Clause 195 - Disqualification

Part of Enterprise Bill – in a Public Bill Committee am 6:45 pm ar 23 Ebrill 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry 6:45, 23 Ebrill 2002

On a point of order, Mr. Beard. I should draw hon. Members' attention to the letter that I have sent to members of the Committee about the OFT's disqualification guidance, which I am sure they will find useful and helpful in further debate on the matter on Report. I hope that that will give the Committee an opportunity to consider that guidance in more detail.

First, the amendment would prevent the court from considering whether the director of a company that has committed a breach of competition law falling outside the ambit of the cartel offence was unfit to be involved in the management of a company. The Bill allows the court to disqualify a director who has been convicted of a cartel offence under clause 179.

It is right that the court should have the opportunity to consider such cases and disqualify directors where that is appropriate to protect the public. Some 7,607 directors have been disqualified under existing provisions, the vast majority of them for being unfit directors of insolvent companies under the existing arrangements. There was some debate this morning about whether the existing provision was being much used, but that is the figure for the five years from 1996 to 2001.

It is important to look at the matter in perspective. The vast majority of companies in business operate responsibly. The disqualification provisions will apply only to the very small minority of directors whose companies have been found to have breached competition law. It will be for the court to decide, on the facts of each particular case, whether the person is fit to be involved in the management of a company. If the court is not satisfied that is the case, it may not make a disqualification order. I believe that we have got the balance right in giving the courts the opportunity to consider the matter, giving the opportunity for disqualification but leaving it up to them to decide. That will make a difference in each case, which is the point of the court's considering the evidence and circumstances in each individual case.

I expect that the vast majority of cases will relate to active involvement in a breach of competition law rather than anything else. However, it is right that the court should decide whether there are other circumstances, such as a lack of knowledge, that might be equivalent to an unfitness for a director to continue. I hope that I have reassured Opposition Members about the nature of the clause, and that the amendment will be withdrawn.