Legislative Consent Memorandum Mental Health (Discrimination) (No. 2) Bill

Draft Legislative Consent Motion

1. The draft motion, which will be tabled by the Minister of Enterprise, Trade and Investment, is:

“That this Assembly agrees that the provisions in the Mental Health (Discrimination)(No. 2) Bill, as introduced in the House of Commons on 20 June 2012, dealing with company directors should be considered by the United Kingdom parliament.”

Background

2. This memorandum has been laid before the Assembly by the Minister for Enterprise, Trade and Investment, under Standing Order 42A. The Mental Health (Discrimination) (No.2) Bill was introduced at Westminster on 20 June 2012. This is a Private Member’s Bill, supported by the UK Government. Mark Harper, MP, Minister for Political and Constitutional Reform, wrote to the Minister of enterprise, Trade and Investment on 16th July 2012, confirming Government’s support for the Bill, and seeking the Minister’s agreement that a LCM is necessary to bring the relevant clause of the Bill into effect in Northern Ireland. The latest version of the Bill can be found at here.

Summary of the Bill and its policy objectives

3. The UK Government is committed to improving life for people with mental health problems. Tackling stigma and discrimination is at the heart of its mental health strategy.

4. The primary aim of the Bill in relation to Company Law is to remove the requirement that a company director's appointment should automatically terminate if his or her rights or powers have been restricted by a court order on mental health grounds.

5. The Bill revokes those parts of the Companies (Model Articles) Regulations 2008 which require that a person should cease to be a director of a company when by reason of that person’s mental health, a court order is made preventing that person from exercising some or all of their powers and rights, or on the written opinion of a medical practitioner, that the person will not be capable of acting as a company director for three months or more.

6. These provisions will apply to the following types of companies:

  • Private companies limited by shares
  • Private companies limited by guarantee
  • Public companies; and
  • Right to manage companies 

Provisions which deal with a Devolution Matter

7. The provisions detailed above will change the law in regard to the requirements placed on company directors in Northern Ireland. They will amend regulations made under the Companies Act 2006, which extend to Northern Ireland and deal with a transferred matter.

Reasons for making the Provisions

8. If the provisions as outlined are agreed by the Assembly, it will mean that Northern Ireland companies will remain on the same regulatory footing as companies in Great Britain. Potentially discriminatory clauses of existing legislation will be removed.

Reasons for utilising the Bill rather than an Act of the Assembly

9. Enacting the provisions in relation to company directors by means of the UK Bill will ensure that the relevant law is updated in Northern Ireland at the same time as it is updated elsewhere in the UK, precluding the development of a legislative gap and the administrative and regulatory difficulties that could follow.  The alternative of bringing forward a separate Bill to the Assembly in relation to Northern Ireland would inevitably take longer and be subject to the Department’s other competing priorities.

Consultation

10. There has been no formal public consultation. The UK Government is supportive of this Private Members’ Bill.

Human Rights and Equality

11. As the primary aim of the Bill is to remove barriers for people with mental health conditions, it is considered that it will promote greater equality for disabled people and therefore have a positive impact on their human rights.

Financial Implications

12. There are not considered to be any public expenditure implications for the NI Executive.

Summary of Regulatory Impact

13. It is considered that the regulatory impact of the change on business will be negligible.

Engagement to date with the Committee for Enterprise, Trade and Investment

14. The Minister of Enterprise, Trade and Investment wrote to the chair of the ETI Committee on 29th August 2012 outlining the main policy proposals of the private members Bill.

Conclusion

15. The view of the Minister of Enterprise, Trade and Investment is that, in the interests of maintaining regulatory consistency between companies in NI and GB, the provisions of the Bill which deal with a devolution matter should be considered by the UK Parliament.

Department of Enterprise, Trade and Investment
24th September 2012

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