Orders of the Day — Registration of Unsatisfied Judgments Bill.

– in the House of Commons at on 8 May 1931.

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Order for Second Reading read.

Mr. TINNE:

I beg to move, "That the Bill be now read a Second time."

Under Section 183 of the County Court Act, 1888, judgments for amounts of over £10, if not satisfied within 21 days, are registered. This register then becomes available and, if a trader is asked for credit, he can ascertain—if he acts with common prudence by going to his trade protection society or to Bradstreets, Stubbs, or some other organisation which exists for the purpose—whether the man who asks for credit is worthy to receive it. In these circumstances, he can avoid losses by not giving credit to those who are not worthy of it. On the other hand, there are certain local courts, such as the Liverpool Court of Passage, the Derby Court of Passage, and the Salford Court of Hundreds and also the High Court itself, where there is no such register kept of unsatisfied judgments and in the bigger actions a man may have judgment given against him, but no register is kept of that judgment, and the trader who is asked to give credit may not be able to find out whether the man who asks it has such a judgment against him or not.

In those circumstances, a case might arise such as one which was mentioned at the annual general meeting of the National Association of Trade Protection Societies last year. That was a case in which a firm which gave credit on the 25th of the month was confronted on the 3rd of the following month with an intimation that a meeting of creditors was being called. There were no county court judgments registered and no debentures, but it transpired that there were no fewer than seven unsatisfied judgments in the High Court running into several thousands of pounds. It ought not to be possible for a situation like that to arise. When a tradesman is asked for credit, and when he uses the ordinary ideas of prudence and seeks information, it should be available for him, and the big man ought not to be able to "get away with it" where the poor man in similar circumstances would undoubtedly have his credit stopped.

This Bill was brought in under the Ten Minutes' Rule on 18th November last. It is now in print, and has been in the hands of the Members of the House for some time. Since it was brought in, the Incorporated Law Society in Liverpool have been in communication with me and have asked that certain points in it should be rectified. The particular point to which they drew attention was that, in the High Court, numerous actions are brought involving no actual payment and that if judgment in such an action was not complied with, it would not in any way affect the financial credit of the parties. It is proposed to meet that objection by a small Amendment which is now in manuscript and if the House is good enough to give the Bill a Second Reading to-day that Amendment will be introduced at a later stage, as I understand it satisfies the Incorporated Law Society, and, I hope, that it may also satisfy the Attorney-General.

The other point which they raised was in regard to the question of who is to make the rules of administration. Of course in regard to courts not under the jurisdiction of the Lord Chancellor, if there is no one appointed for that purpose that matter might raise some difficulty but it is I believe possible to overcome the difficulty by another small Amendment, namely, after the words "Lord Chancellor" to insert the words "or other competent authority," and, if it can be done in four words, that is a matter which ought to be dealt with quickly. There is no reason to prolong the agony by making further remarks. The point is a fairly plain one and I believe that there is general sympathy in all parts of the House with this attempt to correct an anomaly. Indeed I think it only needs to be pointed out in order that it may be put right. It has not been dealt with up to now, I think, mainly for the reason of congestion of business, and if I can secure the sympathy of the House for this Bill I can assure hon. Members that outside the House there are many who will be extremely grateful. Lastly, I may be permitted to make a personal acknowledgment to the hon. Member for Edge Hill (Mr. Hayes) for his kindness in helping me to bring this matter before the House. The Bill is entirely a nonparty one, and one with which I think the House will find themselves in sympathy.

Photo of Mr Francis Smith Mr Francis Smith , Nuneaton

Before the hon. Member concludes, may I ask him whether his proposal is to remove all registration of judgments in the small cases, and to make them the same as the larger cases are at present, or whether he asks that the same treatment shall in future be meted out in the larger cases, as is now meted out in the smaller cases?

Mr. TINNE:

That is exactly the purpose. I want the big man to be treated in the same way as the small man is treated now.

Photo of Mr Herwald Ramsbotham Mr Herwald Ramsbotham , Lancaster

I beg to second the Motion.

This is a small Measure, but it is one which will be warmly welcomed by the commercial community and one which is long overdue. I do not know why this discrepancy or anomaly between High Court practice and county court practice has been allowed to go on for nearly 40 years, unless it be that in the old days the trader was supposed to be easily familiar with the judgments of the High Court—as those judgments attracted considerable attention—whereas he would not be supposed to have that familiarity with the judgments of the county court. Since the passing of the County Court Act, however, cases in the High Court have multiplied and it is much more difficult now for the trader to acquaint himself with the judgments, of the High Court than it was formerly. But, whatever were the reasons for this discrepancy, there is every reason now, why it should be removed. It is certain that the law never intended the small trader to be placed at a disadvantage, compared with the large trader. It has never been the intention of this House that the large trader should escape while the small trader fell easily within the scope of the investigation of trade protection societies. In these difficult commercial days it is more necessary than ever to examine carefully the credit given in commercial transactions. This Measure will make it more easy to do so and will redress the balance between the small man and the big man.

