Corporate Insolvency and Governance Bill

Lord Bourne of Aberystwyth Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, I thank my noble friend the Minister for very clearly and fairly setting out the Bill’s scope. It is a mixture of scheduled insolvency reform, which has been waiting for some time, as well as some urgent mitigation measures relating to the present crisis. Like other noble Lords who participated in the debate, I recognise that there is a much wider issue in looking at the political economy questions that the country will face as we come out of the crisis, but I will confine myself to the Bill we have at the moment.

I will first say something about the moratorium provisions, which, as I said, were very much on the stocks anyway and have been brought forward. This is in the vanguard of the first significant reform of insolvency law since those that enacted the Cork committee recommendations in the 1980s. I welcome them, but I have two significant concerns. The first relates to the seemingly open-ended nature of repeated moratoria, or at least an extension of the single moratorium, into the future ad infinitum. I would welcome the Minister’s reassurance that that is not envisaged and on how it can be prevented.

My second significant concern has been mentioned by others, such as my noble friends Lady McIntosh of Pickering and Lord Hunt of Wirral, and relates to the role of the monitor. We need to ensure that the monitor, although an insolvency practitioner as required under the Bill, is independent of the company. I would welcome the Minister’s reassurance that that will be the case.

I turn briefly to the wrongful trading provisions. I agree very much with the comments of the noble and learned Lord, Lord Hope. The Minister spoke of this as a suspension of wrongful trading. As drafted, it is not; it is a mitigation of wrongful trading because it allows for an assumption of the directors acting in relation to trading, rather than ensuring that it is not the case. In other words, as it stands it is rebuttable, not an actual suspension. I do not know whether that is the intention that needs to be looked at.

I very much welcome what is being done on company meetings. I would have provided for this on a long-term and indefinite, rather than limited, basis, allowing what is the position of common law: for meetings to be held remotely. The case of Byng v London Life Association in the 1990s established that the essence of an effective meeting is the ability to interact and participate, rather than physical presence one with another—something that I am sure we all recognise at the moment as being the way we are proceeding. Like my noble friend Lady Anelay, I would welcome an assurance that these provisions relate to all sorts of meetings. There is a fairly exhaustive list in the Bill, but I do not know whether it is totally exhaustive. It might be wise to provide a catch-all provision, or at least to allow the Secretary of State the power to extend it to other bodies. It seemingly covers trade unions, charities and so on, but it might be that something has been unintentionally missed out.

Subject to that, the provisions relating to meetings are very much to be welcomed. In broad terms, the Bill is something we should support and I certainly do so.