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Seanad Éireann debate -
Tuesday, 7 Jul 2009

Vol. 196 No. 11

Enforcement of Court Orders (Amendment) Bill 2009: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

I thank the House for agreeing to consider all Stages of the Bill this afternoon.

On a point of order, we have not agreed to take all Stages. We object strenuously to taking all Stages.

We are on Second Stage.

I apologise to the Minister of State but I had to say that.

We are only taking Second Stage.

I thank the Senator for his comment. When I left the House on Friday afternoon I did not realise I would be back here so soon. The House will be aware that the Bill flows from the issues raised in the recent High Court judgment in the McCann case in which the applicant successfully challenged the constitutionality of section 6 of the Enforcement of Court Orders Act 1940.

The High Court delivered its judgment on 18 June last and the Minister, following close consultation with the Attorney General, decided not to appeal that decision but to move quickly to apply the principles contained in it to the old legislation in order to provide a definite and reliable method of dealing with debt enforcement. These short but important amendments will be of benefit not just to creditors but also to the individuals who are falling into debt. In these often distressing circumstances, delay and prevarication are not helpful approaches. The earlier a person faces up to his or her difficulties and engages positively with creditors, the easier a manageable solution can be achieved for both parties.

The High Court found that the existing legislation lacked a number of necessary safeguards in circumstances where a person is at risk of imprisonment. The judgment stated that while this process had traditionally been regarded as a civil matter, its effect was akin to a criminal one and the debtor was entitled to similar protections. There was particular concern that the 1940 Act did not appear to require a person to be heard by a court before being imprisoned. Following a default on an instalment order made by the District Court, a creditor could apply to the court for a committal order and even in the case of the non-appearance of a debtor, committal orders could be, and were, granted by the District Court.

The absence of an obligation to attend the court gave rise to difficulty, given that in the legislation the obligation was on the debtor to show that his or her failure to pay was not simply because he or she chose not to. The court had to satisfy itself that the debtor, if he or she appeared, had proved that their failure to pay was not the result of wilful default.

The High Court also took issue with the fact that no option was open to a court to grant legal aid to a debtor at risk of imprisonment, although it should be remembered that it was open to a debtor to apply to the Legal Aid Board for civil legal aid. The provision I am now proposing will replace the existing section 6 and amend sections 8 and 9 of the 1940 Act. The effect will be to insert a number of safeguards to the provisions under which a court may hear an application or grant an imprisonment order against a debtor who has failed to comply with an instalment order. It will also provide that a debtor against whom an imprisonment order may be made will be entitled to apply for legal aid.

The Bill still allows for the possibility of imprisonment, and there are those who will think this is harsh. The Minister gave detailed consideration to that issue. However, we have to live in the real world and consider the effect of abolishing imprisonment on the process of debt enforcement between two contracting parties. Without detaining the House with statistics, the data made available by the Courts Service and the Prison Service demonstrate eloquently the effect of the ultimate sanction of imprisonment in dealing with debt.

In the first six months of this year the Courts Service estimated that there were approximately 4,300 applications to the District Court for enforcement orders. In the same period 186 people, less than 5% of the total, were imprisoned. The average imprisonment period is 20 days. The majority of people who may ignore every other step of the process find the means to pay their debts when faced with the threat of imprisonment. It should be remembered that this process is always preceded by an instalment order granted by the court. It can be seen that, under the 1940 Act, only a very small percentage of debtors were subject to the sanction of imprisonment.

The aim of this Bill is ensure that people who cannot afford to pay will not be subject to imprisonment and that those who can, but simply choose not to, may face imprisonment. The Government view is that this sanction is a necessary aid to creditors who find it increasingly difficult to collect on moneys owed to them, in particular in this challenging economic climate. The legislation is mainly utilised by small creditors, including shops, businesses and credit unions which are struggling to maintain their trade and employees. I would be loath to add to their troubles by abolishing the persuasive sanction that enables them to recover their debts. I will now outline the provisions of the Bill to the House.

Section 1 is a standard provision regarding definitions. Section 2 is the principal provision which inserts into the 1940 Act a new section 6 setting out the process by which the District Court will deal with the summons and hearing and specifying various safeguards and criteria which will in future apply to the granting of a committal order. There is a minor typographical error in this section and Senators should by now have seen the amendment which will deal with it. Subsection (1) sets out the circumstances where a creditor may apply to a District Court clerk for a committal order. As I have pointed out, this will follow on from an earlier court process in which an order for payment by instalment will have been granted. Where the debtor fails to pay these instalments or one of the instalments, the creditor can make an application under section 6.

Subsection (2) sets out the details that will be contained in the summons. These measures concentrate on making the debtor aware of the consequences if he or she fails to attend. It should be noted that the Bill provides for personal service of the summons, which will be a matter for the creditor. Subsection (3) provides that where a debtor fails, without reasonable excuse, to appear in answer to the summons, the judge can either issue an arrest warrant to enable the Garda to bring the debtor before the court at the earliest opportunity or may adjourn the hearing. Senators will note I have tabled a minor amendment to tighten this provision by substituting "shall" for "may". This will remove any doubt that there are two options open to the court and will effectively channel a court towards the provisions and protections in subsections (6), (7) and (8).

Subsection (4) provides that where a debtor is arrested he or she should be brought before a court as soon as possible. Subsection (5) provides that where a person is arrested and brought before a court under the bench warrant issued under subsection (3), a date shall then be fixed for a hearing and specifies that the judge shall make clear in plain English to the debtor his or her entitlement to apply for legal aid, the consequences, including imprisonment, of failing to comply with the instalment order or failing to appear for the hearing on the date fixed. Subsection (6) deals with the judge's explanation in circumstances where the debtor attends on foot of a summons, namely, the entitlement to apply for legal aid and the consequences, including imprisonment, of failing to comply with the instalment order.

