but generally delegated his authority to other persons. What the Bill proposed to do was this-that when any work was carried on, be it a mine, a factory, a workshop, a railway, a building trade, or any such like industrial undertaking, by a company or by persons who did not themselves superintend the manage MINUTES. PUBLIC BILLS-First Reading-ment, but delegated their authority and MASTERS AND WORKMEN WORK- EARL DE LA WARR, in rising to call attention to the state of the law with regard to the liability of employers to make compensation for injuries to persons in their service, and to lay upon the Table of the House a Bill to amend the law on that subject, said, that before asking their Lordships to give a first reading to the Bill of which he had given Notice, he must beg the indulgence of the House if he very briefly referred to the state of the law in respect of the liability of employers to make compensation for injuries to persons in their service. The question was one which very materially affected a large portion of the industrial classes of this country, and he thought it could be shown that the difficulties which surrounded the operation of the law, as it now existed in this respect, had in a great measure arisen from the altered circumstances affecting industrial enterprize. The measure, therefore, which he proposed to introduce would not materially alter the existing law; but was intended to adapt that law to the changed conditions of things. He be lieved that the law, as now interpreted and acted upon, made a master or employer of labour personally liable for injuries which might occur to persons in his employ when it could be traced to any negligence or want of due precaution on his part. The Bill did not propose to alter that-it commended itself as fair and reasonable. But as matters now stood in regard to large undertakings-such as mines, collieries, factories, railways, workshops, or other industrial occupations - the employer rarely had anything or very little to do superintendence to managers or others acting in their stead, the employers or company should be responsible for the acts of those persons whom they had, in fact, put into their places and invested with their authority. It was only comparatively of recent occurrence that large industrial undertakings had grown up which made it, in many instances, impossible for the owners and employers personally to superintend the management; and the consequence, owing to the extent of the work, was this—that a considerable number of persons were appointed, with various responsible duties assigned to them, in superintending the work which the employers were carrying on. The Bill proposed to make the employers liable for the negligence or want of precaution of those persons, the same as if it were the negligence and carelessness of the employers themselves. That seemed to be really only an adaptation of the principle of the liability of the employer for injuries to his servants when it arose from his own want of proper care or precaution; and it might have been supposed that such would have been the natural development of the law when circumstances which he had described became altered. But not so. The law had been interpreted differently-and he might add that there was by no means unanimity between Her Majesty's Judges on the subject-for the law, as at present administered, removed all liability from the employer or master, and gave the workman no redress beyond what he could obtain from the manager or person exercising superintendence. A new difficulty in the administration of the law had arisen in the doctrine of "common employment." This doctrine had been developed to such an extent that the manager or other person in authority in the case of a mine, a railway, a factory, or other industrial undertaking was now considered to be in what was called "common employment" stated that they proposed to introduce a measure on the subject; but owing to the state of Business during last Session, it became impossible to do so. Her Majesty's Government are perfectly prepared now to redeem the pledge which they gave. They have prepared a Bill upon the subject, and that Bill will be introduced forthwith into the House of Commons. In these circumstances, I hope the noble Earl will understand that it is not through any want of courtesy or respect to him that I do not pursue the subject any further at present; and although I am sure we should be glad to see the Bill which he proposes to lay upon the Table, I do not doubt he will think it right, after laying it on the Table, to await the progress of the measure which will be introduced in the same work. The consequence | It has been under consideration and dewas that the company or real employer bate in the other House of Parliament escaped all liability, as the manager or during the last Session, and, if I misperson in authority was considered to be take not, it was considered in that a fellow-workman with all those whom House before a Select Committee. After he was appointed to superintend. The the Report of that Committee, Her MaBill he now submitted proposed to af-jesty's Government, in the other House, ford some remedy, while it would not, as he had said, materially affect the principle of the existing law. It proposed to alter the law of "common employment" so far as to exclude managers or persons exercising superintendence from being in common employment with those placed under them. But it was not proposed to alter the law with