COMMONS AMENDMENT (Hansard, 21 October 2004)

Lord Sainsbury
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7. This is the amendment to the Bill's Long Title, to reflect the inclusion in the Bill of the two new clauses on indemnification of directors, which we have already discussed. The Long Title had to be amended because the insertion of these new clauses in another place extended the scope of the Bill beyond the existing Title.

§ Lord Hodgson of Astley Abbotts
My Lords, I thank the Minister for his explanation. I have one quick question regarding the amendment. The Minister said in the other place that, in line with the … company law review, the new section does not extend to liabilities of officers other than directors".—[Official Report, Commons Standing Committee A, 14/9/04; col. 9.] The Minister repeated that when he introduced new Clauses 1 and 2 a few minutes ago.
If, as the Minister said, the only officers to which this clause applies are directors, why does the Title of the Bill refer to, liabilities incurred by a company's officers", and not liabilities incurred by a company's directors? I am sure that the noble Lord will have a quick and simple answer to that.
I notice that while the Long Title of the Bill has been amended to incorporate the Government's extra clauses concerning directors' liability, the Bill's Short Title of course has been left unamended. No doubt, it has been left unchanged to hide the embarrassment at the Christmas tree that has been created. Properly, of course, the Bill should now be renamed, the "Companies (Audit, Officers' Liability, Investigations and Community Enterprise) Bill". Of course, that Title would serve only to underline the inchoate nature of the provisions of the Bill as a hole.

Lord Sainsbury
My Lords, I think that the question raised by the noble Lord, Lord Hodgson, concerns the directors and whether it is therefore right to say that provision, may be made in respect of certain liabilities incurred by a company's officers". The reason for that is that Clause 310 has been amended to remove other officers apart from directors and auditors. So it is a rather technical point, hut that is the explanation.

§ Lord Hodgson of Astley Abbotts
My Lords, before we leave this point, I thought that the Minister and his colleague in the other place said that this made no difference to any company's officers other than directors. The only people who are affected by the proposed new clauses are directors. The officers remain in the position that they were previously. So why do we have the word "officers" in the Long Title when we actually mean "directors"? As I understand it, those are the only people to whom the new provisions apply. The officers, other than directors, are quite unchanged. Therefore, why are we saying "officers" when we do not mean officers? What we actually mean is directors.

§ Lord Sainsbury of Turville
My Lords, whether you say "directors" to remove officers or "officers" to remove directors is a somewhat technical distinction. 977 It is quite clear and is set out in the Title. Given that, I do not think that there will be any problem in understanding what this means.

§ Lord Hodgson of Astley Abbots
My Lords, I am sorry to come back on this again. As the Minister says, this is a small point. However, clarity is important. If we use the word "officers", someone looking at the Long Title will believe that it is concerned with officers. However, it is not concerned with officers in relation to this point; it is concerned only with directors. Therefore in the interests of clarity, and while this may be only a small change, for those consulting the Act in years to come it would be clearer if it referred to liabilities incurred by a company's directors because it does not affect the position of liabilities incurred by a company's officers. The Minister has told us that.

§ Lord Sainsbury of Turville
My Lords, given the noble Lord's insistence on obscurity rather than clarity, let me clarify the reason. Officers other than directors are now wholly removed from the scope of Section 310. That is why that is referred to in the Long Title.