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3 Feb 2010 : Column 224
Lord Howard of Rising: My Lords, this is a probing amendment. The period of six months that it specifies is not set in stone. The important point is to establish for how long the Minister envisages these orders being in effect. It would make sense for there to be a statutory time limit. If the appointed manager cannot remedy the failure in, say, six months or a year, it may well be impossible to solve the problem. This gives rise to the question of what the core role of the manager will be. The six or 12-month period should be adequate if the main role is to ensure the proper running of the registration of domain names and to ensure that abuses in registering names are stopped, rather than to look after the financial health of the registry. This amendment, or a similar one, would reassure those who are concerned that these powers should not allow a Government to step in permanently via the back door, using the excuse of a serious failure to carry out, in essence, nationalisation. I beg to move.
The Earl of Erroll: My Lords, the Bill could last a long time. The order could still be running after a registry changes its constitution and could be made up in very many different ways-it could be quite difficult for any directors who are left in place if the manager is foisted on them for a very long time. There may be issues of corporate governance and other company law, which may have to be complied with and which the manager may not be specifically tasked with, so there could be conflicts of interest in running the company. Section 450 of the Companies Act, the duties of directors, stakeholders and other interests all have to be taken into account, so there should be some sort of time limit to sharpen people's minds.
Lord Young of Norwood Green: My Lords, I am afraid that I cannot grant the earnest wish of the noble Lord, Lord Howard, in relation to the Government's attitude. The amendment would artificially limit to six months the time that is available to the manager to remedy the failure of a registry. I assure the noble Lord that the Secretary of State would have no interest whatever in keeping the manager in place any longer than was strictly necessary to complete this task, but there might be circumstances in which more than six months were required. I also assure the noble Lord that we have had our fill of nationalisation with the banks. We are certainly not into that concept with domain name registries.
The clear intention of the Government is to remove the manager at the earliest possible date in all cases. That is specifically our intention; with regard to in extremis situations, we felt that it was in the national interest. The legislation already makes sure that this will not happen. I cannot resist observing that when the noble Earl, Lord Erroll, said that this Bill could last a long time, I felt that it already had. I hope that the noble Lord will feel capable of withdrawing his amendment in the light of my assurance.
5.15 pm
Lord Howard of Rising: I thank the Minister for his remarks. If he genuinely means that there is no intention to allow any form of nationalisation, then it would be perfectly feasible to put in a time limit, even if it was a
3 Feb 2010 : Column 225
Lord Howard of Rising: My Lords, the two amendments in this group are tabled to probe the remuneration of the manager. Will the Minister take into consideration the pay of the manager-or indeed, possibly managers-whom the person will be replacing, or will the new manager be paid on public servant scales? The power to reclaim the remuneration from the registry makes the sum which is decided potentially more controversial than it might otherwise be. This in turn raises again the issue of what the Government see as the function of the new manager, which I referred to when we discussed the previous amendment. Will his role be more one of ensuring that domain registry ceases to abuse its position, or more that of the traditional company doctor? This will have a bearing on the remuneration package, on which the shareholders or beneficiaries of the registry might have strong views. I beg to move.
Lord Young of Norwood Green: My Lords, as I understand it, the purpose of this amendment is to ensure that the order appointing the manager details the steps that the Secretary of State considers appropriate for the registry to take to remedy its failure, or the consequences of its failure, being those that the registry should have taken, and which the manager must ensure are taken. The clause allows for the order to include these steps. Further, the Bill is clear that the purpose of the manager's appointment is to secure that the steps identified by the Secretary of State are taken. We want the shortest possible intervention necessary to restore the efficient and effective functioning of the domain name and organisation. That is our clear intention, and I hope that in the light of this assurance, the noble Lord will feel capable of withdrawing the amendment.
Amendment 228A would make it a requirement in the Bill to ensure that the manager limited his actions to ensuring that the registry remedied the failure, and any consequences of the failure, which have been set out in the order appointing the manager. Those are the two explicit circumstances in relation to the role-ensuring that the registry remedies the failure, and any consequences of the failure. I can further assure the Committee that the Secretary of State would have no interest whatever in the manager doing anything other than correcting the failure of the registry. The clause already makes it clear that the manager is being appointed solely for the purpose of securing that the registry takes the steps that the Secretary of State considers appropriate to remedy the failure.
Furthermore, new Section 124O of the 2003 Act introduced in Clause 19(1) restrains the manager from doing anything more than is necessary to comply with the order, and we feel under the circumstances that
3 Feb 2010 : Column 226
Lord Howard of Rising: Amendment 228A, but we have not got there yet. He jumped the gun a bit. I understand his anxiety to get through the business, but perhaps that is carrying it a bit too far. In the mean time, I beg leave to withdraw Amendment 226.
226A: Clause 19, page 21, line 11, at end insert-
"( ) An order under section 124O must make provision about the steps that the Secretary of State considers appropriate for remedying the failure and any consequences of the failure."
Lord Howard of Rising: Although I have heard the noble Lord's response, I will still make my points and hope to hear what he has to say again, or perhaps a varied version of it. This amendment seeks to limit the authority of the appointed manager to deal with the rectification of a specific problem or problems. It would not be desirable or justifiable for the appointed manager to involve himself in matters which are not related to the task for which he was appointed to carry out.
