§ 12.22 p.m.
§ Lord McIntosh of Haringey
rose to move, That the draft regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].
The noble Lord said: My Lords, with the leave of the House, I should like to speak also to the following four regulations set out on the Order Paper, although they will be formally moved separately.
The five sets of regulations before the House set out the detailed provisions behind a change to the law which was supported by both sides of the House when we debated Section 45 of the Criminal Justice and Police Act 2001, which received Royal Assent last year. The proposed regulations will apply to England, Wales and Scotland. They will not apply to Northern Ireland, which has its own companies legislation and registry.
At present, the usual residential address of all directors must be filed at Companies House and he made available for public inspection. Section 45 of the Criminal Justice and Police Act amends the Companies Act 1985by inserting new Sections 723B to F. The amendment allows directors who consider that they are at serious risk of violence or intimidation to apply to the Secretary of State for a confidentiality order. The granting of the order by the Secretary of State will enable directors to file a service address instead of their home address, for the public record.
The home address will still have to be provided to Companies House, but will be kept on a separate, secure register to which only competent authorities—that is, bodies such as the police and other public sector regulators that are listed in the orders—will have a right of access. The protection given to directors in Section 45 also extends to company secretaries and to permanent representatives of overseas companies who have to supply their home address for the public record. Section 45 comes into force on 2nd April 2002, the same date as is proposed for the five sets of regulations.
Having company directors' home addresses on the public record is important for reasons of accountability and transparency. It has been a requirement under company law since 1917, but it has been clear for some time that certain activists have tracked down the home addresses of directors of particular companies, such as Huntingdon Life Sciences, and subjected the directors to abuse. Such 371 actions are clearly unacceptable and it was against this background that Parliament agreed to Section 45 of the Criminal Justice and Police Act.
Following the Act receiving Royal Assent, the Government issued a consultative document last October. This sought views on draft regulations implementing the detailed provisions of the new regime. The Government have taken into account the views expressed by consultees in framing the revised regulations before the House today. Companies House has also needed to implement very substantial changes to its systems since it currently operates an entirely open register where all information filed is available to the general public. The setting up of a separate, secure register has therefore involved a major departure from this policy. In addition, it has been necessary to discuss and agree with the police their contribution, which will be vital, since in many cases only the police will be able to provide an assessment of the risk of violence or intimidation faced by directors.
I should like to turn to the five sets of regulations before the House. The principal regulations are the Companies (Particulars of Usual Residential Address) (Confidentiality Orders) Regulations. Part I of the regulations describes how an application for a confidentiality order may be made. Companies House has drawn up a form to assist applicants to provide information in sufficient detail to enable the Secretary of State for Trade and Industry to make a decision on whether to grant a confidentiality order. An application has to be accompanied by a fee of £100. The fee is calculated to recover the costs of Companies House in setting up and administering the system. In addition, as I have mentioned, in many cases the police will be asked to provide a risk assessment and the fee therefore includes a contribution to them in respect of the assistance they will be providing.
The regulations provide that ultimately it will be for the Secretary of State to determine whether a confidentiality order should be granted. However, unsuccessful applicants may appeal to the court against a decision on the grounds that it was unlawful, irrational or unreasonable, or has been made on the basis of a procedural impropriety or otherwise contravenes the rules of natural justice.
Part II of the regulations deals with service addresses and describes when the service address has to be notified to the company and the criteria for a service address to be valid. Part III covers the duration, renewal and revocation of a confidentiality order. An order will normally last for five years and may be renewed by application prior to its expiry. It may be revoked where false, misleading or inaccurate information has been provided in support of an application.
Part IV deals with access to the confidential record containing the beneficiary of a confidentiality order's home address together with disclosure provisions. Disclosure is generally prohibited except to a competent authority. Part V describes the form and 372 delivery of notices, amendment of enactments, offences and penalties for unauthorised disclosure, and the making of a false statement.
Schedule 1 lists the competent authorities, which consist mainly of bodies such as the police and certain other public sector regulators, while Schedule 2 contains the necessary amendments to the Companies Act 1985 in order to effect the measures described in the regulations.
