HL Deb 06 December 1994 vol 559 cc830-48

2.59 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

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

The Bill is drawn from three reports by the Law Commission and the Scottish Law Commission. The reports are all in the field of private international law; that is to say, the area of our law which enables our courts to deal with cases which contain a foreign element. I am sure that the implementation of the reports will be welcomed by the many noble Lords who support the valuable work that the commissions have done and are doing.

I hope that the Bill will follow the Jellicoe trail to the statute book, blazed during the last Session by the Law of Property (Miscellaneous Provisions) Act. If your Lordships give this Bill a Second Reading, I shall move that it be committed to a Special Public Bill Committee. The first use of this procedure for the Law of Property Bill was, I believe, a success. I consider the present Bill to be equally suited to consideration by such a committee because of its uncontroversial and generally technical nature.

The Bill comprises 18 clauses and one schedule and is divided into four parts. Full explanation of the current law and the proposed reforms is to be found in the three reports from which the Bill derives. Notes on clauses are also available in the Printed Paper Office. Part I implements recommendations in the report on Foreign Money Liabilities (Law Commission paper No. 1124) and is based on the draft clause appended to that report. This part extends only to England and Wales. It changes the law regarding the rate of interest payable on judgment debts and arbitral awards in foreign currency. At present, interest on High Court and county court judgments and arbitral awards is prescribed at a fixed rate, currently 8 per cent. This statutory rate, which is altered from time to time, reflects generally the level of interest rates currently prevailing in the United Kingdom. It does not reflect the rate appropriate to any particular foreign currency. Indeed, the statutory rate will often be entirely inappropriate to the foreign currency in question.

Clause 1 makes provision for the High Court and county courts respectively to direct that a sum awarded by a judgment given by the court which is expressed in foreign currency should carry interest at such a rate as the court thinks fit instead of at the statutory rate. Clause 3 makes analogous provision in relation to sums directed to be paid as an award by an arbitrator. Clause 4 makes various consequential amendments to certain enactments which contain provisions dealing with interest on judgment debts.

Part II and the schedule implement recommendations in the joint Law Commission and Scottish Law Commission reports on Polygamous Marriages (Law Commission Report No. 146 and Scottish Law Commission Report No. 96) and derive from the commissions' draft Bill. This part, which extends to England and Wales and Scotland, concerns the validity under English and Scottish law of marriages contracted by those domiciled in England and Wales or Scotland which are in fact monogamous but which have been celebrated abroad under laws that permit polygamy.

Clauses 5 and 7(1) implement the law commissions' main recommendation in this part of the Bill that persons of either sex domiciled in England and Wales or in Scotland should have the legal capacity—provided, of course, there is no other impediment—to enter into a valid marriage outside the United Kingdom which, although celebrated in a form appropriate to polygamous marriages, is not actually polygamous. All marriages validly celebrated in the United Kingdom are necessarily monogamous in character, so there is no need for this proposition to apply to marriages in the United Kingdom. Subsection (2) of Clause 5 ensures that that clause only affects the internal law of England and Wales. This means that where, under the rules of English private international law, the relevant law of another country is applied for the purpose of determining the validity of a marriage, those rules will still apply.

Clause 6 applies only to England and Wales and ensures that the reforms in Clause 5 should in general apply retrospectively. Subsection (1) extends the rule laid down in Clause 5(1) to marriages celebrated before the date on which this part of the Bill comes into force and deems it always to have applied to such marriages. This has the effect that such marriages are to be regarded as always having been valid. This effect is qualified by various exceptions and savings with the result that the rule in subsection (1) does not apply where either party to a potentially polygamous marriage has remarried or obtained an annulment and does not affect certain property and related rights, such as succession to a dignity or title of honour, which have accrued before the commencement of this part.

Clause 7(2) clarifies the effect in Scots law of a valid potentially polygamous marriage abroad which is at present an area of doubt and uncertainty. Marriages entered into abroad in polygamous form where there is in fact only one husband and wife are to be regarded as effective marriages for all purposes of the law of Scotland so long as they remain in fact monogamous. This provision brings Scots law into line with the present position under English law.

Finally, in this part, Clause 8 provides that the reforms in Part II are not to affect any rule or custom in relation to the marriage of members of the Royal Family. This is in line with the previous enactments in this general area of the law.

Part III of the Bill implements reforms proposed by the two law commissions on Choice of Law in Tort and Delict (Law Commission paper No. 193 and Scottish Law Commission paper No. 129) and also derives from the commissions' draft Bill. These rules relate to any action brought in a part of the United Kingdom in respect of a tort or delict which has a foreign element.

Clause 9 deals with the purpose of the choice of law rules contained in this part. That purpose is to specify the system of law, according to which the rights and liabilities of the parties must be determined, in relation to issues which the courts in this country decide are issues relating to tort or delict, as opposed, for example, to contract or some other basis of liability. This system of law is referred to in this part as "the applicable law". These rules are to take the place of the present common law rules abolished by Clause 10. Other choice of law rules which apply in particular classes of cases, such as torts committed on the high seas (which are governed by the principles of maritime law), are not affected by the Bill.

