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Company Law Reform Bill [HL]

I thank the noble Lord for what he said in moving his amendment, and for his personal welcome to me, which was generous and appreciated. I am sure that my noble friend Lord Sainsbury believes that this will be a constructive debate. We look forward to it. I saw him nodding as the noble Lord, Lord Freeman, expressed the hope that it may be possible to put further representations, which I took to indicate assent. It was helpful of the noble Lord to set out at the beginning of the sitting the overriding questions on this part of the Bill. We shall return to those questions. I shall not respond to the specific points now, but we shall get back to them as we deal with aspects of the Bill. The sentence that Amendment No. 149 would remove performs two functions. First, it explains that the two general duties on former directors apply to the extent set out in subsection (2) as they apply to persons who are still directors. Secondly, it indicates that that is subject to any necessary adaptations that the courts need to make in recognition of the fact that former directors are not in exactly the same position as current directors. These words signal to the courts that they may take into account the fact that the duties are being applied to former directors when interpreting and applying the duties. That means that the courts have more flexibility to take account of the fact that these are not current directors. If the amendment were to succeed, and the words were deleted, it might indicate that the duties were to apply to former directors in exactly the same way as they apply to current directors, which would not leave the flexibility that the courts need. I hope that that provides some explanation and clarifies what the Bill intends. Our concern overall is that removal of the sentence would not clarify the Bill, as the noble Lord hopes, but confuse it and leave the matter open to unnecessary doubt.