Photo of Sir William Jowitt Sir William Jowitt , Preston

As the Mover and Seconder of the Motion for the Second Reading of the Bill have pointed out, it is a non-party Measure and this is one of those occasions on which we are in the fortunate position of being able to consider a Bill on its merits. On the general abstract principle, as to whether I think that a register of unsatisfied judgments would be a useful thing to have, I say that I do think so. On the other hand, I want to point out the very real difficulties which are inherent in the question, and I want to point out also that I think this Bill has not attempted to grapple with those difficulties and that, so far as this Bill is concerned, I regret to say that I think the whole scheme is unworkable. The hon. Member for Lancaster (Mr. Ramsbotham) asked why there was a difference between the county court procedure and high court procedure in this matter. On that, the whole difficulty rests. Ever since at least 1888, and I think from an earlier time, the county court has taken complete seizin over a case, from the beginning until payment. Payment of a judgment in the county court has to be made through the county court, that is to say, subject to an exception which I will mention presently. If a plaintiff recovers a judgment in the county court for, say, £15, the defendant has to pay the £15 into court. The only exception is one that gives the judge of a county court liberty to dispense with that procedure. The Act of 1888 provides that moneys shall be paid into court, but the following exception has been introduced by Section 18 of the County Court Act, 1911: Where a judgment or order has been obtained in a county court for a sum of money and no order is made as to payment by instalments, the money shall, if the court so directs, be paid by one party to the other party or his solicitor instead of being paid into court as required by Section 105 of the principal Act. The Section goes on to order that such judgment, that is to say, a judgment in which the judge has so directed that the money be not paid into court, shall not be registered if, before the expiration of 21 days, proof is given to the registrar by affidavit that the judgment has been satisfied. It does not in practice apply in a large number of cases. In by far the greater number of cases to-day, a county court judgment is satisfied by the moneys being paid through the court. The result is that the county court knows beyond all question whether a judgment has been satisfied, and in exceptional cases, where the judge so directs, if a defendant pays, he has to produce an affidavit and go either by himself or through his solicitor to the county court and satisfy the county court that the money has been paid. I say, therefore, that though I am in favour of a register of unsatisfied judgments, you may call the spirits from the vasty deep, but the question is, Will they come when you summon them? It is quite easy to say, "Let us have a register of unsatisfied judgments," but the question is, What machinery are you going to have to secure that register?

I want the House to realise that at the present time the High Court, quite unlike the county court, has never had, save in exceptional cases, any machinery for payment into court, and the officials of the High Court have not the least idea whether a judgment has been satisfied or not. They have not the machinery for payment into court, nor have they any machinery corresponding to Section 18 of the County Court Act, 1911. To enable this to be done needs an alteration and a remoulding really of a Section of the Judicature Act. This Bill does not provide for that at all, and I very much doubt indeed, though it is not for me to pronounce, whether an amendment of the Judicature Act to make this possible would be within the scope and Title of the Bill.

Then there is this further point to be considered: The necessity for a defendant in a county court judgment, if he does not pay something into court, to satisfy the registrar that the judgment has been satisfied is sometimes rather a troublesome thing to do. He has to provide an affidavit and so forth. The distinction between county court procedure and High Court procedure is this, that in the High Court you may have a defendant in, say, Cornwall and a plaintiff in Cumberland. The plaintiff gets a judgment under Order 14. A large proportion of the judgments are obtained under Order 14, and what happens? The defendant thereupon, having got this judgment against him, has to satisfy the High Court in some way or other, by means of affidavit or instructions to solicitors, that the judgment has in fact been satisfied. I am not saying that all these points are insuperable difficulties, but I am saying that I certainly, from my limited experience, should not care to pronounce upon all these difficulties without having this matter very thoroughly investigated. Though I know enough about the Incorporated Law Society of Liverpool to value its opinion, perhaps I have a prejudice in favour of asking the opinion of the Law Society in London, but I should not care to embark upon this sort of investigation without that.

It may be said, "Why do you not set up a committee to investigate the matter?" Well, we have been a bit criticised for having too many committees already. Particulars were given the other day, and there are certainly over 50 committees and more than 30 that have not yet reported. I rather hesitate, unless we are very much pressed, to advise my Noble Friend the Lord Chancellor to start another committee for this matter. We have already got—I am not sure that to say a bellyful would be Parliamentary—quite enough committees to go on with for the time being, and I would suggest this to the House: As I have said, I think there is certainly a case made out which indicates that a register of unsatisfied judgments would be a useful thing to the trading community, and so far I am entirely in agreement with the mover and seconder of the Motion for the Second Beading. Secondly, I want their help and the help of the House, and I should like the guidance of the profession, which would mean the Law Societies, as to what is the best means to provide machinery to enable that register to be compiled.

