HL Deb 23 October 1985 vol 467 cc1253-6

435A Line 2, after ("insert '") insert (", member or contributory").

436 Page 174, line 33, leave out from 'which' to end of line 34 and insert 'public examinations under section 52 of this Act and proceedings under section 83 of this Act are to be conducted, as to the circumstances in which records of such examinations or proceedings are to be made available to prescribed persons and as to the costs of such examination and proceedings'.

440 [Printed above.}

441 Page 175, line 4, leave out 'his functions by' and insert 'the functions of.

456 Schedule 5, page 178, line 17, at end insert— '17A. In section 222(4) (obligation to preserve, accounting records), for the words from "direction" onwards there shall be substituted the words "provision contained in rules made under section 89 of the Insolvency Act 1985" '.

479 Schedule 6, page 182, line 2, leave out 'provision of and insert 'enactment contained in, or subordinate legislation made under.'.

480 Page 182, line 12, at end insert ', including any such provision as is specified in relation to the trustee of a bankrupt's estate in paragraph 20 or 26 below.

Receiver or manager

9A. Provision as to the manner in which the official receiver is to carry out his functions as receiver or manager of a bankrupt's estate under section 116 of this Act, including any such provision as is specified in relation to the trustee of a bankrupt's estate in paragraph 20 or 26 below.'.

481 Page 182, line 17, leave out 'a bankrupt's'.

482 Page 182, line 32, at end insert— (ca) provision for requiring a bankrupt or debtor to attend a meeting;'.

484 Page 183, line 1, leave out from 'bankruptcy' to end of line 3 and insert ', as to the manner and conditions of proving a debt and as to the manner and expenses of establishing the value of any debt or security.'.

485 Page 183, line 11, leave out 'the official receiver'.

486 Page 183, line 20, at end insert— '21 A. Provision as to the fees, costs, charges and other expenses that may be incurred for any of the purposes of Chapter I of Part III of this Act or in the administration of any composition or scheme approved under that Chapter.'.

487 Page 183, line 21, leave out paragraph 22.

488 Page 183, line 31, leave out from 'creditor' to end of line 32 and insert 'or a committee established under Section 130 of this Act to be supplied (on payment in prescribed cases of the prescribed fee) with such information and with copies of such documents as may be prescribed.'.

489 Page 183, line 33, leave out from 'which ' to end of line 34 and insert 'public examinations under Section 119 of this Act and proceedings under Section 175 of this Act are to be conducted, as to the circumstances in which records of such examinations and proceedings are to be made available to prescribed persons and as to the costs of such examinations and proceedings'.

490 Page 183, line 37, after 'estate' insert 'or the supervisor of a composition or scheme approved under Chapter I of Part III of this Act'.

491 Page 183, line 39, at end insert 'and'.

492 Page 183, line 41, leave out from 'estate' to end of line 45 and insert 'or the supervisor of such a composition or scheme'.

493 Page 183, line 45, at end insert— '26A. Provision as to the manner in which the trustee of a bankrupt's estate is to act in relation to the books, papers and other records of the bankrupt, including provision authorising their disposal.'.

494 Page 184, line 4, leave out from 'to' to end of line 5 and insert 'the carrying out of the functions of an interim receiver appointed under Section 115 of this Act of the official receiver while acting as a receiver or manager under Section 116 of this Act or of a trustee of a bankrupt's estate.'.

This package of amendments relates to Schedules 4 and 6 to the Bill, which respectively provide for matters capable of inclusion in company and individual insolvency rules. The amendments either provide for the re-enactment of existing provisions of the Companies Act 1985, the Bankruptcy Act 1914 or the existing body of rules, or they expand upon those provisions to ensure greater clarity and sufficient authority for the necessary rule-making powers. There is one amendment, however, to Commons Amendment No. 435, which expands the rule-making power, which, as currently drafted, is too restrictive. I commend these amendments to your Lordships.

I am aware that the extensive use of secondary legislation has been criticised during the course of the Bill's progress. Many of the matters contained in the current primary legislation on bankruptcy and winding up would nowadays be included in secondary legislation, being mainly procedural matters which supplement the principal provisions of the insolvency code rather than setting out basic principles. The Bill accordingly removes such matters from primary legislation, enabling them to be prescribed by rules. It can be seen from the present insolvency rules that the moves in this direction were already being made when the rules relating to winding up were revised following the passing of the Companies Act 1948. For example, provisions relating to meetings and proofs of debt, which appear in the first and second schedules to the Bankruptcy Act 1914, can only be amended by further primary legislation. These are largely not included in the primary legislation relating to the winding up of companies. Instead, they appear in the companies winding up rules of 1949 and can, as a result, be more easily amended to cope with changes in circumstances in both commercial and judicial practice.

A source of frustration to the Insolvency Rules Advisory Committee established under the 1976 Act has in the past been the inability to harmonise and modernise the various procedures in both bankruptcy and winding up codes. In its report the review committee criticised the numerous inconsistencies between the two sets of rules; that is, bankruptcy and winding up. Indeed, within the winding up code itself there are differences between the equivalent rules for voluntary winding up and winding up by the court. I take this opportunity of assuring the House that we are doing everything possible to iron out these inconsistencies. This means that on occasions we have had to take a provision from the current primary legislation because its winding up or bankruptcy counterpart is already to be found in the rules. Of course, it would be possible for such provisions to be contained in the Bill, and this may at first glance seem to present a preferable course. But we are not considering just a handful of matters. There are numerous instances of such provisions, and if the Bill had been used to deal with all of them I think it would have been clogged with detailed procedural provisions which are more properly placed in secondary legislation.

The rules made by the Lord Chancellor, with the concurrence of the Secretary of State, are subject to the scrutiny of the Insolvency Rules Advisory Committee, which has recently completed a comprehensive review of all the present rules. New rules for both bankruptcy and winding up will be prepared to complement the new legislation using as a base the revised rules which are the product of that committee's labours. The new rules will continue to be vetted by the committee and the Lord Chancellor will take the committee's advice before making the rules.

Under the present law rules relating to insolvency are made by the Lord Chancellor and laid before Parliament after they have been made. However, the Bill introduces an element of parliamentary control which is not available at present by making the rules subject to annulment by resolution of either House of Parliament.

I commend these amendments to your Lordships. Of course, I am available to answer in detail any particular point which is not sufficiently covered by the generality of my remarks.

Moved, That this House do agree with the Commons in their Amendment No. 223. [Lord Lucas of Chilworth.]

Lord Bruce of Donington

My Lords, the noble Lord has been kind enough to go into some detail about the process that is to be adopted in the formulation of the secondary legislation to which he has referred. I do not wish to question him in any detail about that. Indeed, I am most anxious, as I am sure he is, to make further and speedy progress with the Bill. Perhaps I may ask him for his assurance that these rules will be open to public discussion before Clause 236 of the new Bill is brought into operation, activating those parts of the Bill to which the rules refer. I think it would be desirable that the secondary legislation is published, proved and argued about before the actual date which Clause 236 envisages for the coming into operation of the respective primary legislation. I take it I have the noble Lord's assurances as to that; it would seem to follow almost automatically.

While I am on my feet, perhaps I may say that I think I speak for most noble Lords who have sat most patiently here when I reiterate that we are anxious to proceed with the utmost expedition with the remainder of the amendments that are due for discussion today.

Lord Lucas of Chilworth

My Lords, I am happy to give the noble Lord, Lord Bruce the assurance he seeks with regard to that publication of rules.

On Question, Motion agreed to.