Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

This issue was brought to me by a solicitor named Stephanie Biggs, but apparently represents the views of a significant number of City lawyers who have been discussing it. I therefore tabled amendment No. 54, but it has not been selected because it just slips out the title of the Bill. However, the issue is still important and is directly pertinent to the working of the clause. I raise it now, complicated though it is.

The wording of subsection (7) as currently drafted, replicates section 36A(7) of the Companies Act 1985. The purpose of that section was to make it clear that when acting as an attorney the company should follow the execution formalities applicable to itself as a company and not those applicable to the donor of the power of attorney who might be an individual, another company or various other types of entity. The subsection expressly leaves open the possibility that a document executed by a corporate attorney may be executed either in the name of the donor or in the name of the corporate attorney on behalf of the donor. However, there is no provision that expressly disapplies the common law rule that where a deed is executed by an attorney, as attorney, but in its own name, it is the attorney and not the donor who is bound by the deed.

In consequence, many company lawyers—

John Bercow (Buckingham, Conservative)

Order. I apologise for interrupting the hon. Gentleman, but he will be aware that it is not in order to discuss an amendment that has not been selected for debate. I feel sure, therefore, that he will immediately want to debate the issue of whether clause 44, as amended, should stand part of the Bill.

Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

Indeed, Mr. Bercow. That is exactly what I said I would do. As the amendment had not been selected, I was not suggesting that it should be debated. However, I wanted to raise the matter, as it is an important one and I had proceeded on that basis. A further amendment could be put forward at a later stage that would come within the remit of the Bill.

Many company lawyers are of the view that where a company executes a deed in its own name, but as attorney on behalf of another person, there is a technical argument that it is the corporate attorney and not that other person who is bound by the deed. I was attempting to clarify that where a corporate attorney executes a document in their own name, but on behalf of another person, provided that they are doing so properly, that is within the scope of their appointment and authority. It is that other person and not the corporate attorney who is bound by the document.

That is necessary because it is difficult to determine the way in which a corporate attorney executes, in practice, a document both in the name of another person and in accordance with section 36A of the Companies Act 1985. Corporate attorneys would generally execute documents on behalf of and not in the name of the other person. I appreciate that it is a complicated matter, but it is an important one. I would appreciate the Minister’s comments on that.

John Bercow (Buckingham, Conservative)

The Minister will use her discretion. She will understand and readily appreciate that it is not for her to respond to those parts of an argument that directly or indirectly address an amendment that has not been selected for debate.

Margaret Hodge (Minister of State (Industry and the Regions), Department of Trade and Industry; Barking, Labour)

I am with you on that one. This was an attempt to raise the matter of disapplying common law rules to attorneys. I am not sure that the Bill relates to the law on attorneys. I am not sure that this is the correct place to discuss that matter. However, Miss Stephanie Biggs attempted to do so.

Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

I appreciate the Minister giving way. May I just point out that my points were directly related to section 44(7) of the Act?

Margaret Hodge (Minister of State (Industry and the Regions), Department of Trade and Industry; Barking, Labour)

I understand that. The hon. Gentleman attempted to link his points to section 44(7), but they apply to a different batch of law on the powers and duties of attorneys. Therefore it is inappropriate for us—I look to other eminent people in the room—it appears to be inappropriate to comment on that today. I am open to receiving representations on matters from the members of the public or Members of Parliament. If the hon. Gentleman wishes to approach us in that way, we will see what help we can give.

The purpose of the clause is that it provides the means by which a company can execute a document itself. It is needed as a company, although a legal person can only act through human hands. The amendments to the clause, which we have already discussed and agreed, provide that, for all companies, the alternative to the affixing of its common seal is a signature by two authorised signatories or by one in the presence of witnesses.

It is a matter of everyday practical importance that the way in which a company executes a binding document should be clear, simple, rational and well-known. The clause provides a straightforward alternative to the use of a common seal in all circumstances for all companies under the law of England, Wales and Northern Ireland.