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Lord Sharman: I should like to speak to Amendment No. 101, which is included in this group, and by comparison with the recent exposition of the noble Lord, Lord Kingsland, is a modest contribution to the debate. It seeks to clarify what evidence the prosecution would be capable of leading to, or introducing into, criminal proceedings.

The term "relating to" used in Clause 19 is a wide one. As presently drafted, it seems to prohibit the prosecution from taking any evidence related to the terms of the reply, including the circumstances surrounding the making of the reply. That is too wide. While on the one hand compelled evidence is clearly not something that one would want to see used in prosecution, it should be possible to ensure that the privilege of non-self-incrimination is maintained while allowing the prosecutor to bring in other competent evidence. Therefore, replacing the words "relating to" with the word "of" would achieve that objective.

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Lord McIntosh of Haringey: I am the last person to dwell on,


    "old, unhappy, far-off things,

And battles long ago". The noble Lord, Lord Kingsland, knows perfectly well that we believe that these human rights issues are important. That is why Clause 10 of the Bill amends Section 219 of the Insolvency Act. Clause 10 provides in terms that answers obtained using the powers exercisable under Section 218(5) of the Act—namely, those exercisable under Sections 431 or 432 of the Companies Act 1985—cannot be used in evidence in criminal proceedings against the person who gave those answers other than in very limited circumstances. Similar provision is made in relation to new Section 7A(6) of the Act by paragraph 10 of Schedule 2.

However, it is already the case that answers given at an examination under Section 133 and 236 of the Insolvency Act cannot be used in evidence in criminal proceedings against the person concerned, again, subject to limited exceptions. That is because, on 14th April of this year, paragraph 7 of Schedule 3 of the Youth Justice and Criminal Evidence Act 1999 came into effect amending Section 433 of the Insolvency Act. Section 433 is not relevant to evidence obtained under Section 219 as proposed to be amended or Section 7A, as those sections provide for the use of powers contained in the Companies Act, not the Insolvency Act.

Therefore, given that evidence obtained under Sections 133 and 236 of the Insolvency Act cannot be used in criminal proceedings against the person concerned except for limited purposes, I urge the noble Lord, Lord Kingsland, not to press these amendments.

7.15 p.m.

Lord Kingsland: I thank the Minister for his reply. I shall read his remarks carefully in Hansard, either to return or not to return to this matter at Report stage.

Amendment, by leave, withdrawn.

[Amendments Nos. 79 to 81 not moved.]

Schedule 2, as amended, agreed to.

Clause 3 agreed to.

Schedule 3 [Individual voluntary arrangements]:

[Amendments Nos. 82 to 90 not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 91 and 92:


    Page 36, line 25, leave out ("dividend") and insert ("amount").


    Page 36, line 29, leave out from ("person") to end of line 30 and insert ("the amount payable under the arrangement."").

On Question, amendments agreed to.

[Amendments Nos. 93 to 95 not moved.]

Schedule 3, as amended, agreed to.

Clause 4 [Qualification or authorisation of nominees and supervisors]:

[Amendments Nos. 96 to 99 not moved.]

Clause 4 agreed to.

Clauses 5 to 8 agreed to.

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Schedule 4 [Minor and consequential amendments about disqualification of company directors etc.]:

Lord Sharman moved Amendment No. 100:


    Page 39, line 9, at end insert—


("( ) It shall be competent for a director to object to proceedings being retained in the wrong court and to apply to the court to transfer proceedings to the proper or more appropriate court for determination; and if the court is satisfied that proceedings should be transferred, they shall be transferred to a specified court for determination.").

The noble Lord said: This amendment seeks to make clear that a director can object to proceedings being retained in the wrong court and seek to have them transferred to the proper or more appropriate court. Under the Bill as drafted, proceedings could be raised in the wrong court, to the prejudice of a respondent director. If the director should be given an opportunity to address this issue, then it is appropriate that he or she be afforded the opportunity of making representations in the proper form. That is what the amendment seeks to achieve. I beg to move.

Lord McIntosh of Haringey: It is not necessary to make this provision. The court already has the power to transfer proceedings to another court when it considers it appropriate to do so. Therefore, it is open to a party to the proceedings to apply to transfer those proceedings.

Lord Sharman: I am grateful to the Minister for his response, on which basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 4 agreed to.

Clause 9 agreed to.

Clause 10 [Restriction on use of answers obtained under compulsion]:

[Amendments Nos. 101 to 105 not moved.]

Clause 10 agreed to.

Clause 11 [Insolvent estates of deceased persons]:

Lord Sharman moved Amendment No. 106:


    Page 7, line 28, at end insert—


("(6) Subsection 5 shall not apply in relation to the estate of a person who died before the coming into force of that subsection."").

The noble Lord said: This amendment refers to a matter to which I spoke at Second Reading, dealing with the position of insolvent estates. It is necessary that there should be no retrospective effect on any third party who might have acquired property in good faith. This is why the amendment states:


    "Subsection 5 shall not apply in relation to the estate of a person who died before the coming into force of that subsection".

I beg to move.

Lord McIntosh of Haringey: We understand the concern of the noble Lord, Lord Sharman, which he also raised at Second Reading. We agree that, left as it is, this clause could prejudice the marketability of property where the deceased's interest in jointly-owned property has passed to the survivor on death, irrespective of whether the deceased is solvent or not. We would not wish an arm's length disposal of a

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property by a surviving partner to be made unnecessarily difficult because prospective purchasers were concerned that they might find they did not have good title if the deceased's estate became insolvent.

However, we are not in a position to put down an amendment to deal with this point at this stage. We are in the process of preparing one which should deal with this concern and we will bring this forward as soon as it is ready.

We also propose that the new provision will apply only in those cases where the petition for the insolvency administration order is presented after the new provision has come into force. We recognise that this will not go as far as the proposed amendment. However, on that point I would have to say that we are not convinced that the creditors of an insolvent estate should be in a worse position if the debtor has died than if he is living. We think that limiting the application of the new provision in the way I have just described strikes an appropriate balance.

We are also looking at how we might protect the position of innocent third parties where there have been dealings in the property between the date of death and an insolvency administration order. I hope that reassures the noble Lord, Lord Sharman.

Lord Sharman: I thank the Minister for his reply. I am much reassured and I look forward to seeing the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 agreed to.

Clause 12 agreed to.

Clause 13 [Model law on cross-border insolvency]:

Lord McIntosh of Haringey moved Amendment No. 107:


    Page 7, line 41, leave out ("made with the agreement of the Lord Chancellor").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 109. The amendment provides that the consent of Scottish Ministers must be obtained before the Secretary of State makes regulations extending to Scotland giving effect to the UNCITRAL model law on cross-border insolvency under this clause. This is appropriate as implementation of the model law is likely to touch on matters which have been devolved to that jurisdiction. Additionally, the amendment makes it clear that the agreement of the Lord Chancellor is only necessary where such regulations are to extend to England and Wales.

Perhaps I may refer to Amendment No. 108. In that amendment the noble Lord, Lord Sharman, proposes that regulations under Clause 13 should be made with the agreement of the Advocate General for Scotland as well as that of the Lord Chancellor, but we propose by amendment of this clause that regulations be made, in so far as they extend to Scotland, with the agreement of Scottish Ministers. That has been done with the consent of the Scottish Parliament. Furthermore, the clause, as we propose it to be amended, will mean that regulations extending to England and Wales will be made with the agreement of the Lord Chancellor. I beg to move.

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On Question, amendment agreed to.

[Amendment No. 108 not moved.]


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