Clause 680
Company Law Reform Bill [Lords]
12:00 pm

Disqualification orders: consequential amendments

Question proposed, That the clause stand part of the Bill.

Photo of Jonathan Djanogly

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

The notes explain that this clause extends

“the Company Directors Disqualification Act 1986 so that decisions on whether to take action to disqualify directors can be taken on the basis of information that was obtained or generated by an inspector (or came to his knowledge) as a result of his investigation, notwithstanding whether such information is or will be included in any formal report. In some cases this may speed up the ability to seek to disqualify directors.”

It is the last issue that gives me some concerns. I do not think that it will necessarily always be in the best  interest of companies or anyone else that the directors can be more easily disqualified. If a disqualification order is made on the back of a court case after full due process, all well and good, but there are concerns that rapid use of orders organised by Ministers or through their civil servants, based on, for instance, a few public complaints may not work in the best interests of justice. To defend against such an order can be an expensive business and if the process is now to be made even simpler in evidential terms, as the clause proposes, could perhaps work against the innocent as much as stop the guilty. We are talking about people’s livelihoods.

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

Indeed, people’s livelihoods are important, but the matters would still have to go to court, so the decision would be taken by the court. That ensures that individuals are properly protected and their rights to innocence can be promoted within the court processes.

Photo of Jonathan Djanogly

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

I am pleased to hear that assurance from the Minister. I am not entirely sure that the clause will not mean that the process could be speeded up to the detriment of the individual, depending on the situation, but I will think further on the matter.

Question put and agreed to.

Clause 680 ordered to stand part of the Bill.

Clauses 694 to 698 ordered to stand part of the Bill.