COMMONS AMENDMENTS (Hansard, 23 October 1985)

HL Deb 23 October 1985 vol 467 cc1103-14 1103

§ 1 Clause 1, page 1, line 9, leave out ', and knows or has reasonable cause to suspect that he is.'

§ 2 Page 1, line 18, at end insert 'or as supervisor of a composition or scheme approved by it under Chapter IA of Part II of this Act'.

§ 3 Page 2, line 4, leave out 'in Scotland'.

§ 4 Page 2, line 6, after 'under' insert 'a deed which is'.

§ 5 Page 2, line 15, leave out from beginning to ("to") in line 17 and insert 'References in this section to an individual include, except in so far as the context otherwise requires, references to a partnership and'.

§ 6 Clause 2, page 2, line 32, leave out from beginning to end of line 7 on page 3 and insert— '(2) A person is not qualified to act as an insolvency practitioner at any time unless, at that time—

(a) he is authorised to act as an insolvency practitioner by virtue of section (Authorisation of members of recognised professional bodies) below, or
(b) he holds an authorisation granted under section (Grant, refusal and withdrawal of authorisation) below.

1104 (3) A person is not qualified to act as an insolvency practitioner in relation to another person at any time unless—

(a) there is in force at that time security or, in Scotland, caution for the proper performance of his functions; and
(b) that security or caution meets the prescribed requirements with respect to his so acting in relation to that other person.

(4) A person is not qualified to act as an insolvency practitioner at any time if, at that time—

(a) he has been adjudged bankrupt or sequestration of his estate has been awarded and (in either case) he has not been discharged;'.

§ 7 Page 3, line 10, at end insert 'or

(c) he is a patient within the meaning of Part VII of the Mental Health Act 1983 or section 125(1) of the Mental Health (Scotland) Act 1984'.

§ Lord Lucas of Chilworth
My Lords, with the leave of the House, I beg to move that this House do agree with the Commons in their Amendments Nos. 1 to 7 en bloc.
When the Bill left this House the system for regulating insolvency practitioners was an entirely statutory one. The task of licensing those who were fit and proper and had sufficient training and experience to act as insolvency practitioners fell upon the Secretary of State, who had power to delegate his functions to bodies chosen by him. The intention was that professional associations would exercise the Secretary of State's statutory powers in relation to their members as his delegate.
Very strong representations were made to the Government by the accounting and legal professional bodies that delegation on totally defined terms would restrict the ability of bodies with a proven record of establishing and improving standards of expertise and conduct from continuing to raise such standards in relation to insolvency. Such bodies, it was submitted, should be permitted to undertake the whole procedure on a self-regulatory basis; that is to say, by operating within their own rules, which may be amended where appropriate, following negotiations with the Secretary of State. The Government accepted the force of these contentions and introduced on Report in another place the new clauses and related amendments that are before your Lordships now. In broad terms, the vast majority of practitioners will now be licensed and disciplined by the professional body of which they are members according to their separate rules.

§ 4 p.m.

§ Amendment No. 8—that is in Clause 3 of the print of the Bill at 31st July—provides the machinery for the Secretary of State to recognise bodies, which fulfil the requirements of the clause, as entitled to authorise their members to act as insolvency practitioners for the purposes of Clause 2 as amended. The bodies likely to fall under this heading are those whose members qualify for membership after a supervised period of relevant training and the passing of a written examination at good standard.

§ The bodies will also be issuing practising certificates and controlling their members on the basis of strong ethical and business codes, and furthermore they should be able to demonstrate an involvement in the development of insolvency procedures and practice. Part I of the Bill still retains the procedure for the 1105 Secretary of State to license insolvency practitioners directly himself and to appoint other bodies to operate the direct statutory licensing system.

§ There are existing practitioners in the field who are not members of professional, legal or accounting bodies but who are entirely fit and proper and sufficiently experienced to act as insolvency practitioners under the new system. The direct licensing procedure will enable these to become authorised and provide a continuing means of entry into the field of insolvency for those who meet the requirements but are, for some reason, not members of professional bodies.

