Postal Services Act 2011

Postal Services Act 2011

2011 CHAPTER 5

Commentary on Sections

Part 4: Special Administration

Financial support for companies in administration

Section 80: Indemnities

345. This section applies if a postal administration order has been made in relation to a company that is a universal service provider. It enables the Secretary of State, with the consent of the Treasury, to indemnify specified “relevant persons”, for example the postal administrator, his employees, partners, fellow employees (see subsection (11)) in respect of liabilities incurred or loss or damage sustained in connection with the exercise of the postal administrator’s powers and duties.

346. Subsection (4) requires the Secretary of State to lay a statement before Parliament as soon as practicable after agreeing an indemnity under this section.

347. Subsection (5) provides for repayment by the company of any sums paid by the Secretary of State in consequence of the indemnity and for the payment of interest on outstanding sums.

348. Subsection (7) clarifies that the company does not have to repay sums paid by the Secretary of State for indemnifying a person in respect of a liability to the company.

349. If a sum has been paid out under an indemnity agreed under this section, the Secretary of State must lay a statement relating to that sum before Parliament as soon as practicable after the end of the financial year in which the sum is paid out; and, where there is an obligation on the company to repay the relevant sums, after the end of each subsequent financial year until the company has discharged the liability (including interest).

350. Subsection (10) provides that the Secretary of State can only agree to indemnify persons in respect of liabilities, loss and damage incurred or sustained by them as “relevant persons”; but can agree to indemnify persons who subsequently become “relevant persons” for example by becoming an employee of the postal administrator.

351. Subsection (11) defines the meaning of “relevant persons” for the purposes of this section, namely:

a)

the postal administrator;

b)

an employee of the postal administrator;

c)

a partner or employee of a firm of which the postal administrator is a partner;

d)

a partner or employee of a firm of which the postal administrator is an employee;

e)

a partner of a firm of which the postal administrator was an employee or partner at a time when the order was in force;

f)

a body corporate which is the employer of the postal administrator;

g)

an officer, employee or member of such a body corporate; and

h)

a Scottish firm (as defined in section 85) which is the employer of the postal administrator or of which the postal administrator is a partner.