HL Deb 28 February 1980 vol 405 cc1515-21

3.24 p.m.

Bill read 3a, with the amendments.

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

Lord MACKAY of CLASHFERN moved Amendments Nos. 1 and 2:

Page 3, line 25, after ("and") insert ("(a)")

Page 3, line 29, after ("Kingdom") insert (";or

(b) any requirement imposed by such a court, tribunal or authority to produce or furnish any document or information to a person specified in the requirement,").

The noble and learned Lord said: My Lords, if I may, I will speak to these two amendments that are down in my name together. Clause 2, as presently drafted, allows the Secretary of State to give directions for prohibiting compliance with a requirement to produce a commercial document or commercial information to a court, tribunal or authority of an overseas country. It has been pointed out several times in earlier debates that in the United States discovery in civil proceedings can be both extensive and burdensome. Subsection (3)b), which was amended on Report, is specifically aimed at such forms of discovery which can occur either before or during litigation.

However, we understand that it is not unusual for United States courts to order discovery—that is, the production of documents—by a party or witness directly to another party. A doubt has been raised whether the requirement to produce in such cases would be covered by the term "to produce to any court". Consequently, the purpose of this amendment is to place beyond doubt that discovery, irrespective of whether it is to be furnished to the court or to another person, is covered by the clause. My Lords, I beg to move.


My Lords, this is a matter which was raised in some detail by the noble Lord, Lord Lloyd of Kilgerran, at an earlier stage of the discussions on the Bill. I am sure that we are grateful to the noble and learned Lord the Lord Advocate for giving the matter further thought and I certainly approve the amendment that is proposed.


My Lords, may I rise to support this amendment, which is a further step towards reinforcing the defences of United Kingdom firms against attempts by other countries to enforce their own economic and commercial policies against British industry. Perhaps, with the leave of the House, I may take this opportunity of congratulating the Government on introducing this Bill. It is sad, however, to realise that this Bill, which has long been overdue, has arisen largely because of the actions of United States authorities. To use the words of the noble and learned Lord the Lord Advocate on Second Reading on 24th January, at column 554 of Hansard, about the United States of America: That powerful friend and ally has over several decades been developing a policy of enforcing its economic rules outside its own jurisdiction, in a manner which has become even more acutely difficult for us over the last few years". Also with the leave of the House, may I congratulate the Government, too, in the context of the Government's praiseworthy efforts to give protection to British firms, in their international trading, from the judicial and economic imperialism of our friend and ally, the United States, on the passing of the order known as the Double Taxation Relief (Taxes on Income) (United States of America) Order 1980. The operation of the taxation arrangements of the United States of America was referred to in the other place, when this order was considered, as "international robbery".

As no doubt it became clear from my many speeches during the passage of this Bill through your Lordships' House, there is another field in which British firms are often outrageously dealt with by United States authorities in the course of international trading; that is, trade where patents, trade marks and confidential know-how are involved—a field in which I had and still have a continuing interest. I am obliged to the noble and learned Lord the Lord Advocate for his expressions of appreciation from time to time, and indeed for indicating on at least a couple of occasions that in the field of intellectual property this seems to him to be an area to which this legislation could possibly extend at some later stage.

On Question, amendments agreed to.

3.29 p.m.


My Lords, I beg to move that this Bill do now pass. We have now concluded our scrutiny of this short but important measure. I should like to recall the words that I spoke at the end of the Report stage last week, when I expressed the Government's appreciation of the spirit and the constructive manner in which this Bill has been discussed in both Houses of Parliament. I believe that we have in your Lordships' House improved the drafting of the Bill in a number of important respects. In relation to the most novel and controversial clause, which is Clause 6, discussions in this House have brought to light a number of significant points. We have been able to take account of several of these and I believe that the clause is better drafted and more effective as a result.

In conclusion, I should like once again to put this Bill in perspective. When a measure has been in preparation for some time, it is easy for those who have been intimately concerned with it to exaggerate both its effect and its significance. However, the Government believe that this is an important Bill in the way in which it reinforces our defences against the unjustifiable application against United Kingdom trading interests—and I include intellectual property in this—of the laws and economic policies of other countries. I believe that noble Lords of all parties take the same view, and it is widely said—as the noble Lord, Lord Lloyd of Kilgerran, has just said—that the Bill is in fact overdue.

It is regrettable but inevitable that most of the discussion of this measure in Parliament has been in terms of protecting such interests of the United Kingdom against actions by agencies and authorities of the United States of America. Nevertheless, it is with American laws and policies that we are chiefly dealing and there is no point in trying to disguise that fact. Certain provisions of the Bill have of course been criticised in the United States but we have also seen many expressions of understanding there for what we are doing, and why.