Subsection (7) sets out the options open to the court if it is satisfied that the debtor has not complied with an instalment order. This may be treated as an application for a variation of the existing instalment order. While this option currently exists, I understand it is seldom availed of. Clearly, this is a good option for the creditor and the debtor as some payment is better than no payment. By setting it out clearly here, the take-up of this option may be increased. Subsection (7)(b) provides that the court may request the parties to engage in mediation. What we have in mind here is increased use of the money advice and budgeting service, MABS, which provides such a valuable service to those in difficulties. Government funding of MABS in 2009 is in the order of €18 million. The service provides an extremely effective service to people in trouble, with more than 90% of callers to the helpline finding that their money management and budgeting issues can be resolved with the assistance of the helpline adviser. Other options open to the court include the making of a committal order, which may be postponed until such time as the judge thinks is appropriate, thus giving the debtor a further opportunity to make payment, or may come into effect straight away.

Subsection (8) sets out in detail the standard and onus of proof and the criteria that must be applied by the judge before making an order for imprisonment. Senators will note that we have included the criminal standard of proof beyond reasonable doubt. This is to take account of the High Court's view that the potential effect on the debtor is the same, namely, he or she may be imprisoned and therefore a high standard of proof is required. The onus will be on the creditor to establish the case. This may include showing the court that the debtor is wilfully refusing to pay and has no goods that may be attached in lieu of the debt. This is included specifically to establish that imprisonment really is the last resort. Subsections (9), (10) and (11) are self-explanatory. Subsection (12) is designed to protect the proceedings from a debtor who fails to attend the court hearing. I am grateful to the Labour Party for its suggested amendment on this point. I believe we are trying to achieve the same result and I am prepared to accept its suggested wording. We can deal with this when we reach Committee Stage.

Section 2 inserts a new section 6A which grants power to the court to consider an application for legal aid. This will operate on a similar basis to the current criminal legal aid scheme. It provides for an entitlement to apply to the court for a debtor's legal aid certificate and sets out the circumstances in which it can be granted. Consideration was given to simply referring to the Legal Aid Board as it is currently possible for persons to apply to it for assistance in such matters. However, again bearing in mind that the end result can be imprisonment, it was felt more appropriate to leave the granting of legal aid as a matter for the court to decide. It is not our intention to provide for large fees. Obviously there are financial implications for extending legal aid in this way. Regulations are being drafted and my officials are engaging with the Law Society to ensure that the scheme is structured to restrict the cost to the State as much as possible while allowing for a fair rate to be payable to solicitors for their work. This represents a new avenue of business for the profession which I appreciate has been experiencing its own difficulties. I believe this will be suitable work for recently qualified solicitors. The Minister's proposal is that a rate will be struck on a per case basis. The Department will monitor the impact of the provision and it is proposed that the arrangement will be reviewed once it has been in operation for two years.

Section 2(2) applies the provisions of the amended section 6 to section 8 of the 1940 Act which deals with applications for enforcement proceedings for default of payments due periodically — for example, maintenance orders. I am also bringing forward an amendment to section 9 of the 1940 Act to render more workable the power of the Minister to release debtors where necessary. I do not see this provision being used frequently as it has been rarely used in the past. The issue of whether remission should apply to debtors has been raised — traditionally it has not applied — and it will be examined further in due course.

Senators will be aware that the Law Reform Commission is engaged in a root and branch examination of the debt issue, on which it will publish a discussion paper in September. This will be followed by the commission's annual conference in November, which is also centred on this topic. All this work will lead to the publication of a major paper next year in which it will make recommendations for an indepth reform of this area, which is undoubtedly overdue. The commission has lengthy experience of broad consultation and produces excellent workable solutions in complex areas. I have no doubt it will take into account the jurisprudence and research produced this week by FLAC. Any other issues arising in this area can be considered in that context, including necessary amendments to the District Court rules. I commend the Bill to the House.

Before I call the next speaker, I welcome Councillor Aidan Murray to the Public Gallery.

I reiterate our objections to the procedures being followed by the Minister of State and the Leader of this House in the scrutiny and passing of legislation, which is most unfortunate. This is serious legislation which involves potential imprisonment of people for non-payment of debt. Serious issues were raised in the judgment of Laffoy in the McCann v. Judge of Monaghan District Court on 18 June. It is suggested that this legislation should be dealt with in one day in this House without adequate time following Second Stage for reflection and consideration in terms of tabling amendments on Committee Stage. The Minister of State said that matters will be considered later, but no time has been provided by Government, or by the Minister of State, to allow consideration of the Bill.

We are dealing with the fall-out from the aforementioned judgment in which it was held that the provisions of section 6 in particular of the Enforcement of Court (Amendment ) Act 1940 concerning attachment and committal was unconstitutional on two grounds, namely, it failed to comply with the constitutional right to fair procedures inherent in Article 40.3.1° of the Constitution and it failed to comply with a constitutional right to liberty guaranteed by Article 40.4.1° of the Constitution. I appreciate that this Bill is an attempt to deal with this and the implications of that judgment. It fails, however, in the important material respect of complying with the judgment, findings and ruling of Ms Justice Laffoy.

