4.3.2.3 The Law Commission's proposal

In the Final Report of the Department of Trade and Industry's Company Law Review, the CLR considered the relationship between Part 26 of the Company Act and sections 110 and 111 of the IA 1986. They observed that the former applies to more complicated and wider range of arrangements, the laffer to schemes in a voluntary winding up, but both provisions are intended to facilitate company restructurings and they overlap under certain circumstances. Both also provide a means of protection for the minority shareholders, either by court sanction or by appraisal rights. The CLR then asked whether, for the sake of greater consistency, it was worthwhile to combine the two procedures and provide the company with "a choice of routes", either seeking the sanction of the court or providing appraisal rights for dissenting members.1 After consultation, they showed that the responses to their proposal were evenly divided between supporters who deemed the CLR's reform practicable and objectors who wanted to maintain the current procedures.2 The CLR eventually took a conservative approach for they believed that continuity of the existing provisions was more important than uniformity, and finally abandoned the proposal. It stated:3

If the two sections had been combined in CA 2006, and the scenario of appraisal rights for mergers and other arrangements had been included, more ink could have been spent on this chapter to discuss the appraisal remedy in the UK.