§ 7.35 p.m.
Viscount Colville of Culross
My Lords, I beg to move that this Bill be now read a second time. This is the first of the Private Members' Bills before your Lordships this evening. It is a simple Bill which I think will not bring any wrath upon my head from any quarter of the House. It was piloted through another place by my right honourable friend the Member for Bournemouth, West, and I suppose it will go down as the last of his parliamentary activities because he is not standing again. I am glad, therefore, that with the cooperation of noble Lords opposite it has been agreed that we can take this Bill through and put it on the statute book.
I am also grateful to the noble Lord, Lord Willis, who, last Friday, in a debate on his Bill on not dissimilar subjects, reminded the House about some of the problems of copyright infringement through piracy. He was talking mainly about music and the record industry and he mentioned a loss to legitimate interests of some £3 million per annum. This Bill is really about video-recordings, but it is an equally serious subject.
I should at this stage declare an interest in the matter which I hope will not be thought in any way to disqualify me from pursuing the legislation. I am a director of a large group of companies which includes companies which make programmes, some of which go on to video; another subsidiary processes video tapes; and yet another has numerous outlets for them for retail sale and hire in the high streets.
It was my noble friend Lord Lyell who reminded us last week that the Government intend a comprehensive review of copyright law. I suppose that they are not going to do that today and tomorrow and so we will now have to look forward to the next Parliament for them to pursue this worthy ambition. However, 671 there is one of the two urgent matters upon which the Whitford Committee made recommendations in March 1970 with which we can now deal—namely, the intention to increase penalties under the existing Section 21 of the Copyright Act 1956. The Government in the 1981 Green Paper agreed with that recommendation and they said that they accepted the need for stiffer penalties against those who knowingly deal with infringing products, and they hoped that that would be an effective deterrent. It needs to be an effective deterrent. London has the unenviable reputation at the moment of being the piracy capital of the world and that is not something of which we should be proud.
The British Videogram Association, which is the commercial side of this matter, estimate that they lose at the moment about £120 million per annum in revenue. That does not say anything about the royalties that are lost by a multiplicity of artistes and production companies; nor does it say anything about the reduction in the already fragile cinema audiences. Then of course the taxpayer loses in the form of taxes unpaid and VAT unpaid. There is even an employment aspect, because in the last two years the legitimate video industry has taken on no less than 20,000 people into new jobs. Therefore, that also is something that we would wish to encourage and not see undermined by the influx of the pirates' trade.
By all accounts the infringement of this copyright is big business. The theft—and that is what it is—of the intellectual property protected by copyright is now a major criminal activity. In the United Kingdom it can at present be embarked upon without any real risk at all. In the United States—and I have translated this into rough sterling figures at the current rates of exchange—the maximum penalty is £160,000 or five years' imprisonment; in France it is £3,000 or two years' imprisonment; in Holland it is just over £6,000 or six months' imprisonment; in Italy it is £3,750 or three years' imprisonment—and that is all for the very first offence when an offender comes before the court for making a counterfeit tape. In this country under the Copyright Act, even with the amendments just brought in last month by the Criminal Justice Act of last year, the maximum fine is £200. Only summary proceedings are available in the magistrates' court. I may say that until April the maximum fine was £25, and even if there was more than one offence the total maximum was only £50.
It is perhaps therefore not surprising that in the last six months of 1982 there were only two police raids and seizures of counterfeit tapes. Penalties as derisory as that simply did not warrant the use of scarce police manpower. Therefore, the object of this Bill is to deal with the penalties, and I shall come on to that in a moment. Before that I should mention two other possible remedies which have been available to some extent.
First of all, action has been able to be taken by trading standards officers under the Trade Descriptions Act 1968. An offence under that Act carries a maximum fine of £1,000 for the summary offence, and unlimited fines and/or two years' imprisonment on indictment. That is a little more formidable. The problem, however, is that an offence under that Act is almost certainly only committed if the cassette is 672 packaged in such a way as to mislead the buyer into thinking that it is being marketed by a reputable company with the authority of copyright owners, and up to the standards required by such people. That is not very easy to prove, and it is comparatively easy to avoid if you know about it and wish to see that you do not get into trouble under the Trade Descriptions Act. In any event, one might think that it is perhaps not primarily for those most useful local authority officials, the trading standards officers, to be in the frontline of a fight on something which is now a matter of major organised crime.