The court held that section 6 of the 1940 Act was unconstitutional with reference to fair procedures. The judge found there was no basis for treating a person facing the possibility of imprisonment for three months for non-payment of debt at the suit of a creditor differently from a person facing a criminal charge and the possibility of the imposition of a criminal sanction. In her view there were three fundamental safeguards which had to be in place before the court could properly, and without violating the constitutional rights of a debtor, make an order for the arrest and imprisonment of that debtor. Those three safeguards were that the debtor be present before the court, unless he or she has consciously understood that arrest and imprisonment is a possible outcome of the application and absented him or herself; that the debtor be apprised by the judge of his or her entitlement to legal representation and provided by the court with a means of obtaining legal aid at the expense of the State if he or she is impecunious and incapable of representing him or herself; and that the court applies fair procedures in the hearing of the creditor's application and does not make an order for arrest and imprisonment unless it is satisfied that failure to pay is due to wilful refusal or culpable neglect.

On all of those grounds the court found that section 6 of the 1940 Act was unconstitutional. Section 6 as originally enacted expressly envisaged that an order could be made imprisoning a debtor, notwithstanding that the debtor did not appear and, further, the judge had no jurisdiction to compel the attendance of the debtor with a view to ascertaining whether his absence was due to a conscious decision or otherwise. It is clear the proposed subsections (3), (6) and (7) of section 6 attempt to deal with that.

The second issue is legal aid. The judge held that the Bill was unconstitutional with regard to the guarantee of fair procedures. No jurisdiction was conferred on the judge to grant legal aid to the debtor if he or she did not have the means to retain a lawyer to represent him or her. Again, the new section 6, especially in subsections (5) and (6), attempts to deal with that.

Another fatal defect of section 6 of the 1940 Act was that the burden of proof rested with the debtor to establish that the inability to pay was not due to his or her wilful refusal or culpable neglect and that there was no stipulation that the standard of proof was that of a criminal trial, namely, beyond reasonable doubt. Again the Bill attempts to deal with that situation, with the standard of proof provided by section 6(8) that of beyond reasonable doubt, and the burden rests with the creditor rather than the debtor to establish that the failure to pay is not due to a mere inability to pay or to wilful refusal or culpable neglect and that the debtor has no goods that could be taken in execution under any process of the court by which the judgment order decree for the debt is given.

The issue of imprisonment being a last resort was given great emphasis in the judgment. The judge held that in circumstances in which a debtor had some resources to meet the debt, a statutory scheme that did not require the creditor to seek redress by attaching those resources did not impair the debtor's right to liberty as little as possible. This was a point made by the plaintiff in the case, that it would have made more sense to attempt to attach the debtor's resources, such as social welfare payments, thereby rendering the application for committal a last resort, something required by the application of the doctrine of proportionality to the constitutional right to liberty.

It is on this point that the Bill fails — the proportionality test. It fails to take full cognisance and account of the judgment of the High Court in this respect. It retains imprisonment not as a last resort but as a fundamental part of the scheme and merely deals with the constitutional impediments in the existing Bill. The High Court judge stated that the judge is not entitled to make an order for committal unless he is satisfied the debtor has no goods that could be taken in execution under any process of the court by which the judgment order decree for the debt was given. There is no provision in the Bill for the attachment of earnings. This is the fundamental basis of Fine Gael's objections to the Bill and the manner in which it has been drafted. This is why adequate time should be given for consideration of the Bill if we are to deal properly with the judgment which has been given and the defects in the 1940 Act.

The judge on page 84 of her judgment, wrote that, as the plaintiff's case illustrated, a statutory procedure for enforcement of debt under which the debtor may be imprisoned without there being a positive requirement that the court determine if non-payment is due to an inability to pay before making an order for arrest or imprisonment is not only futile in terms of securing the creditor's remedy, it imposes unnecessary expense both on the creditor and the State. If the warrant for the imprisonment of the plaintiff had been executed, the plaintiff would spend a month in Mountjoy Prison. The credit union, however, which its counsel described as a not-for-profit co-operative financial service provider governed by the Credit Union Act 1997 as amended, would not have received €5,658 or even one brass farthing from the plaintiff. The credit union would have borne the cost of the proceedings for the instalment order and the application for the order for arrest and imprisonment. The State would have borne the cost of two District Court sittings, the execution of the warrant and the accommodation of the plaintiff in Mountjoy Prison for one month. That is the main defect in the Bill. It still does not provide for an attachment of earnings procedure. In that regard, it fails to adhere to the provisions of the judgment.

Section 6 as originally enacted breached Article 40.4.1° of the Constitution in that there was no process similar to order 46(b) of the District Court rules requiring personal service of an order with the penal endorsement before attachment and committal could take place. The failure to require such a process of attachment and committal for the enforcement of a judgment was, according to the judge, unacceptable because it did not represent as minimal an impairment of the debtor's right to liberty as was possible. Order 46(b) of the District Court rules concerns attachment on a committal on foot of a failure to comply with an order other than a monetary judgment. To comply with that procedure, a person with the benefit of such an order must serve the person in breach of that order with a copy of the order personally with the penal endorsement thereon, yet this requirement does not apply to the enforcement of monetary judgments.

It is not germane to this Bill that there is a similar problem with Order 44 of the High Court rules, in that it contains a similar distinction between the enforcement of a judgment for an amount of money on the one hand and orders generally on the other. That is a matter I will invite the Minister of State to address, although it is not central to this Bill.

The Bill attempts to deal with this requirement of personal service of an instalment order with a penal endorsement, and that is acknowledged. The new concept in the Bill is welcome. There are various stages one can go through in terms of dealing with the issue of payment and individuals meeting their debtor obligations. The new section 6(7) introduces the concept of mediation where appropriate as well as the making of an order fixing a term of imprisonment and the postponement of the execution of that order until such time and under such conditions, if any, as to the payment of the outstanding debt and costs, as the judge thinks fit. The lack of a further intermediate step of attachment of income from earnings or social welfare payments is the flaw in the legislation. If the emphasis was placed on attachment of income or other payments which may accrue to the debtor, this would obviate the need for imprisonment. When one considers that in a single year 2,000 people might be sent to prison for failing to pay fines or debts — I do not have the breakdown of these two categories — one can see that the notion of attachment is far more preferable. It is also vital to adhere to the provisions of the judgment with regard to prison being an option of last resort.