regard to those engaged in actual labour, and the employer would not be liable for injuries caused by one workman to his fellow-workman in the ordinary course of his occupation. It was further provided in the Bill that no compensation should be given if the workman himself had contributed to the accident; and whatever might be the nature of the accident, if there had been exercised by those in charge for the time being necessary care and com- "elsewhere." petency, neither the owner nor anyone else was intended to be made sible for such accident. The main object of the Bill was to render an employer responsible, when it was shown BANKRUPTCY LAW AMENDMENT BILL. in evidence that the accident might have been prevented by the exercise of care and ability on the part of those in THE LORD CHANCELLOR, in charge to whom the master or employer rising to call the attention of the House had delegated his authority. Such were to the General Report of the Compthe chief features of the Bill, and he troller in Bankruptcy for the year 1877, thought it might be affirmed that it did and to present a Bill, said: My Lords, not alter the principle of the existing some years ago-in the Session of 1876 law; but proposed, rather, to adapt it-it was my duty to call your Lordships' to the change of circumstances affecting industrial employments. He could assure their Lordships that the greatest moderation had been shown by those who were interested in this question, and that they desired only what was fair and just. respon Bill to amend the law relative to the liability of employers to make compensation for injuries caused by accidents to persons in their service-Presented (The Earl DE LA WARR). THE LORD CHANCELLOR: The noble Earl has brought before your Lordships a subject of great importance and of very considerable difficulty. Bill read 1; and to be printed. (No. 7.) BILL PRESENTED. FIRST READING. attention to the subject of the Law of Bankruptcy as it now stands. At that time the question did not attract a great deal of public attention, and the urgency of other measures before Parliament made it impossible to carry through the Bill which, on the part of the Government, I had proposed. Since that Session, various occurrences have attracted a much greater amount of public attention to the law of insolvency in this country. I own that I am not sorry that has been the case. I cannot help thinking that very considerable changes in that law are required, and I feel persuaded that those changes would be much better made under the vigilance of a large and interested body than at a time when attention would have been | been to leave the administration of divided by other subjects. I have placed bankrupt estates to the creditors, and to upon the Notice Paper a reference to a constitute them the sole judges as to the Report of great interest and importance manner in which the proceedings should -I mean the Report which the Comp- be conducted. At another time, the troller in Bankruptcy presents annually favourite idea has been to take everyas to the subjects over which he has thing out of the hands of the creditors control. Several copies of that Report and to hand the estate over to Courts are on your Lordships' Table. It is not and officials. The first of these theories very long, and it is a Report to some that of administering the law through parts of which I shall ask your Lord- delegates of the creditors-prevailed up ships' particular attention. There are to the year 1832. In that year there two other documents to which it is my was a violent move in the opposite diintention to refer at the same time, rection, the plan not having been found although they are not included in my to work satisfactorily. In that year a Notice. One of these is a Report made Court was consequently instituted, with in the year 1876 by a small Committee numerous officials, and from that time of gentlemen whom I asked to favour to 1860 almost everything connected me with their views upon the working with bankruptcy was done through the of the Bankruptcy Law as it then stood. medium of the Courts and officials. In That Committee consisted of Mr. Kettle, 1860 there came a very strong demand a most experienced County Court Judge; to do away, as much as possible, with Mr. Parkyns, one of the Comptrollers in the control of the Courts, and to place Bankruptcy; Mr. Brougham, one of the as much as possible in the hands of Registrars; Mr. Nicol, an official of ex- creditors. The two great Acts of 1861 perience in connection with the County and 1869 yielded to the demand which Courts; and Mr. Hackwood, a solicitor had been very clearly expressed throughin the City of London, who has had much out the country. The dominion of the experience in the administration of the Court was reduced to a very great deBankruptcy Law. In 1876 I referred gree, and the administration of bankto some parts of the Report made by rupts' property was handed over to these gentlemen, and I ventured to re- creditors to an extent that had never commend the document to your Lord- been the case before. There are two ships. The third document is one which broad distinctions as to the manner in I propose to lay upon the Table of your which those who cannot pay their debts Lordships' House to-night-I allude to are dealt with in this country. Somethe Memorial recently addressed to the times they are made bankrupt in name, Prime Minister, and signed by twenty- and at others they proceed through a three of the principal bankers