Compensation scheme regulations
(1) The Secretary of State—
(a) must by regulations make provision for or in connection with the payment of compensation in connection with the exercise of a principal transfer power;
(b) may by regulations make provision for or in connection with the payment of compensation in connection with the exercise of any transfer power other than a principal transfer power.
(2) In this Part —
“ compensation scheme regulations ” means regulations under this section ;
“ transfer power ” has the same meaning as in Part 1 (see section 51).
(3) Compensation scheme regulations—
(a) must include provision for determining whether a transferor should be paid compensation;
(b) may include provision for determining whether a person other than a transferor should be paid compensation.
(4) Compensation scheme regulations may include provision for or in connection with the payment of compensation where a direction under section 2 of the Steel Industry (Special Measures) Act 2025 (use of assets) has at any time been given to a steel undertaking.
(5) Compensation scheme regulations must include provision requiring the Secretary of State to pay compensation to a person in respect of whom it is determined that compensation should be paid by virtue of the regulations.
(6) Compensation scheme regulations may include provision about the way in which, and time by which, a claim for compensation under the regulations is to be made.
(7) In this section —
“ principal transfer power ” has the same meaning as in Part 1 (see section 2(3));
“ transferor ” means a person from whom securities or (as the case may be) property, rights or liabilities have been transferred by regulations made in the exercise of a transfer power.
Independent valuation of compensation
(1) Compensation scheme regulations must provide for any valuation for the purposes of the regulations to be carried out by a person appointed in accordance with the regulations.
(2) A person appointed by virtue of subsection (1) is referred to in this Part as an “independent valuer”.
(3) Compensation scheme regulations must provide for an independent valuer to be appointed by a person designated by the Secretary of State for the purposes of this subsection (the “appointing person”).
(4) Compensation scheme regulations may either—
(a) require the Secretary of State to make arrangements to identify a number of possible independent valuers, one of whom is to be selected by the appointing person, or
(b) require the appointing person to make arrangements to select an independent valuer, having regard to any criteria specified in the regulations.
(5) An independent valuer may be removed only—
(a) on the grounds of incapacity or serious misconduct, and
(b) by a person designated by the Secretary of State for the purposes of this subsection .
(6) Compensation scheme regulations must include provision for resignation and replacement of an independent valuer (and subsections (3) and (4) apply to replacement as to the first appointment).
Further provision about independent valuation
(1) Compensation scheme regulations may—
(a) confer functions (including discretions) on an independent valuer in connection with the carrying out of a valuation;
(b) make other provision about the carrying out of a valuation by an independent valuer.
(2) Without prejudice to the generality of subsection (1) , compensation scheme regulations made in reliance on that subsection may in particular include provision about any of the matters dealt with in subsections (3) , (4) (b) to (10) and (13) (or any combination of those matters).
(3) The regulations may—
(a) require an independent valuer to apply, or not to apply, specified methods of valuation;
(b) require an independent valuer to assess values or average values at specified dates or over specified periods;
(c) require an independent valuer to take account, or not to take account, of specified matters;
(d) provide for how specified matters must or may be taken into account.
(4) The regulations—
(a) must require an independent valuer, in carrying out a valuation in relation to a relevant steel undertaking, to take into account liabilities in connection with—
(i) compliance with environmental or health and safety obligations, or
(ii) other environmental or health and safety matters,
so far as relating to the undertaking;
(b) may make provision about the approach to be taken by an independent valuer in taking liabilities within paragraph (a) into account.
(5) Provision made in reliance on subsection (4) (b) may include, for example, provision requiring an independent valuer to determine—
(a) which liabilities within subsection (4) (a) are relevant in a particular case, and
(b) the relative weight to be given to each liability determined by the valuer to be relevant.
(6) The regulations may require or permit an independent valuer, in carrying out a valuation in respect of the exercise of a transfer power in relation to a relevant steel undertaking, to do so in accordance with either or both of the following—
(a) by reference to what the position would have been but for any financial assistance that has been provided to or in respect of the undertaking;
(b) on the assumption that no financial assistance will in future be provided to or in respect of the undertaking.
(7) The regulations may require or permit an independent valuer, in carrying out a valuation in respect of the exercise of a SISMA power in relation to a relevant steel undertaking, to do so in accordance with either or both of the following—
(a) by reference to what the position would have been but for any financial assistance that has been provided to or in respect of the undertaking;
(b) on the assumption that no financial assistance will in future be provided to or in respect of the undertaking.