The Bill deals with the defects in the Enforcement of Court Orders Act 1940 concerning the constitutional right to fair procedures. Jurisdiction is conferred on the district justice to take various steps to ensure that no order is made without the engagement and presence of the debtor, unless he or she decides not to engage in the process, and a right to legal aid for suitable persons is established. Furthermore, the onus of proof in establishing that the debtor's failure to pay is attributable to the debtor's wilful refusal or culpable neglect is on the creditor rather than the debtor, which is welcome. The standard of proof is that of a criminal trial — that is, beyond reasonable doubt.

With regard to the issue of personal liberty, the requirement of the new section 6(8)(b) that the creditor establish beyond reasonable doubt that the debtor has no goods that could be taken in execution under any process of the court by which the judgment, order or decree for the debt was given does not include a garnishment or attachment-type option, which is a flaw. This option is precisely the form of alternative order referred to by the plaintiff and Ms Justice Laffoy in the judgment as being necessary to ensure that imprisonment is a last resort. Providing for this — we have tabled detailed amendments in this regard — would obviate the need for imprisonment of people who are unable, or at least not immediately able, to pay their fines or debts. I refer again to Order 44 of the Rules of the Superior Courts; this issue should be addressed.

In the current economic context, we are opposing this Bill because it provides no real alternative to imprisonment for debtors struggling to repay their debts. Many people are under increasing pressure to pay their debts in the current downturn, and with more than 400,000 people unemployed and living off social welfare, the chances of such people finding themselves in difficulties increases significantly. Our prisons are becoming more and more overcrowded and it is costly to the State in terms of court time and expense. Creditors gain nothing from people being sent to prison for non-payment of debt. The attachment of earnings procedure should be followed to address this.

We do not wish to send to prison those who are unable to pay their debts. The current procedures allow for them to be put in prison in such circumstances without providing a mechanism to allow them to meet their obligations over a reasonable period and within their capacity to pay. That is where this Bill fails on grounds of efficiency and fairness. Ms Justice Laffoy highlighted in her judgment the constitutional provision of proportionality. Prison should be a last resort. If the proposals on attachment which we intend to put forward on Committee Stage are accepted, this would obviate the need for imprisonment in practically all circumstances.

I welcome the Minister of State to the House for the debate on this Bill. The purpose of the Bill is to resolve the need for legislation arising from a judgment of the High Court on 18 June in the McCann case, which found that section 6 of the Enforcement of Court Orders Act 1940 is incompatible with the Constitution on a number of grounds. I am somewhat surprised that this judgment was not appealed to the Supreme Court, but that is a personal view. The grounds were primarily that the debtor was not required to be present in court, no provision was made for legal aid to an indigent debtor at risk of imprisonment and the reversal of the burden of proof meant that the debtor might be imprisoned simply because he or she could not prove that his or her failure to pay was not the result of willful default.

It would be great if this process of incarcerating people for non-payment of money, particularly small sums of money, could be eliminated in our civil and criminal justice system, but I am not sure whether that will ever come about. I am interested in a comment made by the Minister during his opening statement:

In the first six months of this year the Courts Service estimated that there were approximately 4,300 applications to the District Court for enforcement orders. In the same period 186 people, less than 5% of the total, were imprisoned. The average imprisonment period is 20 days.

I accept the total number of people who are imprisoned is a small percentage, but it is still too high.

Is a pattern emerging in the various District Court areas, of which there are 21 in the Republic, and, if so, how many orders were granted? The Minister probably does not have the answer to this, but we will deal with the issue again later. I would like to obtain a breakdown by District Court area. In my experience as a practising solicitor, I came across judges in various jurisdictions who had different views on these issues. Most of the judges I dealt with were careful and cautious in granting committal orders for non-payment of debts. However, they could also be compassionate. Normally, in such procedures, one is served first with an order asking one to provide a statement of means. For many of those who provide a statement of means in which it is clear they cannot pay or can pay very little, the judge can be understanding. I have often heard District Court judges say in open court, to their credit, that they will not send somebody to prison for non-payment where it is clear the debtor cannot pay.

In contrast, there are people out there who wilfully refuse to pay. I heard recently, although not in my capacity as a lawyer or a Senator, about an argument between a couple who had separated in which the man, who was relatively wealthy, said the woman would get a penny from him only over his dead body. There are people who have such a stern attitude. In such circumstances, where people have the wherewithal to pay whether in the case of maintenance orders or otherwise but do not pay because of a personal grudge between debtor and creditor, the threat of imprisonment must be retained in our justice system.

However, I compliment the Minister and his officials on their attempts in this legislation to strengthen the position of debtors. The provisions of this Bill will replace section 6 and amend section 8 of the Enforcement of Court Orders Act 1940. Section 2(1) substitutes an amended section for section 6 of the 1940 Act which itself replaced section 18 of the Enforcement of Court Orders Act 1926. Subsection (1) sets out the circumstances in which a creditor may apply for a summons under this section, that is, where a debtor has failed to comply with an instalment order made by a court under section 17 of the 1926 Act. We must always bear in mind that an instalment order will have been served before an application for a summons can be made. In my experience, judges will invariably adjourn proceedings for up to eight weeks to allow the debtor to come before the court. In this respect, the committal system has not been abused.