Then, again, there is the possibility of action in the civil courts. You can go to the High Court for what is called an Anton Piller order, so-called after the German company which was the plaintiff in the case in which this remedy was first, in the middle of the last decade, fully discussed. An Anton Piller order, particularly coupled with an action for damages for breach of copyright, enables premises to be entered and goods seized in order that they should be available for the hearing of the case in the action for damages. But, again, there is a problem, because the courts have said from time to time and again recently that this remedy should be used only in extremely serious cases. The fact of the matter is that they have not been able to use it in a way that would make it possible to wipe out entirely this evil activity.
The people concerned have brought cases before the civil courts. There have been a number of Anton Piller orders made, and again in the last six months of last year they obtained, or think that they are likely to obtain, about £300,000 in damages. But of course the trouble is that the investigation costs and legal fees have cost them nearly twice as much as that, and in any case it is only the tip of the iceberg because they have only thought fit to use these cases against major counterfeiters and have in no way attempted to go for the retailer of these counterfeit tapes.
Hence we have this Bill. It breaks down the offences which are already in Section 21 of the Copyright Act—and there is an amendment of it—into two. In the case of the first group, which is confined to the less serious offences such as possessing counterfeit tapes, or having them available to hire or to sell, or exhibiting them, there will now be a liability for a fine of up to £1,000—that is what the formula in the Bill currently means, and of course it can now be amended without legislation every time—together with the possibility of two months' imprisonment. That is for each offence for each illegal copy sold, possessed, and so on. Therefore, even in the hands of the magistrates there is a very significant change indeed from the present situation.
For the more serious offences the trial can still be summary, and in that case the maximum penalties would be the same; but either the prosecution, or, indeed, the magistrates themselves if they think that it is a serious case, can ensure that the matter goes before the Crown Court. If it is dealt with on indictment or by referral to the Crown Court there is now to be an unlimited maximum fine together with, or as an alternative to, two years' imprisonment. The offences to which this applies are those of making illegal copies of video cassettes for sale. By that I do not include those who just make one in the home, although that is 673 in fact illegal. This applies to those who make them for sale. The other offence is importing such illegal counterfeit cassettes into the United Kingdom other than for private use, and for distributing for trade or other purposes prejudicial to the owner of the copyright such imported cassettes.
It is the second group to which Clause 2 really applies, because there is this one extra matter in the Bill: the power of search in the case of one of these more serious offences, and the power to seize matters that are found in the course of a search. That can only he done on the warrant of a magistrate if he is satisfied on sworn evidence that there are reasonable grounds for believing that one of these serious offences has been committed, or is about to be committed, and that evidence of this will be found on the premises concerned. In Scotland the sheriff is similarly placed to issue a warrant on the same terms.
Thus, in practice, there will be a severe restriction upon the use of this power, which I know full well Members of this House do not look upon with great favour unless a good case is made out for it. But, of course, in the circumstances it has proved necessary in the past to make such searches either under the Trade Descriptions Act or under the civil law, and I believe I can persuade your Lordships that the Copyright Act itself ought to provide the proper provisions for it. But it will not be used to deal with the retail shops because there it is intended that the existing powers under the Trade Descriptions Act will be quite adequate, as they have been before, and the trading standard officers will be able to continue to deal with it.
It is the belief of those who support this Bill that it will put real teeth into the law and provide proper safeguards. I hope, therefore, that it may now quickly be allowed to complete its parliamentary passage so that it can come into force, as it itself says at the end, on 13th July. I beg to move.
§ Moved, That the Bill be now read a second time.—(Viscount Colville of Culross.)
§ 7.48 p.m.
§ Lord Mishcon
My Lords, not for the first time the House will be grateful to the noble Viscount for the lucid manner in which he has introduced an important measure. I find myself in a somewhat original and unique position standing up at this Dispatch Box, because while agreeing fully with my noble friends who have protested at the speed with which Bills have been brought before your Lordships today with an expedition remarkable in its intensity and yet somewhat dangerous in its complexities, I find myself welcoming the fact that this Bill has been dealt with speedily. Without any doubt at all it deals with an evil which is a threat to great industries in this country, to the employees in those industries, and is a measure that ought to be passed by the House with a good heart.
