HL Deb 12 June 1986 vol 476 cc447-62

7.4 p.m.

Read a third time.

Clause 5 [Definition of principal terms used]:

Lord Glenarthur moved Amendment No. 1:

Page 6, line 23, after ("time") insert ("referred to in subsection (6) below as").

The noble Lord said: My Lords, this amendment is purely drafting. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 2:

Page 7, leave out lines 7 to 26 and insert— ("(b) pay any sum which would be included among the preferential debts (within the meaning given by section 386 of the Insolvency Act 1986) in the defendant's bankruptcy commencing on the date of the confiscation order or winding up under an order of the court made on that date.

(8) In the case of a confiscation order made before the coming into force of the Insolvency Act 1986, subsection (7) above shall have effect as if for paragraph (b) there were substituted— (b) pay any sum which, if the defendant had been adjudged bankrupt or was being wound up, would be among the preferential debts."; and in that paragraph "the preferential debts"—

  1. (a) in relation to bankruptcy, means the debts to be paid in priority under section 33 of the Bankruptcy Act 1914 (assuming the date of the confiscation order to be the date of the receiving order) and
  2. (b) in relation to winding-up, means the preferential debts listed in Schedule 19 to the Companies Act 1985 assuming the date of the confiscation order to be the relevant date for the purposes of that Schedule.")

The noble Lord said: My Lords, I beg to move Amendment No. 2. May I at the same time speak to Amendments Nos. 6, 8, 9, 10, 11, 12, 14, 15, 16, 17, 18 and 35. This lengthy list of amendments is required to take account of the Bill consolidating the law on insolvency which was yesterday considered by the Joint Committee. I beg to move.

On Question, amendment agreed to.

Clause 7 [Cases in which restraint orders and charging orders may be made]:

Lord Glenarthur moved Amendment No. 3:

Page 10, line 16, leave out ("court") and insert ("High Court").

The noble Lord said: My Lords, the purpose of this small amendment is to clarify that where action requires to be taken under this Bill before criminal proceedings have been commenced, it will be for the High Court to determine who is to be regarded as the prosecutor. Under the Bill as at present drafted the Scottish Court of Session might have to take a separate decision in this matter in cross-Border cases, and this would add an unnecessary complication. I beg to move.

On Question, amendment agreed to.

Clause 14 [Variation of confiscation orders]:

Lord Glenarthur moved Amendment No. 4:

Page 16, line 10, after ("above") insert ("(a)").

The noble Lord said: My Lords, I beg to move Amendment No. 4, and, if I may, speak to Amendments Nos. 5, 13, 20 and the new clause intended to follow Clause 16. I have a lengthy note, but perhaps it may suffice if I say that your Lordships will recall that during the Report stage of the Bill we agreed amendments to deal with the situation which might arise if assets belonging to a trafficker were tied up in bankruptcy proceedings at the time when a restraint or confiscation order was made. I indicated then that the Government might bring forward similar amendments on Third Reading relating to the liquidation of companies. These are those amendments. If the noble Lord, Lord Mishcon, would like me to go further I can do so; but if he is happy, I beg to move.

Lord Mishcon

My Lords, I postpone my happiness with the amendment for only a moment. I have no comment on it.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 5:

Page 16, line 14, at end insert ("and (b) the court may disregard any inadequacy in the realisable property which appears to the court to be attributable wholly or partly to anything done by the defendant for the purpose of preserving any property held by a person to whom the defendant had directly or indirectly made a gift caught by this Act from any risk of realisation under this Act.").

On Question, amendment agreed to.

Clause 15 [Bankruptcy of defendant etc.]:

Lord Glenarthur moved Amendment No. 6:

Page 16, line 38, leave out ("Part III of the Insolvency Act 1985") and insert ("Part IX of the Insolvency Act 1986").

The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 2. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 7:

Page 17, line 2, after ("21") insert ("of this Act").

The noble Lord said: My Lords, this is a drafting amendment. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 8:

Page 17, line 7, leave out ("154 or 155") and insert ("307 or 308").

The noble Lord said: My Lords, I beg to move Amendments Nos. 8, 9, 10, 11 and 12 en bloc. I spoke to them with Amendment No. 2.