As the Bill is drafted it could be interpreted that once the manager is appointed, he could extend his activities into all sorts of areas which might have nothing to do with the problem he had been appointed to deal with. Since the Secretary of State will already have identified the matters for concern, there should be no need for the manager to have discretion to wander into areas that were not intended. If, on carrying out his appointed role, the manager finds that he needs to extend his activities, there is nothing to stop the Secretary of State from issuing a further order or orders to extend the remit of the manager.
Lord Young of Norwood Green: My apologies for being a bit previous on this group. To reiterate the assurance in relation to Amendment 226A, we share the view that in taking over the registry at this stage, the role of the manager will be to remedy the failure and the consequences of the failure, and not go beyond that remit. The clause allows for the order to include these steps. Furthermore, the Bill is clear that the purpose of the appointment of the manager is to secure that the steps identified by the Secretary of State are taken. With that assurance, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Howard of Rising: If, as the noble Lord says, that is the purpose, why should we not include the amendment?
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Lord Young of Norwood Green: We take the view that the clause allows for the order to include these steps. The order, when taken, will define the steps asked for by the noble Lord. We do not think that it is necessary to put it in the Bill.
Lord Clement-Jones: Perhaps I may suggest to the Minister where he might find comfort. Subsection (2) of new Section 124O to be inserted in the Communications Act 2003 under Clause 19 states:
"The Secretary of State may by order appoint a manager in respect of the property and affairs of the internet domain registry for the purpose of securing that the registry takes the steps described in subsection (1)(c)".
That clearly limits the power.
Lord Young of Norwood Green: That reinforces what I have been saying. We think that we have enough in the Bill to satisfy the understandable concerns of the noble Lord, Lord Howard.
Lord Howard of Rising: It is not often that I would disagree with the noble Lord, Lord Clement-Jones, on a point of law. It is with the greatest temerity that I can even think of it. Equally, I do not think that it is as he says. The provision is far too broad and needs to be narrowed as we have suggested. I would therefore like to test the opinion of the Committee.
5.24 pm
Contents 79; Not-Contents 146.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Arran, E.
Astor of Hever, L.
Attlee, E.
Baker of Dorking, L.
Bates, L.
Bridgeman, V.
Brougham and Vaux, L.
Byford, B.
Caithness, E.
Cathcart, E.
Colwyn, L.
Courtown, E.
De Mauley, L.
Denham, L.
Dixon-Smith, L.
Elton, L.
Ferrers, E.
Fookes, B.
Fowler, L.
Geddes, L.
Glenarthur, L.
Glentoran, L.
Goodlad, L.
Greengross, B.
Griffiths of Fforestfach, L.
Hamilton of Epsom, L.
Hanham, B.
Henley, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
James of Blackheath, L.
Kimball, L.
Knight of Collingtree, B.
Laird, L.
Lawson of Blaby, L.
Leach of Fairford, L.
Lindsay, E.
Lucas, L.
Luce, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Marlesford, L.
Mayhew of Twysden, L.
Montrose, D.
Morris of Bolton, B.
Naseby, L.
Norton of Louth, L.
O'Cathain, B.
3 Feb 2010 : Column 228
Park of Monmouth, B.
Patten, L.
Perry of Southwark, B.
Powell of Bayswater, L.
Rawlings, B.
Sanderson of Bowden, L.
Seccombe, B. [Teller]
Selkirk of Douglas, L.
Selsdon, L.
Shaw of Northstead, L.
Sheikh, L.
Shrewsbury, E.
Skelmersdale, L.
Skidelsky, L.
Stewartby, L.
Strathclyde, L.
Taylor of Holbeach, L.
Tebbit, L.
Trumpington, B.
Vinson, L.
Wakeham, L.
Wilcox, B.
Acton, L.
Ahmed, L.
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Bach, L.
Bassam of Brighton, L. [Teller]
Berkeley, L.
Best, L.
Bilston, L.
Borrie, L.
Bragg, L.
Brett, L.
Brookman, L.
Butler-Sloss, B.
Campbell of Surbiton, B.
Campbell-Savours, L.
Carter of Coles, L.
Chorley, L.
Clark of Windermere, L.
Clinton-Davis, L.
Colville of Culross, V.
Craigavon, V.
Crawley, B.
Crisp, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Desai, L.
Donoughue, L.
D'Souza, B.
Dubs, L.
Eames, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Emerton, B.
Erroll, E.
Evans of Parkside, L.
Falkender, B.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Ford, B.
Foster of Bishop Auckland, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Grantchester, L.
Greaves, L.
Grenfell, L.
Harris of Haringey, L.
Hart of Chilton, L.
Haworth, L.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hunt of Kings Heath, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Joffe, L.
Jones of Whitchurch, B.
Judd, L.
King of West Bromwich, L.
Kinnock, L.
Kirkhill, L.
Lea of Crondall, L.
Lipsey, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Martin of Springburn, L.
Mawson, L.
Maxton, L.
Meacher, B.