More briefly, I turn to the other four sets of regulations. The Limited Liability Partnerships Act 2000 allows the Secretary of State to apply, by regulations, any law relating to companies to limited liability partnerships. The Limited Liability Partnerships (No. 2) Regulations apply Sections 723B to F of the Companies Act 1985 to limited liability partnerships with appropriate modifications. The Limited Liability Partnerships (Particulars of Usual Residential Address) (Confidentiality Orders) Regulations closely follow the principal regulations, thereby allowing members of limited liability partnerships, who also have to make available their home addresses to Companies House for public inspection, to apply for confidentiality orders in the same manner as directors of companies.
The other two sets of regulations are the Companies (Competent Authority) (Fees) Regulations and the Limited Liability Partnerships (Competent Authority) (Fees) Regulations. These regulations provide that Companies House may charge competent authorities a fee for accessing the home addresses of company directors and LLP members respectively. The regulations provide for a one-off registration and validation fee of £50 and an individual search fee of £4. Companies House will, of course, incur costs in providing the home addresses and, as a trading fund, it is required to recover those costs.
There is one final issue that I have to bring to the attention of the House. These measures do not extend to removing or expunging existing records at Companies House and cannot do so since there is no power in the primary legislation. In any case, information on companies, including the usual residential address, is kept in a variety of formats such as paper, microfiche, as an electronic image and in data format, and is kept not only by Companies House but also by many business information companies—such as one that I used to run—which buy them from Companies House for resale. It would be impracticable to expunge past records. The regulations provide that documents filed at Companies House for the public record after an individual has been granted a confidentiality order shall include a service address rather than the home address.
All five sets of regulations have been approved by the Joint Committee on Statutory Instruments and comply with the requirements of the European Convention on Human Rights. I commend the regulations to the House. I beg to move.
373 Moved, That the draft regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)
§ Baroness Miller of Hendon
My Lords, I shall speak briefly to the two regulations relating to the confidentiality of the private addresses of shareholders in limited companies and limited liability partnerships.
As the Minister explained, the need for this protection for shareholders and limited liability partners arises from the threats, intimidation and acts of terrorism—which is not too strong a word for such acts—committed by mindless and sometimes cowardly bullies against shareholders and the bankers of legitimate companies carrying out entirely lawful activities.
We saw only last week the example of an elderly lady who had inherited from her late husband shares in Huntingdon Life Sciences—a company which is particularly at the centre of the activities of these self-appointed people. They have daubed her house with graffiti and she has been subjected to threats of violence, which the police seem powerless to prevent.
Let us suppose that it was not anti-vivisectionists who were conducting this form of gangsterism but the anti-hunt lobby, some of whose supporters are not adverse to bouts of violence. Let us suppose it was the supporters of those who oppose Sunday trading—although I hasten to say that I accept that their campaign was entirely peaceful and proper. Let us suppose it was anti-abortionists trying to intimidate doctors and clinics, as has occurred in the United States of America, resulting in the murders of several doctors. It is a sad sign of the times that to protect companies carrying on a legitimate and lawful business it is necessary to protect the identity of their shareholders by negating the open register of company shareholders that has existed for the past 85 years. But that is a fact of life.
We support both regulations. We also support the two consequential regulations relating to the fees for accessing the registers by what the next two regulations call the "competent authorities".
Finally, we also approve of the Limited Liability Partnerships (No. 2) Regulations which, as the Minister explained, bring the recently introduced limited liability partnerships into line with ordinary limited companies.
§ Lord Roper
My Lords, we on these Benches feel that, although there are some issues in the regulations which could be questioned, overall they make a useful and necessary contribution, particularly for the reasons adduced by the noble Baroness, Lady Miller. We therefore support the passage of these regulations.
§ Lord McIntosh of Haringey
My Lords, I am grateful to both noble Lords for their support for the regulations. I can reassure the noble Baroness, Lady Miller, about shareholders. Unless it was a slip of the tongue and she meant to refer to directors, the present position is that shareholders are not required by company law to file their home addresses at Companies House. In the same way that these regulations provide 374 for directors, shareholders can give a service address, an accommodation address or the name and address of a nominee—for example, their solicitor or accountant. They can give the address of the company, if the company agrees. The only requirement is that they have to be able to receive shareholder communications. These regulations concern only directors who do not have that protection and who arecovered by companies and limited liability partnerships legislation.
On Question, Motion agreed to.