Legal mine fields

The effect of the Act is to make it clear that the law is as most lawyers had believed it to be and, because it is retrospective in its terms, it ratifies decisions made at any intermediate diet.

Some commentators have suggested that this was a unique example of Parliament making legislation which overturned a court's decision and changed the law with a view to depriving successful litigants compensation to which they would otherwise have been entitled.

However, the same situation arose more than 30 years ago when the War Damages Act 1965 contained a clause instructing all courts to dismiss any actions which were proceeding in an attempt to recover damages against the Crown for property destroyed during any war.

The need for the case arose from a decision by the House of Lords in an action raised by Burmah Oil Company seeking more than #2m in damages. On April 21, 1964, the House of Lords, by majority, ruled the action was competent.

The claim arose from the invasion by Japan of Burma in January 1942. The British Cabinet decided that, as it was not impossible to defend Burma, the oil installations belonging to the oil company should be destroyed to prevent them falling into the hands of the enemy. One day before the Japanese occupied Rangoon the installations were blown up by the retreating British Army. Twenty years later the oil company lodged a writ seeking compensation for the losses it had sustained.

Following a lengthy debate before Lord Kilbrandon, the oil company was told that they appeared to have a valid case and the judge ordered a hearing of evidence. The Crown, as represented by the Lord Advocate, appealed and Lord Kilbrandon's decision was overturned on the grounds that the decision to blow up the oil terminals was a necessary military decision taken during a war. The case was therefore dismissed.

Because of the size of the claim and the issues at stake, Burmah Oil Company appealed to the House of Lords and, represented by Mr H S Keith, QC, and Mr James Clyde, they argued that Lord Kilbrandon had been correct. The Lord Advocate was represented by Mr G C Emslie, QC, who was assisted by Mr J McKenzie Stuart and Mr James Mackay, advocates.

By the narrowest margin possible the House of Lords judges supported Lord Kilbrandon's original decision and held that the claim was a valid one. They, therefore, sent the case back to Edinburgh for a hearing of evidence as to the value of the claim. The Government were accordingly facing a possible bill of more than #2m with interest from 1942. The total value of the claim could therefore have exceeded #5m. In addition, there were fears that many more claims would be lodged in an effort to recover the value of factories, housing, and belongings deliberately destroyed to limit the advance of the invading force.

It was to deal with this that the War Damages Act of 1965 was passed. Parliament was not prepared to allow a major payment to be made to an oil company for damage done more than 20 years ago by retreating troops faced with the prospect of allowing the Japanese enemy to fall heir to substantial oil reserves.

The new Labour Government, therefore, passed retrospective legislation ensuring that Burmah Oil's claim could go no further. The court action was eventually dismissed and the company received nothing.

Whether Burmah Oil Company could have survived the financial crises which struck it years later, had it been successful in its claim, is doubtful, but certainly it suffered considerable losses as a result of the Japanese invasion of Burma in 1942.

Parliament rarely agrees to retrospective legislation. It is normally regarded as unfair to change the rules for a time in the past, when nobody anticipated such a change. However, the Burmah Oil case and the recent passing of the Criminal Procedure (Intermediate Diets) (Scotland) Act shows that, where the need arises, the necessary legislation can and will be passed.