HL Deb 18 July 2000 vol 615 cc845-7

(" .—(1) Subsection (2) applies where a member of a body listed in subsection (3) is found liable in civil legal proceedings in respect of something which he did or omitted to do in the course of carrying out his duties as a member of the body.

(2) If—

  1. (a) the member of the body applies to a court for an order under this subsection, and
  2. (b) the court considers that the action or omission which gives rise to the member's liability was honest and reasonable,
the court may make an order extinguishing, reducing or varying the liability.

(3) The bodies referred to in subsection (1) are—

  1. (a) a further education corporation established by virtue of section 15,16 or 47 of the Further and Higher Education Act 1992, and
  2. (b) a body corporate established by virtue of section 116(4) or (5) of this Act.

(4) Where a member of a body listed in subsection (3) applies to a court for an order under this subsection, the court may make any order which—

  1. (a) relates to liability in civil legal proceedings which may come to be incurred by the member in respect of a specified course of action, and
  2. (b) is of a kind which the court could have made if the liability had already been incurred.

(5) In subsections (2)(a) and (4) "a court" means the High Court or a county court; but this subsection is subject to any order under section 1 of the Courts and Legal Services Act 1990 (allocation of business between High Court and county courts).")

Lord Bach

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 175 to 177. I shall speak first to Amendment No. 177. Amendment No. 177 inserts a new clause which meets the commitment we made at the Committee stage in this House to consider what provision we could make to protect the personal liability of individual FE governors. This clause will place governors of FE corporations on a similar footing to trustees of charities or directors of companies. The new clause allows a governor to apply to the courts to be relieved fully or partially from an actual or potential personal liability if the courts find that the governor has acted honestly and reasonably. However, cases where liability has arisen from criminal acts will be excluded, which is consistent with the treatment of trustees and company directors. I should like to thank noble Lords—in particular, the noble Lord, Lord Tope—for the interest they have taken in this issue. I hope that the provision meets with their satisfaction.

Amendment No. 176 inserts a new clause which will correct inadequate provisions in current legislation in the interests of protecting investments of public funds. Under Section 28 of the Further and Higher Education Act 1992 institutions may be designated by the Secretary of State to be part of the FE sector but, on closure, he has no powers to prevent land acquired or enhanced by public funds being lost to the trustees. Given the possibility of the creation of new designated institutions under the provisions of this Bill, we must make sure that there is provision for the recovery of the proceeds of sale of such land or its value where the use of the land is changed, including cases where the institution closes. The new clause achieves that by requiring that the trustees of such an institution inform the LSC or CETW if they dispose of or change the use of land acquired or enhanced in value using public funds and repay the proceeds or value as may be determined. If agreement cannot be reached by the council and the trustees, the Secretary of State or the National Assembly will determine the amount that must be repaid.

Amendment No. 175 addresses a minor drafting point. By inserting the word "property", we secure a formulation: that is, "property, rights and liability", which is consistent with the education Acts.

Moved, That the House do agree with the Commons in their Amendments Nos. 175 to 177.—(Lord Bach.)

On Question, Motion agreed to.

6 p.m.