I would point out again that the machinery is in existence in the county courts, but there is no corresponding machinery in the High Court at all. You would have to constitute the machinery, and then you would nave to consider to what class of cases it was going to apply. Clause 1 of the Bill is drawn almost exactly to follow Section 183 of the County Court Act, 1888, except that in the county court a register of every judgment entered in the court for the sum of £10 and upwards is the qualification, and you would have obviously to draw very carefully a list of judgments that had to be entered, because, first of all, I am presuming that there would be some limit of money. There may be a judgment for £5 in the High Court. Such a judgment would not be registered in the county court, and I presume that it is not desired that it should be registered in the High Court, but equally the difficulty which the Law Society of Liverpool pointed out to the hon. Member applies. A very large number of judgments in the High Court—I have no statistics—do not deal with money at all, such as actions for declarations, which cannot be brought into the county court, but are frequently brought in the High Court. How would you register them? Injunctions—how are you going to register them? Again, I have not the remotest idea what the difficulties are. Anybody who embarks upon this business without getting the very best expert opinion, is obviously seeking trouble.

I welcome this Bill, although I think it cannot possibly be amended to enable us to have the machinery on the lines suggested. I cannot give an undertaking. I have no authority to do so. I do not think it is reasonable to appoint another Committee to consider this matter at the present moment. I am quite prepared to give this matter informal consideration, to see whether there is a way in which these difficulties may be surmounted, and to consider whether the disadvantage, if disadvantage there be—and there obviously is—of setting up machinery compelling a defendant to notify the Courts when a judgment has been satisfied, outweighs the disadvantages of not having the register. We could work out some of the difficulties, and on a future occasion, and at the proper time, they could be committed to expert opinion. I am bound to say I cannot recommend the House to pass this Measure as it is. I am not unsympathetic towards it, but it seems to be really ineffective. After the undertaking I have given, I hope the hon. Member will not press his Bill to a Division.

Photo of Mr John Llewellin Mr John Llewellin , Uxbridge

Those of us who have our names on the back of this Bill will appreciate the very careful consideration that the learned Attorney-General has given to it, and also the reason that he has given to the House. Obviously, there are further matters in the procedure of the High Court, in contradistinction to the County Court, which those of us who have had something to do with the drafting of this Measure had not visualised. Probably he is quite right in saying that those who belong to the profession of the Bar do not know as much about the machinery of how judgments are registered, and things of that sort, as do solicitors. As the learned Attorney-General said, it is necessary to have this Bill, particularly in view of all the facts that he himself mentioned. He contrasted judgment in the High Court with the local judgment. If you get a judgment in the High Court, it is much more difficult for any trader, say, a trader in the North of England, to find out whether that judgment has been registered, and particularly, as my hon. Friend the Member for Lancaster (Mr. Ramsbotham) said, with the increase of the procedure under Order 14. One point that the learned Attorney-General made, was, as a matter of fact, in process of being met by an Amendment. It was proposed to amend the Bill, in order to make it apply only to unsatisfied judgments for the payment of money without stay of execution, which would completely keep out from the ambit of this Bill such delinquencies as injunctions, to which the learned Attorney-General referred.

I think there would be a way of getting this improvement that we all desire within the bounds of this Bill, because the Regulations are to be such as are laid down by the Lord Chancellor or other competent authority. We should thus give him power to make Regulations which would get over a large number of the difficulties to which the learned Attorney-General referred, although that might be a bad case of delegated legislation, to which a large number of us are opposed. I do not know what is the opinion of the hon. Gentleman who moved the Second Reading of this Bill, but I would suggest that probably the best course is that, with the learned Attorney-General's assistance, we should try to go into the matter much more fully and find out whether, before the next Session comes, we could get an agreed Bill, based on the experience of the Law Society and the authority of the Law Department which the learned Attorney-General has at his disposal. We could get a Bill that really meets the case. We want to do this matter thoroughly and well, and to have a Bill on the Statute Book that will work, and that will bring about the results that we all require.

The first Measure we brought in in 1852 to register judgment in the County Courts, and thus there have been 80 or 90 years in which this difference of procedure has been in existence between the two courts. It is quite time that the procedure was altered. If you get a large judgment against you, you can get away with it, under the present procedure, while if it is a small one, up to £10, then it is registered against you. It is far more important, where the Judgment is against a big trader, to have the large Judgment registered, and, if necessary, to let the small ones not be registered in the way in which they have been, under the County Courts. I think we are all obliged to the learned Attorney-General for the help he has given us. I do not know what line my hon. Friend feels disposed to take. I think I had better merely sit down and leave it to him.

Mr. TINNE:

In view of what the learned Attorney-General said I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.