(8) The regulations may require or permit an independent valuer to carry out a valuation in relation to a relevant steel undertaking on the basis of whatever the valuer considers would have been most likely to occur in relation to the undertaking in all the circumstances.
(9) The regulations may require or permit an independent valuer, in carrying out a valuation in relation to a relevant steel undertaking, to do so in accordance with any or all of the following—
(a) by reference to what the position would have been but for the exercise of any SISMA power in respect of the undertaking;
(b) on the basis that any SISMA power that has been exercised in respect of the undertaking ceased to have effect from the specified time;
(c) on the assumption that no SISMA power will in future be exercised in respect of the undertaking;
(d) by reference to what the position would have been but for the exercise of a transfer power in respect of the undertaking;
(e) on the assumption that no transfer power will in future be exercised in respect of the undertaking.
(10) The regulations may require or permit an independent valuer to make assumptions in relation to a relevant steel undertaking; such as, for example—
(a) an assumption that the undertaking is unable to continue as a going concern;
(b) an assumption that the undertaking is in administration;
(c) an assumption that the undertaking is being wound up.
(11) There is nothing to prevent compensation scheme regulations from having the effect that no compensation is payable to a person.
(12) In this section —
“ financial assistance ” means (subject to subsection (13) )—
financial assistance under section 58 ,
loans or any other financial assistance provided in the exercise of the power conferred by section 3(2) of SISMA 2025 (power to secure continued and safe use of assets of steel undertaking), or
any other kind of financial assistance (actual or contingent) provided by the Secretary of State;
“ relevant steel undertaking ” means a steel undertaking in respect of which a transfer power has been exercised;
“ SISMA 2025 ” means the Steel Industry (Special Measures) Act 2025 ;
“ SISMA power ” means a power conferred on the Secretary of State by or under SISMA 2025;
“ specified ” means specified in compensation scheme regulations.
(13) Compensation scheme regulations may provide—
(a) that a specified activity or transaction, or an activity or transaction of a specified description, is or is not to be treated as financial assistance for the purposes of any provision of the regulations;
(b) that a reference in any provision of the regulations to financial assistance does not include a reference to financial assistance provided before a specified date.
Independent valuer: supplementary
(1) An independent valuer may do anything necessary or desirable for the purposes of or in connection with the performance of the functions of the office.
(2) An independent valuer may appoint staff.
(3) Compensation scheme regulations may confer functions on an independent valuer (in addition to functions conferred in reliance on section 54 (1) (a) ), and may in particular enable an independent valuer—
(a) to apply to a court or tribunal for an order requiring the provision of information or the giving of oral or written evidence;
(b) to publish, disclose or withhold information.
(4) Provision made in reliance on subsection (3) may—
(a) confer a discretion on an independent valuer;
(b) confer jurisdiction on a court or tribunal;
(c) make provision about oaths, expenses and other procedural matters relating to the giving of evidence or the provision of information.
(5) Compensation scheme regulations may make provision—
(a) about the procedure to be followed by an independent valuer;
(b) for reconsideration of a decision of an independent valuer;
(c) for appeal to a court or tribunal against a decision of an independent valuer.
(6) An independent valuer (and their staff) are neither servants nor agents of the Crown (and, in particular, are not civil servants).
(7) Records of an independent valuer are public records for the purposes of the Public Records Act 1958 .
Independent valuer etc: remuneration
(1) Compensation scheme regulations may provide for the payment by the Secretary of State of remuneration and allowances to—
(a) an independent valuer and their staff,
(b) a person designated by virtue of section 53 (3) to appoint an independent valuer, and
(c) persons appointed by virtue of subsection (2) (a) .
(2) Compensation scheme regulations may—
(a) provide for the appointment by the Secretary of State of a person to monitor the operation of the arrangements for remuneration and allowances for an independent valuer;
(b) require the approval of a person appointed by virtue of paragraph (a) before things specified in the regulations may be done in the course of those arrangements.
(3) The reference in subsection (1) to the payment of allowances to a person includes a reference to the payment to or in respect of the person of sums by way of or in respect of pension.
(4) Regulations made in reliance on subsection (1) may include provision—
(a) about records and accounts;
(b) about numbers of staff and the terms and conditions of their appointment (which may include provision requiring the approval of the Secretary of State).
(5) An independent valuer (and its staff) is not liable for damages in respect of anything done in good faith for the purposes of or in connection with the functions of the appointment (subject to section 8 of the Human Rights Act 1998 ).
Procedure for compensation scheme regulations
Compensation scheme regulations are subject to the affirmative procedure.
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