' .—(1) Subject to subsection (3) below, any provision to which this section applies, whether contained in the rules of a building society or in any contract with a building society or otherwise, shall be void.
(2) This section applies to any provision for—
(3) Subsection (1) above shall not prevent a building society from indemnifying a person against any liability incurred by him in defending any proceedings (whether criminal or civil) in which judgment is given in his favour or in which he is acquitted.
(4) Section 727 of the Companies Act 1985 or, as the case may be, section 394 of the Companies Act (Northern Ireland) 1960 (which empower the court to grant relief in certain cases of negligence, default, breach of duty or breach of trust) shall apply in relation to officers and auditors of a building society as it applies in relation to officers and auditors of a company.'.— [Mr. Ian Stewart.]
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.The purpose of imposing obligations on individuals is nullified if the society of which they are directors or by which they are employed is unable to undertake to pay any damages or fine due from it in the event of non-compliance with any obligation. The provisions of section 92 of the Building Societies Act 1962 therefore remain appropriate and the new clause re-enacts them.
This is a straightforward matter, merely repeating the safeguards contained in the 1962 Act. Perhaps the Economic Secretary will refresh my memory. Has this provision been separated from another part of the Bill which came before the Standing Committee, or was it an omission that is now being rectified?
When the new clause was brought to me for approval I asked exactly the same question. The provision was not included in the original arrangements. As the hon. Gentleman knows, many of the provisions of the Bill differ from those of the 1962 Act and it was not fully evident until the Bill was in being that it was still appropriate to include this provision. That is why the new clause has been put forward.
Question put and agreed to.
Clause read a Second time, and added to the Bill.