Subsection (2) specifies the details that must be contained in a summons. Subsection (3) provides that where a debtor fails to appear on foot of a summons, a judge may issue a bench warrant or adjourn the hearing. This will serve to strengthen the hand of the unfortunate debtor. As another speaker observed, there are already undoubtedly many such persons — and may be many more in the coming months and years — who will face court proceedings. The issuing of a bench warrant will ensure the debtor is brought before the court. We must take into account the human circumstances of these cases. I have met people, for example, who are under pressure to continue making maintenance payments to a separated partner. There are other people with severe social problems who move from one rented accommodation to another or who are forced to move in with parents or a sibling. It is important that the court and the judge are satisfied that the debtor knows what is going on. A District Court judge will not readily issue a bench warrant unless he or she considers it necessary.

Subsection (4) provides that a debtor arrested under subsection (3) shall be brought before a court as soon as possible. I suggest that, as far as practicable, this should happen within 72 hours. It is unfair for such persons to be detained for an unreasonable period. This is a matter of particular concern in rural areas where District Court sittings may take place as infrequently as once every two months.

Subsection (5) provides that where a debtor is arrested and brought before the court under the bench warrant issued under subsection (3), that a date shall then be fixed for a hearing. The subsection specifies that the judge shall make clear to the debtor his or her entitlement to apply for legal aid, the consequences, including imprisonment, of failing to comply with the instalment and that he or she must attend for the hearing on the date specified. This addresses the weakness in the existing legislation. The Bill, whether rushed or not, must be complimented in this regard. It reflects the spirit of Ms Justice Laffoy's judgment that no person should be imprisoned willy-nilly and without account being taken of proper procedure.

Subsection (7) sets out the options open to the court if it is satisfied that the debtor has not complied with an instalment order. I am aware of cases where a statement of means has been filed and it is obvious the debtor is out of work and cannot meet his or her maintenance payments, credit union loan repayments or whatever. Judges sometimes adjourn such cases for six or even 12 months to allow time for the debtor to improve his or her circumstances. A particularly important provision in this legislation is the entitlement to free legal aid. I am not sure what the financial implications of this will be for the Department of Finance. I understand there are currently some 9,000 applications per year. However, sin scéal eile. The important consideration is to ensure people are not unjustly imprisoned. Subsection (8) sets out the standard and onus of proof and the criteria that must be applied by the judge before making an order of imprisonment. This is another important arrow in the bow of District Court judges in ensuring there is a proper burden of proof in such cases.

Subsection (9) provides that a debtor who is the subject of a postponed imprisonment order and whose circumstances have changed may apply to re-enter the matter. This too provides an important safeguard for debtors in response to the appropriate and valid judgment of the High Court. Subsection (10) makes the same provision as subsection (9) for a debtor who is imprisoned and also provides that he or she may be released immediately on payment of the debt plus costs. This is another positive aspect of the legislation.

I will conclude with some general points. It should be made compulsory through legislation, apart from District Court rules, that a debtor should file a statement of means at whatever stage. It is important to note that the committal of a debtor to prison does not result in an extinction of the debt. In other words, having served seven, 14, 21 or 28 days a prison, a debtor will emerge to face the same debt. Therefore, neither side gains from the imprisonment. I ask the Minister to consider specifying a minimum threshold of debt below which a person cannot be imprisoned in any circumstances. It is unacceptable for a person owing as little as €100, €200 or €500 to be committed to prison for seven or 14 days, with the attendant costs to the State. I understand this issue is being examined by the Law Reform Commission.

Imprisonment for debt makes little sense from any perspective and the consequences for the person concerned are severe. The imprisoned debtor will clearly be unable to secure any earnings while in detention, thus making him or her less likely to be in a position to make repayment. For the person committed to prison there is an enormous stigma to endure. I have spoken to a person who was refused a visa to visit the United States because the Garda PULSE system had recorded his committal for seven days for non-payment of debt. This person had only served one day of that sentence before repaying the debt. Being imprisoned even for seven days on a minor financial matter, with the subsequent criminal record, has huge implications for an individual.

I concur with colleagues that Committee and Report Stages should be staggered over this week and next. However, those who are bound must obey, and I do not intend to disobey the Whip. By and large, the Bill represents a positive response to Ms Justice Laffoy's decision. As such, it accords with our role as legislators.

I propose to share time with Senator Bacik.

Is that agreed? Agreed.

The Minister of State, Deputy Curran, stated in the course of his introduction, "The aim of this Bill is ensure that people who cannot afford to pay will not be subject to imprisonment and that those who can, but simply choose not to, may face imprisonment". We all support that objective. However, Senator Regan makes the valid point that we want to ensure this is good legislation. To rush through all Stages of the Bill with so little opportunity for debate is sinful. I urge reconsideration in this regard.

I expressed concern in this House some weeks ago regarding the position of a man who has deserted his family and against whom a maintenance order has been made. Could such a person exploit this legislation in some way to avoid making payments? Senator O'Donovan referred to an attitude taken by some people to the effect that their debts would only be repaid over their dead body. This approach is sometimes taken in cases of a personal nature. I ask the Minister of State to put my mind at rest on the issue.

Last year, 276 people were sent to jail for an average of three weeks for non-payment of civil debts. In one case, a debtor was sent to prison over a debt of €1,700. The cost to the taxpayer for the three-month sentence imposed on the individual in question was €20,000. The free legal advice centres, FLAC, carried out a survey which revealed that a high number of debtors — 79% — had dependent children. That most of those who were imprisoned for non-payment of debts were aged between 40 and 50 years dispels the myth that the most indebted group is in a younger age bracket.

The United Nations Committee on Human Rights drew attention to Ireland three times in this regard. In its view imprisonment is an inappropriate response to debt. While reform is necessary, the Bill has the potential to become a quick fix solution because it is not ideal for addressing the fundamentally flawed and outdated legislation which has been in place since 1940. I ask the Minister of State to put my mind at rest on this issue also.

