Ian
Pearson: The authorities will work with the service
provider to calculate the appropriate consideration to be paid. New
clause 17 provides that the
“Treasury may
by order specify matters which are to be or not to be considered in
determining...what amounts to reasonable
consideration”. As
a starting point, it is envisaged that authorities will examine how
much the deposit taker was paying for the service before the transfer.
That should be a good proxy for the subsequent
discussions. Amendment
agreed
to. Question
proposed, That the clause, as amended, stand part of the
Bill.
Mr.
Gauke: What is clause 57(3) intended to achieve? It
states:
“The
duty under...the ‘continuity obligation’...may
be enforced as if created by contract between the residual bank or
group company and the
transferee.” If
there is a deemed contract, will it be possible for the courts to imply
terms or to apply the doctrines of frustration, or fundamental breach
or set-off to that contract? If the subsection is merely a mechanism
for determining the quantum of damages due between the parties for
breach of obligation, should it not say so? That deemed contract
approach can be found in a number of places in the Bill, but it is not
entirely obvious—certainly we have received representations on
this—why a deemed contract is required, given that a remedy
would exist in any event in the tort of breach of statutory duty. I
made a similar point earlier, but will the Minister provide
clarification?
Ian
Pearson: My understanding is similar to that which I
expressed earlier. Subsection (3) provides for the obligation to be
enforced as a contract; normal contractual considerations would
therefore apply. I hope that that provides the hon. Gentleman with his
clarification. Question
put and agreed
to. Clause
57, as amended, ordered to stand part of the
Bill.
Clause
58Special
continuity obligations: property
transfers Amendments
made: No. 123, in
clause 58, page 28, line 20, leave
out ‘consideration at market rate’ and insert
‘reasonable
consideration,’. No.
124, in
clause 58, page 28, line 22, leave
out ‘on market terms’.—[Ian
Pearson.] Clause
58, as amended, ordered to stand part of the
Bill.
Clause
59General
continuity obligation: share
transfers Amendment
made: No. 125, in clause 59, page 29, line 4,
leave out subsection (4) and
insert— ‘(4) The duty to
provide services and facilities in pursuance of the continuity
obligation is subject to a right to receive reasonable
consideration.’.—[Ian
Pearson.] Clause
59, as amended, ordered to stand part of the
Bill.
Clause
60Special
continuity obligations: share
transfers Amendments
made: No. 126, in clause 60, page 29,
line 32, leave out ‘consideration at market rate’
and insert ‘reasonable
consideration,’. No.
127, in
clause 60, page 29, line 34, leave
out ‘on market terms’.—[Ian
Pearson.] Clause
60, as amended, ordered to stand part of the
Bill. Clauses
61 to 64 ordered to stand part of the
Bill Further
consideration adjourned.—[Mr.
Blizzard.] Adjourned
accordingly at four minutes past Seven o’clock till Thursday 13
November at Nine
o’clock.
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