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Company Law Reform Bill [HL]

My Lords, my name is attached to this amendment. For the sake of brevity—it is a quarter to 10 at night—I will not repeat all the arguments which the noble Baroness, Lady Noakes, has put forward in support of this group of amendments. However, I support them absolutely. In Committee, we discussed the issue of ““knowingly or recklessly””. I was advised by the Law Society that this did not cover intent. If it does not cover intent, then I am deeply concerned. I therefore believe that, as a minimum, we must have something that does that. The noble Baroness referred to probably the best example of something similar, the Sarbanes-Oxley Act, which criminalised the responsibility for executives in signing off on reporting standards. When a chief executive and chief financial officer sign under Section 302 of the Sarbanes-Oxley Act, they do not do so, as is common in this country, for and on behalf of the board of directors. They sign in their personal capacity, and the consequences of being wrong expose them to criminal sanctions. The result has been a huge burden on individual companies to make absolutely darn sure that there is no possible risk that they could be wrong. I correct my former partner by saying that I think her estimates of the increases in audit fees as a result of the Sarbanes-Oxley Act are woefully understated. My understanding is that it is a minimum of 60 per cent, and the current increase is well over 100 per cent You are lucky if you can get away with that. We must look long and hard at this offence. If the Government believe that we must criminalise this activity, then can we please ensure that intent is included, and that honest mistakes, through negligence or incompetence, are not caught? I support the amendment.