Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Dáil Éireann díospóireacht -
Wednesday, 28 May 1980

Vol. 321 No. 6

Pyramid Selling Bill, 1980. Committee Stage.

SECTION 1.

I move amendment No. 1:

In page 2 line 12, to delete "Energy" and substitute "Tourism".

The functions and title of the Minister were changed since the Bill was introduced and the proposed amendment takes account of this by proposing to delete "Energy" and substitute "Tourism". The change in the Minister's title was affected by the Industry, Commerce and Energy (Alteration of Name of Department and Title of Minister) Order, 1980 that was made under the Ministers and Secretaries (Amendment) Act, 1939.

Amendment agreed to.

I move amendment No. 1a:

In page 2, line 30, to delete "participants" and to substitute "a participant".

Since our previous debate here we discovered that there was a grammatical error in paragraph (d) of subsection (1). The word "participants" in the first line of the paragraph should be in the singular to agree with the word "his" in subparagraphs (i), (ii) and (iii).

Amendment agreed to.

I move amendment No. 1b:

In page 3, subsection (1), between lines 11 and 12 in the definition of "scheme" to insert:

"Provided that nothing in this definition shall be construed to include bona fide commercial operations.”

The reason I propose this addition to section 1 is because of the definition of the word "scheme" which might be misconstrued and inadvertently forbid bona fide commercial operations. I do not think we should leave any word in the Bill open to misinterpretation. The so-called pyramid selling schemes are objectionable in that they provide that payments by participants are made by reason of prospects held out to them of receiving payments or other benefits in respect of people who become participants. As it stands, paragraph (c) of sub-section (1) could be construed to include people operating on a bona fide basis. To put the definition beyond doubt, I submit that the inclusion of the amendment would clarify the situation.

I think the Minister will agree that the amendment is reasonable and fair. I am sure the Minister and the Department are aware of the various methods of salesmanship. I described one such method where items are on display at tea or coffee parties. The promoters of these schemes are rewarded for their efforts by being given goods of the type sold during the evening. On some occasions they receive monetary reward also. There is a kind of social function involved with the people who buy goods paying the promoter for them. The goods I have in mind and which are sold in this way are not available in the shops or by way of any outlet other than at the type of function I have described. Perhaps the Minister knows the products I am referring to.

I know what the Deputy has in mind.

These goods are of a very good quality and anyone to whom I have ever spoken and who had bought some of those products seemed very satisfied with the goods. My concern is that the people involved in this type of activity might consider that what they were doing would be illegal after the coming into operation of this legislation. The amendment tabled by Deputy O'Toole is designed to ease the minds of any such persons. In some instances there are items of a special nature that are not on sale at the parties and which can be obtained only through the promoter. There is some concern that these items might come within the scope of this Bill and in this regard such fears should be put at rest. The operation I have in mind is a very satisfactory commercial operation. Perhaps it is an operation of an unusual nature but there is a demand for it.

What we are discussing is a Bill dealing with pyramid selling and this Bill has taken a long time to reach the House. Work on it has been going on for some years. In the drafting of the Bill great care has been taken in defining "scheme" in order to ensure that no desirable or acceptable trading arrangement would come within the ambit of the Bill. In these circumstances I do not see any reason for the Fine Gael amendment. There have been references to goods being sold at parties. I am aware of such activity in my county but this activity would not in any way be regarded as pyramid selling. It involves the same promoter for a whole area so that there is not any question of someone going from one area to another trying to recruit promoters.

The Bill has been designed to protect people who in the main consider themselves to be involved genuinely in an honest selling organisation. There was a problem in defining pyramid schemes without bringing in schemes that cannot be regarded as such, but Deputy Enright need have no anxiety on that point.

Regarding the points made by Deputy O'Toole, if he refers to the definition of "scheme" in section 1 he will find that the four elements contained in paragraphs (a) to (d), inclusive, in subsection (1) must be present. In other words, a scheme which was not a pyramid scheme might include the elements in (a) and (b) and possibly those in (c) or (d) but not both (c) and (d). Like Deputy O'Toole, I am anxious that the Bill would not catch anyone other than those involved in pyramid selling and to that extent I do not think that either the Deputy or Deputy Enright need have any fear.

