Company Law Reform Bill [HL]

moved Amendment No. 77:"Page 69, line 1, leave out from ““duties”” to end of line 2 and insert ““do not apply to shadow directors save as otherwise provided for in the Companies Acts””" The noble Lord said: My Lords, the clauses that we shall be debating next raise important points of principle. However, Amendment No. 77 is a probing amendment which follows on from Grand Committee stage. It deals with the responsibilities and duties of shadow directors. It is an opportunity for the Attorney-General to clarify the position of shadow directors. On shadow directors, the Bill allows the common law to develop in relation to duties. At present, the application of current common law rules and equitable principles is an area of uncertainty. For ordinary directors, the duties are codified in the Bill in the statutory code. Surely that is confusing and unfair. The duties of shadow directors should be codified and not left in doubt. To be frank, I suspect that the Government have just said that it is too difficult to achieve that. The process is unsatisfactory. The courts decide which common law rules and equitable principles should apply to shadow directors and, of course, they no longer apply to ordinary directors, as their duties are codified in statute. Then the courts have to decide which general statutory duties are applicable that correspond with the common law rules and equitable principles. The Law Society is concerned about this issue and I, like other noble Lords, will appreciate hearing the Attorney-General’s comments. I beg to move.