Company Law Reform Bill

Given what the noble Lord said about the drafting of previous amendments, I venture to suggest with some trepidation that the provisions are clear. The noble Lord is right to say that the difficulty is that codification of the remedies proved to be a very difficult exercise. Indeed, it was too difficult to pursue, although, as he rightly says, the attempt was made. The alternative approach has been taken of directing attention to the existing rules, principles and remedies that are available for the corresponding common law and equitable duties which the new duties are replacing. I respectfully suggest that it is absolutely clear that that is what is intended. Amendment No. 179—the second of the amendments to which the noble Lord has spoken—would create a problem. It would take out the words in brackets in Clause 162(2), which except the reasonable care duty from the provision. The clause otherwise says that these duties are,"““enforceable in the same way as any other fiduciary duty owed to a company by its directors””." We take the view that the,"““duty to exercise reasonable care, skill and diligence””," is not a fiduciary duty. It may be owed by someone who is a fiduciary, but that is not the same thing. Therefore, it is necessary to keep that explicit exception in Clause 162(2). Amendment No. 180 would change the wording from,"““fiduciary duty owed to a company by its directors””," to,"““as though they were fiduciary duties””." Something is missed in that transposition. It is important to keep to the principle that these are enforceable in the same way as any other fiduciary duty owed to the company by its directors. I resist that amendment on the basis that it does not assist in clarifying the purpose of the clause. I say nothing about Amendment No. 181, as the noble Lord does not intend to move it.