Company Law Reform Bill [HL]

I have added my name to the amendments in this group, spoken to by the noble Baroness, Lady Goudie, and support everything that she has said. Case law is based on the current formulation, which talks about securing needless publicity for defamatory matter. We find it difficult to see what abuse other than defamation is likely to arise. Amendment No. 322A, which is in my name, would, on a probing basis, delete subsection (9) from Clause 505. We find it difficult to understand what the rights conferred by the subsection refer to. If such rights are abused, a statement need not be sent out or read out at the meeting, so it is important to know precisely what rights are conferred by the provision. Subsection (2) permits a resigning auditor to call on the directors to convene a general meeting to consider the circumstances of the resignation. The right of the outgoing auditor under this provision is thus to require a meeting of the members. Subsection (3) allows the auditor to request that a statement of reasons be circulated. This is a right to ask, but it does not automatically result in a statement being circulated if, for example, if it is of an unreasonable length or late. My purpose in tabling Amendment No. 322A is to find out what rights are being abused. Is it the right to call the meeting or to ask to have a statement circulated? How does abuse of these kinds of rights—the right to call a meeting or ask for circulation of reasons—actually occur? This is another facet of the problem of changing from a well-tried formulation, for which we have case law, to the more nebulous concept of abuse. That is why we support the amendments of the noble Baroness, Lady Goudie.