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Division No. 2

CONTENTS
Anelay of St Johns, B.
Attlee, E.
Blatch, B.
Boardman, L.
Bowness, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Burnham, L.
Buscombe, B.
Caithness, E.
Campbell of Alloway, L.
Carnegy of Lour, B.
Cavendish of Furness, L.
Chadlington, L.
Clark of Kempston, L.
Coe, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Cox, B.
Craig of Radley, L.
Crickhowell, L.
Cumberlege, B.
Dean of Harptree, L.
Dixon-Smith, L.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Fookes, B.
Fowler, L.
Fraser of Carmyllie, L.
Geddes, L.
Gilmour of Craigmillar, L.
Goschen, V.
Gray of Contin, L.
Hanham, B.
Hanningfield, L.
Hayhoe, L.
Henley, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howe, E.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Jenkin of Roding, L.
Jopling, L.
Kingsland, L.
Knight of Collingtree, B.
Lamont of Lerwick, L.
Liverpool, E.
Lyell, L.
McColl of Dulwich, L.
Marlesford, L.
Mayhew of Twysden, L.
Miller of Hendon, B.
Monro of Langholm, L.
Monson, L.
Montrose, D.
Mowbray and Stourton, L.
Moynihan, L.
Noakes, B.
Northesk, E.
O'Cathain, B.
Oppenheim-Barnes, B.
Park of Monmouth, B.
Parkinson, L.
Pearson of Rannoch, L.
Peel, E.
Perry of Southwark, B.
Pilkington of Oxenford, L.
Platt of Writtle, B.
Plumb, L.
Rees, L.
Renton, L.
Roberts of Conwy, L.
Rotherwick, L.
Saltoun of Abernethy, Ly.
Seccombe, B. [Teller]
Sharples, B.
Shaw of Northstead, L.
Skelmersdale, L.
Stewartby, L.
Trefgarne, L.
Trumpington, B.
Windlesham, L.

NOT-CONTENTS
Acton, L.
Addington, L.
Ahmed, L.
Amos, B.
Andrews, B.
Ashley of Stoke, L.
Ashton of Upholland, B.
Bach, L.
Barker, B.
Barnett, L.
Bassam of Brighton, L.
Berkeley, L.
Bernstein of Craigweil, L.
Billingham, B.
Blackstone, B.
Borrie, L.
Bradshaw, L.
Bragg, L.
Brennan, L.
Brightman, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Burlison, L.
Campbell-Savours, L.
Carter, L. [Teller]
Chandos, V.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clement-Jones, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
Currie of Marylebone, L.
Dahrendorf, L.
David, B.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Desai, L.
Dholakia, L.
Dixon, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Fyfe of Fairfield, L.
Gale, B.
Geraint, L.
Gibson of Market Rasen, B.
Gladwin of Clee, L.
Golding, B.
Goodhart, L.
Gould of Potternewton, B.
Grabiner, L.
Graham of Edmonton, L.
Greaves, L.
Grenfell, L.
Grocott, L.
Hamwee, B.
Hardy of Wath, L.
Harris of Haringey, L.
Harris of Richmond, B.
Harrison, L.
Haskel, L.
Hayman, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Hooson, L.
Howarth of Breckland, B.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L. (Lord Chancellor)
Jacobs, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones, L.
King of West Bromwich, L.
Layard, L.
Lea of Crondall, L.
Lester of Herne Hill, L.
Levy, L.
Linklater of Butterstone, B.
Lipsey, L.
Livsey of Talgarth, L.
Lockwood, B.
Lofthouse of Pontefract, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mackie of Benshie, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Mar and Kellie, E.
Masham of Ilton, B.
Mason of Barnsley, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Methuen, L.
Milner of Leeds, L.
Mitchell, L.
Morgan, L.
Morris of Aberavon, L.
Northover, B.
Oakeshott of Seagrove Bay, L.
Parekh, L.
Patel of Blackburn, L.
Pendry, L.
Phillips of Sudbury, L.
Pitkeathley, B.
Plant of Highfield, L.
Prys-Davies, L.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Rendell of Babergh, B.
Rennard, L.
Richard, L.
Rodgers of Quarry Bank, L.
Rooker, L.
Roper, L.
Russell, E.
Sainsbury of Turville, L.
Sawyer, L.
Scotland of Asthal, B.
Sharp of Guildford, B.
Sheldon, L.
Sheppard of Liverpool, L.
Shutt of Greetland, L.
Simon, V.
Smith of Clifton, L.
Smith of Leigh, L.
Strange, B.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Temple-Morris, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Thornton, B.
Tomlinson, L.
Tope, L.
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Walker of Doncaster, L.
Walmsley, B.
Warner, L.
Warwick of Undercliffe, B.
Watson of Richmond, L.
Weatherill, L.
Whitaker, B.
Whitty, L.
Williams of Elvel, L.
Williams of Mostyn, L. (Lord Privy Seal)