§ While the recognised professional bodies will rely on their existing examination procedures augmented, as they will be, with a measure of experience to produce licensed practitioners, those not being members of recognised bodies who apply to the Secretary of State for a licence will be required to show a long and considerable experience of insolvency procedures, including work at a senior management level. In the initial arrangements full weight will be given to those applicants who have held a substantial number of appointments in their own name as a liquidator, trustee, or a receiver.

§ It might be helpful to your Lordships if I explain briefly the new licensing procedure. In doing so, I should perhaps remind your Lordships that with this group of amendments, Nos. 1 to 7, I am speaking also to Amendments Nos. 8, 9, 10, 11, 12, 13, 13A, 13B, 13C, 13D, 14 and 14A, 15, 16, 17, 18, 19, 389, 410, 414, 414Aand 540.

§ 8 After Clause 2, insert the following new clause: 'Authorisation of members of recognised professional bodies. .—(1) A member of a recognised professional body is authorised to act as an insolvency practitioner if he is permitted so to act by or under the rules of that body. (2) The Secretary of State may by order declare a body which appears to him to fall within subsection (3) below to be a recognised professional body for the purposes of this section; and any such order may be revoked by a further order it it appears to the Secretary of State that the body no longer falls within that subsection. (3) This subsection applies to any body which regulates the practice of a profession and maintains and enforces rules for securing that such of its members as are permitted by or under the rules to act as insolvency practitioners—

(a) are fit and proper persons so to act; and
(b) meet acceptable requirements as to education and practical training and experience.

(4) Any order under subsection (2) above shall have effect from such date as is specified in the order, and any such order revoking a previous order may make provision whereby members of the body in question continue to be treated as authorised to act as insolvency practitioners for a specified period after the revocation takes effect. (5) In this section references to members of a recognised professional body are references to persons who, whether members of that body or not, are subject to its rules in the practice of the profession in question'.

§ 9 After Clause 2, insert the following new clause: 'Applications for authorisation. —(1) An application for authorisation under section (Grant, refusal and withdrawal of authorisation) below—

(a) shall be made in such manner as the relevant authority may direct;
(b) shall contain or be accompanied by such information as that authority may reasonably require for the purpose of determining the application; and
(c) shall be accompanied by the prescribed fee;

and the relevant authority may direct that notice of the making of the application shall be published in such manner as may be specified in the direction. (2) At any time after receiving the application and before determining it the relevant authority mas require the applicant to furnish additional information (3) Directions and requirements given or imposed under subsection (1) or (2) above may differ as between different applications. (4) Any information to be furnished to the relevant authority under this section shall, if it so requires, be in such form or verified in such manner as it mav specify. (5) An application for authorisation under section (Grant, refusal and withdrawal of authorisatu m) below may be withdrawn before it is granted or refused. (6) Any sums received under this section by a relevant authority other than the Secretary of State may be retained by that authority; and any sums received under this section by the Secretary of State shall be paid into the Consolidated Fund'.

§ 10 After Clause 2, insert the following new clause: 'Grant refusal and withdrawal of authorisation .—(1) The relevant authority may, on an application duly made in accordance with section (Applications for authorisation) above and after being furnished with all such information as it may require under that section, grant or refuse the application. (2) The relevant authority shall grant the application if it appears to it from the information furnished by the applicant and having regard to such other information, if any, as it may have—

(a) that the applicant is a fit and proper person to act as an insolvency practitioner; and
(b) that the applicant meets the prescribed requirements with respect to education and practical training and experience.

(3) An authorisation shall, unless previously withdrawn, continue in force for such period not exceeding the prescribed maximum as may be specified in the authorisation. (4) An authorisation granted under this section may be withdrawn by the relevant authority if it appears to it—

(a) that the holder of the authorisation is no longer a fit and proper person to act as an insolvency practitioner; or
(b) without prejudice to paragraph (a) above, that the holder of the authorisation has failed to comply with any provision of this Part or of any regulations made under it or, in purported compliance with any such provision, has furnished the relevant authority with false, inaccurate or misleading information.

