§ Read a third time.
§ Clause 5 [Amendments of section 25 of the Trustee Act 1925]:
§ The Minister of State, Cabinet Office (Lord Falconer of Thoroton) moved Amendment No. 1:
Leave out Clause 5 and insert the following new clause—
§ DELEGATION UNDER SECTION 25 OF THE TRUSTEE ACT 1925
§ (". — (1) For section 25 of the Trustee Act 1925 substitute—
§ Delegation of trustee's functions by power of attorney.
§ 25. — (1) Notwithstanding any rule of law or equity to the contrary, a trustee may, by power of attorney, delegate the execution or exercise of all or any of the trusts, powers and discretions vested in him as trustee either alone or jointly with any other person or persons.
§ (2) A delegation under this section—
- (a) commences as provided by the instrument creating the power or, if the instrument makes no provision as to the commencement of the delegation, with the date of the execution of the instrument by the donor; and
- (b) continues for a period of twelve months or any shorter period provided by the instrument creating the power.
§ (3) The persons who may be donees of a power of attorney under this section include a trust corporation.
§ (4) Before or within seven days after giving a power of attorney under this section the donor shall give written notice of it (specifying the date on which the power comes into operation and its duration, the donee of the power, the reason why the power is given and, 126 where some only are delegated, the trusts, powers and discretions delegated) to—
- (a) each person (other than himself), if any, who under any instrument creating the trust has power (whether alone or jointly) to appoint a new trustee; and
- (b) each of the other trustees, if any;
§ (5) A power of attorney given under this section by a single donor—
- (a) in the form set out in subsection (6) of this section; or
- (b) in a form to the like effect but expressed to be made under this subsection,
§ (6) The form referred to in subsection (5) of this section is as follows—
§
"THIS GENERAL TRUSTEE POWER OF ATTORNEY
is made on [date] by [name of one donor] of [address of donor] as trustee of [name or details of one trust].
I appoint [name of one donee] of [address of donee] to be my attorney [if desired, the date on which the delegation commences or the period for which it continues (or both)] in accordance with section 25(5) of the Trustee Act 1925.
§ [To be executed as a deed]".
§ (7) The donor of a power of attorney given under this section shall be liable for the acts or defaults of the donee in the same manner as if they were the acts or defaults of the donor.
§ (8) For the purpose of executing or exercising the trusts or powers delegated to him, the donee may exercise any of the powers conferred on the donor as trustee by statute or by the instrument creating the trust, including power, for the purpose of the transfer of any inscribed stock, himself to delegate to an attorney power to transfer but not including the power of delegation conferred by this section.
§ (9) The fact that it appears from any power of attorney given under this section, or from any evidence required for the purposes of any such power of attorney or otherwise, that in dealing with any stock the donee of the power is acting in the execution of a trust shall not be deemed for any purpose to affect any person in whose books the stock is inscribed or registered with any notice of the trust.
§ (10) This section applies to a personal representative, tenant for life and statutory owner as it applies to a trustee except that subsection (4) shall apply as if it required the notice there mentioned to be given—
- (a) in the case of a personal representative, to each of the other personal representatives, if any, except any executor who has renounced probate;
- (b) in the case of a tenant for life, to the trustees of the settlement and to each person, if any, who together with the person giving the notice constitutes the tenant for life; and
- (c) in the case of a statutory owner, to each of the persons, if any, who together with the person giving the notice constitute the statutory owner and, in the case of a statutory owner by virtue of section 23(1)(a) of the Settled Land Act 1925, to the trustees of the settlement. "
§ (2) Subsection (1) has effect in relation to powers of attorney created after the commencement of this Act.
§ (3) In section 34 (2)(b) of the Pensions Act 1995 (delegation by trustees of trustee scheme under section 25 of the Trustee Act 1925), for "during absence abroad" substitute "for period not exceeding twelve months". ").
§ The noble and learned Lord said: My Lords, I undertook at the Committee stage of the Bill to introduce a government amendment to meet what the noble and learned Lord, Lord Brightman, had sought to achieve by the addition of a Keeling Schedule, having explained, I hope to your Lordships' satisfaction, why it was that we preferred an alternative approach. Clause 5 in its amended form substitutes a new Section 25 of the Trustee Act 1925 for the present Section 25 in relation to powers of attorney granted after the Bill comes into force. In its present form, Section 25 allows the trustee to delegate by power of attorney, for a period of up to 12 months, the exercise of the trust's powers and discretions—that is, functions—vested in him or her as trustee.