The Deputy Speaker (Lord Airedale)

My Lords, I must take Amendment No. 8 separately.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 9 to 12:

Page 17, line 12, leave out ("127(2)(c)") and insert ("280(2)(c)").

Page 17, line 22, leave out ("133") and insert ("286").

Page 17, line 27, leave out ("134(6)") and insert ("287(4)").

Page 17, line 28, leave out ("133(3)") and insert ("286(3)").

On Question, amendments agreed to.

Lord Glenarthur moved Amendment No. 13:

Page 17, line 33, after ("shall") insert (", subject to a lien for any expenses (including his remuneration) properly incurred in respect of the property,").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 4. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 14:

Page 17, line 38, leave out ("174 or 212") and insert ("339 or 423").

The noble Lord said: My Lords, I beg to move Amendments Nos. 14, 15, 16, 17 and 18 en bloc. I spoke to these amendments with Amendment No. 2.

On Question, Amendment No. 14 agreed to.

Lord Glenarthur moved Amendments Nos. 15 to 18:

Page 18, line 7, leave out ("Part III of that Act") and insert ("the Insolvency Act 1986").

Page 18, line 10, leave out ("III of the Insolvency Act 1985") and insert ("IX of that Act").

Page 18, line 13, leave out ("127(2)(c), 133, 174 and 212") and insert ("280(2)(c), 286, 339 and 423").

Page 18, line 13, leave out ("1985") and insert ("1986").

The Deputy Speaker

My Lords, with the leave of the House I shall put a single Question as to Amendments Nos. 15, 16, 17 and 18.

On Question, amendments agreed to.

Clause 16 [Sequestration in Scotland of defendant etc.]:

Lord Glenarthur moved Amendment No. 19:

Page 18, line 36, after ("21") insert ("of this Act").

The noble Lord said: My Lords, this is a drafting amendment. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 20:

Page 19, line 26, after ("shall") insert (", subject to a lien for any expenses (including his remuneration) properly incurred in respect of the property.").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 4. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 21:

Page 19, line 41, at end insert—

("(7) In any case in which, notwithstanding the coming into force of the Bankruptcy (Scotland) Act 1985, the Bankruptcy (Scotland) Act 1913 applies to a sequestration, subsection (2) above shall have effect as if for paragraphs (a) and (b) thereof there were substituted the following paragraphs—

  1. "(a) property comprised in the whole property of the debtor which vests in the trustee under section 97 of the Bankruptcy (Scotland) Act 1913,
  2. (b) any income of the bankrupt which has been ordered, under subsection (2) of section 98 of that Act, to be paid to the trustee or any estate which, under subsection (1) of that section, vests in the trustee";
and subsection (3) above shall have effect as if for the reference there into the Act of 1985 there were substituted a reference to the Act of 1913.").

The noble Lord said: My Lords, the purpose of Clause 16 is to regulate the relationship between the provisions of this Bill and sequestration under Scots law. This amendment makes transitional provision in the case where the sequestration was awarded before 1st April 1985 (the commencement date for the Bankruptcy (Scotland) Act 1985) and thus is governed by the Bankruptcy (Scotland) Act 1913. The amendment therefore substitutes in Clause 16 (2) and (3), in their application to such cases, suitable references to the 1913 Act in place of references to the 1985 Act. I beg to move.

Lord Mishcon

My Lords, may I congratulate the noble Lord the Minister on his expertise in Scots law, which appears to equal his expertise in his own native law of England?

Lord Glenarthur

My Lords, I merely correct the noble Lord about the words my "native law", because he will find that my native law is Scots also.

Lord Mishcon

My Lords, I must correct myself and apologise and ask the noble Lord whether he will not mislead the House and will really obtain a Scots accent when he addresses us.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 22:

After Clause 16 insert the following new clause:

"Winding up of company holding realisable property.

.—(1) Where realisable property is held by a company and an order for the winding up of the company has been made or a resolution has been passed by the company for voluntary winding up, the functions of the liquidator (or any provisional liquidator) shall not be exercisable in relation to—

  1. (a) property for the time being subject to a restraint order made before the relevant time, and
  2. (b) any proceeds of property realised by virtue of section 8(6) or 11(5) or (6) of this Act for the time being in the hands of a receiver appointed under section 8 or 11 of this Act;
but there shall be payable out of such property any expenses (including the remuneration of the liquidator or provisional liquidator) properly incurred in the winding up in respect of the property.

