HL Deb 14 May 1982 vol 430 cc422-35

11.36 a.m.

Further considered on Report.

The Lord Chancellor moved Amendment No. 27: After Clause 62, insert the following new clause:

("Interest on debts and damages

.—(1) The section set out in Part I of Schedule (Interest on debts and damages—Northern Ireland) to the Act shall be inserted after section 33 of the Judicature (Northern Ireland) Act 1978.

(2) The Article set out in Part II of that Schedule shall be inserted after Article 45 of the County Courts (Northern Ireland) Order 1980.

(3) The enactments specified in Part III of that Schedule shall have effect subject to the amendments there specified being amendments consequential on subsections (1) and (2) above.")

The noble and learned Lord said: My Lords, the purpose of this amendment and the new schedule to which it refers is to do for Northern Ireland what Part II of Schedule 1 does for England and Wales—that is to say, it enlarges the powers of the High Court and county court to make awards of interest on debts and damages. As we have discussed this matter under the English and Welsh umbrella, perhaps I need not enlarge on the subject. I beg to move.

Lord Elwyn-Jones

My Lords, it is clearly desirable that Northern Ireland should be kept in line on this matter and I approve of the amendment.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 28: After Clause 66, insert the following new clause:

("Interest on damages—disregard for income tax purposes

. In section 375A of the Income and Corporation Taxes Act 1970 (interest on damages for personal injuries or death not income for income tax purposes)—

  1. (a) in paragraph (a) of subsection (1), for the words from "an order "to"1937" there shall be substituted the 423 words "a provision to which this paragraph applies"; and
  2. (b) the following subsection shall be inserted after that subsection—

"(1A) The provisions to which subsection (1)(a) of this section applies are—

  1. (a) section 3 of the Law Reform (Miscellaneous Provisions) Act 1934;
  2. (b) section 17 of the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937;
  3. (c) section 35A of the Supreme Court Act 1981;
  4. (d) section 97A of the County Courts Act 1959;
  5. (e) section 33A of the Judicature (Northern Ireland) Act 1978; and
  6. (f) Article 45A of the County Courts (Northern Ireland) Order 1980.".")

The noble and learned Lord said: My Lords, I beg to move that Amendment No. 28 be agreed to. The purpose of this amendment is to expand the tax concession regarding interest on damages for personal injury awards so that it applies to injury awards made under the new provisions of Clause 15 and the new Clause 62A relating to Northern Ireland. It is done by inserting a new subsection into Section 375A of the Income and Corporation Taxes Act 1970. I believe the House will agree that the exemption should be expanded so as to cover awards of interest under Clause 15. I beg to move.

On Question, amendment agreed to. Clause 68 [Commencement]:

The Lord Chancellor moved Amendment No. 29: Page 38, line 11, at end insert— ("(fa) section [Interest on debts and damages];")

The noble and learned Lord said: My Lords, it may be convenient if I speak to both Amendment No. 29 and Amendment No. 30 as I rise to move Amendment No. 29. These amendments tie in with the Northern Ireland provisions regarding awards of interest, and their purpose is to make the provisions subject to a commencement order to be made by the Lord Chancellor. Clause 68, as your Lordships will know, is the commencement clause and subsection (2) lists the various provisions which are to be brought into operation by commencement orders made by the Lord Chancellor. The interest provisions for England and Wales are included in subsection (2) and are identified in subsection (2)(b) as Part III. The purpose of the first amendment is to give the new Northern Ireland provisions on interest, which are to be inserted as a new clause coming after Clause 62, the same treatment. A reference to the new clause is to be inserted into line 11.

The second amendment relates to the repeal of Section 17 of the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937. This section contains the existing power of the High Court and county courts to award interest on debts and damages, which is now entirely superseded by the new provisions and may therefore be repealed. However, since the new provisions are to be made subject to a commencement order—this is the purpose of the first two amendments I am speaking to—the repeal of the existing law needs likewise to be made subject to a commencement order. I beg to move.