A report by FLAC entitled, To No One's Credit, examines the debt enforcement procedures of the courts through the eyes of debtors caught up in the process. The report shows that new solutions are required to meet the current test of unprecedented personal over-indebtedness we have experienced in recent years. The money advice and budgeting service, MABS, has indicated it has an unprecedented number of new clients. It is estimated that only one in five debtors attends hearings to assess his or her ability to repay debts and decide whether imprisonment should follow his or her failure to pay. The reason for this low figure must in part be that such hearings take place in open court, usually near to where the debtor lives. In FLAC’s experience, such a public place naturally puts off participation. Moreover, only 50% of participants in this process have legal representation. In light of these figures, the Minister of State has provided a good explanation for the steps being taken in the legislation.

The lack of access to advisory services at an early stage — before the person's financial circumstances worsen — is also a barrier. Only one in three of those who managed to engage with their problem at court level had any contact with court staff or officials. Among the findings of the FLAC report is that three out of four of those surveyed failed to understand the language of the legal documentation served on them. For this reason, the Minister of State should accept an amendment to preclude such circumstances from arising in future.

The FLAC survey also found that the overwhelming majority of those surveyed did not understand the consequences of the court proceedings being threatened by the lender. The enforcement of court order legislation is in need of a complete overhaul as opposed to adjustments forced upon the State by the High Court decision of Ms Justice Laffoy.

Non-payment of debt is expensive to the State and has a terrible effect on those involved. The system in place for debtors is inherently unfair. The wider debt enforcement overview will be reported upon by the Law Reform Commission later this year and I look forward to examining its recommendations for addressing this important issue.

The free legal advice centres have called on the Government to consider a South African style national credit Act to ban irresponsible lending to protect vulnerable debtors. Two years ago, the South African Government established an agency to implement new consumer laws in a bid to curb reckless lending and reduce over-indebtedness. This model should be examined more closely in light of the major problems being experienced here with loan sharks and other financial lenders to whom people are increasingly turning and who may legally charge interest of 180% on loans. Some of the problems are caused by such practices. The model could provide a means of avoiding cases coming before the courts in the first instance.

I thank Senator Quinn for sharing time with me. While I welcome the debate on this legislation, I concur with the criticisms expressed by Senators Regan, Quinn and O'Donovan regarding the brief time provided to debate this important Bill. It is a terrible shame that the House is rushing through all Stages in one day, given the significant impact the Bill will have on many people.

I have called many times for a debate on prison policy and noted also that far too many people are being locked up in prison for minor offences. This legislation relates to persons who are being locked up despite not being convicted of offences under the criminal justice system. As Senator Quinn pointed out, 272 people were imprisoned last year for civil debts, that is, non-payment of debt. He also helpfully added that Ireland's approach to this issue has been criticised at international level.

I am concerned that the Minister of State's figures show that in the first six months of this year alone, 186 people were imprisoned for an average period of 20 days for non-payment of debts. Three weeks is sufficient time for a person to lose his or her job. Further, the person's children could be sent into care and mortgage and other debts will mount up during the incarceration period. As other speakers noted, matters can only get worse in the current circumstances as more and more people find themselves unable to pay their debts and ultimately face the threat of imprisonment, even with the undoubted improvements offered by the Bill.

I am grateful to the free legal advice centres for their briefing and the report, To No One's Credit, published this week on recommendations for change. As FLAC pointed out, while the Bill contains welcome changes necessitated by the McCann judgment, it does not go far enough in that it still contemplates imprisonment as a sanction for debtors. Although it will improve the current position, it is akin to placing a sticking plaster to an open wound, namely, our shameful policy of continuing to imprison people because they cannot or do not pay their debts.

FLAC, in its comprehensive report, suggests that we move towards the removal of imprisonment as an option in debt cases and instead employ effective non-penal remedies to enforce compliance with civil debt judgments. Senator Regan and FLAC proposed that attachment of earnings legislation be considered as an alternative solution. Other methods, including sanctions available on the criminal side, such as community service orders, could also be employed. There is no reason imprisonment must be used as a sanction in these cases.

Many of us are uncomfortable about moving those who owe civil debts into the criminal system. While we all accept that sanctions must be available, it is the nature of the sanctions that must be examined. The sanction of imprisonment is, as I have outlined, counterproductive because people who are imprisoned can no longer earn money to repay debts they may owe and their position is likely to worsen while they are in prison. They may, for instance, lose whatever employment they have or their children may be taken into care.

It is extraordinary that the comprehensive reform of the debt repayments system promised by the Minister has not been undertaken in the 69 years since the passing of the Enforcement of Court Orders Act in 1940. This was at the start of the Second World War. It is also extraordinary that the House will rush through criminal justice legislation in a matter of hours when it has taken us nearly seven decades to come to some overall reform of the system.

I welcome the fact that the Law Reform Commission is working on this issue and will produce a consultation paper on debt enforcement. We know much of what will be in that paper and, from the work done by FLAC, we know much of what is happening. As I indicated, more than 200 people were imprisoned last year, a figure that appears likely to double this year given that 186 people have already been imprisoned for an average of three weeks in the first six months of 2009. We are aware of the problems that exist and that the system is not working. We should, therefore, seek to improve the system and move away from criminalisation.

The Bill includes many welcome measures. Unfortunately, while it appears it will at least reduce the likelihood of imprisonment of a debtor in his or her absence, figures on the problem are lacking. The Courts Service estimates that only one in five debtors takes part in debt enforcement proceedings. I have been present in District Courts where committal orders were made in the absence of the debtor. While this may not occur as a matter of routine, under current circumstances judges regard this course of action as the only option available to them. The figure I provided is an estimate from the Courts Service. FLAC has pointed out the need for statistics to be gathered on the number of committal orders granted, and on the percentage of debtors who attend, fail to attend or have legal representation. We simply do not have those data, but we can certainly estimate that a small number of debtors are currently involved in the courts process. To have debtors criminalised in their absence is, as the High Court has found, a serious flaw in the current system. It is welcome that measures will now be put in place to ensure it is more likely that debtors will appear in court.

