Charities Bill [HL]

moved Amendment No. 87:"Page 46, line 32, at end insert—" ““(   )   Where the statement in subsection (6)(b) above is false, or appropriate arrangements for discharge of any liabilities have not been made, the relevant charity trustees at the time concerned shall be jointly and severally personally liable for such liabilities.”” The noble Lord said: My Lords, we have discussed this issue on a number of occasions. We discussed it at Committee stage when we dealt with this Bill, or its predecessor, before the last election. The Government were as good as to accept the need for there to be a statement of appropriate arrangements made by charities that are engaging in what is called relevant charity merger, and that is now in Clause 42(6) on page 46. Let us leave aside the issue of whether it is required to be made, but the notification, if given, must,"““include a statement that appropriate arrangements have been made with respect to the discharge of any liabilities of the transferor charity or charities””." I am grateful for that having been placed in the Bill. However, there is a further lacuna in that there is no sanction on the part of any charity or charities giving such notification if the statement of arrangements that they give to the Charity Commission is not appropriate and if the statement that they make is otherwise false. I have had discussions with officials on this matter and one answer is: you have your normal remedies. You can go to the registrar of companies—by this time at least the charity having ceased to exist—and ask the registrar to reinstate the corporate charity, and then you can bring an action against the corporate charity that has been put back on to the register. It may have no assets but you can bring an action against it, and if you are successful you can look into the question of whether the directors have been in breach of other provisions of the Companies Act in winding it up without due allowance made for the liabilities concerned. All that is a grotesquely unreasonable and unfair set of so-called remedies with which to lumber an innocent creditor in the event that these arrangements take their course. My amendment, to which the noble Lord, Lord Hodgson of Astley Abbotts, has added his name, seems to be abundantly fair, because it simply says that if your statement is false you cannot hide behind it, and if you have not made appropriate arrangements you cannot hide behind them. In those circumstances, instead of going round the mulberry bush you can proceed against the trustees of the corporate charity themselves personally. They then stand on the same footing as trustees of an unincorporated charity; namely, that they are jointly and severally liable for the debts concerned. On that basis, I beg to move.