(5) An authorisation granted under this Section may be withdrawn by the relevant authority at the request or with the consent of the holder of the authorisation.'

§ 11 After Clause 2, insert the following new clause:

§ 'Notices

§ .—(1) Where the relevant authority grants an authorisation, it shall give written notice of that fact to the applicant, specifying the date on which the authorisation takes effect. (2) Where the relevant authority proposes to refuse an application or to withdraw an authorisation under section [Grant, refusal and withdrawal of authorisation] (4) above, it shall give the applicant or holder of the authorisation written notice of its intention to do so, setting out particulars of the grounds on which it proposes to act. (3) In the case of a proposed withdrawal the notice under subsection (2) above shall state the date on which it is proposed that the withdrawal should take effect. (4) A notice under subsection (2) above shall give particulars of the rights exercisable under sections [Right to make representations] and [Reference to Tribunal] below by a person on whom the notice is served.'

1107

§ 12 After Clause 2, insert the following new clause: 'Right to make representations .—(1) A person on whom a notice is served under section [Notices] (2) above may within fourteen days after the date of service make written representations to the relevant authority. (2) The relevant authority shall have regard to any representations made in accordance with this section in determining whether to refuse the application or withdraw the authorisation, as the case may be.'

§ 13 After Clause 2, insert the following new clause: Reference to Tribunal. '.—(1) A person on whom a notice is served under section [Notices] (2) above may within twenty-eight days after the date of service give written notice to the relevant authority requiring the case to be referred to the Tribunal referred to in subsection (6) below. (2) Where a requirement is made in accordance with subsection (1) above, then, unless the relevant authority within the period there mentioned—

(a) decides to grant the application or, as the case may be, decides not to withdraw the authorisation; and
(b) gives written notice of that fact to the person by whom the requirement was made,

it shall refer the case to the Tribunal. (3) On a reference under this section the Tribunal shall—

(a) investigate the case; and
(b) make a report to the relevant authority stating what would in their opinion be the appropriate decision in the matter and the reasons for that opinion;

and it shall be the duty of the relevant authority to decide the matter accordingly. (4) The Tribunal shall send a copy of the report to the applicant or, as the case may be, the holder of the authorisation; and the relevant authority shall serve him with a written notice of the decision made by it in accordance with the report. (5) The relevant authority may, if it thinks fit, publish the report of the Tribunal. (6) For the purposes of this section there shall be a tribunal—

(a) which shall be known as the Insolvency Practitioners Tribunal (in this Part referred to as "the Tribunal"); and
(b) in relation to which the provisions of Schedule 1 to this Act shall apply.'

§ 13A Line 2, leave out from beginning to ("give") in line 4 and insert— (".—(1) Where a person is served with a notice under section (Notices) (2) above, he may—

(a) at any time within twenty-eight days after the date of service of the notice; or
(b) at any time after the making by him of any representations in accordance with section (Right to make representations) above and before the end of the period of twenty-eight days after the date of the service on him of a notice by the relevant authority that the authority does not propose to alter its decision in consequence of the representations,").

§ 13B Line 8, leave out from ("authority") to ("to") in line 10 and insert— ("(a) has decided or decides").

§ 13C Line 11, leave out ("decides").

§ 13D Line 12, leave out ("gives written notice of that fact") and insert ("within seven days after the date of the making of the requirement, gives written notice of that decision").

§ 14 After Clause 2, insert the following new clause: Refusal or withdrawal without reference to Tribunal. '. Where no requirement is made under section [Reference to Tribunal] (1) above in respect of a proposed refusal or withdrawal, the relevant authority may, at the expiration of the period within which such a requirement can be made, give written notice of the refusal or 1108 withdrawal to the person concerned in accordance with the proposal in the notice given by it under section [Notices] (2) above.'

§ 14A Line 2, leave out from beginning to ("give") in line 5 and insert— ("Where in the case of any proposed refusal or withdrawal of an authorisation either—

(a) the period mentioned in paragraph (a) of subsection (1) of section (Reference to Tribunal) above has expired without the making of any requirement under that subsection or of any representations under section (Right to make representations) above; or
(b) the relevant authority has given a notice such as is mentioned in paragraph (b) of that subsection and the period so mentioned has expired without the making of any such requirement,

§ the relevant authority may").

