advocate for meeting the point that was raised about assignees. My noble friend Lord Mishcon, who regrets his absence, has suggested to me that the drafting might be improved if there was a deeming provision included—"shall be 'deemed' to include references to any person", et cetera. I am not myself a lover of "deeming", I must say, but if the noble and learned Lord would care to look at that point I submit it as it was mentioned to me by my noble friend.

Lord MACKAY of CLASHFERN

My Lords, certainly I shall be very happy to look to see whether we can improve the situation still further.

On Question, amendment agreed to.

Lord MACKAY of CLASHFERN moved Amendment No. 15:

Page 6, line 26, at end insert— ("( ) This section shall, with the necessary modifications, apply also in relation to any order which is made by a tribunal or authority of an overseas country and would, if that tribunal or authority were a court, be a judgment for multiple damages within the meaning of section 5(3) above.").

The noble and learned Lord said: My Lords, the purpose of this amendment is to extend Clause 6 to cover the situation where a foreign tribunal—such as, for example, the Federal Maritime Commission in the United States—acting either judicially or inquisitorially, orders the payment of multiple damages. It has been brought to our attention that in some circumstances it may be possible for a tribunal or authority of an overseas country to order the payment of multiple damages, and that that tribunal or authority might not properly be regarded as a court. Therefore, it seems wise to make this extension; and, of course, Amendment No. 16 is consequential. I beg to move.

Lord HACKING

My Lords, I stand to thank and support the noble and learned Lord.

On Question, amendment agreed to.

Lord MACKAY of CLASHFERN moved Amendment No. 16: Page 6, line 27, after ("given") insert ("or order made").

On Question, amendment agreed to.

Lord MACKAY of CLASHFERN moved Amendment No. 17: After Clause 6, insert the following new clause:

Enforcement of overseas judgment under provision corresponding to s. 6.

".—(1) If it appears to Her Majesty that the law of an overseas country provides or will provide for the enforcement in that country of judgments given under section 6 above, Her Majesty may by Order in Council provide for the enforcement in the United Kingdom of judgments given under any provision of the law of that country corresponding to that section.

(2) An Order under this section may apply, with or without modification, any of the provisions of the Foreign Judgments (Reciprocal Enforcement) Act 1933".

The noble and learned Lord said: My Lords, this Amendment is intended to introduce a new clause. There have been recently discussions at official level with several other countries relating to the provisions of this Bill with regard to the problems that they also encounter in the same areas. It is clear that several other countries are considering following our example and legislating in this area. It has been suggested, therefore, that it might be helpful if there were provisions for mutual or reciprocal enforcement of such judgments. That is another reason for trying to march according to principle under a clause of this sort. I commend this clause to your Lordships as giving to the Secretary of State an enabling power which would be exercised by Her Majesty by Order-in-Council. This is a power which we think might be of considerable value in the future in this area. I beg to move.

Lord ELWYN-JONES

My Lords, this is an unprecedented provision. I do not remember having come across it before, but that does not necessarily mean that it should be disapproved. That would be a remarkable posture from this side of the House. Perhaps the noble and learned Lord the Lord Advocate will comment on it.

Lord LLOYD of KILGERRAN

My Lords, the noble and learned Lord referred to having discussions with other countries in regard to the content of this Bill and having regard to impressions from other countries in using their laws extra-territorially. Would it not be appropriate to ask the noble and learned Lord whether in his discussions with other countries it would be possible for the Government to issue lists from time to time of foreign laws which are likely to produce difficulties for firms when they are exploiting their products and trading abroad? At the Committee stage, I suggested that Clause 1 was rather cumbersome in the way it was drafted and that it seemed to be commercially undesirable that a company should have to wait until the danger point was reached before having to go to the Secretary of State to obtain relief as now envisaged under the present Clause 1.

Will the noble and learned Lord give consideration to the issue by his department of lists of foreign enactments which would interfere, distort and restrict the trading rights of British companies so that they can be helped in respect of their exploitation abroad and would be able to enter into foreign commercial agree- ments more freely than they are sometimes able to do at the present time?

Lord MACKAY of CLASHFERN

My Lords, with regard to the last point, Her Majesty's Government are always axious to be helpful to companies from the United Kingdom trading abroad. The Foreign Office services are always available in that regard also. We will certainly consider the suggestion that the noble Lord has been good enough to make. So far as precedent is concerned, as the noble and learned Lord, Lord Elwyn-Jones, will appreciate, the clause is very much modelled upon reciprocal judgment clauses and there is a somewhat similar provision in the Nuclear Installations Act 1965. Although it is perhaps novel in concept, it is not a complete departure from a principle which is reasonably familiar.