I have tabled an amendment suggesting that the court summons should include information in ordinary language for debtors explaining that they may a seek a variation of an existing instalment order at the hearing they are required to attend. It should also provide information, in ordinary language, of the consequences of not appearing at any future committal hearing and the possibility of variations being granted at those hearings. The amendment is based on a wording that FLAC has proposed and deals with the serious problem where debtors are not appearing in court. It is to ensure relevant information is provided to them at the earliest stage. I am conscious that in subsection (5) the Bill provides that the information will be given by the judge where the debtor is arrested and brought before the District Court, but that is too late. According to FLAC, that information should be provided then, but should also have been provided at an earlier stage. I urge the Minister of State to consider accepting something like the amendment I have proposed. Its wording may not be the most elegant, but something to the same effect should be accepted to ensure the debtor is provided at an early stage with information as to the consequences of a failure to appear at that early stage, and the possibility of seeking variations. It appears to FLAC, and it is clear from the evidence we have, that people are simply not clear as to what procedure is being instituted when a committal summons is made. I would like the Minister of State to deal with that amendment in his response.

We need to move away from criminalisation. I am slightly concerned at the altering of the onus of proof. It is certainly welcome to see that the creditor must now establish the reason for the debtor's failure to pay instalments — that it must not have been due to wilful refusal or culpable neglect. That is welcome but I am slightly concerned about the insertion of a criminal standard of proof. We should instead be moving away from the criminalisation of this area rather than towards it. On Committee Stage I will also address the amendment we have just seen concerning a new section 9, which provides that a Minister may consult a judge. I have some concern about the appropriateness — indeed, the constitutionality — of that procedure given that the judicial function is spent, in a criminal sense, once sentence is passed. I accept that is not quite the case here, however. FLAC has suggested that if we are to criminalise in this way, at the very least debtors should have some possibility of remission on a sentence. There are a number of issues that need to be dealt with, but the better approach would be to move away from the criminalisation that essentially is still at the heart of this Bill. That is why I will be opposing the Bill.

I welcome the Minister of State to the House again. This short but none the less important Bill has arisen because of the case taken by Ms McCann against the Monaghan District Court justice with regard to an infringement of her constitutional rights and in particular the fact that the Enforcement of Court Orders Act 1940 was incompatible with the Constitution. The High Court decision was on three grounds: that the debtor was not required to be present in court; no provision was made for legal aid for the debtor, especially one at risk of imprisonment; and the onus of proof was on the debtor, which could lead to a situation where imprisonment evolved because the debtor was unable to prove that his or her failure to pay was not a result of wilful default.

In addressing these issues, this short Bill amends sections 6, 7 and 8 of the 1940 Act. It will have the effect of ensuring that where a debtor does not appear, the court can issue a summons to ensure he or she appears. If the debtor still fails to appear, the court can issue an arrest warrant. The Bill enables the court to hear the debtor and be satisfied the debtor has wilfully defaulted or otherwise and that all possible steps have been taken to recover the debt, including instalment orders and mediation, which is an innovation within the structure of this legislation. The Bill safeguards the debtor in that the court will not imprison him or her unless it is satisfied he or she has the means to pay. The Bill will ensure the debtor will be aware of the risk of imprisonment and that his or her entitlement to legal aid is also made known to him or her.

We can all cite hardship cases in response to people who appear before the courts. However, like any legislation, especially in this area, it is a fundamental question of balancing the rights of the debtor with those of the creditor. I think we would all agree, as many Senators have said, that imprisoning debtors is extremely costly to the State. In fact, their imprisonment does nothing to satisfy the payment of the debt to the creditor. We must also be aware that for every genuine person who finds him or herself in difficulty, there are those who are quite happy to play the old soldier and exploit the legal system to the umpteenth degree. In this regard, perhaps the Minister of State can clarify a point. When a person is imprisoned for non-payment of a debt, does the obligation to pay the debt continue after their release or is it expunged with the prison sentence?

With regard to balancing the rights of debtors and creditors, the Courts Service statistics clearly show that the threat of imprisonment is an effective deterrent to encourage people to pay where they have the resources to do so. It is imperative such deterrents are in place. Creditors are now finding it increasingly difficult to recover debts. It is only right and proper that their rights must be protected.

I note from the Minister of State's speech that the Law Reform Commission is examining this area and is expected to publish its report in September. The commission has had wide-ranging consultations on debt enforcement. To me, the concept of attachment is a good one in that it obviates the need for imprisonment and the costs that go with it. Senator Quinn illustrated that cost clearly when he said that the recovery of a debt of €1,700 would cost the State and taxpayers approximately €23,000 when the debtor was imprisoned. Obviously that does not make sense for the State or the creditor. Attachments to income, whether earnings or social welfare payments, are highly desirable.

With regard to the entitlement to free legal aid, I note that some negotiations are being entered into in that regard. I am a long time critic of exorbitant legal fees which arise from a lack of competition within the legal profession, particularly the Bar. This has given rise to fees that unfortunate clients are bound to pay, yet they are not in a position to negotiate a price as one would do in the normal commercial world. That area must be tackled effectively because up to now the State has failed miserably in that regard. In some ways we have probably compounded the difficulties with the arrangements we made for tribunals. We are still paying tribunal barristers €2,250 per day for basic, mediocre administrative work. I do not think that is sustainable or defensible, especially in a situation where others have to step up to the plate, given the economic difficulties that we have.