Lord Renton

My Lords, may I make a brief comment that these two amendments add to the argument in favour of the next amendment on the Marshalled List because they add to the complexity of Clause 68?

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 30: Page 38, line 14, at end insert— ("(ii) to section 17 of the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937;")

On Question, amendment agreed to.

11.42 a.m.

Lord Renton moved Amendment No. 31: Leave out Clause 68 and insert—

(" Commencement

68. This Act shall come into operation on 1st October 1982.")

The noble Lord said: My Lords, I beg to move Amendment No. 31, the purpose and effect of which is to leave out Clause 68, which is one and a half pages long, and to insert the words: This Act shall come into operation on 1st October 1982. This, of course, is the date on which the new law year next begins. I do hope that my noble and learned friend the Lord Chancellor will feel a measure of gratitude towards me for moving this amendment, for, if it were accepted, or something like it, it would shorten the Bill and make it less controversial; it would make it more acceptable, more popular and more certain in its effect.

Under Clause 68 as it stands we are to have a complex triple system. The Bill will be brought into operation partly by a series of appointed day orders. Those appointed day orders are made either by the Lord Chancellor or by a Secretary of State or by both the Lord Chancellor and a Secretary of State. The provisions will be brought into effect partly—that is, under subsections (9) and (10)—three months after the Bill is passed and receives Royal Assent.

It is well known that the judiciary, the Bar, the Law Society, who published a paper on this, and other users of statutes find it very inconvenient when they have to consider whether and when a number of appointed day orders have been made and with what effect and from what date. That is not good enough. The law ought to be certain not only in its meaning and effect but also as to the date when it comes into force. But there has over the years—something like, I would have said, 20 years—been a growing practice of having clauses like Clause 68, and it is, as I say, a practice which is deplored by the users of statutes. May I say in passing that there is nothing wrong with the drafting of Clause 68; it is the substance and the method which I suggest are wrong.

I concede the point which my noble and learned friend the Lord Chancellor will no doubt make, that time will be needed to complete some administrative arrangements resulting from changes in the law, but I suggest that it would be better to fix a date for the whole of the Bill to come into force instead of doing it piecemeal. If 1st October is too soon to enable the really not very considerable administrative arrangements and not very lengthy rules of court to be made, I would ask my noble and learned friend to fix another date—perhaps 1st November or 1st January. But of course it would be nice to have 1st October, because it would enable us to celebrate the start of a new judicial year in that way.

There is another alternative, if my amendment is not found acceptable to my noble and learned friend, and it would be an improvement. That is to leave subsections (9) and (10) as they are but to say that the rest of the Bill—that is to say, those clauses or sections not mentioned in subsections (9) and (10)—shall come into force six months after Royal Assent. One wonders why if it is right to have three months under Clause 68(11) it would be wrong to have six months for other subsections.

There is a further and even less happy feature of this matter, and that is that there have been cases—and the Lord Chancellor, I have no doubt, is familiar with some of them—where appointed day orders have not been made at all; the law has not been brought into effect, not only after a very long time, but one case has been brought to my notice where the legislation has not been brought into effect at all, after many years, and thereby, of course, the intention of Parliament is frustrated.

Therefore, I do hope that my noble and learned friend the Lord Chancellor will show his usual concern and tell us that he will get rid of Clause 68 in its present cumbrous form and consider one or other of the alternatives, either the one in my amendment or others which have mentioned. I beg to move.

Lord Hacking

My Lords, I should like to express very briefly my support for this amendment. The growing practice of enactment clauses of this complexity which are brought in by statutory instrument does, present a lot of problems to all users of statutes, whether they be lawyers or other persons. It is a practice which is becoming increasingly undesirable, and for that reason and for the reasons put forward by the noble Lord, Lord Renton, I support his amendment.