§ This power to delegate is, however, subject to various safeguards intended to protect the interest of beneficiaries from excessive delegation. In brief, these are that the trustee may not delegate to a sole co-trustee, unless a trust corporation; must give notice of each appointment to specified persons; and remains liable for the acts and omissions of the attorney. The powers conferred by Section 25 may be excluded or restricted by the document, if any, creating the trust. That comes from Section 69(2) of the Trustee Act 1925.
§ I have spoken briefly to the noble and learned Lord, Lord Brightman, and I understand him to be satisfied with the effect of this amendment. I trust that on this occasion I have given him no cause to feel even slightly niggled. I think my undertaking was rather broader, and I have come back with an amendment before the Bill goes to the other place. I hope that he is satisfied. I beg to move.
§ Lord BrightmanMy Lords, I should like to thank the Minister for this amendment to Clause 5 of the Bill, which I wholly support. It is a great improvement on my own amendment which I tabled at Committee stage in the form of a Keeling Schedule. The method of the noble and learned Lord in dealing with Clause 5 is, quite honestly, superior to a Keeling Schedule. I am certain that all lawyers and non-lawyers concerned with the administration of trusts will be grateful to the Minister for simplifying the effect of the amendment.
§ Lord GoodhartMy Lords, I support the noble and learned Lord, Lord Brightman, in welcoming the amendment. It will improve what is already a useful Bill. Perhaps I may just point out a most serious defect 128 in the last line of the amendment, where the words "for period not exceeding twelve months" should surely read "for a period. "
§ Lord Falconer of ThorotonMy Lords, new Section 25(2)(b) in my draft says "continues for a period of twelve months". Is the noble Lord reading from a different part?
§ Lord GoodhartMy Lords, I am reading from subsection (3) of new Clause 5. It is on page: 3 of the Marshalled List, the last line of Amendment No. 1. It deals with Section 34 of the Pensions Act 1995.
§ Lord Falconer of ThorotonMy Lords, I have got it now. The noble Lord is right, it should read "for a period not exceeding twelve months".
§ On Question, amendment agreed to.
§ Schedule [Repeals]:
§ Lord Falconer of Thoroton moved Amendment No. 2:
§
Page 8, leave out lines 4 to 11 and insert—
("1971 c. 27. The Powers of Attorney Section 9. ") Act 1971.
§ The noble and learned Lord said: My Lords, I have spoken to the amendment. I beg to move.
§ On Question, amendment agreed to.
§ Lord Falconer of ThorotonMy Lords, I beg to move that this Bill do now pass. I hope that your Lordships agree that this is a worthwhile small Bill. As I said at Second Reading, it is one for which we must thank the Law Commission. Its thorough consultation and meticulous preparation generally make dealing with its Bills such a satisfactory process for your Lordships and for the Minister. I believe that the Bill leaves this House to begin its journey in another place in the polished form that the noble and learned Lord, Lord Brightman, hoped for at Committee stage.
§ Moved, That the Bill do now pass. —(Lord Falconer of Thoroton.)
§ Lord GoodhartMy Lords, I now make an intervention slightly more serious than my previous one. I welcome this minor but useful Bill. In doing so, I wonder whether the Government will be prepared to look again at the procedure for dealing with Bills of this kind. I understand that there are at least 20 Law Commission Bills waiting in the queue. A fast-track procedure for uncontroversial Bills could cut the backlog for the Law Commission. Furthermore, a fast-track procedure could be used for other purposes—such as the deregulation and pruning of redundant legislation and minor amendments to current legislation—thereby reducing excessive use of Henry VIII clauses. The Government have just published a discussion paper on the deregulation process. While 129 these are procedural issues which are ultimately a matter for your Lordships' House, I hope that the Government will be prepared to give a lead on this one.
§ Lord Falconer of ThorotonMy Lords, I note what the noble Lord said. I particularly note what he said with reference to the deregulation consultation paper. We should take note of what he said and see whether there are means by which proposals could be made in relation to the sort of process he has in mind. I can give the noble Lord no guarantees, but I make it quite clear that I think it is worth while thinking about how one can improve the process.
§ On Question, Bill passed, and sent to the Commons.