HL Deb 15 June 1992 vol 538 cc73-9

7.7 p.m.

Lord Goff of Chieveley

My Lords, I beg to move that this Bill be now read a second time.

As your Lordships know, the Bill was introduced in this House during the previous Session. It received support from the Government and from the Opposition Benches. There was no opposition to the Bill in principle. No amendments were tabled. It passed through all its stages in your Lordships' House in a very short space of time. But, most unfortunately, it fell in another place, not through any opposition to it—indeed, I know of none— but simply for want of time.

There is general agreement in the shipping and insurance industries in this country and among all lawyers with experience in this field that this measure is badly needed as a matter of urgency. I have therefore taken the liberty of introducing the Bill for a second time in your Lordships' House in precisely the same form as before. However, since your Lordships' House has already considered the Bill on a previous occasion, I trust that noble Lords will think it sensible if I do not go into the Bill in as much depth on this occasion as I did on the last.

I conceive it to be my duty to your Lordships to expound the purpose of the Bill as briefly as I reasonably can. I trust I shall be forgiven if I draw to some extent upon what I said on the previous occasion.

The Bill provides a long awaited opportunity to reform and update the law of this country in respect of the rights of suit relating to contracts for the carriage of goods by sea. A very large number of contracts for the carriage of goods by sea throughout the world are expressly governed by English law even though the ships, cargoes and ports involved have no connection with this country. London's role in the making of those contracts and the settlement of disputes which may arise under them results in a significant contribution to our invisible earnings and helps to secure the status of London as the world's leading maritime centre and centre for the resolution of maritime disputes.

The basic problem has been that, since the contract of carriage is made between the shipper and the carrier, at common law only those parties could sue and be sued under that contract, for example, for damage suffered by the cargo on the voyage or for short delivery of the cargo at destination. Thus, although the goods subject to the contract may have been sold or resold while afloat—and there can be long chains of contracts—at common law the buyer of the goods afloat was unable to sue on the contract of carriage.

The Bills of Lading Act 1855 was passed to remedy that defect. However, for some considerable time lawyers and commercial interests have considered that the statutory provisions of the 1855 Act relating to the right to sue the carrier have themselves become out of date because the statute no longer reflects commercial practice, and is unduly restrictive in the rights that it grants.

Although there has long been agreement on the need for reform, until the Law Commission and the Scottish Law Commission took the matter in hand lawyers and commercial interests found it difficult to agree upon the scope and form of change which is needed. The Law Commissions' reports were published in March of last year and the widespread support which their proposals received reflects the quality of the work undertaken by the commissions and the appropriateness of the balance which they struck.

The text of the Bill is the culmination of the commissions' work, and support for its early enactment has come not only from United Kingdom interests but also from other European interests which adopt and wish to continue to adopt English law as the basis for their contracts for the carriage of goods by sea. Based on their consultation and examination of the law in other jurisdictions, the Law Commission concluded that, for the following reasons, the Bills of Lading Act 1855 no longer meets commercial requirements or accommodates commercial practice.

The 1855 Act enables the receiver of goods shipped under a bill of lading to sue the carrier for non-delivery or defective delivery if the property in the goods had passed to him upon or by reason of the consignment or endorsement of the bill of lading. That requirement causes difficulty whenever property either has not passed at the relevant time or has passed independently of the transfer of the bill of lading with the result that the transfer of the bill of lading is in no way causative of the passing of property. That problem has arisen in particular with bulk cargoes. Again, the 1855 Act does not reflect current commercial practice whereby goods are often carried under a document other than a bill of lading, notably a sea waybill. Finally, the 1855 Act does not allow for future development in commercial practice in this field and in particular the increasing use of electronic data interchange.

The Bill now before your Lordships' House solves those problems, first, by simply providing that any lawful holder of a bill of lading has the right to sue the carrier; and, further, by conferring the same right on a person who is identified in a ship's delivery order covering part of a cargo originally shipped in bulk. In addition, the Bill provides that a person entitled to take delivery of goods under a sea waybill which contains or evidences a contract for the carriage of goods by sea is likewise enabled to sue the carrier. In turn, any person thus entitled to make a claim is placed under the same liabilities towards the carrier as if he had been party to the original contract of carriage.

The Secretary of State for Transport will be given authority under the Bill to make regulations governing electronic data interchange, though it is recognised that the timing of any such regulations will depend on the development and acceptance of electronic data interchange by the industry. Finally, the Bill does not seek to restrict other rights to sue, for example, under a charterparty or in tort. Nor does it affect in any way the application or operation of the international Hague Visby Rules on liability and limitation in respect of cargoes carried under a bill of lading.

