Clause 16 - Offences by bodies corporate and scottish partnerships

Tobacco Advertising and Promotion Bill – in a Public Bill Committee at 2:31 pm on 8 February 2001.

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Photo of Mrs Irene Adams Mrs Irene Adams Labour, Paisley North 2:31, 8 February 2001

The question is that the clause stand part of the Bill.

Hon. Members:


Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

We have spent quite a bit of the break between the sittings of the Committee having a closer look at the Food Standards Act 1999.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

Does my hon. Friend find it surprising, given that the Opposition are seeking to toughen up the Bill, that Labour members are so anxious to get it through that they are calling Divisions before we have even discussed the clause?

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

I am afraid I have turned a deaf ear to what is going on. It has been attempted before. Things must be given their proper time and it would be a dereliction of duty if we did not stop to look at what has been placed in the clause.

The more I have read the misleading assurance given in the explanatory notes that the enforcement provisions mirror what is in the Food Standards Act 1999, the more disquieted I have become. There are many differences between the two pieces of legislation, and I wish that I had not taken on trust what the explanatory notes said on the parallels between them.

Clause 16 deals with the officers of a body corporate. I seek an assurance from the Minister that an officer of a body corporate who is unaware of a tobacco advertisement displayed or produced by an employee of his company will not be liable to prosecution for the neglect referred to in clause 16(1)(b). It would be unfair if the production or display of a tobacco advertisement by an employee of a company made the managing director of that company guilty of an offence, even though he was unaware of the advertisement. If I read the Bill correctly, there is no defence for officers of bodies corporate who did not know, or had no reason to suspect, that the purpose of the advertisement was to promote tobacco, that its effect would be to promote a tobacco product, or that the advertisement would be published in the UK. Such a defence exists for those guilty of an offence under clauses 2 or 3.

Will the Minister make clear whether I have misread the Bill on that point? A number of exceptions are given. It is the style of the Bill to list the offences and then the defences, but there is not always an exact parallel between them. We have already discussed one amendment that would ensure that groups are not unwittingly left out of the series of defences that are proffered. I seek assurances for the officers of bodies corporate.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

I am sure that it is due to my ignorance, but I want to get a couple of detailed points on the record. [Hon. Members: ``Hear, hear.''] I am grateful for that endorsement from Labour Members. I am not quite sure where it came from; I will not point the finger of blame.

I want to deal with the question of plurality and singularity. Clause 16(1)(a) states:

``If an offence under any provision of this Act committed by a body corporate is proved—

(a) to have been committed with the consent or connivance of an officer.''

What happens if more than one officer is proved to have been involved in the process? Can the authorities proceed against more than one officer, or should clause 16 be amended to ``an officer or officers''? I should be grateful for clarification. Does the clause allow more than one individual to be prosecuted if they are seen to be to blame? In the case of advertising, the body in question may not be just the company; it may be an advertising agency, or the organisation that carried the advertisement. So I imagine that proceedings could be taken against more than one body corporate.

The Bill makes specific provisions for partnerships in Scotland, but makes no mention of partnerships in England, Wales and Northern Ireland. It may just be that I am ignorant of company law, but does that mean that the definitions included in clause 16 extend to partnerships in England, Wales and Northern Ireland?

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I wish to make a similar point about the definition of exactly who is liable. I was told by my accountant when I first set up a limited company that the company secretary was the person who ended up going to jail. That is why, within any companies in which I have been the main person, my wife is always the company secretary. She would get more sympathy from the courts than perhaps I would. It is important when considering who should be going to prison that we know what the Minister intends.

My other point is similar to that made by my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) about prosecuting more than one person. There was a tragic case in which a child had been beaten to death. The child could only have been beaten to death by the father or the mother, each of whom accused the other. The courts could not decide who was responsible. Clearly, they were both irresponsible in that they did not stop it happening, but both of them got off. A director of a company could have authorised various people to carry out advertising activities. We have to find the person who gave the order. I am concerned that each director in turn could say, ``No, it was not me, it was the other director.'' [Interruption.] Would the hon. Member for Dundee, West (Mr. Ross) like to intervene?

