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Serious Crime Bill [Lords]

Serious Crime Bill [Lords]



The Committee consisted of the following Members:

Chairmen: Mr. Joe Benton, John Bercow
Blunt, Mr. Crispin (Reigate) (Con)
Brokenshire, James (Hornchurch) (Con)
Browne, Mr. Jeremy (Taunton) (LD)
Campbell, Mr. Alan (Lord Commissioner of Her Majesty's Treasury)
Coaker, Mr. Vernon (Parliamentary Under-Secretary of State for the Home Department)
Cox, Mr. Geoffrey (Torridge and West Devon) (Con)
Eagle, Maria (Parliamentary Under-Secretary of State for Justice )
Gwynne, Andrew (Denton and Reddish) (Lab)
Hogg, Mr. Douglas (Sleaford and North Hykeham) (Con)
Lucas, Ian (Wrexham) (Lab)
Moran, Margaret (Luton, South) (Lab)
Mountford, Kali (Colne Valley) (Lab)
Reed, Mr. Jamie (Copeland) (Lab)
Rogerson, Dan (North Cornwall) (LD)
Ruane, Chris (Vale of Clwyd) (Lab)
Waltho, Lynda (Stourbridge) (Lab)
Wright, Jeremy (Rugby and Kenilworth) (Con)
Emily Commander, Committee Clerk
† attended the Committee

Public Bill Committee

Tuesday 3 July 2007

(Afternoon)

[Mr. Joe Benton in the Chair]

Serious Crime Bill [Lords]

Clause 28

Powers to wind up companies etc: England and Wales
Amendment proposed [this day]: No. 36, in clause 28, page 16, line 28, after ‘to’, insert ‘—(a) ’.—[Mr. Coaker.]
4.30 pm
Question again proposed, That the amendment be made.
The Chairman: I remind the Committee that with this we are discussing the following: Government amendments Nos. 37 to 49
Government amendment No. 200
Government amendment No. 201
Government new clause 15—Powers to wind up: supplementary.
The Parliamentary Under-Secretary of State forthe Home Department (Mr. Vernon Coaker): Good afternoon, Mr. Benton. Welcome back to the Committee. You will notice that there is a bit of a change of membership, but we shall still be proceeding in good heart and with good debate.
I wish to turn to the point made by the hon. Member for Hornchurch in response to my formally moving the various Government amendments. He referred to what the applicant authorities will give consideration to when deciding whether it is in the public interest to make an application for the winding up of a body. To put the matter in context, I wish to emphasise the two-part nature of the winding-up process—as the hon. Gentleman did. When an organisation has been convicted of the offence of a breach of an order, the applicant authority will consider whether it is in the public interest to petition the court to have it wound up. It is then up to the court to consider separately whether it is also just and equitable for the organisation to be so wound up. I did not mean to refer to the director of the applicant authority this morning. I apologise.
The purpose of the clause is to deal with instances, even though they might be few, when an organisation is being used effectively as a shell or front for serious criminal activity, is producing or doing little or nothing of worth and is being used to cause harm through serious crime. The applicant authorities will be considering that when looking at the public interest and, effectively, whether the organisation is still a legitimate concern and working towards a legitimate legal end or whether it is simply a vehicle for criminal purposes.
As I made clear, when the latter is the case, it will still be for the courts to make a separate determination whether it would also be just and equitable for the organisation to be wound up. That will include a consideration of what effect the winding-up will have on third parties, such as the customers or creditors of the organisation. We believe that it is an effective sanction with adequate protections in place to ensure that it occurs only when appropriate.
All the amendments are technical and would improve the Bill and, now that I have answered the hon. Gentleman’s specific points, I hope that the Committee will support them.
Amendment agreed to.
Amendments made: No. 37, in clause 28, page 16,line 29, leave out ‘as if it were’ and insert ‘; and
(b) the company’s winding up;
as it applies in relation to’.
No. 38, in clause 28, page 16, line 30, leave out ‘(petition for’ and insert
‘for the winding up of a company and the company’s windingup (’.
No. 39, in clause 28, page 16, line 43, leave out ‘has effect’ and insert
‘applies for the purposes of this section’.
No. 40, in clause 28, page 17, line 2, after ‘appropriate,’, insert ‘in relation’.
No. 41, in clause 28, page 17, line 3, at end insert ‘and the relevant body’s winding up’.
No. 42, in clause 28, page 17, line 9, at end insert—
‘( ) No petition may be presented to, or order to wind up made by, a court in Scotland by virtue of this section in respect of a company, partnership or relevant body whose estate may be sequestrated under the Bankruptcy (Scotland) Act 1985 (c. 66).’.
No. 43, in clause 28, page 17, line 28, leave out ‘Scotland or’.—[Mr. Coaker.]
Clause 28, as amended, ordered to stand part of the Bill.