Clause 11 establishes a new general rule that, when a dispute arises in one part of the United Kingdom out of a tort or delict committed in another part of the United Kingdom or in a foreign country, the country whose law will be used to decide the dispute is that in which the events constituting the tort or delict occur. This general rule should identify the most appropriate applicable law in the majority of cases. It is likely to correspond with the reasonable expectations of the parties involved in the tort or delict. Where significant elements of the events constituting the tort or delict have occurred in different countries, the tort or delict is to be taken to have occurred in the country either where the plaintiff was injured, or where the property was damaged, or, in other cases such as an international conspiracy to commit a tort, where the most significant elements in the sequence of events occurred.

An exception to the general rule is laid down in Clause 12 so as to displace that rule in any case in which it appears to be substantially more appropriate for the applicable law to be the law of another country. Let me emphasise the word "substantially". The exception is not intended to operate every time another applicable law might be more appropriate but only where it would be substantially so.

This seems an appropriate moment in my description of Part III to mention an exception to the rules recommended by the law commissions which the Government have decided not to implement. The law commissions proposed that where conduct constituting a tort or delict takes place in the United Kingdom the law of the relevant part of the United Kingdom should apply, irrespective of what law would apply under the new general rules. They sought to justify this exception on the ground that a person who acts in the United Kingdom should not, by the application of a foreign law, be held liable in a United Kingdom court for consequential injury, loss or damage which occurs elsewhere and would not be recoverable under our law.

The Government consider this proposal to be objectionable in that it would reintroduce the nationalistic attitude which the law commissions are otherwise seeking to obviate. Further, it might not in fact protect defendants who act in the United Kingdom. In the context of the European Economic Area plaintiffs may, under the Brussels Convention of 1968 or the Lugano Convention of 1988 on jurisdiction and enforcement of judgments in civil and commercial matters, legitimately bring their proceedings in the country where they suffered the damage instead of in this country, and the courts of the other country might well apply their own law to the case. If the plaintiff is successful, the courts in this country would be obliged under those conventions to enforce the judgment against the defendant here, notwithstanding the terms of the law commissions' proposed exception.

Clause 13 ensures that the reforms in this part do not have retrospective effect. It also saves the effect of various procedural rules, the application of the principles of public policy and certain mandatory domestic rules, which are regarded as so important that, as a matter of construction or policy, they must apply to any action before our courts, even where the issues would otherwise in principle be governed by a foreign law selected by the new choice of law rules. These are important safeguards for defendants against liabilities and remedies under foreign law that for one reason or another it would not be tolerable to enforce here.

Clause 14 removes from the Foreign Limitation Periods Act 1984 and the Foreign Limitation Periods (Northern Ireland) Order 1985 two references to the common law abolished by Clause 10.

Part IV of the Bill deals with commencement, extent and Short Title. It also, in Clause 16, modifies the Northern Ireland Act 1974 so as to facilitate the extension of the reforms in Part II to Northern Ireland.

The Bill represents a useful and uncontroversial measure of law reform which has attracted the support of the legal profession. I am grateful to the Law Commission and the Scottish Law Commission for the careful work they have put into the preparation of the reports on which the Bill is based. Accordingly, I invite noble Lords to give the Bill a Second Reading.

Moved, That the Bill be now read a second time.—(The Lord Chancellor.)

3.10 p.m.

Lord Irvine of Lairg

My Lords, we welcome all three aspects of the Bill. When the noble and learned Lord invited me to say whether or not I considered the Bill suitable for the Jellicoe procedure, I confirmed that I did. I even suggested that its then title, "Private International Law Bill", might give the wrong impression in foreign places. It might be thought that it was a comprehensive measure dealing with the whole of our private international law and therefore intended, for our country, to serve the purpose which Switzerland's Private International Law Act 1987 serves there—an Act running to a mere 200 articles and 154 pages. I suggested the title, the Private International Law (Miscellaneous Provisions) Bill. In the spirit of co-operativeness which will accompany the passage of the Bill, the noble and learned Lord was good enough to agree. From time to time I have persuaded him to accept amendments that I have moved but never before to alter the title of a Bill. This is plainly the summit of my legislative achievements thus far.

As the noble and learned Lord said, Part I will give the courts welcome flexibility in the case of foreign currency judgments to order, at their discretion, a rate of interest other than the one prescribed under the 1838 Judgments Act. As I understand it, that rate can be fixed or variable in the court's discretion and I agree with the noble and learned Lord that present rates may not reflect commercially appropriate rates in the relevant currency.

Part II ensures the validity of marriages, in fact monogamous though contracted under a law permitting polygamy. Part III abolishes the double actionability rule which provided that where a civil wrong was allegedly committed in a foreign country, it could be sued on here only if it was a civil wrong under our law and also a civil wrong under the law of the country where it was done. The new general rule that the applicable law should be the law of the country where the wrong is committed—subject to sensible qualifications where significant elements of the events constituting the wrong occur in different countries —is welcome. The Bill will bring our law into line with the laws of most other countries.