The Lord Chancellor

My Lords, the interest of my noble friend Lord Renton in the statute law is well known, and I think a subject of universal admiration, because there is no doubt that there are very many things wrong with the statute book. Many of the arguments which he presented in support of this particular amendment were of a general character, and it may be that I shall give him a little comfort about them. But some of them which are of a general character do not really tie in with this particular amendment, and I can give him less comfort in relation to them.

There have been as the noble Lord, Lord Hacking, has reminded us, a number of moves in the past two or three years, by the Law Society, the Holborn Law Society and the Statute Law Society, to persuade the Government that commencement provisions should be simpler and demonstrate a greater awareness of the needs of the public and, of course, the practitioner. I have a good deal of sympathy with these representations. So far the Government have not gone very far to meet all the wishes of these representative bodies. Nevertheless, they have adopted some changes in the form of commencement orders—for instance, orders now describe in an explanatory note the effect of earlier commencement orders made in relation to the same Act—and I can tell my noble friend and the noble Lord, Lord Hacking, that Ministers are currently considering some further suggestions including the proposal that, wherever possible, statutes should not come into force until six weeks after Royal Assent in order to avoid difficulties created by printing delays. I hope that that will give the noble Lord some measure of encouragement.

I turn now to Clause 68 which is the actual subject of the amendment. The complexity of that clause reflects the nature of this particular Bill. Most Bills are concerned with a single set of proporals and it is then possible to adopt a more or less coherent scheme for their commencement. But this Bill, as I have had to explain in different contexts previously, is quite different. While it is true that Parts I to IV are concerned with the implementation of law reform proposals, the rest of the Bill, I must confess, is a heterogeneous collection of individual proposals and a wide variety of considerations affect the commencement dates of particular provisions. There is, for instance, a small group of clauses which come into operation on Royal Assent and that is because no administrative arrangements are required for their implementation and they are not of immediate concern to practitioners at all—for example, Clause 58 deals with temporary vacancies in the Law Commission.

Many of the substantive law reform proposals can properly come into operation as soon as practicable after Royal Assent, because no rules or administrative arrangements are required. All that is necessary is that practitioners and the public should have reasonable notice of the commencement date and with that I agree. These, for instance, include Clauses 1 to 5 which are concerned with damages; Clauses 17 to 22 which deal with the making of a will, the revocation of a will and the interpretation of wills; and Clause 68(11) provides for all those provisions to come into operation three months from Royal Assent. I must tell my noble friend that it really is not possible to predict with complete certainty when the date of Royal Assent will be. But I think that that would have met the substantive point which he was making.

There are, on the other hand, many provisions which will require extensive administrative arrangements for the making of rules, and it is quite impossible to provide in advance for a realistic commencement date, or I would have done so. These provisions are set out, for instance, in Clause 68 (2), (4) and (6). It is necessary to have three different lists because the Lord Chancellor alone is responsible for some of the provisions, while he shares responsibility with the Secretary of State for Scotland for others, and the Secretary of State for Scotland is, of course, solely responsible for those parts of the Bill which relate only to Scotland.

I frankly admit that, in relation to this particular Bill, the commencement provisions are more elaborate than I would have wished, but they do involve so many different proposals affecting the three different parts of the United Kingdom, in different respects and in various degrees, and with the best will in the world it would be quite impossible to have a fixed commencement date in this case for the whole Bill. Moreover, some of the provisions are dependent upon rules being drafted and made; others will need new administrative arrangements which cannot immediately be brought into being. I shall assure my noble friend that each provision has been carefully considered with an eye to the appropriate commencement arrangements and the inevitable result has been a somewhat complex commencement clause.

I shall, however, promise my noble friend that if he will withdraw the amendment, I shall ask the parliamentary draftsman once again whether he is in a position to simplify what is admittedly an overelaborate clause from the point of view of ideal draftsmanship. With that assurance I trust that my noble friend will not find it necessary to press the amendment, for the discussion, in relation to which I am grateful.