and an course of what is called "liquidation." equal number of leading commercial In the case of a man who is formally houses in the City of London. It will adjudicated a bankrupt in name, the law be satisfactory that I should say that provides that a meeting of his creditors in all of these three documents there is shall be called, who shall appoint a a substantial agreement as to the nature trustee, whose duty it shall be to take of the evils which exist in the present possession of his property, if he have Law of Bankruptcy; and that they go any, and to wind up the estate in the far in agreement as to the mode in best possible way for the benefit of the which it will be desirable to cure whole body of the creditors. In doing those evils. Avoiding as far as pos- this the trustee is to be assisted by a sible all technicalities, I will state committee of inspection, also chosen by as shortly as I can what I myself the creditors. In theory nothing could understand to be the defects of be better than this; because one would the existing system, and then I will lay before your Lordships the proposals of Her Majesty's Government. The legislation in regard to bankruptcy in this country during the last 40 or 50 years, has-if I may so describe it -oscillated very violently between two extremes. At one time, the theory has naturally suppose that the creditors would be the persons most anxious to make the best of an estate in which they were interested; but the practice has turned out very different from the theory. It was very soon discovered that it was a source of profit to become a trustee under bankruptcy proceedings, So and there immediately arose a number | ing the eight years which followed the of persons who laid themselves out to passing of the Act of 1869 only 1,843 be appointed trustees and to reap the out of 7.126 bankruptcies were ever profits that were to be derived from the closed with the payment of a dividend; proceedings. Therefore, when a man the remainder were kept open and floatbecame bankrupt, one of these persons ing for the benefit of the trustees, who found out who his creditors were, and as had the use of the balances as long as the creditors were, as a rule, supine and there was any money remaining. indifferent as to estates out of which much for cases in which persons are they expected to get little or nothing, actually adjudicated. I will now turn they did not make much difficulty about to the other and much larger class of giving proxies to these would-be trus- cases, where the debtor who cannot pay tees for use at the meeting of creditors, his creditors is not adjudicated bankrupt, the result being that these meetings be- but has his affairs wound up "by liquicame mere matters of form, some person dation by arrangement" as it is termed appearing with his pocket full of proxies, which enabled him to propose and carry the appointment as trustee of some friend of his own; and, further, these proxies were drawn in such a way as that they could be used by the trustee at each and every subsequent stage of the bankruptcy proceedings. One result of this in practice has been that there has existed no means of bringing bankruptcies to an end; and as it sometimes happens that the same person is trustee under 20 or 30 bankruptcies, and has control of the balances belonging to each estate, your Lordships will see that, if he wishes to do it, the same trustee can retain in his hands the control and use of all these balances for years. The Committee of 1876-to whose Report I have referred--describe this state of things in their Report. They say― We are informed that in a certain class of cases it is the common practice for proxies to be held by persons who at the meeting apparently represent the views of independent creditors, but who are in reality paid or retained by the debtor or the candidate for the trusteeship; and that wherever there are assets, out of which heavy costs may be paid, there is much canvassing, and what has been commonly called touting, for proxies. Proxies are, it is also said, often bought and sold, where required to turn the scale in favour of some resolution. It happens, not occasionally, but so frequently as almost to form the rule, that a stranger, so far as appears upon the face of the proceedings, is enabled, by the proxies he has obtained, to vote himself trustee, to fix his own remuneration, to nominate the committee of inspection, to order the payment of his costs, and finally to vote, in liquidation cases, the debtor's discharge. Such is the way in which the system which was designed to be so beneficial has been worked. And, as showing what I have said as to bankruptcies never coming to an end, I may say that dur which in practice, appears to me even worse than the cases in bankruptcy. Now, my Lords, these liquidations by arrangement came about in this wayThe Bankruptcy Statute of 1869 provided a code for the administration of the Bankruptcy Law; but then it was naturally supposed that there might be cases where a debtor might arrange with his creditors without bankruptcy, and two sections were put into the Statute to meet those cases. One of these sections provided for the case where a debtor could agree with his creditors to hand over his property to them without going to the Bankruptcy Court at all, so that they might make the most they could of it. The other related to the case where the debtor offered his creditors a composition, by himself or by some of his friends, of so much in the