Clause 27
Company Law Reform Bill [Lords]
4:30 pm
Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)
The Minister may have noticed that I tend to speak to those amendments first raised in the other place only when I feel that I have something to offer that could move the argument forward. It is quite hard to do that on this clause. We are talking about whether a figure should be this amount or that amount.
The amendments are probing. I thought it was worth questioning what was said in the Lords. Lord McKenzie of Luton said:
“We consider that £200 is the right amount for the one-off civil penalty. It is not our intention to overpenalise companies through that route but rather to encourage compliance with the law.”—[Official Report, House of Lords, 30 January 2006;Vol. 678, c. GC23.]
I do not think that either side of the debate had a heavyweight legal argument. It comes down to the question of what is an appropriate amount to act as an incentive to companies to use the amended articles. For the average company, £200 is not much of a deterrent, especially given that preferably it would mostly be dealt with by way of civil rather than criminal proceedings. I know that the general mood is that such things should be dealt with as civil matters, and this is one such instance. We feel that if the amount was slightly higher, the civil route would be more attractive than the criminal route.