§ 15 Leave out Clause 3.

§ 16 Leave out Clause 4.

§ 17 Leave out Clause 5.

§ 18 Clause 6, page 4, line 25, leave out from 'for' to 'shall' in line 29 and insert 'the purpose of giving effect to this Part.

§ (1A) Without prejudice to the generality of subsection (1) above or to any provision of this Part by virtue of which regulations may be made with respect to any matter, regulations under this section may contain—

(a) provision as to the matters to be taken into account in determining whether a person is a fit and proper person to act as an insolvency practitioner;
(b) provision prohibiting a person from acting as an insolvency practitioner in prescribed cases, being cases in which a conflict of interest will or may arise;
(c) provision imposing requirements with respect to—

(i) the preparation and keeping by a person who acts as an insolvency practitioner of prescribed books, accounts and other records; and
(ii) the production of those books, accounts and records to prescribed persons;

(d) provision conferring power on prescribed persons—

(i) to require any person who acts or has acted as an insolvency practitioner to answer any inquiry in relation to a case in which he is so acting or has so acted; and
(ii) to apply to a court to examine such a person or any other person on oath concerning such a case;

(e) provision making non-compliance with any of the regulations a criminal offence; and
(f) such incidental, supplemental and transitional provisions as may appear to the Secretary of State necessary or expedient.

§ (2) Any power conferred by this Part to make regulations, rules or orders'.

§ 19 After Clause 6, insert the following new clause:

§ Interpretation of Part I

§ '. In this Part—

§ "prescribed" means prescribed by regulations made by the Secretary of State;

§ "the relevant authority" means—

(a) in relation to a case of any description specified in directions given by the Secretary of State, the body or person so specified in relation to cases of that description; and
(b) in relation to a case not falling within paragraph (a) above, the Secretary of State;

§ "the Tribunal" means the Insolvency Practitioners Tribunal.'

§ 389 After Clause 194, insert the following new clause: Amendment of Restrictive Trade Practices Act 1976. (".—(1) No restriction in respect of any of the matters specified in subsection (2) below shall, after the coming into force of this section, be regarded as a restriction by virtue of which the Restrictive Trade Practices Act 1976 applies to any agreement (whenever made). (2) The said matters are—

(a) the charges to be made, quoted or paid for insolvency services supplied, offered or obtained;
(b) the terms of conditions on or subject to which insolvency services are to be supplied or obtained;
(c) the extent (if any) to which, or the scale (if any) on which, insolvency services are to be made available, supplied or obtained;
(d) the form or manner in which insolvency services are to be made available, supplied or obtained;
(e) ihe persons or classes of persons for whom or from whom, or the areas or places in or from which, insolvency services are to be made available or supplied or are to be obtained.

§ (3) In this section "insolvency services" means the services of persons acting as insolvency practitioners or carrying out under the law of Northern Ireland functions corresponding to those mentioned in section 1(2) or (3) above, in their capacity as such; and expressions which are also used in the said Act of 1976 have the same meanings as in that Act.

§ (4) In Schedule 1 to the said Act of 1976 (services excluded from designated services), after paragraph 9 there shall be inserted the following paragraph—

§ "9A. Insolvency services within the meaning of section (Amendment of Restrictive Trade Practices Act 1976) of the Insolvency Act 1985.".")

§ 410 Clause 211, page 165, line 26, at end insert— '(ba) section [Amendment of Restrictive Trade Practices Act 1976]; (bb) section 196;'

§ 414 Schedule 1, page 167, line 30, at end insert— Supervision by Council on Tribunals

§ 5.—(1) The Tribunals and Inquiries Act 1971 shall be amended as follows.

§ (2) In section 8(2) (concurrence required for removal of members of certain tribunals), after "6A" there shall be inserted "10A".

§ (3) In section 13(1) (appeals from certain tribunals), after "10" there shall be inserted "10A".