Viscount Colville of Culross

My Lords, I hope that my noble friend will allow me to intervene for a moment. I do not expect my noble and learned friend on the Woolsack to give an answer immediately. However, I should like to put to him a point which I have found to be of particular difficulty for practitioners when dealing with commencement orders on a Bill which is, as he himself has said, of a heterogeneous nature. The matter relates to the title of the commencement order. What happens in the Printed Paper Office here is that there is kept a consecutive pile of statutory instruments as they come out in the course of the year—and a very large pile it is—and at the same time there is kept an index and each of the statutory instruments is catalogued according to the initial letter of its title. However, in most legal libraries the only current list of statutory instruments is an individual copy kept in consecutive order as the statutory instrument comes out. So whichever system one uses one is entirely dependent upon the heading at the top of the statutory instrument. My noble and learned friend will appreciate, I think, if he looks at precedents of this nature that, if one is looking for Commencement Order No. 3 or No. 4, whatever it may be, one can be almost certain that the only thing it will not say at the top is, "Administration of Justice". It will be indexed and it will be headed by reference to the county courts, or mental health, or attachment of earnings, or solicitors or whatever it may be. It really does make it absolutely impossible for a practitioner looking through a colossal pile of current statutory instruments which have not been sorted out or indexed at all, because it is very difficult to find out which heading one is looking for. One thumbs through the pile and as often as not one misses it.

If there could he some reference in the heading to the original Act under which the commencement order is made with, if necessary, a sub-heading dealing with the title, then at least there would be some clue and I think that would be of assistance. I do not expect an answer now, but I point this out as a practical matter.

The Lord Chancellor

My Lords, I can only say—and that only by leave of the House—that I am very much obliged to my noble friend. I will try to take the matter on hoard and see what can be done. I cannot, as he apprehended, give him any kind of an answer, but it is obviously a point of importance and I shall take it on board.

Lord Elwyn-Jones

My Lords, this an exceptionally heterogeneous Bill, to use the noble Lord's adjective, and I well understand from a little experience previously on this kind of measure the difficulties that are faced. But we note that the noble and learned Lord will invite the draftsman to have another look at it. I do not readily see how it can be improved, but the noble Lord, Lord Renton, is a determined protagonist for clarity and simplicity in this field. Whether he will succeed on this one, I doubt very much.

Lord Renton

. My Lords, before I beg leave to withdraw the amendment, I wonder whether I may be allowed first to thank my noble and learned friend the Lord Chancellor for the explanation of the reasons for the clause as it stands, and thank him even more for the undertaking which he has given to consider the matter further. I would also like to thank the noble and learned Lord, Lord Elwyn-Jones, my noble friend Lord Colville of Culross, and the noble Lord, Lord Hacking for their support.

With the leave of the House I should like to make two brief comments. The first is that my noble and learned friend the Lord Chancellor very wisely introduced the problem of printing, to which my noble friend Lord Colville also referred. Very often there are such printing delays, not only in the publication of statutory instruments containing commencement orders, but in the printing of Bills themselves, that people simply do not know where they stand and cannot find out where they stand. So that is one reason why I greatly welcome my noble and learned friend's undertaking. With deep respect, may I say to him that I think this is a matter much more for officials of his department and for those who have to exercise the rule-making power than for the parliamentary draftsman. Quite clearly, he will require fresh instructions, and I think that that was implied in what my noble and learned friend said.

In view of what my noble and learned friend said, I agree that the particular form of my amendment is too tough, too stringent, and that it is too soon. But I very much hope that, perhaps at Third Reading, my noble and learned friend may be able to put forward an alternative which overcomes the complexity but which enables the administrative arrrangements, such as they are, to be completed. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 69 [Extent]:

12.2 p.m.