(2) Where, in the case of a company, such an order has been made or such a resolution has been passed, the powers conferred on the High Court by sections 8 to 12 of this Act or on a receiver so appointed or on the Court of Sessions by sections 19 to 21 of this Act shall not be exercised in relation to any realisable property held by the company in relation to which the functions of the liquidator are exercisable—

  1. (a) so as to inhibit him from exercising those functions for the purpose of distributing any property held by the company to the company's creditors, or
  2. (b) so as to prevent the payment out of any property of expenses (including the remuneration of the liquidator or any provisional liquidator) property incurred in the winding up in respect of the property.

(3) Nothing in the Insolvency Act 1986 shall be taken as restricting, or enabling the restriction of, the exercise of those powers.

(4) Subsection (2) above does not affect the enforcement of a charging order made before the relevant time or on property which was subject to a restraint order at the relevant time.

(5) In this section— Company" means any company which may be wound up under the Insolvency Act 1986; and the relevant time" means—

  1. (a) where no order for the winding up of the company has been made, the time of the passing of the resolution for voluntary winding up,
  2. (b) where such an order has been made and, before the presentation of the petition for the winding up of the company by the court, such a resolution had been passed by the company, the time of the passing of the resolution, and
  3. (c) in any other case where such an order has been made, the time of the making of the order.

(6) In any case in which a winding up of a company has commenced, or is treated as having commenced, before the date on which the Insolvency Act 1986 comes into force, this section has effect with the substitution for references to that Act of references of the Companies Act 1985.").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 4. I beg to move.

On Question, amendment agreed to.

Clause 25 [Enforcement of other external orders]:

Lord Glenarthur moved Amendment No. 23:

Page 27, line 14, leave out ("14") and insert ("17").

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Clause 28 [Sections 26 and 27: supplementary provisions]:

Lord Glenarthur moved Amendment No. 24:

Page 31, line 24, leave out ("professional").

The noble Lord said: My Lords, this again is a drafting amendment. I beg to move.

On Question, amendment agreed to.

Clause 29 [Disclosure of information held by government departments]:

7.15 p.m.

Lord Glenarthur moved Amendment No. 25:

Page 32, line 20, leave out ("property available in respect of the defendant") and insert ("realisable property").

The noble Lord said: My Lords, your Lordships will recall that on Report stage we deleted a large number of references to "property available in respect of the defendant" and replaced them with references to the new concept of "realisable property". I am afraid that one escaped us, and this amendment is intended to bring the terminology of Clause 29 into line with the rest of the Bill as revised. I beg to move.

On Question, amendment agreed to.

Clause 30 [Offence of prejudicing investigation]:

Lord Glenarthur moved Amendment No. 26:

Page 34, line 5, leave out ("or having reasonable grounds to suspect").

The noble Lord said: My Lords, this amendment was suggested by the Criminal Bar Association, as I think the noble Lord, Lord Mishcon, will remember. It will alter the required mental element in the offence of prejudicing a drug trafficking investigation by removing the objective test of having reasonable grounds to suspect that an investigation was taking place. If the amendment is adopted the prosecution would have to show that the accused knew or suspected that such an investigation was under way at the time he disclosed information prejudicial to it, not simply that there were grounds for him to suspect it.

Your Lordships will recall that at Report stage we adopted a similar amendment to the mental element in the new laundering offence when I explained that the Government had concluded that it would be right to avoid any risk of punishing mere inadvertence. I believe that the same considerations apply here and I am grateful to the Criminal Bar Association for its suggestion. I beg to move.

Lord Denning

My Lords, I should like to say a word about this. I do not agree with the Criminal Bar Association. I think we shall have a great problem, if this amendment is accepted, both in regard to this and to the laundering. Let me explain a little. We are dealing here with a new offence; namely, warning, say by a friend of the drug trafficker, that proceedings are being taken. We are dealing with two methods of investigating drug trafficking offences. One concerns seizing the material that has been involved in drug trafficking. That is one section. The other section is getting a search warrant or the equivalent of a search warrant for premises where you may find material engaged in drug trafficking. Those can be obtained on application to the court.