§ (4) In Schedule 1 (tribunals under general supervision of Council), after paragraph 10 there shall be inserted the following paragraph—

"Insolvency Practioners. 10A.

The Insolvency Practitioners Tribunal established under section (Reference to Tribunal) of the Insolvency Act 1985."

§ Parliamentary disqualification

§ 6.—(1) In Part III of Schedule 1 to the House of Commons Disqualification Act 1975 (disqualifying offices), there shall be inserted at the appropriate place the following entry—

§ "Any member of the Insolvency Practitioners Tribunal in receipt of remuneration."

§ (2) A corresponding amendment shall be made in Part III of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975.'.

§ [Consequential on Commons Amendment No. 414]

§ 414A Page 165, line 26, at end insert— ("(bc) paragraph 6 of Schedule 1;")

§ 540 Schedule 9, page 202, line 9, column 3, at beginning insert 'In section 302(1), the words "or liquidator".'

§ Reverting to the new licensing system, Commons Amendments Nos. 9 to 14 inclusive introduce further new clauses which provide in more detail than the clauses they replace for the procedure to be followed when an application for a licence is made to a relevant authority, who may be the Secretary of State, or some other body appointed by him who will operate the same licensing requirements. These clauses in particular provide the relevant authority with greater powers to require all the information that may be necessary in order for it to be satisfied that an applicant is fit and proper and suitably experienced for appointment.

1110

§ Commons Amendment No. 12 increases the rights of an applicant who is refused a licence or whose existing licence is about to be revoked. On being served with such a notice of such intention by the Secretary of State, he will have two options which he may consider as alternatives. He may first attempt to persuade the Secretary of State not to refuse his application or revoke his licence, by making written representation within 14 days. Alternatively he may ask that the matter be referred to the Insolvency Practitioners Tribunal for consideration, and Commons Amendment No. 13 increased from 14 days to 28 days the period in which the applicant might opt for this course. However, he may first make written representations and, if unsuccessful, he may then ask for the case to be referred to the tribunal.

§ It would seem appropriate to speak now to our own Lords' amendments to the Commons' Amendments, 13 A and 13D and 14A. These amendments anse from an undertaking given in another place and they provide that, where written representations are made by a person against an impending decision by the Secretary of State, the 28-day period in which referral to the tribunal must be requested shall not begin to run until he, the applicant, becomes aware that his written representations have been rejected. I am sure that noble Lords will agree that this is a desirable improvement.

§ The tribunal's role has also been more clearly defined in the new clause, and the obligation of the relevant authority to follow the tribunal's decision. Noble Lords may recall that in Schedule 1 we provided for the Secretary of State to set up the tribunal, and for the Secretary of State and the Lord Chancellor to provide panels of persons from whom the tribunal members will be drawn.

§ Commons Amendment No. 414 places the Insolvency Practitioners Tribunal under the supervision of the Council on Tribunals The consequential Amendment No. 414A ensures that members of the Insolvency Practitioners Tribunal are subject to equivalent parliamentary disqualification in Northern Ireland as in Great Britain.

§ Commons Amendment No. 18 extends the general rule-making powers previously provided in relation to the licensing of practitioners. In particular it enables rules to be made prohibiting conflicts of interest, replacing Clause 2(3) of the Bill as it left this House. Your Lordships will recall that that particular matter excited a good deal of criticism through its complexity.

§ Commons Amendment No 389 disapplies the Restrictive Trade Practices Act to agreements and arrangements involving the supply of insolvency services. This will ensure that the services of insolvency practitioners will be treated in the same way as legal and auditing and accounting services for the purpose of the Restrictive Trade Practices Act. It will enable the rules of the professional body requirement to implement the licensing and disciplinary arrangements to be exempt.

§ I should emphasise that the bodies will still be subject to the fair trading and competition Acts which the Government consider to be the more appropriate legislation for dealing with the competition implications of the rules of an insolvency practitioners' 1111 professional body. In effect, this will mean that the recognised bodies, by the use of their licensing procedures, will not be able to create a monopoly or operate a cartel.