On Question, amendment agreed to.

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

5.44 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 18:

Page 6, line 34, at end insert— (" "measures" shall include any regulatory provision, rule, regulation, direction, order, licence, permit, consent, judgment or court proceedings or any other executive, legislative or judicial act whatsoever made under the law of an overseas country. Associate Company" and "subsidiary Company" means any United Kingdom company in which 50 per cent. or more of the shareholding is owned by the party referred to in Clause 6(1); permitted user" has the meaning assigned to it by subsection (1) of section 28 of the Trade Marks Act 1938.").

The noble Lord said: My Lords, may I speak to the word "measures". It has been indicated that the word "measures" in Clause 1 is not very clear and may be ambiguous. The only part of this amendment to which I shall speak is the definition of the word "measures". I realise that there are difficulties in delineating the scope of the meaning of a word by breaking it down into a number of other parts. In doing this, you may miss out some factor and, in the case of interpretation, that may cause difficulties. The definition of "measures" is a little wider than the definition of "measures" considered in another place and for which a certain amount of sympathy was expressed by the Secretary of State. I beg to move this amendment in so far as the word "measures" is concerned. The other parts of the amendment have been dealt with and have now lapsed because of the way the House has dealt with former amendment.

Lord ELWYN-JONES

My Lords, there is a long list of words and I wonder whether, even now, they are all-embracing. This is the difficulty of defining the use of the word "measures". I am slightly inclined not to clutter up the statute book with a long list of what might be conceivably sufficient to exclude any omissions. On the whole, subject to what the noble and learned Lord the Lord Advocate thinks, I am not enamoured of this vast extension and this long list.

Lord MACKAY of CLASHFERN

My Lords, I am grateful to the noble Lord, Lord Lloyd, for raising this matter. It is an important question. I am also grateful to the noble and learned Lord, Lord Elwyn-Jones, for encouraging me in what I am going to say. The concern that this clause should be as effective as possible is understood and appreciated. The view we have taken is that that object is more effectively attained without a specific definition of the word "measures". Indeed, the lengthy list that the noble Lord puts forward lends some strength to that feeling. The word "measures" was used in the 1964 Act and, so far as we know, has not given rise to any problems. It is intentionally wide but we think it does not need to go quite so far, possibly, as the noble Lord's definitions; because, generally speaking, a judgment or something of that sort would be given under something which could be properly described as a measure. Certainly, it is something that would lie behind the judgment that we would have in mind. While appreciating this suggestion, on the whole we are inclined to the view of the noble and learned Lord, Lord Elwyn-Jones, and would like to adopt the situation existing in the Bill as it stands.

This is the last occasion I have to say anything of any consequence. May I express my gratitude to all noble Lords who participated with suggestions for improvement of the Bill. I think that I can claim that every noble Lord who has put forward a suggestion in regard to improvement has had some suggestion incorporated in the Bill—although, of course, not every suggestion that every noble Lord has made. For that we are grateful and I should like to record that gratitude.

Lord ELWYN-JONES

My Lords, I should like to reciprocate that attitude to the noble and learned Lord the Lord Advocate, but this is not the time to say farewell. We have yet another stage and I cannot give an absolute guarantee that noble Lords who are not here will not come to raise new points. Therefore, while I am grateful to the noble and learned Lord the Lord Advocate for favours already shown, it may be that, like Oliver, we shall in due course ask him for some more.

Lord Lloyd of KILGERRAN

My Lords, may I add my thanks to the noble and learned Lord for his kind words and for his sympathetic approach to so many of the amendments I put forward, particularly in the field of intellectual property. I endeavour to introduce a certain amount of commercial realism into any amendments I produce for a Bill of this kind—and in particular, into this amendment before us. It may not be all-embracing but it endeavours to clarify certain general ambiguous matters in the Bill. As the noble Lord, Lord Hacking, said earlier, it is all very well for lawyers sitting in a Government establishment to say, "Well, perhaps it is all right"; sometimes it is a good thing to be more explicit in relation to the definitions of terms that you use in a novel Bill of this kind. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord MACKAY of CLASH FERN moved Amendment No. 19:

Page 6, line 38, at end insert— (" ( ) References in this Act to a claim for, or to entitlement to, contribution are references to a claim or entitlement based on an enactment or rule of law.").

The noble and learned Lord said: My Lords, I explained this amendment in relation to Amendment No. 9. I beg to move.

On Question, amendment agreed to.