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Company Law Reform Bill [HL]

My Lords, I would like to support Amendment No. 349. Although the distinction may seem initially to be very slight, to a lawyer I think it would be very substantial. The statement which an auditor makes under Clause 510(3) will be a statement protected by privilege if he is sued for libel in respect of that statement. If the statement can relate only to the circumstances that were actually connected with his ceasing to hold office, he cannot express the circumstances where he feels that he has been removed because members of the company think that he is getting a little too close to the awkward truth. Surely what is needed is that he can say, ““I feel that I am being removed because I am very unhappy about transaction xyz and I wish to investigate it further, and I think I am being removed because they don’t want me to do that””. If he can only say what has actually happened and not announce his suspicions he will be prevented by his partners from going down the latter route for fear of landing them in a massive defamation suit. Therefore, Amendment No. 349 is worthy of serious support.