HL Deb 13 November 1989 vol 512 cc1149-50

423 Page 204, line 29, after 'have', insert 'adequate'.

424 Page 204, line 30, leave out 'are reasonably' and insert 'take such steps as may reasonably be expected of them to secure that they are'.

Lord Trefgarne

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 423 and 424. The amendments alter the test in the requirement that recognised supervisory bodies have rules and arrangements on meeting claims arising out of company audit work. As the Bill left your Lordships' House, the test entailed assessing whether the body's rules produce the result that company auditors will be reasonably able to meet claims if claims are made.

The amendments require an assessment of whether the rules and arrangements are designed to achieve the result that the company auditors take such steps as may reasonably be expected of them to secure that they are able to meet claims. The purpose is to reinforce the point that the test is not an absolute one. In considering it, the Secretary of State may have regard to the circumstances, such as the cost and availability of professional indemnity insurance, in deciding whether it is met.

Moved, That the House do agree with the Commons in the said amendments. —(Lord Trefgarne.)

On Question, Motion agreed to.