John Tribe

Parliamentarians and bankruptcy: the disqualification of MPs and peers from sitting in the Palace of Westminster

Bankruptcy is a legal state that only natural persons can pass into in English and Welsh law. Once a natural person is in the state of bankruptcy a number of disqualifications may occur. One notable disqualification amongst the plethora of disqualifications is the preclusion from sitting in either house of the English and Welsh legislature, or from continuing to sit in the legislature. This disqualification has applied to both MPs and peers from 1871. Successive statutes have maintained and perfected this disqualification element. The current statutory provision that disqualifies bankrupt aspirant or actual Westminster parliamentarians, if they are subject to a Bankruptcy Restrictions Order (BRO ), is section 426A of the Insolvency Act 1986 (IA86). There has been a relatively recent change in the insolvency legislation that realigns who may be subject to the bankruptcy related exclusion from Parliament. As Sealy and Milman have opined this raft of changes was borne of a policy desire to remove automatic restrictions from the shoulders of bankrupts. Prior to the enactment of section 266(2) of the Enterprise Act 2002 (EA2002), simply being a bankrupt was sufficient to give rise to the power of parliamentary exclusion for being a bankrupt. Section 427 IA86 was however amended by section 266(2) of the EA2002 so that references to bankruptcy orders made in England and Wales in section 427 IA86 were removed. In addition to this amendment, section 426A was introduced into the IA86. This new provision introduced the parliamentary prohibition on sitting but only when a BRO was also made in addition to the bankruptcy order. A parliamentarian can now therefore only be excluded from sitting in Parliament if they are subject to a BRO , a Bankruptcy Restrictions Undertaking (BRU ) or a Debt Relief Restriction Order (DRO ). Being a mere bankrupt is now insufficient.

The Poulson Affair: Corruption and the Role of Bankruptcy Law Public Examinations in the Early 1970s

This article examines the Poulson affair of the early 1970s. In so doing it examines two areas in particular. First, the role of the bankruptcy law public examination procedure in exposing Cabinet level involvement in the corrupt practices of the bankrupt architect, John Garlick Llewellyn Pouslon. In the course of his 1972 bankruptcy proceedings, in Wakefield, it emerged that Poulson had used, through one of his companies, the services of Reginald Maudling MP, a former Chancellor of the Exchequer, and at the time of Poulsons bankruptcy Home Secretary and Deputy Prime Minister in Edward Heaths government. As a result of his involvement in Poulsons affairs Maudling was compelled to resign as Home Secretary. In the course of the next three years or so Poulson, T. Dan Smith, Pottinger and several others were convicted of bribery offences in the Leeds Crown Court and sentenced to lengthy terms of imprisonment. The second main area examined in this article highlights the attempt to curtail the public examination of Poulson through the undermining of the trustee in bankruptcy’s silk, namely, Mr Muir Hunter QC. In examining the bankruptcy public examination procedure the article tests whether the demise in the importance of public examinations has harmed the effectiveness and social benefit of English and Welsh personal insolvency law.