The Bill is a tribute to the work of the law commissions—of "both" commissions, as the noble and learned Lord said. At the end of September the sad fact was that of 27 Bills published by the law commissions since March 1989 only three had by then reached the statute book. I do not underestimate the difficulties in finding parliamentary time. For far too long non-controversial reports by the law commissions have been gathering dust in Whitehall. I cannot do better than quote my noble and learned friend Lord Archer of Sandwell who, in your Lordships' House on 2nd November, said: Between 1967 (when the Law Commission was established) and 1981, 40 Law Commission reports have been wholly or partly implemented—about half on the initiative of the government of the day and about half on the initiative of private Members in one or other of the Houses. Since 1981 only 33 have been wholly or partly implemented. Moreover, since 1989 there has been what Sir Henry Brooke"— the present chairman of the English Law Commission— has described as a grade one disaster area: only one Bill has been implemented on government initiative since that time. In 1981, 13 reports were awaiting implementation. That figure had doubled to 26 by 1985. The figure now stands at 36 reports and represents the hard work of some of our most talented people—hard work which has borne no fruit of any kind".—[Official Report, 2/11/94; col. 874.] I desire to take the opportunity of this Second Reading debate to state as clearly as I can the position of my party on law reform. It was the Labour Government of 1964, under its distinguished Lord Chancellor, Lord Gardiner, which set up the two law commissions. It is only possible to keep increasingly complicated and far-reaching law efficient, fair and up to date by making full and effective use of the law commissions. As Sir Henry Brooke recently observed, a nation which neglects the ordinary care of its laws is neglecting something which is very important to its national well-being". The commissions have an impressive record in achieving clarification and reform of the law, but in recent years both have expressed increasing concern at government failure to implement their recommendations. Many much-needed reforms that have been fully reviewed and considered by the commissions remain unimplemented. In many cases the Government have not even troubled to give a public indication of whether they accept or reject the commissions' proposals.

The importance and momentum of law reform must be restored by enhancing the status of the commissions and putting in place arrangements for the implementation of their proposals. What is required is not merely talk about law reform, but the action that has been lacking in recent years. No government, of course, can be bound by the proposals of the commissions or undertake always to implement them. But where government disagree with those independent bodies, democracy demands that the reasons for that disagreement be stated openly and be subject to public and parliamentary scrutiny. To put law reform back with a high place on the political agenda, basic changes, as a matter of urgency, are essential.

The reports of the two commissions are usually impressive documents with proposals formulated after full consultation with all interested and informed parties. A Labour Government would regard the commissions' reports as the agenda for government response and action and not as an excuse for delay through the government themselves undertaking more consultation. The important public status of the commissions should be reinforced by government accepting an obligation to respond publicly within six months of publication of any commission report, giving full reasons for non-implementation or delay in the implementation of the commissions' proposals.

Lord Harmar-Nicholls

My Lords, is not the action being called for by the noble Lord still capable of being applied through the normal parliamentary procedures? There is nothing to stop the noble Lord, for example, under the many opportunities that our procedures give, from commenting that something is being neglected or not answered.

Lord Irvine of Lairg

My Lords, as the noble Lord says, that is an opportunity which can be, and frequently is, availed of. The important point is that government should not leave the reports to gather dust unnoticed in Whitehall, without any statement as to whether they have simply failed to read them or to consider them or whether, on considered grounds, they are opposed to them for whatever reason. I am proposing a more rational approach with an obligation upon government to respond in the interests of democracy. Of course, I support, in the current state of our procedures, the suitability of the Jellicoe procedures for carrying out much needed law reform. The noble and learned Lord is well aware that that is so.

A new obligation of government to respond publicly to Law Commission reports would be important. It could be reinforced by the creation of a joint committee of both Houses of Parliament, perhaps along the lines of the Ecclesiastical Committee, with a remit to oversee government action on law reform. The committee would draw on the combined legal expertise in the other place and in this House. The Government's response to law reform reports would be monitored by the committee, and Ministers would give evidence to the committee about that response. That would be an important obligation of government.

Many law reform proposals will be controversial and will need full parliamentary debate. Many others, however, should not require that time-consuming and delaying process. One of the tasks of such a joint committee would be to indicate which recommendations, and which parts of them, are in effect technical, and which raise issues of policy and substance. Active steps should be taken to expedite the implementation of proposals that the joint committee regards as non-controversial and, fortified by the opinion of that committee, all parties in Parliament would be expected to co-operate in the rapid enactment of such proposals. That would leave more time for the full debate of law reform proposals involving issues of greater sensitivity.

There is one further consideration. Although the law commissions would be the main engine of law reform, it is not practicable, or suitable, for the law commissions to undertake all of the work themselves. In recent years too much use has been made of ad hoc committees, or of interdepartmental studies, without reference to the expertise of the law commissions. The position originally envisaged by Lord Gardiner should be restored: the law commissions should once again advise government of the most suitable body to undertake any particular piece of law reform; and where law reform is contemplated by other government agencies the law commissions should give advice on procedures and approach. That should avoid duplication. It should lead to a coherent programme throughout government and ensure that all law reform work, wherever performed, is conducted to a high standard.

I have taken the opportunity to emphasise the major importance my party attaches to law reform and its conviction that it must be pushed significantly higher on the political agenda and that both law commissions must be supported and encouraged by putting the fruits of their labours, so far as possible, on the statute book. Meanwhile, we support the expeditious passage of the Bill.

3.23 p.m.