What this clause is intended to do is to catch the man who gives the tip-off—a friend of the drug trafficker—who may say to him, "They are going to the court to get an order. You be quick. Get rid of those proceeds at once before they get the court order". It is that person whom this clause is intended to hit. It is intended to make him guilty of a criminal offence if he warns someone. He may be a clerk in a solicitor's office or anyone else who can say, "Look here, they are going to the court to get an order. You get rid of those proceeds at once". It is that person who is held by this clause to be committing a criminal offence.

Let us see what the Criminal Bar Association says about it. It suggests the words "knows or suspects". It says that the prosecution has to prove his state of mind, that he knew or suspected. As Clause 30(1) stands, it states that a person who knows or suspects or has reasonable cause to suspect that an investigation has taken place is guilty—in other words, if he turns a blind eye to it.

Then come the words: In proceedings against a person for an offence under this section, it is a defence to prove that he did not know or suspect that the disclosure was likely to prejudice an investigation". If this amendment goes through, there would be a complete inconsistency in the clause. You would have the first clause which says that he is guilty if he knows or suspects, and then you have the next clause saying that it is a defence for him to prove that he did not know or suspect. In other words, you have two inconsistent clauses; one saying that it is for the prosecution to prove that he knew or suspected; and the other clause saying it is a defence for him to prove he did not know or suspect. That is my criticism of this clause as it stands.

I am sorry that I could not be here at the Report stage; but I am very glad indeed to see laundering made a complete offence. When anyone in a bank, institution or building society, knows or suspects, or has reasonable ground to suspect, that it is drug-trafficking money, then it is his duty to disclose it. Otherwise, if he lets the arrangement go forward, if he helps in the laundering, then he himself is guilty of an offence. The clause makes it perfectly clear that the man in the bank or building society or whatever it may be, ought to tell the constable or Customs and Excise or whoever: "I think that it is probably drug-trafficking money". He ought to tell that to the police and then go by what the police tell him to do.

The same question arises here concerning laundering. I am afraid that words were taken out in Committee. As originally drafted, I think Clause 23 was quite good. It was not only that the man knew or suspected, but also had reasonable grounds to suspect. Those words were taken out. So you have the same inconsistency. You have on the one side the prosecution having to prove that he knew or suspected; and then, in that case, you have the same thing in Clause 23(4) that it is a defence to prove that he did not know or suspect. There you have again the prosecution having to prove that he knew or suspected but you have a clause in the statute which says that it is a defence for him to prove that he did not know or suspect. Those are the two inconsistencies. I do not know how the courts will go about it. I certainly would not want any time to be taken up or delay caused by any amendments here. This Bill ought to he got through as quickly as may be.

I am not sure that the best policy is not to let the amendment go through as it is and leave the courts to solve the problem when it comes before them. I do not know whether or not that is right. I have an idea that they will say, "If it is a defence for him to prove that he did not know or suspect, the inference from that is that it is presumed against him that he did know or suspect unless he makes good his defence". Whether the courts will do that or not, I do not know. They do not read Hansard—they are not allowed to read Hansard—to see what any of us say about it. The courts will have to go through it and decide it without the help of anything that is said in here in this House at all.

I would point out that this amendment to Clause 30 and the present state of Clause 23 leaves the courts with an almost insoluble problem: the prosecution having to prove that he knew or suspected—and that is what the Criminal Bar Association says—but the statute saying that it is a defence for him to prove that he did not know or suspect. There it is. It has to be solved somehow. I should like to know what anyone else has to say about it.

Lord Mishcon

My Lords, one always listens with the greatest possible respect—and this is a phrase always used when one follows the noble and learned Lord, Lord Denning; and I use it once more—to anything that the noble and learned Lord says to the House. If I really believed that there was a grave inconsistency here and that the courts would have a terribly difficult task to perform—which is what the noble and learned Lord thought—I should certainly want to consider negating this amendment. I did not quite follow the noble and learned Lord when he said that possibly the best course, in spite of the inconsistency that he saw and the impossible task laid before the courts, was to leave it to the courts to sort it out.

If he will forgive me for saying so, to me that was a graver inconsistency than the one that he pointed out; since if they have an impossible task it is not for Parliament to put them in such a position that they have such an impossible task. I view this amendment in the following way, and I say this most respectfully. We are dealing with a criminal charge where, in a Bill, we have imported very unusual sanctions and very unusual provisions in our criminal law. But here we are not dealing with the people directly involved when we are dealing with laundering. Nor are we dealing in this section with those who are directly involved. We are dealing with those who disclose that an investigation is pending; and there may be more than one reason for such a disclosure.

