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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,

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

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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?

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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

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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.

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