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Baroness Andrews: My Lords, I am very grateful to noble Lords who have responded so positively to the order. We much appreciate the welcome and we appreciate the work of the Delegated Powers and Regulatory Reform Committee.

The important procedural point, mentioned by the noble Baronesses, Lady Scott and Lady Carnegy of Lour, has tested the Regulatory Reform Act procedure. That is not surprising as it was often cited during the passage of the Regulatory Reform Act. This would be a major test for the capacity, flexibility and efficacy of the process. It is lengthy and the process of ensuring that the tests are met has been difficult and complex. Reading the reports and considering the way in which the RRO was amended in that process is evidence of that. The work that has gone into the order has involved exploring the limits, the tests and the interpretation of the Act. It has been a formative process and it is a pathfinder.
 
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Noble Lords on the Delegated Powers and Regulatory Reform Committee noted in their report that it was at the upper limit of what they considered acceptable. I entirely take the point made by the noble Baroness again today. Our experience is now being taken into account as part of the review of the Regulatory Reform Act, which is being undertaken by the Cabinet Office. We have a reflective process in place to establish where we are.

It might have been possible to reduce the number of provisions by incorporating them into the Fire and Rescue Services Act. That was a possible option, but it would have resulted in a much larger Act. It was concluded that that would have been a burden of its own kind, but the draft order concerns fire safety whereas the Act mainly concerns the organisation and function of fire and rescue authorities. As we are doing two different things in this legislation, we thought that the regulatory reform process was appropriate.

I say to the noble Baroness, Lady Carnegy of Lour, on the Scottish point that we are confident that the majority of the provisions of the Act will commence in Scotland alongside our own legislation in England.

Part 3 of the 2005 Act which was passed on 1 April by the Scottish Parliament deals with fire safety issues. Its principles are similar to the regulatory reform order and its objective is to ensure, as far as is practicable, a consistent fire regime across the UK. Obviously, the Scottish Parliament has to take into account different building regulations, legislation and so on. As I said, Part 3 is currently planned to commence in April 2006, which is a similar timescale to that to which we are working in England.

On the point raised about necessary protection, which is linked to the regulatory reform order, our firm view is that the order not only maintains all necessary protections the existing law offers but that it goes further because it puts prevention at the heart of fire safety. I hope that reassures the noble Baroness.

In relation to the specific point the noble Baroness made about multiple occupancy, I have known situations in the voluntary sector where 10 or even 15 voluntary organisations share a building. That matter clearly has to be covered. The order deals with that. It makes each employer or other occupier responsible for their actions. So, for the safety of themselves and the others who use the building, there is an absolute duty on each employer for the protection of their staff. For others the duty applies to the extent that that person can exercise control over the situation. If there are areas beyond their control, the owner of the building has to take responsibility.

The duty of responsibility is backed by other duties. Each responsible person is under an obligation to co-operate with other responsible persons in respect of fire precautions. That is a very clear obligation for organisations to work together in their written submissions—for example, when they carry out risk
 
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assessments. I imagine that they will have to make sure they know what each says and that they will have to advise other responsible persons of significant findings in the risk assessment, so they can take account of the hazards that arise. That is all backed by the power of enforcement.

I hope that satisfies the noble Baroness. I can always write to her and provide even more detail if she would like me to.

I turn to the questions raised by the noble Baroness, Lady Hanham. I shall deal first with the question of what we mean when we say "where necessary" and how the guidance will elaborate on that.

There are two elements to the assertions which have been made about the use of the term "where necessary". The first is that it contravenes the requirement of the European Directive 89/654. The second is, as the noble Baroness said, that it removes necessary protection. They are interlinked.

The European point was made by the Fire Brigades Union in response to the minimum requirements laid down in Annexes 1 and 2—directives 4.1 to 4.7 on means of escape and directives 5.1 and 5.2 which concern fire-fighting equipment. The provisions suggested that those were absolute requirements and we disagreed with that. That is not the case. Indeed, we built in the caveat that the obligations laid down in the annex apply whenever required by the features of the workplace, the activity, the circumstances or hazard. We built in that caveat into the Articles 13 and 14 the noble Baroness quoted by using the term "where necessary".

The most important point is about necessary protection. Indeed, no such protection is removed because the whole burden of this legislation is to require the fire precautions to be present. They are necessary to protect people. They must be there for necessary protection.