There, we have to be extremely careful that we do not allow the rigours of our criminal law to fall upon the heads of people without giving them adequate room for adequate defences. Where I do not see the inconsistency is in this. The prosecution, as I see it, will have to make a prima facie case out before the court that this prisoner knew or suspected. Having made out that prima facie case, the defendant is then put in the position either of seeing that the evidence is so weighty that he cannot possibly rebut it—in which case presumably the court finds him guilty—or the defendant says, "Yes, all that circumstantial and suspicious evidence which has been put forward by the prosecution is all very well. They have indeed to the satisfaction of the court made out a prima facie case. Now the onus is upon me to show that I did not know and that I did not suspect". If that onus of proof is satisfied by his evidence, or the evidence that he calls, then he is entitled to an acquittal.

However, if you import into the Bill another way of allowing the prosecution to make out a prima facie case and you say, "I can't prove that he knew and I certainly can't prove that he suspected. But I put evidence before the court that he ought to have suspected even if he didn't know". He had "reasonable grounds"—those are the words, if I may respectfully say so to the noble and learned Lord, and not "reasonable cause". There may be a slight difference in the two words. The words in the Bill originally were, "reasonable grounds".

If you import that and you say that if the court is satisfied about that and then you put upon the defendant the onus of proving to the court that he had no reasonable grounds for suspecting at all, that really is an objective test which I would have thought our criminal law would want to retreat from because it is a negation, I would have said, of proper justice in this context where somebody is not directly connected with the offence.

So I say that it is right; and I say to the Criminal Law Association that their submission to the Minister was a useful one and I congratulate the Minister, if I may say so, for having listened to such a worthy association. I am sure that, equally, he has listened with great deference to the noble and learned Lord; but I hope that he finds that what I have said—and, indeed, I hope that the noble and learned Lord finds that what I have said—is not without sense.

7.30 p.m.

Lord Wigoder

My Lords, speaking as one who I believe is still a vice-president of the Criminal Bar Association, may I very strongly support this amendment and hope that the Government will persist in it? I give my support on three grounds. First, the offence in Clause 30 will then be the offence of knowing or suspecting certain matters. That is a formula which is accepted and recognised in the criminal law of this country.

Secondly, it is clearly desirable that there should be consistency throughout this Bill, and the fact that those are the words used in Clause 23 and that no attempt has been made today to amend them makes it necessary that we should now amend Clause 30 to bring it into line. Thirdly, on general principles, I would think it wrong for us to attempt to import into Clause 30 the objective element about which the noble Lord, Lord Mishcon, has spoken, which is included in the words, having reasonable grounds to suspect". I go along with the noble and learned Lord, Lord Denning, when he says that this offence may not always be an easy one to prove. In our submission, that is no justification for tinkering with established legal principles in order to make it easier to obtain convictions. I hope the Government will persist with this amendment.

Lord Glenarthur

My Lords, I am grateful to the noble Lord, Lord Mishcon, and indeed to the noble and learned Lord, Lord Denning, for their comments. So far as consistency is concerned—a point which the noble Lord, Lord Wigoder, raised—of course it is consistent with Clause 23. I will study what the noble and learned Lord has said, but I believe the point about our amendment was really best summarised perhaps by what the noble Lord, Lord Mishcon, said. If the person making the disclosure knew or suspected that the investigation was taking place—and that is a matter for the jury on the basis of the evidence put forward—he would be found guilty. What we want to avoid is putting at risk, for example, a bank clerk who might not realise the investigation was taking place and who might disclose something prejudicial to it. We do not want to punish mere oversight, and although the prosecution must prove that the person actually knew or suspected, the defendant can be asked questions (if he gives evidence) about the reasonableness of his conduct to establish that beyond all reasonable doubt he knew that he was tipping off the defendant.

The noble Lord, Lord Wigoder, referred to the defence in Clause 32. It is indeed a defence if he did not know or suspect that the disclosure would prejudice the investigation. But in Clause 31 a person will commit an offence if he knows or suspects that the investigation is taking place and makes a disclosure. I believe we have it right. Of course I note the wisdom of the noble and learned Lord, but I hope he will allow this amendment to go forward.

