I thank all the speakers on this group. I will take the points made in turn, starting with Amendment 3 in the name of the noble Lord, Lord Lea. I get the impression that his amendment intends to expand the information that the court can consider when it hears an application for the disqualification of a former director of a dissolved company to include that person’s conduct in all other insolvent or dissolved companies. If that is the case, I am happy to assure the noble Lord that the court is already able to consider such evidence, whether through the report supporting the disqualification application or through the evidence submitted either in defence of the application or in mitigation by the defendant. It is also possible for the Secretary of State to introduce information provided by third parties, such as regulators, in support of a disqualification application. I hope that the noble Lord will concede that his amendment is unnecessary.
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Amendment 7 in the name of the noble Baroness, Lady Blake, would require the Secretary of State to announce a public inquiry into unlawful behaviour of former directors of dissolved companies within one month of Royal Assent. It is worth pointing out that, as we discussed, and as the noble Lord, Lord Fox, made clear, the measure in the Bill is there to address an issue that is already known about: the difficulty of tackling director misconduct in relation to dissolved companies. It will expand the current power of the Secretary of State to investigate the conduct of directors and apply for their disqualification to former directors of dissolved companies. It will allow specific instances of misconduct to be identified and addressed, and where that misconduct has caused losses to creditors,
it will allow for compensation orders to be sought. In this way, it will target those individuals who abuse the dissolution process and have used it to hide reckless or irresponsible behaviour, and act as a deterrent to others acting in a similar way.
Company dissolution is an important part of the life cycle of registered companies and the measure does not seek to change or review any aspects of that fundamental process. Those are the objectives of the measure. It is my strong view that a public inquiry would have no such targeted effect, while being a very different proposition to what is intended in the Bill. Although public inquiries of course have an important part to play in dealing with matters of national concern, such as when there has been a major incident or accident —a number of inquiries are ongoing—or when something goes seriously wrong inside a government or public body, the question of whether one should be held in relation to the conduct of former directors of dissolved companies is, I respectfully submit, not really a matter for the Bill.
I move on to some of the general points that were made. The noble Lord, Lord Fox, asked some quite reasonable questions that require answers. He first asked which companies will be held and targeted for investigations, and whether that will be at the expense of other investigations. I can tell the noble Lord that the Insolvency Service prioritises investigations according to the seriousness of the misconduct and, in each case, it applies a public interest test to determine which of the complaints it receives should be investigated. This ensures that public money is used effectively and that investigations are not carried out in situations where other regulators have a role or other remedies exist.
Although the changes will expand the investigative powers of the Insolvency Service, this will not incur ongoing additional cost to the public purse because, in any case, cases will be prioritised for investigation according to which is most strongly in the public interest, and always within the resources available for such work. Each disqualification case is assessed on public interest grounds, and the impact on government—and other—creditors will of course always be included in that assessment. I am happy to reassure the noble Lord that the impacts on other creditors will also be assessed. For example, the serious public impact of a company defrauding vulnerable people, such as elderly customers, will be considered by the service when it decides whether to launch an investigation.
On the comment made by the noble Lord, Lord Fox, about the resources of the Insolvency Service, that is subject to separate spending review processes and negotiations with the Treasury, as always. Of course, the Insolvency Service’s resources are not limitless, but I can reassure him that all cases are carefully reviewed and assessed to determine the degree of harm caused to the public and to businesses, with the most serious cases prioritised, as I said earlier.
I think that also answers the noble Baroness, Lady Blake’s question about how more or other resources will be allocated. It is a matter for separate discussions with the Treasury. We will want to ensure that the resources made available to the Insolvency Service for these cases are adequate for investigating the most
serious cases and resolving those issues. With those reassurances, I hope that the noble Lord, Lord Lea, will feel able to withdraw his amendment, and that the noble Baroness, Lady Blake, will not press hers.