§ I assure your Lordships that the remaining amendments in the group to which I have been speaking relating, as they do, to Part I of the Bill, where they do not delete clauses which are now replaced are technical and consequential, or in fact minor drafting improvements. Accordingly, I commend these amendments to the House.

§ Moved, That this House do agree with the Commons in their Amendments Nos. 1 to 7.—(Lord Lucas of Chilworth.)

Lord Bruce of Donington
My Lords, the House will be grateful to the noble Lord for the clear explanation he has given to this group of amendments. May I at this stage refer to three matters which underline not only this group of clauses but in fact all groups of clauses. In fact, I thought that the noble Lord was about to reply to the questions I addressed to him earlier in these proceedings.
I asked the noble Lord by what date the Government expected the Bill to be in full operation; secondly, I asked whether an amending Bill was going to be introduced and, if so, when; then I asked whether it was intended to bring into operation those parts of the Bill dealing with the appointment of administrators, and, if so, to what extent. As I raised these three questions, within the profession curiosity will have been aroused by the fact that the questions were asked, so I think it only proper that the noble Lord should be offered the opportunity of replying to them now to clear up any misunderstandings that there still may be in the public mind in relation to these three matters.
In relation to the amendments that have been discussed by the noble Lord, and outside the amendments which I hope to move presently, I have one question to ask which he undoubtedly will be able to answer fairly quickly. It is in regard to the relevant authority. It would be useful at this stage if the noble Lord were to notify the House what relevant bodies by name he proposes to establish for the purpose of implementing this part of the Bill. For example, one would expect the Law Society to be one of the relevant bodies and one might hope that the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants in Scotland would be other relevant bodies. Is it possible for the House to be given a list of these?

The Earl of Selkirk
My Lords, as I understand it, a new profession is being set up. One wonders whether Clause 1 is necessary at all. I am not aware whether, if anyone tries to act as a barrister when he is not qualified, he is liable to summary conviction and a period of imprisonment. I should have thought that if this profession were being properly set up these words would be totally unnecessary.
As the Bill stands, it is the responsibility of the person to say that he is qualified. If one takes out these words in Clause 1 one comes to the other party, that is, the company. It seems to me that it falls to the company to make quite certain that the liquidation or 1112 insolvency is carried out by a qualified person. I should like to have confirmation that this applies to any liquidation regardless of whether there is an element of insolvency. I should like confirmation that that is true. Why should an insolvency practitioner be engaged in a company dissolution or a company reorganisation which has nothing to do with insolvency? I do not understand that.
What I think is desirable is to know how one is to decide whether a practitioner is qualified as an insolvency practitioner. He may start on the work and when, it is going may be found to be incompetent. He may be sent to prison for three years, but that does not help the company. The company is put to the further expense and difficulty of finding someone else to do the work. Much of the organisation has already been done by a chartered accountant of some kind, but he will have to do it again with another practitioner. Is that the purpose of this clause? The clause surely requires complete redrafting to make it more sensible. I should be grateful for the noble Lord's confirmation that I have interpreted the clause correctly.

§ Lord Meston
My Lords, I should like to support this group of amendments. The integrity and competence of insolvency practitioners is absolutely vital. It is important, however, that we ensure that insolvency practitioners, or the phrase "insolvency practitoner", is not just an impressive label for an unimpressive package, because without competence at ground level the whole edifice of this legislation falls to the ground.
The insolvency practitioners must be competent, but so also must those to whom they delegate. That is vital. I mention an example from some recent litigation with which I was involved, in which a receiver was held to be negligent because he had sold the assets of the company at about half their true value. He had had very little to do with the winding up or the receivership. He had simply delegated to unqualified people who would have found if difficult to get a penny in the pound. Indeed, they would have found it difficult to sell a pound for a penny. It is therefore critically important that not only are the so-called insolvency practitioners competent but that their employees are as well.

§ 4.15 p.m.