Lord Denning

My Lords, certainly I will. I should like to say only this. I preferred the original draft of the Government's advisers, both in regard to Clause 23 and in regard to this one. But, on the other hand, I quite agree that there ought to be consistency. Clauses 23 and 30 ought to be on the same lines; otherwise, we shall have the courts arguing about that. On the whole, I think that in the circumstances it is much better to let the amendment go forward, and if there are troubles —I think there might be, but I hope there will not be—I am sure the courts will be able to decide them satisfactorily. If I may say so, they all lean in favour of the defence a great deal, perhaps, but, on the other hand, in those cases I hope they will realise that we want to stop this drug trafficking and all those who assist in it just as much as we can.

On Question, amendment agreed to.

Clause 33 [Power to inspect Land Register etc.]:

Lord Glenarthur moved Amendment No. 27:

Transpose clause 33 to after clause 31.

The noble Lord said: My Lords, this is a rearrangement of two clauses, and I beg to move.

On Question, amendment agreed to.

Clause 37 [General interpretation]:

Lord Glenarthur moved Amendments Nos. 28 to 34:

Page 40, line 17, leave out ("where") and insert ("when").

Page 40, line 17, after ("summons") insert ("or warrant").

Page 40, line 18, leave out from ("1980") to end of line 22 and insert ("in respect of the offence").

Page 40, line 23, leave out ("where") and insert ("when").

Page 40, line 24, leave out from ("warrant") to end of line 25.

Page 40, line 26, leave out ("where") and insert ("when").

Page 40, line 29, leave out from ("section") to end of line 30.

The noble Lord said: My Lords, I beg to move Amendments Nos. 28 to 34 en bloc. They are all drafting amendments.

On Question, amendments agreed to.

Clause 38 [Minor amendments]:

Lord Glenarthur moved Amendment No. 35:

Page 41, line 31, leave out ("128(4) of the Insolvency Act 1985") and insert ("281(4) of the Insolvency Act 1986").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 2. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 36:

Page 41, line 35, leave out "(1)") and insert ("(2)").

The noble Lord said: My Lords, this is a drafting amendment, and I beg to move.

On Question, amendment agreed to.

Clause 39 [Short title, commencement and extent]:

Lord Glenarthur moved Amendment No. 37:

Page 42, line 4, leave out ("subsection (4)") and insert ("subsections (4) and (5)").

The noble Lord said: My Lords, this, again, is a drafting amendment. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 38:

Page 42, line 7, after ("sections") insert ("7(4),").

The noble Lord said: My Lords, with the leave of the House I should like to move Amendment No. 38 and to speak also to Amendments Nos. 39, 40 and 41. These amendments to this extant clause of the Bill provide for four further provisions of the Bill to apply to Scotland. The first three amendments are of a drafting and consequential nature. The amendment concerning Clause 23 is more substantial.

The House may recall that my noble and learned friend the Lord Advocate announced at Report stage his intention to introduce this amendment to extend to Scotland the statutory protection from actions for breach of confidence afforded by the Bill to any person who discloses information about funds or investments which they suspect may be derived from drug trafficking. This amendment to this extant clause achieves that purpose, and I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 39 to 41:

Page 42, line 10, at end insert ("section 7(3)").

Page 42, line 13, leave out ("and 16") and insert (", 16 and [Winding up of company holding realisable property]").

Page 42, line 14, at end insert—

("section 23(3)(a)").

The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move them en bloc.

On Question, amendments agreed to.

Lord Glenarthur

My Lords, I beg to move that this Bill do now pass. Tonight we have completed our consideration of a measure which, although entirely straightforward in intention, has proved perhaps unusually complex. I believe there has been no doubt anywhere in your Lordships' House about the importance of depriving those who traffick in drugs of the proceeds they have made. All your Lordships who have spoken during the consideration of this Bill, and indeed on other occasions, have expressed abhorrence of those who engage in this dreadful trade, and have also expressed their deep concern for those—very often young people—whose lives are effectively destroyed as a result. Your Lordships have rightly stressed the need for wide-ranging action against drug misuse, both to bring about a reduction in demand and also to take effective action to counter the illegal supply of controlled drugs.