The Lord Chancellor moved Amendment No. 32: Page 39, line 28, leave out ("and 58") and insert ("58 and [Interest on damages—disregard for income tax purposes]").

The noble and learned Lord said: My Lords, I can move this amendment very shortly. Its purpose is to provide that the changes made in the Income and Corporation Taxes Act 1970 by the new Clause 66A apply to Northern Ireland as well as to England and Wales. I beg to move.

On Question, amendment agreed to.

Schedule 1 [Interest on debts and damages]:

12.2 p.m.

Lord Hacking moved Amendment No. 33: Page 41, line 10, after ("simple") insert ("or compound").

The noble Lord said: My Lords, I beg to move the amendment which stands in my name. With the leave of the House, I intend to address my comments to all four of the amendments that have been tabled in my name; that is Amendments Nos. 33, 34, 35 and 36. The subject of compound interest on this sunny summer morning is perhaps not the most riveting of topics, but I hope to persuade the House that it has some importance.

When the noble and learned Lord the Lord Chancellor introduced these proposed measures at Second Reading on 8th March, he said that he was seeking to remedy what he regarded as a serious injustice. That injustice is that, under the present provisions, which are contained in Section 3 of the Law Reform (Miscellaneous Provisions) Act 1934, there is no power in the court to award interest except on a judgment sum. So, if a debtor pays at any time before judgment, the creditor is deprived of any award of interest from the court.

My concern is that these proposed measures still limit the powers of a court, so that if they are not amended, some injustice will remain. I speak entirely as a lawyer in private practice. It is right to say that, although I have no personal interest in this, I am concerned, as with other lawyers—particularly in commercial work—with clients who will be affected both ways by the proposed amendment before your Lordships.

I think that a sensible starting point is to look at the principle. Perhaps I may enunciate it, and then turn to the words of Mr.Justice Forbes in a recent case. I believe that the principle is this: that a creditor who is a plaintiff in court proceedings should be compensated for the loss of the use of the moneys which have been wrongfully withheld from him; that is, he is compensated for loss to him of having to borrow money elsewhere in the market.

The High Court recently heard the case of Tate and Lyle Food and Distribution Limited v. Greater London Council. Mr. Justice Forbes was the presiding judge in that case and he put the principle, which I respectfully adopt, in this way: I think the principle now recognised is that it is all part of the attempt to achieve restitutio in integrum. One looks, therefore, not at the profit which the defendant wrongfully made out of the money he withheld (this would indeed involve a scrutiny of the defendant's financial position) but at the cost to the plaintiff of being deprived of the money that he should have had. I feel satisfied that in commercial cases the interest is intended to reflect the rate at which the plaintiff would have had to borrow money to supply the place of that which was withheld". Although Members of this House—indeed, any member of the public—may wish to borrow money at simple interest, the plain fact is that money can only be borrowed from banks or elsewhere in the financial market at compound interest, and usually from the major clearing banks at three-month rest periods.

Thus the Bill as drafted will not enable the courts to compensate a plaintiff for his real loss. It also provides—and I consider this to be a further matter of importance —an incentive to a debtor to delay paying his debt for the cost would be greater for him to borrow money in the market at compound interest than submit himself to a judgment which would only attract, in the present state of the Bill, an award at simple interest.

I seek only to give power in the High Court and in the County Court for discretionary awards of interest. But my serious concern rests with the bigger commercial cases, where the difference between awards at simple interest and compound interest can be quite large. I did calculate this out, with the help of one of the librarians of your Lordships' House, in order to give an example of the difference between an award at simple interest and at compound interest. The figure I took was a debt of £500,000 which has been due for three years by the time the matter comes before the court. In other words, it has been outstanding for three years. I set a 13 per cent. interest rate and for the purpose of making the compound interest calculation, I set a three months' rest period.

