Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government what assessment they have made of the impact that introducing legislation to reverse the effect of R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28 will have on the review into the opt-out collective actions regime.
Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)
As announced on 17 December 2025, the Government intends to implement recommendations made by the Civil Justice Council to mitigate the effects of the PACCAR judgment, alongside proportionate regulation of litigation funding to improve transparency and fairness for all.
The review of opt-out collective actions is focused on finding the right balance between preserving an important route to redress for those harmed by anti-competitive behaviour and ensuring that the burden on business is proportionate. Work on litigation funding is distinct from the review, but will complement it and is expected to support the smooth operating of the regime.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government whether they have made an assessment of the risks to inward investment and perceived cost of doing business in the UK of facilitating an increase in funder-backed collective actions.
Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)
Funders enable access to justice when litigation costs are high. This is often the case for group litigation, including opt-out collective actions relating to competition issues. These claims play an important role in the competition enforcement landscape, and safeguarding competitive markets is to the benefit of consumers, businesses, and the UK economy.
However, litigation risk for businesses should be proportionate. Opt-out collective actions are under review, and a consultation on potential improvements will be published in due course. The Government is also working to implement proportionate regulation of litigation funding to improve transparency and fairness.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government how many intellectual property licences the Department for Business and Trade holds under contracts or terms of reference for (1) grants, (2) pre-procurement or proof of concept work, and (3) procurement; how many of those have sub-licensing rights; how many of those have resulted in sub-licensing; and how many of those sub-licences are for patents, and for which countries.
Answered by Baroness Jones of Whitchurch
The requested information is not readily available in respect of grants, pre-procurement proofs of concept or contracts. Investigation work in order to collect relevant information would incur a disproportionate cost.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government, further to the Written Answers by Baroness Jones of Whitchurch on 10 March (HL5235), why the guidance was not developed to address matters relating to distributable profits given that, under part 23 of the Companies Act 2006, annual accounts are the relevant accounts for determining whether a distribution is lawful.
Answered by Baroness Jones of Whitchurch
The guidance referred to in HL5235 is the FRC's Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity risks). This guidance was developed to support companies in completing their 'going concern statement' and not to address matters relating to distributable profits. The Institute of Chartered Accountants England and Wales (ICAEW) currently prepares guidance on how companies should calculate their distributable reserves.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government, further to the Written Answers by Baroness Jones of Whitchurchon 10 March (HL5234 and HL5235), whether they have taken account of the fact that the House of Commons Business, Energy, and Industrial Strategy Committee's report The Future of Audit, published on 26 March 2019, concluded that international accounting standards were defective compared to the requirements of company law.
Answered by Baroness Jones of Whitchurch
The Government announced in the King's Speech its intention to publish a draft Audit Reform and Corporate Governance Bill that will transition the FRC to a new Audit, Reporting and Governance Authority and provide it with relevant powers. The Government will consider the recommendations of the report, including relating to the Government and FRC producing definitions and guidance on what constitutes distributable profits, as work progresses.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government, further to the Written Answer by Baroness Jones of Whitchurch on 10 March (HL5234), whether complying with accounting standards rather than the law was invoked by KPMG when the Insolvency Service sought £1.3 billion from KPMG in connection with its audits of Carillion plc and its subsidiary companies.
Answered by Baroness Jones of Whitchurch
The Official Receiver on behalf of Carillion Plc and another issued a negligence claim against KPMG, the company's auditors, in November 2021. The area of law on which the claim was based was negligence. The negligence action and compliance with accounting standards are closely connected and the defence to the action relates to both. The defence itself is held on the court file which can be inspected with the consent of the court.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government, further to the Written Answer by Baroness Jones of Whitchurch on 10 March (HL5234), whether they have considered whether the Financial Reporting Council guidance would have caused the threshold for applying the going concern basis of accounting in the cases of Carillion and its subsidiary companies to be regarded as high even where these were insolvent.
Answered by Baroness Jones of Whitchurch
Guidance issued by the Financial Reporting Council does not change any legal requirement. The issuance and/or application of this guidance would not therefore have caused a change in the going concern basis of accounting assessment.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government what assessment they have made of the discrepancy between the Financial Reporting Council's Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks), published on 25 February, and section 393 of the Companies Act 2006, where the former requires that "the financial statements give a true and fair view" while the latter addresses specific numbers being "a true and fair view of the assets, liabilities, financial position and profit or loss".
Answered by Baroness Jones of Whitchurch
The Financial Reporting Council (FPR) 'Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks)' (the guidance) is non-mandatory and non-statutory guidance issued by the FRC to support its public interest outcomes. The guidance was not developed to address matters relating to distributable profits.
Section 393 of the Companies Act 2006 is referenced in the guidance as one of the relevant requirements. Accounting standards set the threshold for departing from the going concern basis of accounting. As noted in paragraph 3.3 of the guidance, there are often realistic alternatives to liquidation or cessation of operations.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government why the Financial Reporting Council’s Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks), published on 25 February, does not mention that using the going concern basis of accounting is relevant under Part 23 of the Companies Act 2006 in considering whether or not a distribution is lawful.
Answered by Baroness Jones of Whitchurch
The Financial Reporting Council (FPR) 'Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks)' (the guidance) is non-mandatory and non-statutory guidance issued by the FRC to support its public interest outcomes. The guidance was not developed to address matters relating to distributable profits.
Section 393 of the Companies Act 2006 is referenced in the guidance as one of the relevant requirements. Accounting standards set the threshold for departing from the going concern basis of accounting. As noted in paragraph 3.3 of the guidance, there are often realistic alternatives to liquidation or cessation of operations.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government why the Financial Reporting Council’s Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks), published on 25 February, does not mention that section 836 of the Companies Act 2006 requires the numbers in the "relevant accounts" to establish whether or not a distribution is lawful.
Answered by Baroness Jones of Whitchurch
The Financial Reporting Council (FPR) 'Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks)' (the guidance) is non-mandatory and non-statutory guidance issued by the FRC to support its public interest outcomes. The guidance was not developed to address matters relating to distributable profits.
Section 393 of the Companies Act 2006 is referenced in the guidance as one of the relevant requirements. Accounting standards set the threshold for departing from the going concern basis of accounting. As noted in paragraph 3.3 of the guidance, there are often realistic alternatives to liquidation or cessation of operations.