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Company Law Reform Bill [HL]

There is a superficial attraction to what the noble Lords have said, but there is another important consideration: there is a need for certainty in the marketplace. The amendment would delete Clause 642(6), which provides that no company can opt out within the first year of the company having taken a decision to opt in. We are required by Article 11 of the takeovers directive to permit a company that has opted in to opt out again, but we think there is a need for certainty. If a company, having carefully weighed the consequences, decides to opt in, it seems right to provide at least a limited time period—and that is all this is—of one year during which the company cannot reverse that decision to opt in. That will focus minds on whether it is the right decision to have made. It is wholly consistent with the provisions of the directive, in our view. Once the 12 months has expired, the company can opt out again if it chooses to do so. I invite the noble Lords to consider that the benefits of that certainty outweigh the superficial argument based upon practice in other countries, about which I do not know at the moment. I will have to look into that.