In the context of our attack on illegal supply, this Bill has a dual purpose. On the one hand, it will send a clear signal to the trafficker that if he is convicted he will not be able to retain any of the wealth he has made as a result of his evil activities. If he is found guilty of just one trafficking offence, he stands to lose everything he has gained. That will surely give cause for thought to those who are currently prepared to take the risk of receiving a long prison sentence provided they can look forward to a life of ease and plenty on their release.

Secondly, the legislation will allow the proceeds to be taken out of the drugs trade altogether so that they cannot be used to finance further drugs deals. Large-scale trafficking not only generates big money but also depends and even thrives on it. The more money we can get away from the drugs area by means of confiscation, the greater will be our impact on the trade, and the Bill provides for the police and Customs to investigate a drug trafficker's financial dealings. The greater the trafficker's likelihood of being caught in the first place, the greater deterrent will be the prospect of confiscation.

The deep concern we all share about the misuse of drugs has been demonstrated in the spirit of constructive co-operation which has marked the approach to this Bill at all its stages in your Lordships' House and in another place. I should like to express my deep gratitude for the suggestions which have come forward and for the assistance which the Bill has received. I should particularly like to express my thanks for the patience and good humour with which your Lordships have considered an unusually large number of Government amendments during the later stages of the Bill's passage. I know that this has put something of a burden on all those who have participated in the proceedings and has caused not a little alarm on the part of my noble friend the Chief Whip. But the confiscation scheme established by the Bill is a novel one and its details are very complex. We thought it right to take our opportunities to refine the Bill's provisions as it went through your Lordships' House.

The Bill before us must of course be considered on its own merits. As I have explained, I am certain it will play a significant role in the overall battle against the traffickers and i repeat the Government's gratitude for the patient and constructive way in which it has been considered by your Lordships. I beg to move.

Moved, That the Bill do now pass.—[Lord Glenarthur.]

Lord Mishcon

My Lords, the noble Lord the Minister was right to stress at the end of the passage of this Bill through your Lordships' House what was said in the introductory speeches on the Bill; namely, that the House was dealing with one of the greatest evils with which our society has to deal. Possibly there has been an example of that only over the past 24 hours or so; whether or not that be so, I know that all your Lordships would wish to extend your sympathy to a bereaved family which is of significant value in public duty and in public work for this country.

It was because of this situation that the Government achieved co-operation from all sections in your Lordships' House as they did in another place. I hope on behalf of my noble friends that I have shown our deep concern at this dreadful traffic and our desire to do anything we possibly can by legislation to bring the drug trafficking business to an end, and where it still exists, to see that appropriate punishments of a very high order are administered and that profits do not accrue if we can stop that. That is the reason for the confiscation provisions and other unusual provisions in the Bill.

I make no apology to your Lordships for repeating something I have said so often in the course of our discussions. It is that this should be realised as being a unique case where we have introduced unique provisions and unique penalties. The noble Lord, Lord Wigoder, is much more entitled to speak on behalf of the Criminal Law Association than ever I would be as he is a distinguished officer of the association, as indeed he was a distinguished member before his retirement of the criminal Bar. The association emphasised the uniqueness of the situation in a letter which it sent to Mr. Mellor who dealt with this matter in the Commons on behalf of the Government. I have seen a copy of Mr. Mellor's reply. I hope it is made perfectly clear that the Government realise the unique measures that have been introduced, and that if there is any question of ever introducing them into any other criminal legislation, such provisions will have to be taken on their merit by Parliament, and that this is not deemed to be a precedent in any way.

My last words are of congratulation to the noble Lord the Minister on the way in which he has steered this measure through the House with his usual courtesy and clarity of thought.

7.45 p.m.

Lord Denning

My Lords, I should like to join in congratulating the noble Lord, Lord Glenarthur, on introducing the Bill in the House and carrying it through. It is perhaps revolutionary in our law, but it deals with a most intransigent subject. The new provisions are as follows. There is confiscation. After the man is convicted there will be confiscation of the proceeds of drug trafficking. We have not had it before. There is the restraint order. Before the man is convicted, or long before that—almost as soon as he is charged—you can go to the High Court and get an order preventing any of the people who hold or may hold the proceeds of the trafficking of drugs dealing with them or getting them away.