I appreciate the Minister's approach to this question. He has now stated that all the four elements in paragraphs (a) to (d) of subsection (1) of section 1 must be present to constitute the kind of scheme that comes under the Bill, but the fact remains that in the preamble to the definition the word "scheme" means:

any trading scheme which includes the following elements...

Paragraphs (a) to (d) are then listed. Taking the English language at face value, there is nothing to show that the scheme must include the four elements, as the Minister has now stated, which is what he meant to have included in the Bill. There is nothing there to exclude further elements, as the Minister must also admit. The phrase is "Scheme means any trading scheme which includes...". It does not say that it must include the four elements exclusively. It is a question of putting this matter beyond any shadow of doubt.

Paragraph (c) is the crunch. In order to come under the prohibition section of the Bill, element (c) must be present. For that to be so there must be a definite connection between payments by participants and the prospects held out to them, as mentioned in paragraph (c). I fully appreciate what the Minister has said, but the fact is that that is not stated in the drafting of the Bill. As the Minister well knows, a Bill becomes an Act and becomes a legal document. In this country we do not have what people have elsewhere, the spirit of the Act. As far as I know, what the Minister has said on Committee Stage cannot be taken as admissible evidence in the event of this Act being discussed in court, whereas this could be done elsewhere, I understand—for example in the UK. What a court must make judgment on is what they see in cold print in front of them.

In order to put this definition beyond any shadow of doubt, it should be stated that it excludes people engaged in bona fide operations. As Deputy Enright mentioned, there are strange types of sales promotions, as the Minister is well aware, some of them closely related to pyramid selling—first cousins or second cousins, at least. Unless we get down to the nitty gritty of the operations it is difficult to differentiate between pyramid selling and the kind of operation which is taking place, albeit a legitimate, lawful, legal operation. If this Bill goes through in its present form there is a danger here, though not a very great one, and on Committee Stage it is our job on this side of the House, and indeed on the Government side, to ensure that as good a job as possible has been done on the drafting and that no loopholes are left whereby any one word might be open to misinterpretation or misconstruction. This is very important in the case of the definition section of a Bill, where one is defining words. One is not talking about a word down through a section; one is talking here about a definitive section of the Bill. That preamble worries me by stating " `Scheme' means any trading scheme which includes the following...".

Let me finish by repeating that it does not say that it must include all four elements, nor does it say that any further elements are excluded. This is my argument, which is logical. I fully appreciate the Minister's problem in that accepting amendments from this side of the House is not the normal thing. I hope however, that the Minister is not averse to this kind of suggestion if he saw that it would help at the end of the day to produce a Bill which was watertight and beyond any misinterpretation or misconstruction by anyone outside this House.

An amendment put down by anybody, if it has merit, will be included. I can see the Deputy's concern and his reason for putting down the amendment. However, his amendment does not really affect the word "scheme".

Further elements may be present but to be included or involved in pyramid selling (a), (b), (c) and (d) must be included. " `Scheme' means any trading scheme which includes the following...", seems to me to be a very definite statement. It does not say "which may include one or more". It says "which includes the following", which means that the scheme must include the following. There is a "must" in that.

I suggest then that the Minister put in the word "must". He said this word himself. That would have the same effect as my amendment.

The phraseology of that is definite. What the Deputy is trying to bring in as an amendment has been the concern of the drafting people and others involved. It is phrased in this manner so that no bona fide person will be caught out. As we said in the early part of the Bill on Second Reading, we want to eliminate the con person. This definition of "scheme" is very definite. The real crunch comes in (c) and (d). Discussion on this is good and it could be referred to later on, but I feel that it is already taken care of.

Would the Minister not agree that it would have the same effect as my amendment if that particular line were amended to include the word "must"? For the first time in the House, the Minister has stated that the four elements must be present to constitute the definition of "scheme" under this Bill. That confines it to a narrow area of activity which we are trying to curtail and abolish.

The Chair suggests that there is only one amendment before the House at the moment. If the line were to be amended as suggested by the Deputy it might be done on Report Stage, but we cannot do that here.

I appreciate that.

The amendment goes back to the word "scheme". What we are discussing goes back to the meaning of this word.

