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.
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 obviouscertainly we have received representations on thiswhy 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.
Special 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.
General 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.
Special 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 oclock till Thursday 13 November at Nine oclock.
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