Lord Lester of Herne Hill

My Lords, the Law Commission and the Scottish Law Commission are excellent institutions, created, as the noble Lord, Lord Irvine of Lairg, has just reminded us, almost 30 years ago by Lord Chancellor Gardiner as his great innovation, supported, as I recall, by Home Secretary Jenkins. The law commissions have rightly expressed anxiety recently about the way their work has been consistently neglected by Parliament, an anxiety shared by many other people concerned with the quality of our laws. I endorse what has been said about that just now by the noble Lord, Lord Irvine of Lairg. It is therefore most welcome that the Government have introduced this Bill to give effect to three of the law commissions' reports in the field of conflict of laws. Unlike the noble Lord, Lord Irvine of Lairg, however, I must say that Part III of the Bill is highly controversial, as were some of the law commissions' own recommendations on choice of law in tort and delict. Since most noble Lords are not lawyers, I shall try to explain why in words which even I understand.

Part I of the Bill will allow an English court to order that interest on a judgment given in foreign currency is set at the rate appropriate to that currency. Until now the interest rate has been the same, no matter what currency the judgment was given in. It may come as a surprise to some noble Lords that our courts do not have this power at the moment; but they do not, and it is high time that they did. Part I of the Bill is therefore wholly sensible and entirely uncontroversial.

Part II of the Bill deals with overseas marriages in which one of the parties is domiciled in a country where polygamy is permitted. It makes a limited, sensible proposal. Just because the husband happens to be domiciled in a country where polygamy is permitted, the marriage should not be automatically invalid if the wife is domiciled in England. The present law has developed in a rather unsatisfactory way. If a man from this country wishes to marry a woman from, let us suppose, Pakistan, and goes to Pakistan for the marriage ceremony, the marriage will not be treated as polygamous, and will not be void. But if the roles are reversed, and a British woman goes to Pakistan to marry a man domiciled there, the marriage will be treated as potentially polygamous and will therefore be automatically void. It is an accident that the law has evolved in this way, but the law now discriminates between men and women in a way which is wrong in principle. Of course, if the marriage is actually polygamous, it will not be affected by the Bill. But the limited and principled measure proposed in Part II of the Bill is entirely welcome.

I regret that the same cannot be said in respect of Part III. It proposes to abolish in their entirety the carefully developed common law rules about choice of law in tort and delict cases. One of the most controversial proposals is the removal of the present rule that a plaintiff may succeed in the courts of the United Kingdom only if the conduct complained of would have amounted to a tort under our own law. The version of the Bill drafted by the law commissions did not go as far in this direction as does the present Bill and the law commissions' version provided a better balance of conflicting policy considerations. It is unfortunate that the Government have departed from the law commissions' more balanced proposals.

Some examples may help to illustrate my real concern about Part III. First, let us suppose that a complaint is made against a United Kingdom power generator that its emissions have damaged forests in Norway or that a nuclear power station has injured the livelihood of fishermen in Ireland. Let us suppose that both generators have carried out their operations in scrupulous compliance with UK common law and statute law. Under the law as it stands today, a plaintiff could not recover damages in England because the conduct would not be tortious in England or Scotland. But Clauses 10 and 11 would probably permit them to do so. At present, if proceedings are brought in Norway or Ireland, the judgment may be enforced in the United Kingdom. That is, in my opinion, a more appropriate way of dealing with the problem than to require a court in the United Kingdom simply to apply foreign law to a question like this and to displace our own statutory scheme under which the power generators have lawfully operated.

Next, let us suppose that a British newspaper or broadcaster has published truthful but damaging material about an elected politician or public officer and the publication occurs abroad as well as in this country. At present, if the plaintiff were to attempt to sue in England for libel he would fail, because it is a defence in English libel law for the publisher to prove that what he published was true. But under this Bill the plaintiff will be able to obtain damages or even an injunction in the United Kingdom if in the foreign country where the publication also took place truth would be no defence.

The same applies to the defence of qualified privilege for libel about the way in which someone has discharged, or failed to discharge, his or her public functions. That defence of qualified privilege may well be recognised as part of English common law, as it is in the United States or Australia or India, but it may not be recognised in the plaintiff's country—say, Canada, Malaysia or Singapore. The newspaper or broadcaster will not be able, under Part III of the Bill, to rely on the English defence. A foreign government or a foreign politician will be able to use a more draconian foreign libel law as a sword against the British media.

The law commissions carefully considered this problem and concluded that, where the UK is the country of origin of the defamatory statement, UK law should apply regardless of where the alleged wrong was subsequently published. The law commissions did not support this new exposure of the British media to foreign libel claims in this country which will arise if Part III of the Bill is enacted in its present form.

I believe that there is an important point of principle here. Freedom of expression and freedom of the press are vital civil rights and liberties which, as the Law Lords have also made clear in the Spycatcher and Derbyshire cases, are restricted under English law only where necessary in a democratic society in accordance with the common law and Article 10 of the European Convention on Human Rights. Surely, in this age of global communications, it would be quite wrong for the freedom of the press in this country and elsewhere to be chilled or restricted by applying in English courts the laws of foreign countries which are far more repressive of freedom of expression. I hope that your Lordships will think that there is nothing narrowly nationalistic about my saying so.

There is a third example. Suppose that an auditor acts without proper care and as a result an investor in the company suffers loss. As a matter of English law recently and clearly established by the Law Lords in the Caparo case, there is no liability to such a stranger for what is purely economic loss. By what if the investor lives in and loses money in a country under whose law the auditor would be liable to him? Is it right that such an investor should have a claim which would be denied to an English or a Scottish investor in exactly the same boat?