Resolved in the negative, and amendment disagreed to accordingly.

19 Nov 2001 : Column 916

5.59 p.m.

Clause 78 [Contents of claim notice]:

Lord Kingsland moved Amendment No. 12:

Page 38, line 37, at end insert—

"( ) It must include an offer of cover to provide for the RTM company directors' and officers' liability insurance, fidelity guarantee and professional indemnity insurance."

The noble Lord said: The amendment would require the RTM company to obtain the three forms of insurance that are specified. Directors' and officers' liability insurance would protect those leaseholders who are involved in the management of the company; fidelity guarantee would protect leaseholders' funds that are held by third parties in service charge or reserve accounts; and professional indemnity insurance would protect companies against failure in the day-to-day management of a block.

The main beneficiaries of the amendment would be the leaseholders, because it would be their interests that were insured. Contrary to what I suspect the Government will say, the amendment is not intended

19 Nov 2001 : Column 917

to put obstacles in the way of the right to manage; it merely involves what one would expect from competent managing agents. I beg to move.

Lord Bassam of Brighton: My Lords, Amendment No. 12 seeks to require the RTM company to include an offer for liability insurance in its claim notice. It is my recollection that the noble Lord, Lord Kingsland, tabled a similar amendment both in Committee and at Report stage, but did not move it on either occasion. Having reflected on the matter, we came to the conclusion that the noble Lord had been so persuaded by the powerful arguments advanced by the Government when the Bill was in Grand Committee in the previous Parliament, so we are somewhat surprised that the noble Lord has returned to the issue again.

On the previous occasion, the noble Lord, Lord Hodgson of Astley Abbotts, and my noble friend Lord Williams of Elvel made a number of very sensible comments indicating the inadvisability of putting such a requirement on the face of the Bill. As we are entirely in agreement with them, I hope that they will not mind if I reiterate them here.

First, this amendment effectively makes the provision of liability insurance a qualifying requirement for the right to manage through the back door. Therefore, it undercuts the simple philosophy behind the right to manage; namely, that leaseholders should have the right to a say in the management of their own block by virtue of their investment in the property.

The noble Lord, Lord Kingsland, has suggested on a number of occasions that there is a need to build all manner of safeguards into the legislation to protect the interests of the landlord. As we have said before, we fully accept that the landlord will continue to have a legitimate interest in the block under the right to manage. The Bill has been drafted on that premise. That is why the landlord has both the right to be a member of the RTM company, and the rights granted to him to address management failures.

We cannot, however, accept that the landlord's minority interests entitle him to a disproportionate protection such as this one. The landlord already has a disproportionate control over the management of the block. The right to manage addresses that by giving leaseholders the right to manage their own homes. A requirement to prove to the landlord—we note in passing, not the leaseholders with their majority stake—that the company has been given an offer of liability insurance is inappropriate in that context.

Secondly, this requirement is largely worthless, as it says nothing about the level of insurance to be offered. The RTM company could therefore come forward with a laughable and negligible insurance offer and still comply with this requirement. I hope that the noble Lord, Lord Kingsland, will not press us to include a redundant provision in this important Bill.

Finally, and perhaps most importantly, we would expect RTM companies to take out such insurance as a matter of course. We certainly intend to encourage

19 Nov 2001 : Column 918

them to do so in guidance, but we do not intend to require them to do so. No other property owner is required by law to take out liability insurance just because they want to manage and maintain their home. In our view, a requirement which would do that just for RTM companies is therefore unfair, unfounded and unjustified. I hope that the noble Lord will be prepared to withdraw his amendment.

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