Let me repeat, therefore, what was said by my right honourable friend the Secretary of State for Trade when moving the Second Reading of the Bill in another place. He finished with these words: that the Bill was not anti-American, or, indeed, anti-anybody and that it was designed to protect and not to provoke.

The problems between our own country and the United States with which this Bill deals are of a very special nature. They have not affected the otherwise close and friendly relationship between our two countries. We have too many shared economic, political and social objectives for that to happen. My right honourable friend said that he hoped he would have little cause to use the discretionary power conferred by the Bill, but he left no doubt that he would be prepared to use it in the defence of the legitimate economic and trading interests of our country.

I should like to underline that statement. If, when it becomes law, the operation of this Bill causes arguments, even with our closest friends, we are ready for that. We hope, however, that what we are doing will stimulate discussion and bring opposing interests to the meeting table. The right way to settle international difficulties in the economic field, as in so many others, is by discussion and negotiation between Governments. We believe that this Bill will contribute in an important manner to that process. My Lords, I beg to move.

Moved, That the Bill do now pass.—(Lord Mackay of Clashfern.)


My Lords, we on this side of the House regard the Bill as both timely and necessary. It is unfortunate that diplomatic efforts over the last decade or two to resolve the difficulties created by the actions of the American courts were not successful. However, I am glad that the noble and learned Lord the Lord Advocate has indicated that continuance of discussion on these problems, which will not be eliminated by this Bill, is very important and that our attitude here is not one of confrontation but of willingness to get round the table to eliminate what is damaging in its present practice, not only to the trading interests, at the end of the day, of the United Kingdom itself but possibly to those of our friends in America, many of whom have also been discontented with the operation of some of the American provisions. Therefore I welcome the Bill and fully agree with what was said by my noble friend Lord Lloyd of Kilgerran in his interesting Third Reading speech.


My Lords, may I, from the Cross-Benches, comment for a few moments upon this Bill. Having, in my various activities in moving amendments at both the Committee stage and the Report stage, put in severe jeopardy my membership of the New York Bar, I desire to say a few kindly words towards the United States of America, which was described by the Secretary of State for Trade in the Second Reading debate in the House of Commons as "our most powerful and valued friend".

As we have learned, going through the various stages of this Bill and examining each of the clauses, this Bill will have widespread application to laws that are in current existence in the United States of America, well beyond the field of anti-trust upon which the latter clauses of this Bill concentrate. I refer to such measures in recent times as the Foreign Boycott Amendments of 1977, the Foreign Corrupt Practices Act 1977 and various Tax Acts, in particular the 1976 Tax Act, all of which gave powers to seek information from persons abroad. Those powers can now be restricted, so far as United Kingdom interests are concerned, by directions issued by the Secretary of State under Clauses 1 and 2 of the Bill.

I suggest that all these measures have been introduced to enable the United States to protect its domestic economy and, to a lesser extent, its national security. It is my judgment that in the main, although not always, these measures have been introduced from a defensive posture and not from an offensive posture. I will venture also to say to your Lordships that the United States of America has every right to ask its friends and neighbours to restrain those who seek to damage its economy and its interests. Even in this country United States interests are responsible for over 9 per cent. of our employment. I made a calculation a year or two ago to ascertain how many persons—wives and children as well as the employees themselves—were supported by United States companies, and my calculation came out at a figure of 80 million persons throughout the world. Therefore I very willingly join, if I may, the noble and learned Lord the Lord Advocate when he says he hopes this Bill will stimulate discussion. May I put it in this way to your Lordships: May this Bill become a spur to obtain greater international agreement on trading laws and in particular on competition laws.

Finally, I should like to thank the noble and learned Lord and the Department of Trade not only for their courtesy towards each and every one of my amendments but for their even greater kindness in accepting the principle, if not the words, of the various amendments that both I and other noble Lords have moved in your Lordships' House.

May I end my few words by making a request to Her Majesty's Government? It is a twofold request. It would be enormously helpful, as soon as this Bill has received the Royal Assent, if the Government could state how they intend to exercise their powers and, more specifically, how the Secretary of State intends to exercise his powers under Sections 1 and 2 of the Act, as it will shortly become. Secondly, it would be of immense help if the Government could introduce a lucid explanatory memorandum, to be issued as soon as possible after the publication of the Act. As so often happens, an Act as first introduced in our Houses of Parliament becomes a much more complicated document by the time it leaves Parliament in order to receive the Royal Assent. That is precisely what has happened in this Bill. To take just one example, that arithmetical formula in Clause 6, which was of elementary simplicity and which did not require any blackboard for the instruction of those who found difficulty in understanding it—alas! by the time it leaves your Lordships' House, it has become much more complex and extremely difficult to follow. I take that as only one example. If the Government could spare the time, it would be of immense value if they could do that. As your Lordships' know, it is most important that this Bill should be read and understood by those abroad.

On Question, Bill passed, and returned to the Commons.