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Company Law Reform Bill [HL]

These clauses introduce provisions relating to the protection of confidential information and they do so for good reason. The takeovers directive would in any event require us to make provision under law for when disclosures can be made. I do not think that there is any disagreement between us that when a regulator can disclose confidential information should be set out and carefully considered. However, we need to make sure also that the gateways—the avenues for disclosure—are sufficient to enable the regulatory body properly to carry out its functions where it legitimately needs to do so. Otherwise, the directive would preclude the disclosure of information. We have approached this by looking at existing precedents in company and financial services law. Clear precedents exist in earlier legislation which Parliament has made; for example, in Sections 348 and 349 of the Financial Services and Markets Act 2000, together with regulations made under those provisions—the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001. Those apply in relation to the Financial Services Authority. Schedule 2 seeks to mirror the disclosure gateways approach in those regulations. The regulations also provide that the FSA and its staff may disclose information for the purposes of discharging public functions. There is a clear precedent. There is nothing objectionable about enabling the panel to disclose information for the purpose of facilitating the carrying out of any of its functions. Indeed, it is essential. It is quite a narrow power, as it refers not to any disclosure, but to disclosure for the purpose of facilitating the carrying out by the panel of any of its functions. I shall give a couple of practical examples of where it would be necessary for the panel to be able to use this power to pass on information. The first is in appeals against decisions of the panel that are referred to the Takeover Appeal Board, which will be a distinct body from the panel. Without the necessary powers, the panel could not put the Takeover Appeal Board in possession of the relevant facts and documents necessary to consider an appeal. Equally, in making an application to the court, which Clause 630 envisages the panel may make, it could not disclose the relevant information without the power. One could have attempted to add to the gateways list to seek to address all the individual cases in which one might see the need for the disclosure. That can be a difficult process. I am personally aware of a recent Bill where we ended up failing to cover an important disclosure gateway because we sought to list the gateways separately. In this case, it was decided, rightly, to wrap up the disclosure right of the panel by reference to the purposes of the panel carrying out its functions. That is the explanation for the clause. It seems to be an entirely appropriate way of describing the gateway.