Fourthly and lastly, there are some foreign torts which sound very strange indeed to English ears, such as "insult" or "infringement of self-esteem". It would be very dangerous to require an English court to give effect to such laws which may differ very greatly from the fundamental values of English and Scots law.

I realise that some may say: if a UK court is prepared to enforce a contract governed by foreign law, why should it be reluctant to give damages for a tort under foreign law? One answer is that all contracts are agreements, and all agreements are much alike. Torts are very different, much more variable, and enshrining disparate national views as to freedoms, duties and the extent of compensation. They need more careful scrutiny than foreign contracts usually do.

Others may point out that Clause 13(3) (a) (i) allows a foreign law to be displaced if it is found to conflict with public policy. But surely it is invidious for a judge to have to find, and to say that he has found, the law of another country to be so objectionable that it offends English or Scottish public policy. Yet there is a danger that this will be more and more often what is required of our judges if the Bill is enacted in this form, and in a manner which protects our civil rights and liberties. I suggest that that is a recipe for a divisive jurisprudence —the very opposite of the aims of a fair and reasonable system for resolving conflicts of law—in which our judges are compelled to find, say, the libel law of Canada, Malaysia or Singapore to conflict with English or Scottish principles of public policy.

I should add that I do not regard Clause 12 as solving the problems to which I have referred. It is too vague to secure reference to English or Scots law in the situations to which I have referred.

I hope I shall be forgiven for having taken so long. I would like to conclude by saying this. Liability in tort raises important issues which go right to the root of civil liberty and civic responsibility. Part III of this Bill proposes making the freedoms and standards of English and Scots law largely irrelevant when the tort occurred wholly or mainly overseas. Even though this matter was examined at some length by the law commissions, it cannot be regarded as uncontroversial, and ought to be given very careful and detailed scrutiny if the new law is not to be much less satisfactory than it is today.

3.35 p.m.

Lord Wilberforce

My Lords, like both noble Lords who have just spoken, I greatly welcome the fact that this Bill takes up the reports of the Law Commission and implements its recommendations. It is therefore with considerable regret, and indeed embarrassment, that I cannot welcome Part III of the Bill. On that I go along with the noble Lord, Lord Lester, rather than with the noble Lord, Lord Irvine.

I do not see how it can possibly be said that this is a an uncontroversial part of the Bill. As the noble Lord made clear, it is intensely controversial. The Law Commission itself said in its report, quoting from the noble and learned Lord, Lord Denning, at one point, that the choice of law questions raises, one of the most vexed questions in the conflict of laws". The Law Commission took a great number of opinions on it. It sent out a consultative document. It also heard a great number of witnesses, a list of whom appears in its report. It received a number of very differing views, all of which appear very fairly reflected in the Law Commission's report. These will certainly surface again. So one cannot say that this is an uncontroversial Bill within the terminology which has been used until now. Therefore, I must ask the indulgence of the House to give me the opportunity in a few moments to explain why I am opposed to this part of the Bill. The explanations slightly overlap those of the noble Lord, Lord Lester, but on rather more general grounds.

First, I take the general point that the subject 'of conflict of laws is essentially one which ought to be left to the judges. It has been developed by the judges over the years and, on the whole, the judges have done a very good job. There are very few cases where injustice has been seen to be done. One does not want this part of the law to be frozen into the lapidary phrases of the Parliamentary draftsmen, however well drafted they may appear to be. It is better to leave it to the judges.

Secondly, perhaps I may take this point. I suggest to your Lordships that statutory intervention in this area, or any area, is only justified if one has certain conditions fulfilled. For example, the first is where the common law has given rise to injustice which it is feared may continue to exist; secondly, where the law is seen to be too complex or uncertain in its application; or, thirdly, where the reform of the law is thought to be necessary for some international reason to bring us into line with an international convention with other countries. But none of those conditions is fulfilled in the present case.

Since 1870 when this rule was enunciated in the case of Phillips v. Eyre 124 years ago, there has been only one case which has resulted in injustice. That was a Scottish case with very particular circumstances which would certainly not be applied in England or in Wales and very doubtfully followed in Scotland. Therefore, the case of injustice simply does not exist.

The law is not either uncertain or complex any more than follows from the infinite variety of cases which may have to be considered. The noble Lord, Lord Lester, gave some instances of the very great variety of cases which may happen. When one considers that there are 175 countries in the world with different nationalities, and the numbers are multiplied, one can see the number of varied cases against the hundreds of thousands of cases which may occur. You cannot cater for them all in a few phrases.

Thirdly—this is rather an interesting point—the origin of the Law Commission's report, and why it was called upon to report, was that it was hoped at that time (in the early 1980s) that there would be an international convention dealing with all sorts of obligations generally. That convention came into existence in relation to contracts. As your Lordships know, a convention was concluded and brought before this House not so many years ago. Legislation was duly and properly enacted to give effect to that international convention, but there is no such convention in relation to torts. The project for a convention has been abandoned, so there is no case whatever for saying that we need this Bill to bring us into line with some international convention.

So, in my respectful submission, the three classic reasons for legislation do not exist here. That brings me to the substance of this Bill, to Part III. Let us remember that we are talking about double actionability. You must have actionability under the law of the place in which you are suing and under the law, if you can identify it, where the wrong took place. I now make the proposition that, as the law has been perfectly well adjusted by the judges, it is not in need of any further reform.