As I have said, the Bill has gained the support of all the commercial interests affected. Although cargo interests might have been expected to support it, I am glad to say that the Bill also has the support of shipowners and their insurers. It is some considerable time since the enactment of the Bills of Lading Act 1855. There is now strong evidence that commercial practice has moved on and that our law in this area needs to be amended and updated. Indeed, the updating proposed is badly needed and long overdue. Further delay could erode London's international position. I commend the Bill to the House.

Moved, That the Bill be now read a second time. —(Lord Goff of Chieveley.)

7.16 p.m.

Lord Clinton-Davis

My Lords, the House will wish to congratulate the noble and learned Lord, Lord Goff of Chieveley, on making his third speech in support of the Bill—the first being on the Second Reading in February—not only for his explanation of its provisions but also for expanding on the arguments in support of change which is certainly needed.

A point was made in the previous debate about the Short Title of the Bill by the noble and learned Lord, Lord Roskill, and the noble Lord, Lord Byron. In responding to that point, the noble and learned Lord asserted that the Long Title provided sufficient explanation of the purpose of the Bill. With respect, I did not find that wholly convincing. The issue of nomenclature might have been better resolved; it constitutes a slight problem when there is other legislation under the same name. Perhaps I may suggest the name the Carriage of Goods by Sea (Elimination of Anomalies) Bill, or some such name. However, in time perhaps the issue of nomenclature will be resolved by a simple reference to the Goff Act.

As the noble and learned Lord has explained, there is clear need for reform. He recognised, as was recognised in the debate in February, the extremely able and scholarly work undertaken by the Scottish Law Commission and the Law Commission. As he also pointed out, the Bill's significance is not confined to, although it certainly embraces, our own national interests. Shipping in all its interests remains a major national industry, contributing extensively to this country's balance of payments. However, it is an international, indeed global, business and much of the law governing shipping—in the resolution of disputes in particular—is transacted in the City, adopting English law in respect of contracts for carriage of goods by sea.

It had clearly become evident that the Bills of Lading Act 1855 had become unduly restrictive and anomalous. It had been overtaken by time and developing practical requirements. It is most satisfactory that the Bill has emerged after the most extensive consultation with all relevant interests. It is based on a very wide consensus, by no means confined to British interests. It will help to correct the possibility that without those amendments to the law, British interests could have withered to some degree in the need to resolve international disputes perhaps by using other laws and other fora. I agree with what the noble and learned Lord said in the previous debate. It was: With the enactment of the Bill … Parliament will move our law in this area from the middle of the 19th century to well into the 21st".—[Official Report, 4/2/92; col. 234.] Perhaps I may turn to a matter which is allied to the Bill but not wholly related to it. I shall not tax the noble and learned Lord about the matter, but I have given the Minister notice of the point that I wish to raise, albeit in parenthesis. It is hoped that in the not-too-distant future this Government and other member states will give consideration to another element of the carriage of goods by sea; that is a draft council directive concerning minimum requirements for vessels bound for or leaving Community ports and carrying dangerous or polluting goods. It is a modified proposal which is likely to emanate soon from the Commission. I wish to ask the Minister a question, and I hope that he is able to reply tonight. Can we expect that an impetus will be given to the draft directive during the forthcoming United Kingdom presidency of the Commission?

There is a clear need for legislation to set minimum information and notification requirements for ships bound for or leaving Community ports and carrying dangerous or polluting goods in bulk or in packaged form and also for shippers of such goods to be bound by these arrangements. It is quite clear that such a proposal is overdue. It is also right that when a vessel leaves a Community port or leaves a non-Community port before entering Community waters, all bulk cargo and goods in packages which are dangerous or polluting should be listed in the way prescrioed, and that there should be a duty on the master to report his position and to disclose the authority which holds the relevant information.

That is, in résumé, the burden of the proposal which the Commission is making. I repeat the question that I have asked the Minister: can we expect that the Government in their presidency will give impetus to that important but not well-known issue?

In conclusion, I wish to repeat what I said at the beginning. I thank the noble and learned Lord, Lord Goff, for introducing the Bill and for explaining it so well. In doing so, he has rendered an indispensable service not only to the shipping industry and to legal interests but also to this Parliament and to the country as a whole. The Bill is overdue and I wish its passage well. As the noble and learned Lord said, it is not likely to be controversial.

7.23 p.m.

Lord Byron

My Lords, I am pleased that the measure has now been reintroduced into your Lordships' House. I wish to thank the noble and learned Lord, Lord Goff of Chieveley, for bringing the matter back at the earliest opportunity and to thank the Government for providing the time necessary for the Bill.