Perhaps I may mention the laundering provisions suggested at first by the Select Committee of the House of Commons and then taken up by your Lordships. How important they are, because the first thing a drug trafficker does is to try to get the moneys away—out to a numbered bank account in Switzerland, out to buy a house in the name of his wife, or put in the name of a nominee. There are all kinds of ways in which a trafficker launders the dirty money and tries to make it appear clean so that when it comes back to this country it cannot be traced.

With regard to the laundering provisions, how important it is that the banks have all agreed to deal with it. The banks will notify the constable or the Customs when any laundering arrangement comes to their notice. When any money comes into their hands which they suspect is drug trafficking money they will notify the constable or the authorities as it may be. That will help a great deal. If they do not notify when they ought, they will be guilty of an offence. There it is; for their own protection they will readily co-operate.

I shall say only one word of controversy. The noble Lord, Lord Mishcon, raised it. He said that this provision must be applied only to drug trafficking money; it must not apply to the money which robbers steal from banks and then put in another bank. He said that we must have nothing to do with that. My Lords, hesitate a little. When a bank cashier receives£100,000 in bank notes he may suspect that it is drug trafficking money; he may suspect that it is from a burglary or some other crime. He cannot tell which, but he very much suspects that it is ill-gotten money. What is he to do? If he wants to be safe, he should tell the authorities.

I should like to repeat what the noble Lord, Lord Glenarthur, said at Report stage: There will be cases in which a bank suspects that money is the proceeds of crime but cannot say whether it is the proceeds of drug trafficking. In order to avoid the possibility of the laundering offence being committed the bank would be wise to proceed on the basis that it is drugs money, and the new protection would extend to it if it did".—[Official Report, 13/5/86; col. 1117.] It seems to me that that is very good advice to the banks or anyone handling money which they suspect may be from drugs or from something else. At all events they should report it. Let the police and all those concerned get on with it, and try to get hold of the drug traffickers, bring them to justice and confiscate their money. This will be by far the most important provision on the statute book with regard to trying to get the drug traffickers. I thank the Government for bringing it forward and for doing it so quickly and so well.

Lord Wigoder

My Lords, I do not want at this late stage of the Bill to intervene in the controversial matter that has arisen as a result of what has been said by the noble Lord, Lord Mishcon, and the noble and learned Lord, Lord Denning. Nor indeed do I want to make any comments at this stage on the contents of the Bill, because most of what one wanted to say has been said on several occasions during the course of the Bill's passage.

All I want to do, particularly on behalf of my noble friend Lord Harris of Greenwich, who is not able to be here at this moment, is to say how much we have appreciated the assistance that we have always received from the Minister throughout the passage of the Bill, and the sympathetic and careful way in which he has considered such suggestions as have been made.

That has been exemplified by the submission of the Criminal Bar Association, which was a lengthy submission and a complicated one. Unfortunately, it arrived too late to be of any real assistance so far as the noble Lord, Lord Mishcon, or I could be of assistance in tabling amendments. One was forced to ensure that the noble Lord, Lord Glenarthur, had received that submission and to invite him to consider it with care, to see whether there was anything in it that he thought was worth while. The fact that the Government have today brought forward at least one amendment based on that submission is a clear indication of the Government's determination to get the Bill right. We are all very grateful to the noble Lord.

Lord Glenarthur

My Lords, I thank all noble Lords for their kind comments. Having listened to the introduction of a slightly contentious point between the noble Lord, Lord Mishcon, and the noble and learned Lord, Lord Denning, I will merely say that the extent to which the provisions in the Bill should apply to other kinds of profitable offences has been raised before, as the noble and learned Lord said. I have noted the views of all those who have taken an interest in this matter—the noble Lords, Lord Mishcon and Lord Harris, and the noble and learned Lord, Lord Wilson, and others. The Government will of course examine those matters very fully before developing their wider proposals.

Reconciling some of the views that are held will be far from easy. I am thinking particularly of the dilemma of resolving the opposing views expressed earlier by the noble Lord, Lord Mishcon, and the noble Lord, Lord Harris, on the subject of bank disclosure, but I can promise that the implications of both points of view will be studied with the utmost care. This particular measure is a proper and significant addition to the statute book; we are all agreed on that. I beg to move.

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