Under compound interest the plaintiff in this case that I have instanced would be entitled to an award of compound interest of £734,000, while at simple interest over exactly the same three year period, he would only be entitled to an award of £695,000: a difference of £39,000. I suggest that this example which I have given to your Lordships is by no means exaggerated. Indeed, I suggest without being able to do the full research, there are many cases before arbitrators and before the commercial court in which there are far larger sums of money which in interest awards would give a far greater difference between an award of interest at simple interest rates or at compound interest rates.

It is quite true that the Law Commission recommended against compound interest both in its proposed statutory scheme, which has not been adopted by the Government, and in the exercise of the court's discretionary power, which is the subject-matter of this schedule before your Lordships. But this House is not bound by the Law Commissions recommendations. Indeed, the noble and learned Lord has not put before the House the proposed statutory scheme that the Law Commission recommended.

It is also right to record that the Law Commission stated that views were expressed both ways concerning this discretionary power and whether that discretionary power should include the power to award compound interest. I refer to paragraph 153 of the Law Commission's Report.

Next, the Law Commission's report gave no reason for the recommendation against compound interest, except to state that the case "for change" had "not been made out". Having read the report, I confess that the Law Commission's view appears to have been coloured by their wish to keep discretionary interest awards in line with interest awards under their proposed scheme which, as I have already indicated, has been rejected.

In considering their statutory scheme they of course made the point about the great complexity of involving compound interest in a national interest award scheme. But that is not the case here. To calculate compound interest is the everyday business of banks and other creditors in the financial markets, so to give power here to the courts is not creating any great complications. What it is doing is seeking to compensate the plaintiff for the real loss of being deprived of his money.

I do not want to over-emphasise this, but I believe that this amendment also has certain international overtones. The commercial court currently has well over 50 per cent. of parties before it who come from overseas and this House has played an important role in recent years in encouraging international arbitrations to come to London. So this matter also falls in the field of international arbitration for it gives the power to arbitrators to follow the same principles of compensating a plaintiff for his real loss. I would ask your Lordships to consider this amendment, and to consider this amendment in the light of the fact that many years may go by again before we have another opportunity to get the interest provisions right. Section 3 of the Law Reform Act has been with us for nearly 50 years with what the noble and learned Lord the Lord Chancellor has described as a "serious injustice" in its terms.

Finally, I should like to mention I recognise that there are of course administrative consequences of making provisions for compound or simple interest, because those awards have to be assessed and somebody has to assess them. On default summonses, for example, the Masters in the High Court assess interest awards, and it is certainly not my intention to have the Masters' corridor crowded with plaintiffs in default summonses seeking assessments of compound interest. I have given this problem some thought. I believe it can be dealt with simply. The terms of the proposed provisions incorporate Rules of Court, and I suggest that the Rules of Court can provide for a set scale of interest for default judgments. Indeed, already there are to be found, for example, in Order 13, Rule 1, interest rates set out in the White Book at 5 per cent. from the date of the writ to the date of entering judgments.

My concern is that there should be the power given to the court in the major commercial cases to award compound interest and, as I have said several times, properly to compensate plaintiffs for their loss. I suggest that such worries as the Lord Chancellor may have about pressures on the Masters for the assessment of statutory interest, whether it be at compound or simple interest rates, can be met by providing set scales of interest. Plaintiffs can then choose whether to go ahead and apply for interest at a set scale (involving no assessment by the Master) or, in appropriate cases, go for a full assessment, and a full assessment including an assessment of compound interest. I beg to move.

The Lord Chancellor

My Lords, in the absence of any other participant, perhaps I had better reply to the noble Lord on the Cross-Benches. As he candidly conceded, this matter was carefully considered by the Law Commission when they made their proposals. They in fact came down in favour of simple interest against compound interest. I am bound to tell the noble Lord on the Cross-Benches that that corresponds with my own judgment.

