Select committee: Constitution Committee
Recommendation 32
7th Report - Corporate Insolvency and Governance Bill
Published 12 Jun 2020
Constitution Committee Corporate Insolvency and Governance Bill All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We recommend that the Government considers measures to make the imposition of retrospective legislation strictly proportionate to the Bill’s aims, rather than a form of punishment for those who exercised rights which were valid at the time. One option is to remove paragraph 7 of schedule 10. Another is to introduce powers enabling payment of compensation to those who suffered retrospectively imposed loss as a result of the Bill. Delegated powers
From: Constitution Committee, 7th Report - Corporate Insolvency and Governance Bill, 12 June 2020
Government response
The government responded to the whole report on 19 June 2020 (deadline 12 August 2020).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government agrees to limit the clause 18, clause 22 and clause 39 delegated powers, but does not change the permanent provisions or the retrospective measures, saying it considers the latter an "exceptional case".
- On the clause 39 power to extend temporary provisions, the government agrees and "will add the condition recommended" so it can only be used to deal with the effects of COVID-19.
- On the clause 18 power, it agrees that restrictions should be put in place, adding a condition that the Secretary of State "must be satisfied of the urgency of the situation" before it is exercised. For clause 22, it will add a limit so the expiry date cannot be extended beyond 2 years after Royal Assent.
- On retrospective effect for wrongful trading, it does not amend the Bill as recommended, saying a retrospective presumption "would not cure the problem this measure seeks to address" and that the provisions "strike the right balance".
- On paragraph 7 of Schedule 10, it does not consider affected creditors to have suffered as a result of retrospective application, and notes that any contribution will be at the court's discretion.