Company Law Reform Bill [HL]

moved Amendment No. 490:"Page 468, line 16, at end insert—" ““(2)   Such agreement may be valid for a maximum of twelve months.”” The noble Lord said: My Lords, I rise to rise to speak to Amendment No. 490 which concerns paragraph 9 of Part 4 of Schedule 6. Part 4 of Schedule 6 enables companies to communicate electronically with their shareholders where shareholders have given their consent. But there appears to be no time limit to the consent once given. The noble Lord, Lord Sharman, made clear during our debates that the electronic communication provisions enable companies to save a considerable sum of money. However, there is also the potential for problems caused by the failure of an individual member to understand properly what he or she is being asked to accept, and then being deemed to have agreed under paragraph 10. There was some confusion when this amendment was tabled in Grand Committee. It was originally tabled with an amendment that made it read ““minimum”” instead of ““maximum””. This was corrected before the Committee sat, but I fear too late for the changes to reach the Minister as his speaking note addressed the minimum rather than the maximum that we intended. The noble Lord, Lord Sainsbury, said,"““I do not see the value of requiring a minimum period of commitment to receiving company documents by means of a website. Why should a member who agrees to use the web not be able to change his mind?””.—[Official Report, 30/3/06; col. GC 378.]" Absolutely: that is precisely the point. I am sorry that we caused confusion with our wrong tabling in the first place. We have therefore re-tabled this amendment for the same reasons that we did in Committee. The amendment seeks to cap any agreement between a company and a member to a maximum of 12 months. When this period expires the company would have to negotiate another agreement for the next year. We do not think that it is unreasonable to require companies to do this, given the savings they will make by using communication via a website in the event of member agreement. The main benefit from this will be to protect members who unwittingly agree to use the website for communication. They will then be given an opportunity to rescind their decision, while those who wish to continue with such an agreement can easily continue to do so. I beg to move.