I shall have to explain that, I am afraid, in relation to two reported cases, but I shall do it as simply as I can. It could have been said before 1969 that the rule about double actionability was too rigid. It was stated in a very rigid form in Dicey's Conflict of Laws with no exceptions and no modifications. Then in 1969 we had the case of Boys v. Chaplin. That case involved two British servicemen who were serving in Malta where they had a road accident. An action to recover damages was brought in this country. The question was: could you award the damages in accordance with English law, taking account of pain and suffering, or were you limited to Maltese law, which gave only about £50?

That case came to this House and was decided by the appellate committee, which decided that it was a case where one should not be limited by the rule and that a flexible approach should be applied. It was decided that British law could be applied to the issue of damages. Certainly there were a number of rather ambiguous speeches which were long and difficult to comprehend, but in the end it was decided, almost by process of Darwinian selection. One of the speeches came to be accepted generally by the textbooks and judges and can be said to be a fair description of the law so far as it went.

The Law Commission knew of the decision at the time. It referred to it in its report, stating that it was very good so far as it went but that it did not go far enough, leaving a number of points undecided. I would respect that view entirely if the situation had been left there, but it was not.

Let us see what happened in July 1994—only five months ago. The case of the Red Sea Insurance Company Limited v. Bouygues SA—I hope that I have pronounced that correctly —and 33 others was decided by the Privy Council. The case was brought in Hong Kong and related entirely to matters arising in Saudi Arabia to do with the University of Riyadh. Everything arose in Saudi Arabia, except the fact that the action was brought in Hong Kong. Action could not be brought in Hong Kong but could be brought under the law of Saudi Arabia. But the judicial committee of the Privy Council decided that it was a case in which the full and unequivocal terms of the rule could not be applied and although it was not actionable in Hong Kong, it could nevertheless be dealt with in Hong Kong under the law of Saudi Arabia.

A magnificent judgment was given by my noble and learned friend Lord Slynn—I am sorry that he is not in his place —and by four other Law Lords sitting with him—not retired Law Lords, I may say, but full-blown Law Lords. That judgment has swept away the whole of the law of the first part of Phillips v. Eyre. The common law rule has gone. The Law Lords said that there is complete liberty, where there is a proper case, to decide according to the law of the place where the tort took place. They did so in that case.

So, Clause 10 which sweeps away the common law rule, has nothing to do with the rule that is being swept away. There is a perfect opportunity for judges to decide these cases in accordance with the law of the place where the tort occurred or any other relevant place. They can decide the whole of the case in accordance with that law, not just one particular issue.

It is worth adding that the judgment referred fully to the Law Commission's report and quoted from it. It said that it was quite right to require further flexibility. It decided to give effect to that flexibility by judicial decision. In effect, therefore, the important aspects of the Law Commission's report have been carried out. It may be said that the decision is uncertain, that it does not cover every case, and that how far it does and does not go still remains to be decided. Of course, it does not cover every case. No judicial decision ever covers every case—nor is it desirable that it should—but nor does the Bill. The Bill contains all sorts of general expressions about "substantial connection" and "relevant circumstances". Obviously, such questions have to be left open. However, the decision completely frees the court from the shackles of the old rule, to sweep away which was the main purpose of the Bill.

Finally, it is worth adding quite unofficially but, I believe, firmly, that the editors of Dicey's Conflict of Laws are satisfied with the decision and think that the new rule can be perfectly well stated so as to give effect to it. On that point, I respectfully suggest to the Government and to the noble and learned Lord on the Woolsack that they should consider whether it is wise to proceed with Part III of this controversial Bill, which will give rise to any number of disputes, whether it reaches a Special Public Bill Committee or is dealt with on the Floor of the House. Is it wise to freeze in statutory language a result which the courts have already achieved? We do not need it for an international convention. We do not need the law further to be clarified. Admittedly, this is flexible and leaves many doors open, but the Bill rightly does that also. It leaves open many doors and refers to "significant elements" and all the "circumstances". So, why not leave these matters to the judges?

I have two short points to make in conclusion. First, it is correct that Part III deals with matters other than the direct question of double actionability. That is quite true, but on the other hand it is the double actionability point that is central, as the Law Commission said, to the whole of that suggestion. On most of the other points, the Law Commission has either left the position open or has said, "Let's leave it to the judges". Once you have dealt with the double actionability point, as I suggest the judges have, there is no real case for law reform in this area.

Secondly, assuming that there is a case for statutory intervention, the question that we must ask is: Has the Bill got it right? I do not want to argue that point now—certainly not when there are more fascinating subjects to follow—but suffice it to say that there are a number of considerably difficult points in the Bill. As the noble Lord, Lord Lester, said, this is not an easy subject. It is not uncontroversial. It is going to take a very great deal of time if we are going to sort it out. As the Law Commission said, quoting the noble and learned Lord, Lord Denning, choice of law questions raises, one of the most vexed questions in the conflict of laws". Although I welcome Parts I and II of the Bill, I most earnestly suggest to the Government that it might be wiser to leave the matter where it has now been brought with the 1994 decision and to leave this to the judges rather than take up a very great deal of Committee time, as would be the case if we were to go through the Bill to try to bring it into statutory form.

3.49 p.m.

