Clause 243

Company Law Reform Bill [Lords] – in a Public Bill Committee on 13th July 2006.

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Derivative claims

Amendment proposed [this day]: No. 485, in clause 243, page 110, line 22, leave out paragraph (b).—[Mr. Djanogly.]

Question again proposed, That the amendment be made.

Photo of Eric Illsley Eric Illsley Labour, Barnsley Central

I remind the Committee that with this we are discussing the following amendments: No. 494, in clause 243, page 110, line 26, leave out ‘or proposed’.

No. 487, in clause 243, page 110, line 29, leave out

‘or another person (or both)’.

No. 488, in clause 243, page 110, line 30, leave out subsection (4).

No. 495, in clause 243, page 110, line 38, at end add—

‘(6) A derivative claim under this Chapter may only be brought if the directors have been requested by a member of the company to bring a claim in respect of an act or omission specified in subsection (3) and have not agreed to the request after the expiry of a reasonable period from service of the request.’.

Photo of Mike O'Brien Mike O'Brien Solicitor General, Law Officers' Department

I am grateful to the hon. Gentleman for giving way. He referred to a letter from my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael), suggesting that it was misleading. In fact, the issue was raised in another place with my noble Friend the Attorney-General, who agreed to consider the letter. The fact that he did not feel it necessary to correct the letter confirms that what my right hon. Friend wrote still stands. I am happy to put that on the record.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice)

I thank the Solicitor-General for putting that on the record.

We will want to review amendment No. 494 in light of the Minister’s comments. The same is true of amendment No. 487. From what the Solicitor-General said, it is clear that the breadth of the parties that could be included within the ambit of the clause is wider than many realise, and we will want to consider the  implications. I have made it clear that, overall, we are not happy that the clause is quite right.

If there is one amendment that re-establishes the principle that we want to assert, it is amendment No. 495. In that regard, I agree with the hon. Member for Cambridge (David Howarth). It is amendment No. 495 that I shall press to a Division. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 495, in clause 243, page 110, line 38, at end add—

‘(6) A derivative claim under this Chapter may only be brought if the directors have been requested by a member of the company to bring a claim in respect of an act or omission specified in subsection (3) and have not agreed to the request after the expiry of a reasonable period from service of the request.’.—[Mr. Djanogly.]

Question put, That the amendment be made:—

The Committee divided: Ayes 8, Noes 11.

Question accordingly negatived.

Clause 243 ordered to stand part of the Bill.