When the Bill first came before this House in February I raised a number of points on which I thought some clarification might be helpful. The noble and learned Lord has been kind enough to write to me about those matters and, therefore, I do not propose to say anything in detail about the substance of the Bill. It is indeed an important and useful piece of law reform which will help to maintain the reputation of English mercantile law and the position of the Commercial Court in London as the preferred means of resolving disputes for many of those involved in international trade and the carriage of goods.

I cannot, however, let this debate pass without expressing a slight sense of disappointment that following the dissolution of Parliament the opportunity was not taken to reintroduce the Bill with a different Short Title. That point has already been touched upon by the noble Lord, Lord Clinton-Davis. The confusion which is likely to be engendered by choosing the name Carriage of Goods by Sea Bill has been raised by a large number of commentators. It was also touched upon by others far more erudite in this field than I am when the matter came before your Lordships' House in February; namely the noble and learned Lords, the Master of the Rolls and Lord Roskill.

Practitioners in the field of maritime law, of which I am one, will always associate the name Carriage of Goods by Sea, first, with The Hague and, subsequently, with The Hague Visby Rules. In introducing the measure the noble and learned Lord, Lord Goff, stressed its importance to the international mercantile community. In those circumstances it is a pity that a name has been chosen which will probably confuse foreign users of the English courts even more than practitioners in this country. Indeed, at a recent Posidonia shipping exhibition in Athens I was approached by a Dutch lawyer who had noted with interest that the United Kingdom was adopting legislation to enact the Hamburg Rules. I said that I thought he was wrong and I am glad to say that he was, at least for the present. His confusion naturally arose as a result of the name chosen for what is, in effect, a new Bills of Lading Act to replace the 1855 Act.

That point has been made many times and obviously has not found favour with the Law Commission or with the Department of Transport. Clearly we must become used to a Carriage of Goods by Sea Act 1992 as a replacement of the old Bills of Lading Act 1855. However, I venture to predict that practitioners may in common parlance dub it the "new Bills of Lading Act".

I shall say nothing further about the Bill except again to thank the noble and learned Lord for his work and support. I wish it a speedy passage through this House and onto the statute book.

7.27 p.m.

Viscount Astor

My Lords, I too thank the noble and learned Lord, Lord Goff of Chieveley, for his able introduction of the Bill. Again, the Government wholeheartedly welcome and support the measure and they hope for an early enactment on this occasion.

The Bill represents the fruits of several years' work by the English and Scottish Law Commissions. One of the most impressive features of that work was a consultation exercise undertaken by the two Law Commissions. They canvassed and obtained the views of all interested parties, including commodity and other traders, shipowners, underwriters, arbitrators and bankers. They also received invaluable advice from many distinguished commercial lawyers with expertise in marine cargo disputes, including practitioners, academics and members of the judiciary. The result of the two Law Commissions' extensive consultations has been the production of a commendable piece of law reform which seeks to preserve the position of London as major financial and commercial centre, with all that that implies for our invisible earnings.

The noble Lord, Lord Clinton-Davis, asked me about a modified proposal for the directive for the minimum requirement for vessels entering or leaving Community ports. That question was wide of the Bill; indeed, it has nothing to do with the Bill. I shall be delighted to answer the question if he tables it for another occasion.

I commend the work of the two Law Commissions which has resulted in the Bill now before us. Again, I thank the noble and learned Lord for bringing forward this important measure. I trust that with your Lordships' agreement we shall speed the Bill on its way to the statute book.

7.29 p.m.

Lord Goff of Chieveley

My Lords, I am grateful to Her Majesty's Government for again supporting the Bill and I hope that they will assist us in speeding its path towards the statute book. I am also grateful for the support of the noble Lord, Lord Clinton-Davis.

I must refer once again to the vexed question of the Bill's Title. It was considered by the Law Commissions in considerable depth. Of course the matter was raised with them during their consultation process. Their problem was that they could not find another name which was neither cumbrous nor inaccurate. Therefore, they fell back on this name, which has been criticised, as I know.

When the time came to reintroduce the Bill in your Lordships' House, I felt that the matter had become so urgent that I did not wish to do anything which might delay or impede the passage of the Bill. I was much concerned that, if the name was changed, some people might think that the substance of the Bill was in some way affected. Therefore, for that reason I did not propose to your Lordships that the name should be changed at this stage. I hope your Lordships will understand that. I commend the Bill to the House.

On Question, Bill read a second time: Committee negatived.

Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 9th June), Bill read a third time, and passed, and sent to the Commons.