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Lord Hodgson of Astley Abbotts: My Lords, the noble and learned Lord the Attorney-General is always very persuasive. I begin, as he ended, by talking about gold-plating. He said that there has been extensive consultation. He said that Clause 636, which deals with compensation, is not good enough because the panel will not use the power—it does not want to. But the power exists.

Lord Goldsmith: My Lords, I also said that I could envisage cases in which the power to provide compensation would not meet the problem. There are certain requirements for the provision of information in which other people are interested, such as employees; the rules may require arrangements in relation to employees to be provided in an offer document. I am doubtful whether a power to provide compensation would meet a failure in that respect.

Lord Hodgson of Astley Abbotts: My Lords, I understand that there were two barrels to that argument. One was that although the panel had the power, it would not want to use it. The noble and learned Lord said that we need not be concerned because the panel could not enlarge the offences. My concern was not about enlarging but altering them. As the nature of what is required in the offer document changes, so does the nature of the offence. In addition, my noble friend Lord Patten mentioned the issue of the light touch.

We read very carefully what the noble and learned Lord said in Committee, which is why we tried to find out what other people were doing about this. We have been unable to find any other country that has found it necessary to introduce a criminal offence to cover this point. We on these Benches are very concerned about gold-plating. We admire what the panel has done; we do not wish to see it dragged any further into the criminal justice system. Its success in the past has been its light touch. We understand that it cannot continue to be a self-regulatory body because of the EU takeovers directive. However, I think that this is a step in the wrong direction and I wish to test the opinion of the House.
16 May 2006 : Column 209

6.16 pm

On Question, Whether the said amendment (No. 464) shall be agreed to?

Their Lordships divided: Contents, 54; Not-Contents, 123.

Division No. 1


Astor, V.
Astor of Hever, L.
Blackwell, L.
Bridgeman, V.
Brougham and Vaux, L.
Buscombe, B.
Caithness, E.
Carnegy of Lour, B.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Craigavon, V.
De Mauley, L.
Dean of Harptree, L.
Denham, L.
Dixon-Smith, L.
Dundee, E.
Eccles, V.
Eden of Winton, L.
Elton, L.
Fookes, B.
Geddes, L.
Hayhoe, L.
Henley, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howe, E.
Jenkin of Roding, L.
Kimball, L.
Kingsland, L.
Lyell, L.
MacGregor of Pulham Market, L.
Mar, C.
Marlesford, L.
Monson, L.
Morris of Bolton, B.
Noakes, B.
Northbrook, L.
Norton of Louth, L.
Patten, L.
Pearson of Rannoch, L.
Peel, E.
Pilkington of Oxenford, L.
Rawlings, B.
Renton, L.
Roberts of Conwy, L.
Saltoun of Abernethy, Ly.
Seccombe, B. [Teller]
Shephard of Northwold, B.
Skelmersdale, L.
Strathclyde, L.
Ullswater, V.
Waddington, L.
Wakeham, L.
Wilcox, B.


Acton, L.
Adams of Craigielea, B.
Adonis, L.
Ahmed, L.
Alli, L.
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Barnett, L.
Bassam of Brighton, L.
Beaumont of Whitley, L.
Bhattacharyya, L.
Bilston, L.
Blood, B.
Borrie, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Carter of Coles, L.
Clinton-Davis, L.
Colville of Culross, V.
Corbett of Castle Vale, L.
Crawley, B.
Darcy de Knayth, B.
David, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Desai, L.
Dixon, L.
Drayson, L.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Foster of Bishop Auckland, L.
Fyfe of Fairfield, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Giddens, L.
Gilbert, L.
Golding, B.
Goldsmith, L.
Gordon of Strathblane, L.
Gould of Brookwood, L.
Graham of Edmonton, L.
Grenfell, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haworth, L.
Hayman, B.
Henig, B.
Hogg of Cumbernauld, L.
Howarth of Newport, L.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Janner of Braunstone, L.
Jones, L.
Judd, L.
King of West Bromwich, L.
Kirkhill, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McDonagh, B.
Macdonald of Tradeston, L.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Masham of Ilton, B.
Mason of Barnsley, L.
Massey of Darwen, B.
Maxton, L.
Moonie, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Yardley, B.
Moser, L.
Nicol, B.
Patel, L.
Pendry, L.
Pitkeathley, B.
Prosser, B.
Puttnam, L.
Ramsay of Cartvale, B.
Rogan, L.
Rooker, L.
Royall of Blaisdon, B.
Sainsbury of Turville, L.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Simon, V.
Smith of Leigh, L.
Snape, L.
Soley, L.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Triesman, L.
Turnberg, L.
Varley, L.
Wall of New Barnet, B.
Walpole, L.
Warwick of Undercliffe, B.
Whitaker, B.
Williamson of Horton, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.

Resolved in the negative, and amendment disagreed to accordingly.

16 May 2006 : Column 210
6.26 pm

Clause 635 [Failure to comply with rules about bid documentation]:

[Amendment No. 465 not moved.]

The Deputy Speaker (Baroness Pitkeathley): My Lords, I should point out that if Amendment No. 466 is agreed to, I shall not be able to call Amendment No. 467 for reasons of pre-emption.

Lord Goldsmith moved Amendment No. 466:

"(b) where the person making the bid is a body of persons, any director, officer or member of that body who caused the document to be published."

The noble and learned Lord said: My Lords, in moving Amendment No. 466, which stands in the name of my noble friend Lord Sainsbury, I wish to speak also to government Amendments Nos. 470 and 474 and to Amendment No. 467.

In Committee the noble Lords, Lord Hodgson and Lord Sharman, proposed amendments in relation to the proposed bid documentation offence at Clause 635, which was the subject of the previous debate. Certain of those matters are being pursued further today. If I understood the purpose behind those amendments correctly, they sought both to provide greater certainty as regards those potentially liable for the bid documentation offence and to narrow the scope of such persons.

As I foreshadowed in what I said in the previous debate, we have reflected further on the scope of the bid documentation offence in the light of those amendments and those concerns. We have also discussed the coverage of the bid documentation
16 May 2006 : Column 211
offence with lawyers responsible for advising bidders on the preparation of offer and response documents. The present amendments result from those discussions and deliberations.

Amendments Nos. 466, 470 and 474 seek to do two things. The first is to restrict liability for the offence in respect of offer documents to the bidder or any director, officer or member of the bidder who caused the bid document to be published. This has the important consequence of relieving employees and agents of the bidder from potential liability for the offence and the additional costs that might have arisen from this; for example, to professional advisers.

Secondly, we have sought to clarify the intention behind the provision related to the liability of officers where the offence is committed by a corporate body. This aims to ensure that where, for instance, a corporate director is liable, then the directors of that corporate body can also be pursued. The intention has never been to make the directors of the corporate body strictly liable, which was a concern expressed in Committee.

Amendment No. 467, which stands in the names of the noble Lords, Lord Sharman and Lord Razzall, proposes a different approach. It aims to link liability for the offence to the person responsible for the offer document in accordance with the rules of the Takeover Panel. We carefully examined this approach. I recognise that it has merits but we decided to pursue the formulation that we have taken as the panel rules do not provide absolute clarity as to the person responsible in all cases and there is an element of discretion available to the panel. For instance, the panel may consent to certain directors not being responsible in exceptional circumstances. We think that our solution produces a similar result to that proposed by this amendment in most cases, but has the advantage of greater certainty.

I very much hope that noble Lords will agree that our amendments meet the concerns which have been expressed. I hope that they will find support. I beg to move.

6.30 pm

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