Photo of Mr Ernie Ross Mr Ernie Ross Labour, Dundee West 2:45, 8 February 2001

It is rather strange that the Opposition Front-Bench spokesmen want to increase the defences and the Back-Bench Members seem to want to close down the defences. I am not quite sure how they are working together on this one.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I do not imagine that the hon. Gentleman has had a good lunch because I can see that he is very attentive, but he clearly was not listening to what I was saying. We want to ensure that, having decided that one wants to go after a particular director or manager under the clause—after all, we are here to examine the detailed working of such clauses—a defence would not arise from the wording of the clause whereby people could simply say, ``We know that someone within this company has authorised the advertisement, but you can't get us because we will keep accusing each other of it.'' One needs to know that if a body corporate has been guilty of doing something, someone will be sent to prison. A company cannot be sent to prison; a person has to be sent to prison. Therefore, determining how a person is identified is a very important issue for the Committee, and I hope that all my colleagues agree with that.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The hon. Member for Meriden (Mrs. Spelman) seemed to be suggesting that I was misleading the Committee. I hope that she was not suggesting that.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

The wording of the explanatory notes is misleading. They say:

``Such powers are standard powers for enforcement officers (see for example similar provisions in the Consumer Protection Act 1987 and the Food Standards Act 1999).''

Such parallels are absent in the section on penalties. The previous legislation includes a penalty for an enforcement officer who discloses to any person information obtained on the premises with regard to any trade secret. There is no parallel in this Bill, yet there is an equal risk. That is just one example of where standard features of other Bills are supposed to be mirrored in this Bill, but are not.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The explanatory notes have never stated, and nor have I said in the course of our debates today, that the provisions were identical. We are talking about different pieces of legislation. Certainly, the important powers have been modelled on the Consumer Protection Act 1987 and some elements of the Bill are modelled on the Food Standards Act 1999. It is perhaps a rather tight and not a reasonable interpretation of the explanatory notes to say that, just because there are differences between the Bill and those other Acts, the explanatory notes are inaccurate.

The hon. Member for Mid-Worcestershire asked whether more than one officer could be prosecuted. Yes, more than one officer can be prosecuted under the Bill, and they have the same defences as apply in earlier clauses— that they were unaware, were not able to foresee or were not able reasonably to suspect. They have the same defences—if they were unaware, were not able to foresee or were not able reasonably to suspect—identified in earlier clauses on defences.

Partnership in England is not a body corporate. Scottish partnerships are the equivalent of the body corporate in England. The clause provides that an officer of a company can be personally liable, as well as the company itself being liable, where his or her actions were instrumental, for reasons of, say, neglect or connivance, in committing the offence. That is why the parallel provisions apply to Scotland.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

The Minister said that so rapidly that I may have misunderstood or not heard what the Minister said. I asked about partnerships in the United Kingdom being taken to court. Could a firm of family solicitors, for example, who were instrumental in placing an advertisement, be prosecuted as a partnership, and who would be prosecuted? Would it be the senior partner?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

My understanding is that partnerships are not covered as a body corporate by clause 16. Therefore, the issue relating to officers who are part of the body corporate would not apply in the same way.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I understand that the Minister is saying that a partnership in England effectively counts as unlimited liability. The individuals are the individuals. Can the Minister address my point that if no particular officer is identified in a company as the person who gave the order, and if it is therefore the company that is seen as guilty, who will be the designated fall guy or girl who ends up going to prison?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The hon. Member's point about partnership, as I understand it, is that there is individual liability in partnerships. On the question of which officer might be liable, the clause means that an officer can be personally liable if his or her actions were instrumental. Under those circumstances, the individual would be liable.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

We are not debating the same point. When a court finds that a company has transgressed, whom does it imprison for three months? The courts cannot imprison the company or the company logo. If a person has not been identified as an individual within the body corporate, who is liable? Is it the company secretary, or some other officer?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

I am informed that that will depend on the facts of the case. I will clarify that issue and get back to the hon. Gentleman.

Question put and agreed to.

Clause 16 ordered to stand part of the Bill.