There is of course one case at least where compulsory compound interest may be awarded, and that is where there is a breach of fiduciary duty. That was decided only in 1975. The traditional approach of the courts against making debtors pay interest at all has moved slowly and with caution over my professional lifetime, I think wisely, in spite of the advance which the Bill now makes which was only one of two proposed by the Law Commission. I believe that to be right.

The research of the Law Commission suggests that there are absolutely no other countries in Europe where compound interest may be awarded at all. All European systems that have been examined are geared to simple interest only. I cannot help recalling to the House what my noble friend Lady Trumpington, on behalf of the consumer interests who would be the target for charges of this kind, said in reply to my noble friend Lord Stanley of Alderley when he tried to have a more onerous provision on the lines of the Law Commission's first proposal. I think that the consumer interests would in fact resist this particular claim on the part of the noble Lord on the Cross-Benches.

I could not help thinking as I listened to the noble Lord that his view is possibly rather coloured by the class of very large claims with which his own extremely lucrative practice is concerned. It was a good example to take the case of a debt of £500,000 outstanding for three years, but of course that is far removed from the county court, where there are 500,000 default judgments over a year. The sums of money are very much smaller. There are 70,000 judgments in the High Court. In the commercial court, where the noble Lord on the Cross-Benches practises with such skill, there are only about 50 cases a year tried. I do not think he has really fully appreciated the extra cost in time, and indeed in money, to the parties which anything like the acceptance of his proposal would give rise to.

Let us look at one or two of them. It would seldom be possible to identify any particular element in a plaintiff creditor's borrowing which was referable to a particular debt or a particular expense. The rates payable on his borrowing will vary from time to time by fractions of 1 per cent. The financial circumstances of the plaintiff will determine partly the rate on which he can borrow, and, secondly, his need to borrow at all. These will vary as a result of factors which have nothing whatever to do with the liability or behaviour of the defendant in not paying damages or debts.

Borrowing and the interest on it are beneficial to the plaintiff, in that he is able to set the expenses against his profits for tax purchases. How is that going to tie in with this? The noble Lord referred to the Tate and Lyle case. But the judge who tried it arrived at an award on the basis of averages and general assumptions rather than on the interest liability which was actually incurred by the plaintiff. He said in justification of this approach that, when making discretionary awards of interest, judges are entitled to, and do, adopt a very broad approach. I would respectfully agree, but a very broad approach in relation to matters of interest over and above what is incurred on the debt itself is not something which will necessarily commend itself to everybody.

Having given that answer to the noble Lord, I shall certainly think about it as the Bill plods its way through one House of Parliament or the other, but I do not want the noble Lord on the Cross-Benches to have too much comfort that I am likely to change my preliminary view, which is not altogether enthusiastic in support of the amendment. I am sorry I cannot be more friendly to him than that, but I have given the matter some fairly close attention.

Lord Elwyn-Jones

My Lords, I share the doubt, if that is the right way of putting it, of the noble and learned Lord the Lord Chancellor, as to whether we should make this change. I was particularly interested to learn that apparently no other countries in Europe provide for compound interest. I took careful note of that, in the light of the importance of international arbitration, the expertise of the noble Lord, Lord Hacking, in this field, and the fear that if we did not move in this direction the advance we have made in attracting more work into the field of international arbitration might be retarded if we did not make this move. I am not sure what the situation is in the United States; I apprehend that it may be the same as ours. In any event, I thought the note of caution struck by the noble and learned Lord in regard to the nature of consumer interest reaction was a wise note to have struck.

Lord Hacking

My Lords, I am grateful to the noble and learned Lord the Lord Chancellor for the careful consideration he is giving the matter and for saying that he will give it further consideration following this short debate. While it is my intention to seek to withdraw the amendment, I would state first that I, like anybody who is involved in the assessment of damages, in whatever field loss has been inflicted on the plaintiff, am much aware of all the complexities involved and how, at the end of the day, the trial judge (if it is a trial judge who is assessing the damages) has to take a broad view and give his award of damages on that broad view.