I cannot give the noble Baroness at this stage any great detail about what the guidance will contain. I can reassure her on the point she raised about delay, that we are firmly of the opinion that our deadline of early January 2006 is very much within reach. It is tight but we aim to have the majority of the guidance published early in January 2006. We have agreed to work closely with the Health and Safety Executive, the DfES and the Department of Health, and others.

I cannot anticipate what is in the guidance because it is in preparation, but as soon as we have drafts of it I shall be happy to ensure that the noble Baroness sees them. We will be consulting with the stakeholders, and the question has rightly been raised.

The noble Baroness asked who were the business stakeholders with whom we have been working. The CBI has been the key partner throughout, but we have also worked with the Federation of Small Businesses, the British Hospitality Association, the British Retail Consortium and many more representatives. Again, I am very happy to supply her with a list of the people with whom we have been working if that will help.

In terms of the guidance itself, I should say that because of the different sectors covered we are producing 11 comprehensive guides suited to each sector. This is not
 
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a situation where one size fits all. That is one reason why the guidance is taking time to produce. It has to be carefully done. It is a major undertaking. As I said, we are confident that we are on track to achieve it within the timescale we have set ourselves.

I hope I have answered all the questions noble Lords have raised. If not, we shall certainly scrutinise Hansard tomorrow. As I have said, we are very happy to share progress with noble Lords as we go along.

On question, Motion agreed to.

Regulatory Reform (Execution of Deeds and Documents) Order 2005

7.16 pm

Lord Evans of Temple Guiting rose to move, That the draft regulatory reform order laid before the House on 21 February be approved [14th Report from the Regulatory Reform Committee, Session 2004–05].

The noble Lord said: My Lords, I beg to move the Regulatory Reform (Execution of Deeds and Documents) Order standing in my name on the Order Paper. I bring forward this order under the Regulatory Reform Act 2001 on behalf of my noble and learned friend the Secretary of State for Constitutional Affairs and Lord Chancellor. This is the first such order promoted by his department, or its predecessor the Lord Chancellor's Department, to have reached this stage.

The order amends the law relating to how companies and other corporations enter into deeds and other documents. However, before I go further let me make something absolutely clear: I am not a lawyer; I have never been a lawyer; and noble Lords will be delighted to hear that I have no plans to become a lawyer. That may put me at something of a disadvantage because an order about how companies sign and seal documents is bound to be extremely legal in content. In fact, the order before us is not just the stuff of lawyers' law, it is the stuff of the minutiae of lawyers' law. Whatever the technical merits of the reforms contained in the order—and I think they are worth while—the order will not be turning the world upside down.

In commending the order to the House, I, as a layman, cannot exaggerate the comfort I draw from the process by which the order has been created. First, the order implements almost verbatim recommendations of the Law Commission. Those recommendations bear all the hallmarks of quality and precision that we have come to expect from that body. The commission reached its conclusion after an extensive and detailed consultation.

Secondly, as part of the regulatory reform order process, the department consulted publicly on the recommendations and their suitability for implementation by order. Of those who replied, over 90 per cent supported the recommendations and over 80 per cent supported their implementation by order.

Thirdly, following on from that consultation, the draft order was closely examined by your Lordships' Select Committee on Delegated Powers and Regulatory
 
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Reform and was approved by it as suitable for implementation. The committee concluded that the proposals removed burdens and that the one new burden enhanced the protection provided by the law. The committee was satisfied that the order met the test of proportionality, fair balance and desirability.

The Regulatory Reform Committee in another place reached a similar conclusion and recommended that the order be approved. I am sure that noble Lords will agree with me that this legislation has been as fully aired and as closely examined as any piece of legislation is likely to be.

Here I must pause to express my thanks, and that of Ministers, to the chairman and the members of the committee for their work in scrutinising the draft order and for recommending the order to the House. We are very grateful to them.

I shall now briefly describe the content of the order. The overriding purpose of the order is to clarify and simplify the law by removing inconsistencies and uncertainties. This will bring greater certainty to business transactions. This can only benefit those involved. The order amends three aspects of the law of England and Wales relating to the execution of deeds and documents by corporations: first, how corporations enter into deeds; secondly, the use by corporations of agents to enter into documents; and, thirdly, how a deed is distinguished from other documents.