Lord Meston

My Lords, I should like to make two preliminary points about the treatment of Bills which emanate from the law commissions. The first, which has already been touched upon, is the delay in turning them into legislation. This Bill is the product of three reports from the English Law Commission and two reports from the Scottish Law Commission. Those reports were published in 1983, 1985 and 1990. Each report was itself the result of a lengthy consultation process. The English Law Commission has justifiably commented upon the problem of delay in implementation in at least its last two annual reports.

It is characteristic of Law Commission proposals that they are researched and argued thoroughly and that they are generally uncontroversial. The reports typically come complete with draft Bills annexed to them, and when eventually introduced such Bills usually take up little parliamentary time. Thus, Law Commission Bills may not need any particular fast track or special track through Parliament but rather a faster track to the parliamentary starting gate.

The consequences of delay are various. Two consequences have struck me. First, the reports and draft Bills themselves are overtaken by other developments in the law, sometimes, but not always, small and unforeseen developments. Secondly, there is created a degree of uncertainty in the minds of the public and the legal profession who read the law commissions' proposals and assume—and indeed are entitled to assume—that change will follow within a reasonable time, and are entitled to organise themselves accordingly. Likewise, after a lengthy delay they are perhaps entitled to assume that, after all, the proposed changes will not take place. I hope that the Bill's introduction marks the beginning of an endeavour to clear up some of the backlog.

The second point is more technical. For some time of course it has been possible for the courts to look at Law Commission reports and draft Bills as an aid to statutory interpretation. It is now also possible for the courts to be referred to parliamentary debates in certain circumstances for the same purposes. With that development, the courts can focus on the reality of what Parliament intended if there is an ambiguity or obscurity apparent on the face of the Act.

However, more often than not, the lawyer who trawls through the Hansard reports finds that in the debates there was little or no reference or guidance to the intention behind the use of the word or phrase which concerns him or her. In the case of legislation being debated which uses the same wording as a Law Commission Bill, the absence of parliamentary comment is generally not surprising. What can be perplexing—I am speaking with experience of a case which is presently sub judice—is the absence of an explanation to Parliament when there are significant, or possibly significant, differences between the Law Commission's draft Bill and the Bill as introduced to Parliament.

If there are such differences, it would add to the effectiveness of the parliamentary process, as well as helping the courts in their interpretation of the enactment at a later date, if the existence of, and general nature and reason for, such differences could at some stage be mentioned, if only in the explanatory memorandum which we have as part of the printed Bills introduced into this House.

What may or may not be an example of what I am referring to is in Part I of the Bill. Paragraph 4.12 of the relevant Law Commission report and the draft Bill annexed to it proposed a power to order a variable rate of interest. In the Bill today there is no such express power, and the word "rate" appears in the singular. I suspect the reason is that the Acts of 1838 and 1970 allow for a single rate only and there is no reason to treat judgment debts which are not in sterling any differently.

The noble Lord, Lord Irvine of Lairg, indicated his understanding that a variable rate could be ordered. It may therefore be that there is some other simple explanation for the difference which I am too stupid to have grasped, but it may also be that in such a situation in years to come the courts will have to speculate as to why the draftsman of the Bill, and Parliament in enacting it, departed from the words in the Law Commission Bill.

Likewise, in respect of Part II of the Bill, there are certain differences of wording. I think that I understand the reasoning behind those changes, but I may seek to probe further in Committee. In any event, the law commissions are to be congratulated on tackling the law concerning the validity of potentially polygamous marriages in the way that they have, following the difficulties thrown up by the decision of the Court of Appeal in the case of Hussain. Even for those who have to consider that area of law frequently, it is sometimes complex and confusing. Accordingly, the sensible proposal in the Bill to treat potentially polygamous marriages as monogamous is welcome. It is to be hoped that it will remove any disadvantages in terms of matrimonial relief, the right to remarry, rights of succession and the right to social security.

I believe that Clause 6 deals with the various particular consequences of the proposed change. I do not believe that Clause 8(1) can be read as suggesting that polygamy is an option available to the Royal Family, merely that whatever other problems the Royal Family may have to trouble them, potential polygamy is not one of them.

So far as concerns Part III of the Bill, I had thought that the proposals were uncontroversial, removing the double hurdle placed in the way of intending plaintiffs by case law both in England and Scotland. Successive works on the conflict of laws by the late Dr. Morris have cited the condemnation of the first branch of the rule in Phillips v. Eyre by Professor Lorenzen who wrote over 60 years ago: English law manifests an illiberal attitude which does not obtain elsewhere except in China and Japan". Having recently read the trenchant criticism of the Law Commission's proposals in the Law Quarterly Review of 1991, which has been echoed by the noble and learned Lord, Lord Wilberforce, and having heard my noble friend Lord Lester on Part III of the Bill in so far as it departs from the Law Commission's Bill, I know that I am now in waters too deep for me to make any useful contribution on that aspect of the Bill beyond asking for certainty for those of us who may have to dip our toes in only occasionally.

3.57 p.m.

The Lord Chancellor

My Lords, I think that I can safely be grateful for the extent of the welcome the Bill has been given, notwithstanding the reservations expressed in respect of part of it. I am anxious to bring to the statute book, as soon as I can, those recommendations of the Law Commission and the Scottish Law Commission which appear to be generally accepted.