Clause 29

Powers to wind up companies etc: Northern Ireland
Amendments made: No. 44, in clause 29, page 18,line 8, after ‘to’, insert ‘—
(a) ’.
No. 45, in clause 29, page 18, line 8, leave out ‘as if it were’ and insert ‘; and
(b) the company’s winding up;
as it applies in relation to’.
No. 46, in clause 29, page 18, line 9, leave out ‘(petition for’ and insert
‘for the winding up of a company and the company’s windingup (’.
No. 47, in clause 29, page 18, line 22, leave out ‘has effect’ and insert
‘applies for the purposes of this section’.
No. 48, in clause 29, page 18, line 25, after ‘appropriate,’, insert ‘in relation’.
No. 49, in clause 29, page 18, line 26, at end insert ‘and the relevant body’s winding up’.—[Mr. Coaker.]
Clause 29, as amended, ordered to stand part of the Bill.

Clause 30

Bodies corporate including limited liability partnerships
Question proposed, That the clause stand part of the Bill.
Mr. Coaker: In asking the Committee to support the clause, I hope that it will be helpful if I respond to the hon. Member for Hornchurch who asked, in reference to “a person” under clause 26, about orders against corporate bodies. I had promised to return to that issue this afternoon.
If a body corporate is given a serious crime prevention order—as set out in clause 30 and other clauses—it will be capable of being prosecuted for breach if it does not comply with the terms of the order. Therefore, the reference to “a person” under clause 26 includes not only an individual, but a body corporate, a partnership and an unincorporated association.
However, the hon. Gentleman was also interested in the position of officers or employees of a company. For example, clause 32—as does clauses 31—provides that, if an offence under clause 26 is committed by a body corporate, with the consent or connivance of an officer of the body corporate or a person purporting to act in that capacity, the officer as well as the body corporate is guilty of the offence under clause 26 and is liable to be prosecuted. In that context, “officer” means a director, manager, secretary or other similar officer. There are similar provisions in relation to partnerships and unincorporated associations in clause 31(8) and clause 32(7) respectively. I hope that that answers the hon. Gentleman’s question.
James Brokenshire: I welcome you to the Chair, Mr. Benton, and I express my pleasure at serving under you in this Committee. I thank the Minister for that response and the clarification in relation to the role of officers in that context, which is helpful. I may have one or two further questions about unincorporated associations with which I hope he will be able to assist me when we get to that clause.
Question put and agreed to.
Clause 30 ordered to stand part of the Bill.
Clause 31 ordered to stand part of the Bill.

Clause 32

Unincorporated associations
Question proposed, That the clause stand part of the Bill.
Obviously, an unincorporated association, by its nature, is a group or a body of individuals who make up that association. Its membership may change from time to time. The Minister may not be able to answer this question immediately, but a thought that crossed my mind in relation to fines is that the Bill says that fines will be paid out of the association, but if the association does not have such funds, in those circumstances normally one would look in terms of individual liability that would attach to the members. I know that there are specific provisions that govern when someone is deemed to be a member, or when the membership changes, which are contained in the earlier part of the clause, but I seek clarification or assurance from the Minister as to whether the situation has been envisaged where a fine has been levied but there are insufficient assets from the unincorporated association to meet such a liability, and what would happen in such circumstances.
Mr. Coaker: I reiterate that persons, or whoever is connected with the unincorporated association, will be liable only if they have conducted a conspiracy that did not meet the serious crime prevention order conditions. That gives me the chance to stress that that would not be so if someone were negligent. That is the important point. Subsection (7) states:
“If an offence under section 26 committed by an incorporated association is proved to have been committed by the consent or connivance of an officer of the association, he (as well as the association) is guilty of the offence and liable to be proceeded against and punished accordingly.”
What one would have to look at in terms of the individuals who may have connived or conspired to subvert, is whether it would be appropriate for them to be held liable. That would be a decision for the court, and it would be a matter of whether that would be reasonable or not.
James Brokenshire: To assist the Minister about the terms that I was making, I entirely accept his point about the connivance argument. I was looking at subsection (6), which deals with the fine imposedon the association and what might happen in circumstances where the funds of the association were not sufficient to pay the fine if it was levied at a high level. I was seeking clarification on that matter. I entirely accept the Minister’s point in relation to connivance.
Mr. Coaker: I am sorry; I slightly misunderstood the point that the hon. Gentleman made. With respect to subsection (6), our intention would certainly be to pursue the funds of the association rather than to pursue individual members.
Question put and agreed to.
Clause 32 ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
 
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