Your Lordships have already heard from the noble Viscount of the losses that are being sustained. He mentioned a figure of £120 million and he used the word "piracy" again. He referred to a Bill which was moved by my noble friend Lord Willis which obtained a Second Reading last week. My noble friend correctly 674 said that he thought that "piracy" was too romantic a word to be used in connection with what is undoubtedly theft. I therefore intend to talk about robbers and not pirates. At least, I have added something to the noble Viscount's speech and from that point of view will not merely be copying what he has said.
Without a doubt this is a field in which the criminal law has to move and with some amount of force because of the sums involved. As the noble Viscount said, this city of ours, of which we are so proud, has a new name as the centre of this robbing industry. It is a disgraceful reputation for us to have and the sooner we deal with these robbers the better.
As the noble Viscount hinted, the civil law is not sufficient to deal with this matter. He explained very lucidly the order, which is known as the Anton Piller order. To add to what he has already said, the judges have made it quite clear that those orders can only be obtained in exceptional circumstances. I am using the phrase that I believe was used by Mr. Justice Whitford. It has also been made clear in some cases that these matters are more properly dealt with in the Crown Court than in the civil court, and it was a civil Chancery Judge who said it. The onus is upon us to deal with this matter and to see that proper penalties are imposed. That is what the Bill does.
I have only one other set of observations to make and they will be brief. My noble friend—as I call him without any difficulty—the noble Viscount, referred to the seizure section of this Bill when, after a warrant has been issued, it is possible for documents and goods to be seized.
There was a Bill of which some of your Lordships may have heard. It was called the Police and Criminal Evidence Bill. Your Lordships may have remembered that never were their postbags so full as when that Bill came before another place. I do not intend to discuss the demerits of that Bill at this stage, because it has died a decent death. It would not have lived a decent life had it survived, but Clause 14, as amended, in that Bill made it perfectly clear that when the police exercise their rights of seizure of documents they could not seize documents that were privileged as between a legal adviser and a client.
When this Bill was before another place, under the able pilotage of Sir John Eden—whose passing from parliamentary life is a matter of regret, regardless of political allegiances—representations were made to him on behalf of the legal profession that that Bill, of itself, did not seem to spell out the protection that ought to be given to these legal privileges. Sir John Eden correctly said that we should look at Clause 14 of the Police and Criminal Evidence Bill to find that it would cover the situation when it becomes an Act. As we know it is not to become an Act and therefore one has to look rather carefully at these rights of seizure to make absolutely sure that the common law situation on privilege in relation to legal documents is not being defeated.
The last thing in the world that I want to do on behalf of my noble friends is to impede the passage of this Bill in any way. Normally, if I had had more time, I would have put down an amendment. It would have been discussed and we would have decided whether 675 that amendment was necessary to cover my point. I do not have that opportunity, for if I did avail myself of it I should be stifling the Bill. Indeed, it would be stillborn. I do not intend to do that. Instead I hope to rely on the fact that common law rights are in no way interfered with by the Bill, that this exception does stand and because of other legislation that the noble Viscount mentioned—which clearly one thinks retains the right of privilege—that this would apply to this Bill. It would help if on the record the noble Viscount and the noble Minister were able to say that they were both sure that this point was covered.
If we find that somewhat unfortunately a case emerges in which the noble Lord and the noble Viscount are found to be wrong, our care in this matter will be on record and possibly—but I hope not—some short amending Bill will have to be passed. I mention this out of abundant caution because your Lordships appreciate that the privilege which obtains between a legal adviser and his client in relation to documents is sacred in our legal tradition and one not lightly to be cast aside.
Subject to those comments, we on these Benches welcome the Bill and express our appreciation to the noble Viscount and to the Member in another place who are both responsible for the Bill being before your Lordships tonight.
§ 7.57 p.m.
§ Lord Lyell
My Lords, it only remains for me, on behalf of the Government, to reiterate everything that has been said by the noble Lord, Lord Mishcon, to my noble friend Lord Colville of Culross and indeed if he would pass on the encomiums it has received and deservedly so in your Lordships' House to our right honourable friend in another place for bringing this Bill, which the Government warmly support, before your Lordships so swiftly following its very successful passage in another place.