My concern is that, so far as interest is concerned, the learned judge in taking his broad view, should take into account the reality facing plaintiffs who are deprived of money; namely, that they have to borrow money at compound interest and not at simple interest. It is not my desire to make a trial judge's task more difficult. My only desire is that he should have the power to take into account all the factors which he should properly take into account in the assessment of damages, and that includes compound interest. With that observation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 34 not moved.]

12.21 p.m.

The Lord Chancellor moved Amendment No. 34A: Page 41, line 44, leave out (" of this Act ").

The noble and learned Lord said: This is a purely drafting amendment, my Lords. Schedule 1 inserts a new section into the Supreme Court Act 1981. The purpose of the amendment is to match the drafting style of the new section with that of the rest of that Act.

On Question, amendment agreed to.

[Amendments Nos. 35 and 36 not moved.]

The Lord Chancellor moved Amendment No. 37: Page 43, leave out lines 32 to 38.

The noble and learned Lord said: This is technical, my Lords. The provisions in Schedule 1 regarding the Income and Corporation Taxes Act 1970 are no longer needed, since the same provisions are now part of Clause 66A.

On Question, amendment agreed to.

Schedule 4 [Attachment of debts]:

The Lord Chancellor moved Amendment No. 37A: Page 50, leave out lines 2 and 3.

The noble and learned Lord said: My Lords, with permission, I will speak at the same time to Amendment No. 37B. Both are drafting amendments relevant to the identification of those deposit-taking institutions which should be entitled to deduct their administrative expenses from any deposit which may be attached in garnishee proceedings. The first amendment leaves the opening words of Section 40A (1)(b), any such institution of a prescribed description. but removes the succeeding words, or with not less than a prescribed number of branches. The difficulty created by the extra words is that they may prevent the Lord Chancellor from identifying a class of institutions by reference to the number of outlets other than branches; for instance, those building societies with no branches but with a great number of agencies. The difficulty is removed by removing the additional words. The second amendment is in exactly the same terms as the first and is directed at exactly the same point; it does for the county courts what the first does for the High Court.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 37B: Page 50, leave out lines 35 and 36.

On Question, amendment agreed to.

Schedule 6 [Damages for personal injuries etc.—Northern Ireland]:

The Lord Chancellor moved Amendment No. 38:

Page 53, line 24, at end insert— ("(aa) any person who—

  1. (i) was living with the deceased in the same household immediately before the date of the death; and
  2. (ii) had been living with the deceased in the same household for at least two years before that date; and
  3. (iii) was living during the whole of that period as the husband or wife of the deceased;").

The noble and learned Lord said: With permission, my Lords, I will speak at the same time to Amendment No. 39. These amendments introduce for Northern Ireland the same provisions relating to common law spouses as the amendments to Clause 3, which we discussed on a previous occasion, make for England and Wales. The dependants who may claim following a fatal accident will now include any person who was living with the deceased in the same household immediately before the death occurred, had been so living for at least two years and was living through the whole of that period as the husband or wife of the deceased. In assessing damages, the court will be required to take into account the fact that the defendant had no enforceable right to financial support by the deceased.

Lord Elwyn-Jones

My Lords, I welcomed this on an earlier occasion and I welcome it again now.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 39: Page 54, line 38, at end insert— ("(2A) In paragraph (3), for the words "In assessing damages payable to a widow in respect of the death of her husband in an action under this Order" there shall be substituted the words "In an action under this Order where there fall to be assessed damages payable to a widow in respect of the death of her husband"). (2B) The following paragraph shall be inserted after that paragraph— (3A) In an action under this Order where there fall to be assessed damages payable to a person who is a dependant by virtue of Article 2(2)(aa) in respect of the death of the person with whom the dependant was living as husband or wife there shall be taken into account the fact that the dependant had no enforceable right to financial support by the deceased as a result of their living together.".").

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 40: Insert the following new schedule—

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