Insolvency Law and Practice: Cork Report (Hansard, 18 April 1983)

Lord Bruce of Donington
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ Lord Lyell
My Lords, Her Majesty's Government have accepted the general principles underlying the Cork Report. Accordingly, urgent consideration is being given to the programme of legislation which would be needed to provide a modern body of insolvency law.

Lord Bruce of Donington
My Lords, is the noble Lord aware that his reply is far from satisfactory? Is he aware that the Government have had this report in their hands for nearly two years now, and that in professional circles as well as in commercial circles there is very wide support for the main recommendations contained in the report of the review committee? Will the noble Lord ask his right honourable friend whether, pending the urgent consideration that he mentioned in his reply, some immediate efforts could be made by Her Majesty's Government to stem the practices of dishonest liquidators in conjunction with dishonest directors to defraud their creditors; and, also, whether some urgent steps could be taken to define more closely the duties of receivers, many of whom have over the past few years been disposing of assets on behalf of debenture holders at a fraction of 399 their real value, the interests of the unsecured creditors going completely unprotected?

§ Lord Lyell
My Lords, I am sure the noble Lord will appreciate that the Government do not just have the report "in their hands". The report requires two pairs of hands to lift it: it contains 1,982 paragraphs, 52 chapters and five appendices. The noble Lord himself covered about seven of the chapters in his first supplementary question. But I am able to say that Sir Kenneth Cork wished the entire report to be taken as a whole. Of course, one has to bear in mind—and nobody more than the noble Lord, with his professional qualification—that the recommendations which might appear to be most suited for early treatment are in the nature of a jigsaw, in that they are interrelated and their effects are often interdependent both as regards the subject matter and as regards the different personages who might be involved.
As for the noble Lord's last salvo, about receivers selling assets at below their realistic cost, I am afraid that we have not had any major complaints, but if the noble Lord has details of specific cases we should certainly be very pleased to receive them.

Lord Bruce of Donington
My Lords, may I press the noble Lord a little further in thanking him for his most courteous and detailed reply? May I draw his attention to the fact that Sir Kenneth Cork's committee also provided Her Majesty's Government with an interim report a long time before the final report was published, and that their minds ought perhaps to have been attuned, after such a long time, to the main requirements for the formulation of legislation which, in the event, will be a good deal less complex than some of the tortuous legislation Her Majesty's Government have inflicted on us over the past two years?

§ Lord Lyell
My Lords, if the noble Lord would wish to legislate on these 1,982 paragraphs, I should certainly be happy to try to assist him, but not in your Lordships' House, though possibly in one of the Libraries. I suspect that we should be here until well beyond pensionable age, probably into the year 2050. The Government's mind is continually attuned to the needs of modern commerce, and that which the noble Lord has raised is one of the many factors which are at present under consideration—and, as I said in my first reply, under urgent consideration.

§ Lord Leatherland
My Lords, can the noble Lord confirm that the number of insolvencies has increased considerably since the present Government came into office?

§ Lord Lyell
My Lords, I am afraid that I could neither confirm nor deny that; I have not got the details. Noble Lords may think this is joke-time. It is no joke at all that insolvencies are running at a high level. But of course there are insolvencies in all sorts of different matters. There are insolvencies, bankruptcies, and other forms of liquidation.

§ Lord Jenkins of Putney
My Lords, would the noble Lord be good enough to say what, in this context, the word "urgent" means in terms of time?

§ Lord Lyell
My Lords, I would not wish to regale the noble Lord with the interesting story of the French Revolution and of various chinese statesmen saying it was too early to give a firm view on the French Revolution—this statement being made in the year 1982. I could not necessarily say whether "urgent" means this century, this year, or next month.