My noble friend pointed out and the noble Lord, Lord Mishcon, reminded us of what happened last Friday when we discussed video piracy, but the situation is much more serious and less glamorous than that. Video piracy has seen a phenomenal growth in the past two or three years and we understand that about two-thirds of the videograms—which I understand is the trade name for pre-recorded video tapes—on the sale and rental market in this country are now pirate copies. The outcome of this extraordinary level of criminal activity is that some £120 millions each year is lost to the legitimate film and video industry and, above all, to those whose creative skill and energy result in the products on which that industry is based. Correspondingly there are fewer funds to be ploughed back into new productions, which is a serious threat to jobs, and it is also a threat to the production of new films—all this at a time when there is a great and notable resurgence of the British film industry, as witness the two examples "Chariots of Fire" and more recently "Ghandi".
The Government see this Bill as one of two measures which complement one another. In the one measure are the very substantial increases, which were mentioned in customary detail by my noble friend, in the penalties that offenders who are found guilty of film or record copyright offences will face. It has long 676 been recognised that the penalties which are currently available for offences against the Copyright Act 1956 are inadequate. The Copyright Green Paper, published in 1981, that many of us have discussed, stated that the intention of the Government was to increase the penalties to make them effective deterrents. The sudden and, as it is now seen to be, unforeseeable explosion in video piracy has demanded that this problem receives immediate and urgent attention in advance of the general reform of copyright. As my noble friend has pointed out, under the Bill the penalties will become very severe and, as a result of this, we can look forward to a turning of the tide against the video pirates as the deterrent influence of these very heavy penalties takes effect.
The Government also strongly support the Bill's second provision giving the police the powers necessary to detect and pursue video and record pirates. This provision strikes, we hope, the right balance in requiring a constable to apply to a magistrate for a warrant and in granting these powers of entry only in relation to premises where it is suspected that one of the more serious offences (that is, manufacture, import or distribution) has been or is about to be committed. This will assist the police in the investigation of piracy offences. It will be for the local chief police officers to decide what resources they should allocate to these new powers. It will remain important for the film and video industry to continue to do the major part of the work of investigation and collection of evidence.
To digress slightly, I think the noble Lord, Lord Mishcon, turned towards documents. My admirable advisers have given me a brief outline which I hope may be of some comfort to him. We understand that the legal professions welcome this Bill. They have expressed concern that the loss of the Police and Criminal Evidence Bill may mean that legally-privileged documents would become vulnerable to seizure. I acknowledge that the Police and Criminal Evidence Bill would have introduced important, specific safeguards here; but we do not think that the professions should be anxious over the privacy of their offices. This is because of the way that my noble friend's Bill is drafted. I understand that Clause 2 of the Bill provides that a justice may issue a search warrant if he is satisfied that there are reasonable grounds for believing that evidence of a copyright offence is in the premises where the offence has been or is about to be committed.
My Lords, this does not answer all the questions which have been raised. There are many questions in this particular field which have been raised by the legal professions. The Bill before the House is very limited in its aims and, in common with other, similar measures—and one example is gaming legislation—it gives a power to search for evidence of certain specific offences. This is a very difficult area and we would suggest that this Bill is not the place to deal with a matter of somewhat broader legal principle which should apply equally to other legislation. I myself have not entered deeply into this problem of legal search warrants especially as I have extended it in this brief addendum to my remarks on the Bill before us. I hope that this might in some way have helped in answering the point.
My Lords, I hope the noble Lord will forgive me. The last thing I want to do is to burden him with a technical argument. It would be completely unfair and I do not think your Lordships would greet it with great approbation at this hour. Can he say that it is certainly the Government's intention that documents should be protected if they come under the common law privilege of documents which are between a legal adviser and his client? If he could say that it is the Government's desire that that is so and their belief that that is so, it would help in view of what I was trying to say before in an effort not to impede the progress of this Bill.
§ Lord Lyell
My Lords, I was prepared to speak for a little longer to allow one of my noble colleagues to obtain advice through the traditional winged messengers. I have seen with my own eyes, and my noble friend has indicated, that there was a degree of head-nodding and that we could assure the noble Lord on that particular point. I am afraid the noble Lord has caught me totally in a field with which I am not familiar. I hope that assurance will satisfy him so far as the legally privileged documents and the privilege aspect of this Bill are concerned.
In conclusion, the view of the Government is that this is an excellent Bill which deserves to become law. Our support for it at all stages has reflected the Government's determination to stamp out video and record piracy as well as our belief that the Bill represents a major step forward towards that objective.
