Extracts of interest
Here are the meeting minutes of the Company Law Committee of The City of London Law Society for July 2011, September 2011 and November 2011. Points of interest:
Red Tape Challenge: “It was noted that the [Government's Red Tape Challenge] website invited comments on a very large number of company related regulations without any analysis of what the regulations were for, what effect sweeping away the regulations would have, or whether it would be compatible with EU law to do so. It would be far too time-consuming for the committee to go through and comment in relation to all of the regulations.”
Overseas payments in takeovers: “As noted at the previous meeting, the Takeover Panel and Capita have been in discussions about an initiative whereby accepting shareholders on takeovers will be able to opt to receive the consideration moneys due to them in their local currency. It was reported that the working group was due to meet with representatives of Capita to discuss the proposals and to probe certain areas, including which jurisdictions the service would be open to, who would bear the costs of providing the facility and whether it would be an embedded term of the offer or an add-on service.”
Women on boards and the Davies Review: “There was a discussion of the potential problems with definitive targets, and in particular, the recommendation by Davies that the Chairman would make a personal commitment. The danger of committing to a target was that as few vacancies arose within the horizon, it would be difficult to appoint anyone other than women. It was noted that, although under the Equality Act 2010 it was generally unlawful to discriminate on the grounds of gender, there was a justification exemption. Thus a company could choose to appoint from an underrepresented section of society provided that it did not adopt a policy of doing so.”
Takeovers: “The meeting discussed the possible effect of paragraph 3.5 of Practice Statement 20, which provides guidance on the Panel’s approach to Rule 2.3(d) of the Code. Whilst a potential bidder can still ‘down tools’ before a leak and thus avoid being named, it is now much harder to avoid being named or locked out if the potential bidder has not downed tools by the time of the leak. It would seem that paragraph 3.5 is designed as a powerful anti-avoidance measure; its effect in practice remains to be determined.”
Chandler v Cape: “The committee discussed the decision of the High Court in Chandler v Cape plc [2011] EWHC 951 (QB), in which a parent company was held to be directly liable in negligence to a former employee of one of its subsidiaries who had contracted asbestosis at work, the subsidiary company having long-since ceased to exist. The committee agreed that the case had potentially far-reaching and undesirable implications, undermining the principle of separate legal personality within a corporate group. The Secretary noted that an appeal was outstanding. It was agreed that the committee would reconsider the case once judgment had been given in the appeal.”
Farstad v Enviroco: “Simon Griffiths updated the meeting following Keith Stella’s email to the committee before the meeting. BIS were highly receptive to the committee’s submission and BIS had advised that the committee’s proposals would be put out to consultation once BIS’s own agenda allowed for it; at that time BIS would check to make sure the legislative change the committee had proposed could indeed be dealt with by secondary legislation.”
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