pound on his debts. These two processes were what was called 'liquidation by arrangement." There is no doubt that nothing could be better in theory. Clearly nothing could be more desirable than that a man should meet his creditors face to face, tell them the whole truth about his affairs, and make the best proposal he could in the circumstances; but, as in the former case, the practice has worked very differently from the theory. What has been the fact? In these cases, a man who cannot pay his debts is able to fix his own time and place for calling a meeting of his creditors and, I am sorry to say, the debtor takes care to fix a time and place which are not the most convenient for his creditors to meet him. And, moreover, there is nothing whatever with regard to the principal class of those cases which insures the necessity of his giving notice to all his creditors of the meeting. And then, having proceeded in this way, all he has to do is to have the arrangement confirmed, not by a majority of the whole of his creditors, but of those who are present at the meeting; and, therefore, if he can only contrive to have the meeting so arranged that the greater number of his creditors cannot come to it, or that those at the meeting should be friendly creditors, your Lordships may imagine he will obtain a majority of his creditors who were present at the meeting. Well, my Lords, when he gets the resolution passed accepting his proposition-or in the case of a composition, when he has had it confirmed by another meeting of a similar kindsmall as is the control where the debtor is a bankrupt, in these other cases there is absolutely no control at all. There is no security to be given by the trustees, there is no audit whatever of the accounts, and there is no provision that the liquidation shall be completed within any given time. My Lords, as I have described, in words not my own, what happened in bankruptcy-I will now take the liberty of describing, also in words not my own-what occurs in these liquidation arrangements. The statement I refer to is made by the Secretary of the Mercantile Law Amendment Society "A debtor can now file a petition for liquidation by arrangement, and convene a meeting of his creditors at any time within a month, and almost at any place he pleases, and if at such meeting a majority in number, representing present, or represented by proxy, pass a resolution agreeing to a composition, and such resolution is afterwards confirmed at a second meeting by a bare majority in number and value of the creditors present or represented, such arrangement is binding on all the creditors. As a rule, the chief creditors rarely attend such meetings, and the result is that the debtor, by the aid of proxies of friendly, bribed, oftentimes of fully-secured, and sometimes of fictitious creditors, can get released from his debts upon almost any terms he thinks fit." three-fourths in value of the creditors there My Lords, it appears by the statistics given in the Report that actually 75 per cent of the several thousands of compositions which have been made in the year have been under 58. in the pound, and a very large proportion were even of 18. or 28. Now, that being the working of the present arrangement of bankruptcy and liquidation, I think I have shown the made by those who object to the existing system. The first, which is strongly dwelt upon in the Memorial from the City, complains-and I am not surprised at it-of the vicious facilities, as they term it, for making private arrangements and escaping the control of the Court; and they complain of the encouragement thus given to reckless and fraudulent trading. My Lords, you will find a most interesting table on this subject in the first page of the Comptroller General's Report made last year for the year 1877. In that year there had been eight years' experience of the working of the Act of 1869, and the Report shows the manner in which those liquidations by arrangement have swelled in number, and how they have completely distanced all the proceedings in bankruptcy. Your Lordships will find, if you turn to the year 1870, that there were in that year 1,351 bankruptcies, while there were of liquidations by arrangement 2,035, and of liquidations by composition 1,616; making together 3,651. There were, therefore, of insolvencies brought to the notice of the Court 5,002. Well, my Lords, eight years afterwards the bankruptcies, which in 1870 numbered 1,351, had fallen in 1877 to 967, while the liquidations by arrangement, altogether free from the control of the Court, had risen to the enormous number of 5,239, and those by composition to 3,327, or 8,566, as compared with 3,651; while the insolvencies brought to the notice of the Court had risen from 5,002 to 9,500, or nearly double, as compared with the year 1870. Now, my Lords, I know it has been said sometimes that this enormous increase was owing to the condition of trade in 1877, and was the result of the depression of the mercantile world at that time. But that cannot be the case; because if your Lordships will take the four years which are generally referred to as the most prosperous years we have had of latenamely, 1871, 1872, 1873, and 1874you will find that at the end of 1874 these liquidations had risen to 6,924 and therefore the rate of increase cannot be attributed to the depression of trade, but must be traced to the enormous facilities which are given to debtors who wish to be released from their debts on these easy terms. There |