Viscount Colville of Culross
My Lords, I am grateful to the noble Lord, Lord Mishcon, for his welcome and for the Government's support in this measure. There is just one thing which I think needs dealing with and upon which I believe that I can add a little to what my noble friend has said. I am delighted to hear that that is the Government's policy, and the fact that it was in Clause 14 of the Police and Criminal Evidence Bill in general terms, applying to a very broad range of powers of search, underpins what my noble friend has said. I would put this to the noble Lord, Lord Mishcon, as something that I should like him to think about. There are, indeed, a fairly large number of statutes which, for limited and proper reasons, give powers of search and seizure of documents to certain persons, usually the police, where criminal offences are anticipated to have occurred.
I mentioned one of these when I was referring to the Trade Descriptions Act. It is under that Act that so far the vast majority of the seizures of counterfeit video cassettes have been undertaken. What it says in Section 28 is that the trading standards officer:may seize and detain any goods or documents which he has reason to believe may be required as evidence in proceedings for an offence under this Act".It does not say anything about them not being privileged documents. What it says in subsection (7) is that:Nothing in this section shall be taken to compel the production by a solicitor of a document containing a privileged communication made by or to him in that capacity …In other words, in 1968, in that Act, in common with a large number of other Acts where the question 678 of search and seizure has been passed by Parliament, it was not considered necessary, it appears, for Parliament to do anything about the common law in relation to privileged documents on the premises of the supposed criminal. All right! They have made a specific provision for the solicitor's own office not to be subject to these searches, but when it comes to his client in his client's own premises, it has been thought, evidently, that the common law is enough.
That is the situation as it would apply under this Bill. I would suggest to the noble Lord, Lord Mishcon, it is probably best that it should be so left, for this reason. It is one thing in Clause 14 of the Police and Criminal Evidence Bill to give this protection overall to a large number of instances under different statutes whereby privileged documents might be threatened in some way or another; but to put it in only one individual case of a large set of statutes, all of which have similar powers but all the others of which say nothing about privileged documents, would be much more likely to throw doubt on the degree of protection available under the other powers of search than it would to do anything greatly in the way of protection of the sort of documents being referred to under this Bill. In other words, it might be said that if Parliament thought that in the copyright sphere it was necessary specifically to say something about privileged documents, why on earth did it not do it in all the other legislation?—and that would throw doubt on the protection of these sort of documents under the other legislation.
This is an argument often raised in Parliament and the noble Lord will know it is a matter of statutory interpretation. It is something which can quite often come in front of the courts. A parliamentary inconsistency of this kind is a very dangerous thing. I am sure there will be a major outcry if anyone is so silly as to seize under these powers a privileged document, and then no doubt there will have to be legislation passed, I hope in general terms, to stop it. But as the Bill stands, and even without Clause 14, I hope that the noble Lord is somewhat reassured by my technical argument and by the policy statement we have heard from my noble friend on the Front Bench. In those circumstances, I hope that he will think it is safe for this Bill to go forward to the statute book.
§ Lord Mishcon
My Lords, before the noble Viscount, Lord Colville of Culross, sits down, may I thank him for the helpful addition to the discussion we have had. I made it abundantly clear that the last thing I would do would be to try and seek protection in a clear and emphatic way, which we all hope is not necessary, for privileged documents and in fact in doing so, protect the robbers we have been talking about in the House tonight. I have no wish on behalf of my noble friends to delay this legislation. It is unfortunate that we could not discuss the matter at Committee stage, but there it is, and I am most grateful for the discussion which has taken place.
Viscount Colville of Culross
My Lords, the noble Lord, Lord Mishcon, is very generous. We have had a little Committee stage of a sort in the course of the Second Reading. In these circumstances, there has been such a welcome for the Bill that I may safely ask 679 your Lordships to give the Bill a Second Reading, and I so move.
§ On Question, Bill read a second time.
§ Then, Standing Order No. 43 having been suspended (pursuant to Resolution of 10th May):
Viscount Colville of Culross
My Lords, I understand that no amendments have been set down to the Bill and that no noble Lord has indicated or is indicating a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
§ Moved, That the order of commitment be discharged.
§ —(Viscount Colville of Culross.)
§ On Question, Motion agreed to.
§ Bill read a third time, and passed.