It does, but I submit that what we are talking about is amendment 1b.

The Chair agrees with the Deputy on this, but the Deputy is now suggesting another form of amendment which is not before the House at the moment and which could be made on Report Stage.

I am endeavouring to sow the seeds of co-operation in the Minister's mind, that he might on Report Stage agree to a more clear and definite expression in writing of what he actually means and what he has expressed to be the case, that the four elements must be present to constitute a definition of the word "scheme" as defined. I am not a legal man but I put it to him that if that is not done it may be misconstrued. I am not sure that what the Minister states—that the inclusion of the word "includes" is sufficient to ensure that all four elements must be present—is there. Looking at this as a layman I felt the amendment proposed was necessary to put this beyond a shadow of doubt. I ask the Minister to look at this between now and Report Stage to find out if the word "includes" could be construed to mean something other than what he stated.

It is very definite as it is. There could be several other elements involved as well but these are the four that really matter. That is what the Bill is referring to.

I appreciate from what the Minister said that these four elements must be present. That is what he is saying?

Yes. The phrase used is "Which includes". What is the difference?

I am not sure if the legal interpretation of "includes" is as definite as the Minister is saying. That is my problem. The Minister must agree that a strengthening of that would put it beyond yea or nay. My amendment would definitely do that. As I said, the inclusion of "must" would have the same effect and would strengthen this beyond any shadow of doubt. I am not sure the word "includes" is as definite as the Minister suggests.

My advice is that this is a very definite section. The phrase "which includes" could not be more definite. It has a legal meaning and is a definite statement. There is no way of getting round it.

Amendment, by leave, withdrawn.
Section 1, as amended, agreed to.
SECTION 2.

Amendments Nos. 1c and 1d are related and will be discussed together.

I move amendment No. 1c:

In page 3, subsection (1), line 36, after "induce" to insert "or attempt to induce".

This legislation is endeavouring to clamp down on the type of operation known as pyramid selling because of its objectionable approach, the soft sell and the way people can be unknowningly caught up in it. If we accept that this whole area of pyramid selling is objectionable, we could have a situation where a promoter would try to induce people to participate in this kind of promotional work of pyramid selling which may or may not be successful. The effort at commissioning this type of salesmanship would also be frowned upon under this legislation because it is wrong.

This is a tidying up operation. Elsewhere in legislation dealing with pyramid selling this format has been adopted. The phrase "attempt to induce" is a common expression in other areas of life and would ensure that this approach to sales of this type ought to be brought under the aegis of this Bill. It is logical to seek that it be included in this legislation. If a person tries to do something wrong but, because of certain circumstances beyond his or her control does not succeed, that does not make that attempt any more legal.

In this case we could have attempts made at pyramid selling by a promoter and without this amendment there is no way he or she can be found to be in breach of this legislation. This is simply to tidy up the whole approach to this measure to ensure that it is all pervading and does the job it is meant to do, which is to stamp out this objectionable type of promotion.

There is another reason. The Minister knows that with the introduction of this legislation there are probably a number of people at this very moment trying to find some way round his Bill. It is accepted that there are very highly paid people in the area of taxation to look in depth at legislation and scrutinise it very closely to see what loopholes exist. Invariably they find loopholes. A person who attempts this kind of operation and fails may, while being outside the provisions of this legislation, find some more sophisticated approach.

What exact difference does the Deputy see between "induce" and "attempt to induce"?

Under this Bill a person who induces another person becomes a participant. It is strongly inferred that the person is successful in so inducing and has got his client. A promoter may call a meeting of a few prospective agents in an hotel and go through his Madison Avenue type of promotional talk, but if the assembled people refuse to participate he will not have induced anybody although he will have attempted to do so. That alone should be frowned on if we are serious about this legislation. The inducing of a person infers success but an attempt to induce infers, initially at least, failure. That is my definition.

I am as concerned as the Deputy to ensure that there are no loopholes in this Bill. We are discussing the words "induce" and "attempt to induce". The dictionary definition of "induce" is to "persuade or prevail on"; it is not definite. I would have no objection to putting in "attempt to induce" if I thought it was necessary but I am convinced, as are the Department, that an attempt to induce a person to participate in a pyramid sales scheme would constitute an offence. I am satisfied that an attempt to induce would constitute an act of inducing. We have gone to some trouble to check up on this matter and there is a border line. According to the Concise Oxford Dictionary the definition is "to prevail on or persuade to do". It did not seem that "to induce" meant that an action was definite. The word "induce" should be watertight and include "attempt to induce". An attempt to induce would constitute an act of inducing.