Mitchell, L.
Monson, L.
Moonie, L.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Handsworth, L.
Morrow, L.
Murphy, B.
Myners, L.
O'Loan, B.
O'Neill of Clackmannan, L.
Parekh, L.
Patel, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Prosser, B.
Puttnam, L.
Ramsay of Cartvale, B.
Rea, L.
Redesdale, L.
Rendell of Babergh, B.
Richard, L.
Rogan, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Saltoun of Abernethy, Ly.
Sawyer, L.
Sewel, L.
Sheldon, L.
Simon, V.
Slim, V.
Smith of Gilmorehill, B.
Snape, L.
Soley, L.
Steel of Aikwood, L.
3 Feb 2010 : Column 229
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Thornton, B.
Tomlinson, L.
Tope, L.
Tunnicliffe, L.
Uddin, B.
Wakefield, Bp.
Wall of New Barnet, B.
Walpole, L.
Warner, L.
Warnock, B.
Waverley, V.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williamson of Horton, L.
Young of Hornsey, B.
Young of Norwood Green, L.
The Earl of Erroll: My Lords, I have tabled this terribly simple amendment to help the Minister have more flexibility. As it reads at the moment, should the manager have to go in and sort things out, there is provision for the registry's directors to be prevented from exercising any of those functions. One can rightly see why one might want to restrain them from interfering, but it would seem to be all or nothing. I should like to insert the words "any of" the registry's directors so that they can select, because one or two of the directors may have expertise in a particular area that could assist and not obstruct the manager. Giving the Minister the discretion to pick and choose among the directors, although he can still restrain all of them if he wishes to, gives much more flexibility to this clause. I beg to move.
Lord De Mauley: Amendment 227 would introduce a sensible amount of flexibility. In many, perhaps even most organisations, each director, especially the executive ones, carries out a different role. It is possible that some of the directors may still be of value to the appointed person in his role in the registry when the others are no longer required. It would be throwing the baby out with the bathwater to insist that they, too, must be excluded because of their less helpful colleagues. There is also the matter of continuity. Getting rid of everyone at the top without a proper handover period might create problems.
The wording of the Bill without this amendment is unnecessarily inflexible, while at the same time the insertion of the words in the amendment would still allow the prevention of all the directors exercising the functions in question, if that was necessary.
Lord Young of Norwood Green: My Lords, I thank the noble Earl for his offer of help. The Government recognise that it may not be appropriate in every case for all the directors to be deprived of their functions and, taking that into account, we are prepared to accept the amendment.
Amendments 228 and 228A not moved.
3 Feb 2010 : Column 230
The Earl of Erroll: This is another amendment where I hope I am being helpful in order that something inadvertent does not happen. It was pointed out to me that should there be an appeal and the courts end up taking an interest, the issue will probably have got quite complex and could be tricky-there could be points of law and all sorts of things involved. If this then involves the removal of the powers of the directors or even the directors themselves, they would not be able to appeal as members of the company any more, and there could be difficulties. It was therefore felt that it would be wiser to have such an appeal or whatever held at High Court level, where there is the expertise to consider things properly, rather than at county court level. A county court judgment might still be good but might be less considered; I am given to understand that there would be a problem appealing from it. Again, this amendment seeks to help the Minister so that, if things come to these dire straits, there is a better outcome overall.
Lord Young of Norwood Green: My Lords, as I understand it, the noble Earl, Lord Erroll, is concerned that the instances where the Secretary of State may have to apply to the court for directions are too serious to fall within the jurisdiction of the county court.
First, I should point out that the amendment will create an anomaly between England and Scotland, where in the case of the latter the sheriff-the equivalent of a county court-will retain jurisdiction. This definition of the court is derived from the Companies Act 2006. In that case, Parliament chose to give jurisdiction to both the High Court and the county court. An effect of this amendment would be to appear to put domain registries in a different category from all other companies.
I assure the noble Earl that no prejudice to registries would occur were the Secretary of State to apply for directions to the county court rather than to the High Court. Indeed, as he is no doubt aware, the Civil Procedure Rules give a wide discretion for a case to be transferred from the county court to the High Court if necessary. Furthermore, it may be considered a waste of resources to require every application to be made to the High Court.
I hope that in the light of this explanation the noble Earl will feel able to withdraw his amendment.
The Earl of Erroll: I thank the Minister very much for that extremely comprehensive reply, which answers most of the questions. I see his point about the anomaly; that could be tidied up at Third Reading, should it be necessary. That is exactly what Third Reading is for, and I am sorry we missed the point. I hear what he says; he is probably right; I should like to go back, confer and make sure. I beg leave to withdraw the amendment.
Clause 19, as amended, agreed.
Clause 20 : Application to court to alter constitution of internet domain registry
3 Feb 2010 : Column 231
Clause 20, as amended, agreed.
Clause 21 : Functions of C4C in relation to media content
Lord Howard of Rising: My Lords, Amendment 230A probes the relationship between Channel 4's existing remit and the new one which is being debated today. Channel 4's existing remit is set out in Section 265 of the Communications Act which, as it is unamended by this Bill, will therefore remain in force.
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