The proposal was published last November and meetings were held to discuss in the Justice and Home Affairs Council's working group on civil law. The first meeting took place on 16 January. It was a fairly exploratory meeting. A lot of member states were still analysing the proposal. We are expecting eight meetings altogether by the end of the Maltese Presidency at the end of June. The main activity for our Departments at the moment in preparation of our response has been the launch of a joint public consultation after the proposal came out in mid December. We have allowed until the end of January for submissions to reach us but we have had a number of indications that stakeholders would like more time to prepare their submissions. We are very pleased to have that level of engagement. We would prefer to get reflective submissions, so we will be extending time to facilitate them coming in to us.
In common with other member states, Ireland has not adopted a position on the Commission initiative as of yet. We are still examining the proposal and its supporting documents. Along with other member states in the Council working party, we are clarifying certain aspects with the Commission. We are anxious to have the results of the consultation with stakeholders before we work on finalising our initial views on the proposal. We have some initial concerns which will inform some of the questions we are asking and we have drawn attention to those in the scrutiny note which was submitted to the Oireachtas before Christmas.
Looking at the legal context of the proposal, essentially this is a directive to harmonise the substantive law of member states in relation to insolvency law for the first time. There is existing EU legislation but it is limited to regulating cross-border aspects of insolvency law. It does not try to harmonise member states' national law. It is also relevant to note that the Commission produced a recommendation on restructuring and second chance in 2014 which put forward a number of non-binding recommendations to member states covering a lot of the ground now covered in this proposal. The Commission was not happy that member states did not change their laws immediately in response to that. Most member states were still heavily involved in negotiations on the cross-border insolvency regulation which was being recast at that stage.
In terms of the scope of the proposal and who is affected by it, it would cover both company and personal insolvency law to some extent and also bankruptcy law in Ireland. It applies to an individual entrepreneur, which is defined widely and would include any person carrying on a trade, business, craft or profession. It does not cover what one might describe as pure consumers with insolvency debts, but member states have the option to include them if they so wish. The directive focuses on substantive insolvency law in relation to restructuring, second chance and the effectiveness of restructuring procedures. It adopts a fairly detailed, and at times very prescriptive, approach to many of those aspects. It does not just set out general principles that member states can decide how to apply in practice in their own national legal systems. The objectives that the Commission's proposal refers to include facilitating capital markets union. The Commission has stated that it intends to address barriers to the free flow of capital. The objectives also include the Single Market strategy, which advocates a better second chance opportunity for entrepreneurs, and perceptions that differences between national insolvency laws are creating difficulty for saving businesses that are in trouble and keeping businesses afloat.
I will briefly look at the main issues that we are addressing in our ongoing examination. The objectives of the proposal, such as avoiding unnecessary insolvencies, saving jobs and promoting second chance, are clearly worthy of support, and Irish law is relatively advanced in the EU in that respect. The means that the proposal has chosen have to be seen in the context of other member states' insolvency frameworks. Most members states still have a much more penal approach to companies recovering from debt. The proposal does not always seem particularly suited to Irish national laws and frameworks. We are looking at whether the proposal overall would add value or reduce the effectiveness of Irish insolvency law. We already provide for much of what is proposed but some of the detailed requirements, as currently drafted, do not seem to fit with some important provisions of Irish law which are working well. We see some difficulties in the approach to organisation of the courts. The directive sets rules which might be difficult to reconcile with the independence of the Judiciary. There are some very cumbersome data requirements which would be quite onerous, and we wonder whether they are proportionate in the light of overall priorities in the area of insolvency.
The last point I would draw attention to is that this proposal is based on Internal Market articles of the treaty, so while it is being dealt within the framework of Justice and Home Affairs, unlike most such proposals, it does not afford Ireland the right to opt out of this legal instrument if it so wishes. This would be governed by the normal qualified majority voting in Council.
That is our initial presentation, and we would be very happy to respond to questions.