The dictionary definitions given by the Minister of State infer success on the part of the inducer or persuader.

Would I not fail in persuading the Deputy to join the Fianna Fáil Party?

Obviously I am failing very badly in my attempt to persuade the Minister of State to accept my amendment but I am making a very good attempt. I put down amendment No. 1 (b) and attempted to persuade the Minister to accept it; if he had done so I would have induced him. I failed to do so and therfore my inducement did not go beyond the attempting stage. That is the difference and it is very clear to me. If my putting down the amendment was in breach of an Act of this Parliament, surely it must be accepted that my attempt was also a breach of that Act.

We are outlawing pyramid selling. If the promoter is successful in inducing people to participate in this scheme which we hope to outlaw, surely an attempt to induce by a person—albeit unsuccessful—must come within the ambit of the provisions of the Bill. I am not talking about something new. The Minister will find this format in umpteen Bills. It is used regularly in legislative phraseology and in legal books.

I am as worried as the Deputy about this point and I want to be definite about it. I will look at the matter between now and Report Stage.

If the Minister does not accept my amendment does that mean that a person who attempts to induce a person or persons to participate in pyramid selling will get away scot-free? The reply to that question has a great bearing on the effectiveness of this legislation.

We are discussing specifically one person to another, A inducing B to participate in such a scheme. I have no doubt that a discussion would be involved and I would like to know if the Deputy would agree with me when I say that that would amount to "attempting". The two come under the one heading.

It is very clear that there is a difference between A attempting to induce B and A inducing B.

If A approaches B and suggests that B joins in a pyramid scheme that is inducing but where does the attempting to induce come in?

In that case the attempting and the inducing occur at the same time but they part company where A is successful in inducing B and B falls victim to A's sales talk. If A fails, A is unsuccessful but A has attempted to induce B to participate. In my view "induce" implies success.

The word "persuade" means to prevail upon but that does not mean success.

I appreciate the Minister's problem but we are back again to the cold print. We are talking about the word "induce" and not the word "persuade" which does not appear in the Bill. I can visualise a learned judge with his dictionaries giving definitions of the word "induce". I can see that the omission of the words "attempting to induce" will have the effect that the person who tries to promote a pyramid selling scheme but fails will not be liable for prosecution. That person should not get off the hook because of this omission.

To induce does not mean anything definite, it can mean winning or losing.

If we changed the word induce to seduce the Minister must admit that trying to seduce and seducing are two different things. If he applies the same logic to the word induce surely he must come up with the same answer which is that attempting to induce does not mean the same thing as inducing. I am trying to ensure that this legislation will be applied across the board to include those who are involved in the operation of pyramid selling and those who try to involve others. The formula of words I have suggested is to be found in possibly every piece of legislation that goes through the House.

I was satisfied when I came in here that attempting to induce was covered by the phrase "to induce" but I will have a look at this matter before Report Stage. If we do not agree on the matter then the Deputy will have an opportunity of amending the section. I am as worried as the Deputy is about this matter.

Amendment, by leave, withdrawn.
Section 2 agreed to.
SECTION 3.

Amendment No. 1 (d) falls with the decision on amendment 1 (c).

Amendment No. 1 (d) not moved.
Section 3 agreed to.
Sections 4 and 5 agreed to.
SECTION 6.

I move amendment No. 2:

In page 5, line 19, to delete "on conviction" and to substitute", on conviction on indictment,".

It is implicit in section 6 that subsection (6) (1) is concerned with conviction and indictment. The object of the amendment is mainly to make this explicit. There was some discussion about this on Second Stage.

Amendment agreed to.
Sections 7 to 9, inclusive, agreed to.
Title agreed to.
Bill reported with amendments.

When is it proposed to take Report Stage?

Tomorrow morning.

Report Stage ordered for Thursday, May 29 1980.
Barr
Roinn