I turn first to the law relating to how corporations enter into—or, in the technical language of the law, execute—documents. The principal statutory provisions relating to the execution of documents by corporations are Section 74 of the Law of Property Act 1925 and Section 36A of the Companies Act 1985. The order makes three main changes. First, under the present law, Section 74 allows a purchaser to assume that a deed has been properly executed by a company incorporated under the Companies Acts, when the deed is sealed and attested by a director and the company secretary. However, Section 36A permits an additional director to sign any document in place of the company secretary. The two provisions are therefore inconsistent and Section 74 is an unnecessary restriction on the way that business may be conducted. Article 3 of the order removes these difficulties by making it clear that attestation by two directors is equivalent to attestation by a director and a secretary.

Secondly, there is also a lack of clarity under the present law as to whether a person who is a director or the company secretary of more than one company entering into a deed needs to sign the deed separately for each company or whether one signature will do. Paragraph 10 of Schedule 1 to the order will clarify the position by requiring directors and secretaries of more than one company to sign separately for each. This small additional burden will make it clear that the signatory has directed his or her mind to all the companies for which he or she is signing, enhancing the protection offered by the law.

Thirdly, there are corporations, who are themselves directors and company secretaries. Sections 74 and 36A do not seem to accommodate these legal persons
 
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very clearly. Paragraphs 2 and 11 of Schedule 1 to the order set beyond doubt that they are included in the statutory scheme.

The second principal aspect of the law affected by the order relates to the use by corporations of agents to enter into documents. As legal persons, corporations are able to delegate the execution of deeds and documents to third parties, whether as agents or under a power of attorney. However, Section 1 of the Law of Property (Miscellaneous Provisions) Act 1989, which defines how a deed may be created, makes no reference to execution on behalf of the person creating the deed. Similarly, Section 7 of the Powers of Attorney Act 1971 deals with the execution of a document by a person acting under a power of attorney, but refers to the signature of the person giving the power, which appears to preclude that person being a corporation. Article 7 and paragraphs 6 to 8 of Schedule 1 to the order put an end to these uncertainties by making it clear that there is no restriction on corporations in these areas.

The third and final aspect relates to how a deed is distinguished from other documents. Here, we descend—or, maybe if one is a lawyer, ascend—to the almost mystical concept of delivery: in particular, to the irrebuttable presumption of delivery, the concept of delayed delivery and the presumption of authority to deliver. We must also address the face value requirement. I will attempt to explain.

Delivery is an essential element in the creation of a deed. It describes the moment at which the maker of a deed demonstrates that the deed is to take effect and that he or she is to be bound by it. Once again, the interaction of statutory provisions has rendered the present law somewhat uncertain.

Section 36A currently provides that in favour of a purchaser a deed created by a company is delivered on its execution. This presumption cannot be rebutted. This imposes a restriction on companies preventing them delaying delivery where it might be appropriate: for example, where it is administratively necessary to have a deed sealed in advance of a transaction. The presumption also appears to be at odds with the general scheme of delayed delivery for deeds introduced by the Law of Property (Miscellaneous Provisions) Act 1989. Delayed delivery allows the maker of a deed to sign or seal it and to allow a third party, such as a solicitor, to deliver the deed when the relevant conditions—perhaps the payment of money—have been met. Articles 4, 5 and 6 of the order amend Section 36A so that companies will benefit from the possibility of delayed delivery.

The second reform in this area relates to Section 1 of the 1989 Act. It simplifies the operation of the concept of delayed delivery by giving conveyancers a presumed authority to deliver deeds in conveyancing transactions. This useful provision is restricted to land transactions. Article 9 extends its benefit to all types of transaction.

Finally, we arrive at the face value requirement. This is the rule in Section 1 of the 1989 Act that a deed must make it clear on its face that it is intended to be a deed.
 
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This may sound straightforward enough, but does the affixing of a company seal in itself satisfy the requirement? Many people appear to believe that it does. The better opinion is that it does not. Article 8 makes clear that it does not.

I hope that I have sufficiently explained the purpose and effect of the order. I pay tribute once again to those who have assisted in its scrutiny and I beg to move.

Moved, That the draft regulatory reform order laid before the House on 21 February be approved [14th Report from the Regulatory Reform Committee, Session 2004–05].—(Lord Evans of Temple Guiting.)

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