Before I speak about one or two matters of detail, I have to remind your Lordships that, as the noble Lord, Lord Irvine of Lairg, said, the only ultimate way of giving effect to Law Commission work is by statutory provision. It is true that the analysis of existing law which the Law Commission provides in its working papers and its final reports can of itself be useful: I have found those analyses useful from time to time while sitting judicially. But the ultimate proposal of the Law Commission is for a Bill, and therefore it is by statutory intervention only that the proposal can be given effect to.

It is a consequence of what my noble and learned friend Lord Wilberforce said, that, so far as concerns private international law at least, it would be difficult for the Law Commission to operate because it is bound to innovate ultimately—if it is to innovate effectively—by statutory means. I hope that we shall be able to have a number of these Bills. As your Lordships know, the gracious Speech indicated the promotion of law reform measures. I hope that that will occur.

One of the difficulties of law reform is that it is sometimes hard to obtain the necessary measure of agreement. In that connection, I refer to what was said by the noble Lord, Lord Irvine of Lairg. In a sense law reform embraces all changes in law. Those are proposed by the Government on the basis that they are reforms. However, here we are dealing with law reform which flows primarily from the law commissions, although from time to time other bodies may produce proposals which fall properly within that category.

I wish to comment on some of the special issues that have been mentioned, but perhaps full discussion is best left to the Committee stage. The Law Commission formulated its proposals, which are incorporated substantially in Part III of the Bill, against the background of the rule in Phillips v. Eyre and Boys v. Chaplin, as referred to by my noble and learned friend Lord Wilberforce. The latter case contains a distinguished account of the law as it then stood. The law was developed in the Privy Council in the Red Sea Insurance case. I believe that, technically speaking, the decisions of the Privy Council, while a persuasive authority here, are not part of the law of this country. I have come across at least one case in which the House of Lords in this jurisdiction did not follow closely a parallel case in the Privy Council in relation to the effect of duress in the criminal law.

It is fair to say that in the Red Sea Insurance case the Judicial Committee of the Privy Council expressed difficulty in knowing to what extent exceptions were to be permitted to the law of double actionability. Therefore, I believe that the Law Commission's proposal that that rule should be abolished is wise. I say that with all due respect to the great learning and experience in this area of my noble and learned friend Lord Wilberforce. Obviously, the matter must be discussed further and I shall reflect on all that he said.

The noble Lord, Lord Lester of Herne Hill, claimed a larger effect for the proposal of the Law Commission than it had. I understand the proposal to be that where the conduct constituting tort or delict took place in the United Kingdom the law pertaining to that part of the United Kingdom should apply. I do not believe that that proposal will in all cases have the effect that the noble Lord suggests. However, the difficulty is that if that is a good rule for England, Wales and Scotland, it is hard to see why it is not a good rule for everyone else. If that is right the whole system is undermined. The criticisms levelled at the Law Commission's proposal—that it is nationalistic in character and undermines the commission's own proposals—has a good deal of substance. As has been pointed out, there are public policy provisions and, as I indicated in my opening speech, the possibility of enforcement by reference to the convention laws of this country.

My submission to your Lordships is that these matters are technical. They involve controversy which is not party political but technical, and a good deal can be said on both sides. However, I hope that whatever is said will not be at such length as to destroy the possibility of this route for this type of reform. Those of your Lordships who are interested in having the Law Commission's reports brought forward and implemented—I know that that is true of your Lordships as a whole—will agree that the proposals of my noble friend Lord Jellicoe, which we are now using, are most important. Consistent with the proper consideration of these matters, I should not like anything to happen that would undermine the utility of that proposal for dealing with questions of this kind. I suggest that these are questions of a technical kind which are appropriate for the special committee, as I mentioned earlier. If your Lordships give the Bill a Second Reading I propose to move that it be committed to a Special Public Bill Committee. I commend the Bill to the House.

On Question, Bill read a second time.

The Lord Chancellor

My Lords, I beg to move that this Bill be committed to a Special Public Bill Committee.

Moved, That the Bill be committed to a Special Public Bill Committee.—(The Lord Chancellor.)

Lord Wigoder

My Lords, given the nature of the debate to which we have all listened with great interest; given the noble and learned Lord's reminders that the Jellicoe Report referred to uncontentious Law Commission Bills being suited to the new procedure; and given that the most recent view of the committee of your Lordships' House was that such a step should be taken only in relation to a few Bills of a technical nature and largely devoid of party political controversy—and I accept that the controversy that has arisen is not party political—does the noble and learned Lord believe that in the light of the major matters that have been debated on Second Reading today if we take the step proposed by him we shall be stretching the previous decisions of your Lordships' House?

The Lord Chancellor

My Lords, I think not. The nature of the controversy is of a party political kind which goes beyond the type of consideration raised here. I accept that these questions are important but they are of a technical kind and I suspect that not all Members of your Lordships' House will feel inclined fully to participate in a debate on them. I may be wrong—there may be a tremendous desire to participate in the debates—but I think not. I believe that in order to make progress this is the only way open.

I suggest that my Motion that the Bill be committed to a Special Public Bill Committee is wise. The matters can then be discussed and perhaps when the Bill returns to your Lordships' House they will have been settled. I must then consider carefully what to do in the light of my general anxiety, as far as is possible and practicable, to get reformed law on the statute book. I move the Motion in the belief that it is wise and suitable if we are to be able satisfactorily to implement proposals of this kind.

On Question, Bill committed to a Special Public Bill Committee.