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Lord Hodgson of Astley Abbotts: My Lords, I am extremely grateful to the Minister for that very full response. Clearly, a great deal of thought has been given to this issue. I am grateful for the half—or is it a third?—of a loaf in regard to the change of approach as to who can execute documents and their appearance on the register. I think that we have gone as far as we can on this issue and, therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Effect of registration]:
[Amendments Nos. 3 and 4 not moved.]
Clause 44 [Execution of documents]:
[Amendments Nos. 5 and 6 not moved.]
Clause 115 [Rights to inspect and request copies]:
Lord Sainsbury of Turville moved Amendment No. 7:
"( ) A person seeking to exercise either of the rights conferred by this section must make a request to the company to that effect.
( ) The request must contain the following information—
(a) in the case of an individual, his name and address;
(b) in the case of an organisation, the name and address of an individual responsible for making the request on behalf of the organisation;
(c) the purpose for which the information is to be used; and
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(d) whether the information will be disclosed to any other person, and if so—
(i) where that person is an individual, his name and address,
(ii) where that person is an organisation, the name and address of an individual responsible for receiving the information on its behalf, and
(iii) the purpose for which the information is to be used by that person."
The noble Lord said: My Lords, I shall speak to Amendments Nos. 7 to 10, which relate to the register of members, and also to Amendments Nos. 51 to 65 and to Amendments Nos. 81 and 99.
Recent activities of animal rights activists have once again focused attention on the risks associated with shareholders' names and addresses being publicly available. Last week, noble Lords made clear that they wanted the Bill to provide greater protection for members. We were very sympathetic to that. Clearly, there is a balance to be struck between, on the one hand, protecting members from attempts to defraud or to harass them and, on the other hand, members' and the public's right to know who a company's members are and how to contact them. As the UK Shareholders Association points out,
I do not think that it is possible, while retaining the principle that the register is a public document, to draft provisions that will make it impossible for anyone ever to abuse the information it contains. However, I believe that this group of amendments strikes as fair a balance as possible between the various competing interests.
Before I deal with the amendments in detail, it is perhaps worth explaining the Government's general approach to this problem. We start from the position that the existing law, which has been amended several times in recent years, particularly by the Serious Organised Crime and Police Act 2005, is entirely adequate to deal with cases of the sort recently exemplified by the attempted harassment of GlaxoSmithKline shareholders. Once someone is putting information from the register to malicious or fraudulent use, they will be committing an offence under the existing law. Moreover, the existing law on aiding and abetting, counselling and procuring and conspiring to commit criminal offences deals with those who deliberately assist campaigns of fraud or intimidation without participating in them directly. What we are therefore concerned with here is to try to ensure that when these crimes are committed, there is a paper trail leading from the primary offenders back to the requests made to the company for access to the register. By introducing further safeguards and offences at the top end of this paper trail, we aim to assist companies in exercising their rights and generally to encourage much tighter management of information from registers of members by all concerned.
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In framing these amendments, we have, of course, considered a broad range of possible provisions. We are grateful to the Opposition and other interested parties for having suggested some of these. I will come later to why we have not adopted some of the suggestions that they have made.
I turn now to the amendments themselves. Clause 115 provides that access to the register of members will be denied if, but only if, the court, on the company's application, is satisfied that it is not being sought for a proper purpose. The first three amendments expand this clause. Amendment No. 7 makes it easier for companies to identify those requests for access to their registers of members that may be damaging to members' interests and ensures that companies will have a record of who has requested access and why they have said they want it. It also makes it easier for companies to decide whether or not to comply with such a request.
Amendment No. 8 protects companies from improper requests in two ways. It provides the power for the court to order that the costs of the application to the court be paid by the person making the request. It also addresses the risk of companies being swamped by co-ordinated campaigns in which, for example, activist organisations might generate hundreds of similar access requests. In this context it provides the court with the power to make an order prospectively, relieving the company of any obligation to grant access to its register in response to a specified class of further requests. Amendment No. 9 simply replicates subsections (6) and (7) of current Clause 115.
Amendment No. 10 introduces two new offences relating to abuse of the public right of access to registers of members. As I have already mentioned, we are satisfied that the existing criminal laws of theft and harassment deal adequately with substantive misuse of information from registers of members. However, we consider that it would afford useful extra protection if it were an offence to make a misleading, false or deceptive statement when applying for access to the register, or to do, or fail to do, things that may lead to the information coming into the hands of someone who may use it for an improper purpose. Amendment No. 10 provides for such offences. These amendments fulfil my promise at Report to bring forward amendments to strengthen this clause.
I turn now to some of the suggestions made in this area which we have not followed. We were urged to define what constitutes a proper or improper purpose. In our view this is a case where it is impossible to formulate a definition satisfactory in all situations. In this case that does not matter, because a court or company will instinctively know a purpose that is not proper when it sees one. Any definition we put in the Bill would either restrict the discretion of the courts in a way that would be unhelpful in the future, or fail in its purpose. For example, we could talk in terms of purposes relevant to members' holdings or the exercise of their interest, and clearly most such purposes would be proper. On the other hand, it would be easy to present a letter-writing campaign by animal rights
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activists as falling within such a definition. Even giving examples could narrow the perception of what is thought of as proper, and so risk diminishing the protection this clause affords to members.
It is not an undue burden to place on companies who have a suspicion that a request for access to its register may be misused to ask them to decide that it may not be for a proper purpose, and so apply to the court. It could be argued that the burden should be the other way around: that those requesting access be obliged to prove that their request is for a proper purpose and apply to the court if it is turned down. However, this would be a step too far away from a public right of access to a register.
I return now to the other amendments in this group. It is not sufficient only to protect members. There are similar rights of access to any register of debenture holders that a company may keep. New Part 19A, introduced by Amendments Nos. 54 to 60, moves Clauses 581 to 583. These did not sit comfortably in Part 19, and are thus removed by Amendments Nos. 51 to 53. These amendments also introduce further provisions to ensure that debenture holders have the same protection that the earlier amendments provide for the register of members.
A public company that investigates the interests in its shares using the powers conferred under Part 21 is required also to keep a register of interests in shares. There are significant differences between these registers and registers of members, not least the absence of a time limit for the company's compliance with a request for access. As the risks listed are similar to those affecting members, Amendments Nos. 61 to 65 provide similar protection, while retaining the effect of the previous clauses. We have been mindful of the need to strengthen existing safeguards without overreacting to recent events. I hope noble Lords will agree that these amendments increase protection for companies' shareholders while retaining the ability for anyone to contact the owners of any company.
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