§ Lord Lucas of Chilworth
My Lords, I am grateful to noble Lords for their contributions to this first series of amendments. I wish to answer the three specific points that the noble Lord, Lord Bruce of Donington, put to me in his opening remarks. At the risk of upsetting the order of our proceedings, I should perhaps do that now. He asked me when we were anticipating bringing into effect this Bill when enacted. The greater part of the Bill is designed to be brought into effect at the same time, but some of the provisions are free-standing such as those related to the disqualification of directors and the attachment of personal liability for wrongful trading. Others such as the provisions for licensing of insolvency practitioners will need to be brought into force in advance of the main procedural provisions to ensure that they are in existence at the time that the practitioners, who are then duly authorised, are likely to undertake insolvency work.
1113 We have not made an announcement, nor has a final decision been taken, on the target date for the various commencement orders. One factor to be taken into account is the preparation of the new and revised insolvency rules. I suspect that we shall return to those later. That is necessary to assist the smooth running of the procedures contained in the Bill.
Here I come to the point recently raised by the noble Lord opposite in regard to the recognised bodies. The noble Lord used the phrase "relevant authority". We have referred throughout to the "recognised bodies". We have no list, because were I to give a list it would imply exclusion of others who may properly make claim to be a recognised body to grant licences to practitioners. Therefore it would be wrong to do that. All those bodies now recognised in the accountancy profession—I believe there are five separate bodies there—together with the Law Society and the Association of Insolvency Practitioners, as well as associated bodies, have already been invited to consultations to establish the common criteria. If I gave a list, that would then exclude the individuals who will make application on their own account without the authority of a recognised body behind them. That it why I am reluctant to give a definitive list.
The noble Lord also asked me whether we are planning to introduce an amending Bill in the next Session. I must say now that we have no intention of introducing amending insolvency legislation in the forthcoming Session. As my noble friend the Leader of the House has said, the Bill before us has greatly benefited from the contributions offered by your Lordships, by practitioners and others with whom we have consulted, not least with regard to the administrative procedure which we aim to maintain.

§ Lord Mishcon
My Lords, perhaps the noble Lord will forgive me for intervening before he passes to another point. He made the specific statement that there would be no amending Bill during the next Session. Can he make it clear that it is not the Government's intention to have an amending Bill before this Bill comes into operation?

§ Lord Lucas of Chilworth
My Lords, it is certainly not the intention of the Government to have an amending Bill before this Bill, when hopefully it becomes an Act, comes into operation.

§ Lord Mishcon
My Lords, thank you.

§ Lord Lucas of Chilworth
My Lords, my noble friend Lord Selkirk asked a number of questions with regard to the authorised insolvency practitioner, whether or not he is acting in a liquidation. The purpose of requiring that in all such companies receiving the services of a liquidator he shall be a licensed liquidator is precisely that which the noble Lord, Lord Meston, set out in his remarks. One is not here concerned with, as it were, the competence or incompetence but with the regulation of someone who sets out to practise as an insolvency practitioner, whether he be an accountant, a lawyer or some other kind of person. Those persons will have to 1114 demonstrate, through the authorising bodies or directly to the Secretary of State, that they are fit and proper, and have relevant experience and practice to undertake the work.
By this means we hope to prevent the practice to which our attention has been drawn, where people with no experience and perhaps lacking suitable ethics have involved themselves in liquidations, perhaps to the benefit of the directors of companies or other parties, without taking proper regard for the position of the creditors.
No Act of Parliament can provide against the incompetence of an individual, even if he be licensed. However, the body which has authorised the licence would obviously take into account such elements of incompetence, as would the Secretary of State in the event of his being the sole licensing authority, and this would give rise to consideration of a revocation of such a licence.

The Earl of Selkirk
My Lords, perhaps I may ask my noble friend this. The point I am really making is why should a licensed insolvency practitioner deal with a case which involves no question whatever of insolvence? That is what I cannot quite understand.

§ Lord Lucas of Chilworth
My Lords, because at that stage there may not be a question of insolvency and only a licensed practitioner should determine whether or not the company is insolvent. I feel sure that my noble friend will agree that a number of companies have in fact traded while insolvent, or have ceased trading and been insolvent. It is for the practitioner to determine properly and professionally the circumstances of the company.

§ On Question, Motion agreed to.