I was taken with some of the recommendations in the submission made by FLAC, especially the recommendation on the new section 6(2). This provides that the summons requiring the debtor to attend would ask why the instalment order is not being complied with and would set out that the debtor has failed to comply with the order, that imprisonment is a possibility and that the debtor may be arrested if he or she fails to appear at the hearing. FLAC makes the point that the provision does not inform the debtor that the committal hearing may be used as an opportunity to vary an existing instalment order. That might be a useful addition to the Bill and perhaps the Minister might look at it.

The Senator's time is just up.

I welcome the change in section 6(3) from the discretionary "may" to the mandatory "shall". On section 6(7), FLAC makes the point that the inclusion of mediation is obviously very welcome, but that there might be some reference to MABS to give some direction to the court on where the mediation process might be assisted.

Further onuses placed on the creditors showed that the debtor has no goods which could be taken in execution. Will the Minister of State explain how that can be met by the creditor in circumstances where it might be very difficult to determine, other than by using the sheriff? FLAC makes the point that using the sheriff in those circumstances seems to be somewhat excessive and questionable.

The High Court judgment that has led to the necessity to amend this legislation is most welcome. I do not share the view expressed by colleagues that it was a decision the State ought to have considered appealing. I cannot understand the basis on which the State would consider appealing this judgment. When one reads the judgment, one is almost inclined to ask how the law could have been stated like that. How could a debtor be imprisoned without any positive requirement that the District Court would first have to decide whether the non-payment was due to an inability to pay or a refusal to pay? It seems to be a fundamental point. It is not an area of the law with which any of us was familiar until it came out in this judgment. I cannot understand how it could possibly be the law or how it could be justified as the law.

It also seems basic to many people that fair procedures should be available for a hearing dealing with the possible imprisonment of a debtor before the courts. How could it possibly have been the law that such decisions were made in circumstances where there was no real opportunity for the debtor to be heard and for fair procedures to be applied to the hearing of his or her case? There is a number of other basic points in the judgment that were of fundamental importance to people's rights. It seems to be entirely wrong for the State not to accept the ruling that has been made. I am glad that the Government has proceeded to amend the legislation and to deal with the strictures of the decision of Judge Laffoy in that case.

While I accept the necessity for the Oireachtas to address the implications of this judgment, no satisfactory explanation has been given as to why it must be dealt with in one day. It is something of a spectacle for us to be considering a Bill such as this over a few hours. Let us consider the work by bodies such as FLAC and the expertise that such bodies can make available. We do not have to agree with everything they say, but they can open our eyes to aspects of the issue that did not immediately strike us. FLAC published a report on indebtedness and quickly put together a briefing for our assistance in this debate so it is easy to see that it has a great level of expertise. To respond to FLAC's detailed analysis by dealing with this Bill in a couple of hours is simply unacceptable. It offends not only FLAC, as that is only one body, but also democratic accountability. As Senator Regan said on the Order of Business, conducting the debate in this way on such an important issue is just one more nail in the coffin of the Seanad as a forum for parliamentary scrutiny. I appeal to the Leader at this late stage to consider not proceeding with Committee Stage.

Senator Bacik has seen some of the very genuine proposals brought forward by the outside organisations that I mentioned, yet we have to scramble amendments together within a few minutes and go back and forth to the Bills Office. We will sit next week so why can we not have Committee Stage then? This decision was made in the High Court on 19 June so one more week will not cause the sky to fall in.

Senators Regan and Bacik spoke about the need for us to have a more wide-ranging debate. It may be that these amendments cannot await the wider debate on the use of imprisonment in the enforcement of debts. I am not as persuaded as Senator Walsh and others by the statistics that we have been given on the District Court. The Minister of State told us in his speech that there were approximately 4,300 applications for enforcement to the District Court in the first six months of the year and that in the same period, 186 people were imprisoned, less than 5% of the total, and that the average imprisonment period is 20 days. The clear conclusion was that this proves that the threat of imprisonment is a deterrent for all those other people who then paid up. I do not accept that this constitutes full proof of the point. It bears further scrutiny and I am glad the Law Reform Commission will look at it. If somebody who has not paid a debt is threatened with imprisonment and subsequently pays the debt, that may strongly suggest to the Minister of State and others that the existence of the threat was the reason they paid. Frankly, I do not believe it follows that it was the reason they paid. It is worth scrutinising further. It takes time to complete the process of making enforcement orders, entering judgments and going through the enforcement procedure. During that period, people can realise the seriousness of the situation they are in and take steps to discharge their debts. I do not think the existence of the threat constitutes the high and unanswerable level of proof that is being argued for. It is not necessarily the only reason a person might decide to pay a debt.

I agree with other Senators that there is considerable scope for us to consider non-custodial approaches to the enforcement of debts. Regardless of whether we are a far more sophisticated society than we were in 1940 — I might have to think again about that one in light of some of the things we now know — it is certain that more sophisticated means of ensuring debts can be discharged are available to us nowadays. The State obviously has an interest in ensuring people who are owed money ultimately get paid. As Senator Regan has pointed out, a developed system of attachment of earnings has evolved over recent times. I know it is difficult in some cases. People who work in family law know that attachment of earnings is not always available because of the income situation of some people, including the self-employed. It is not always the answer.

Senator Bacik mentioned other forms of sanction, such as community service orders. We need to consider other means of putting pressure on people who owe money to pay up. It is a little crude for us to continue to rely on what Senator O'Donovan has referred to as the "whip hand". I understand what he means. We should not rely on the old-fashioned threat of sending people to the slammer if they do not pay up. It seems to be a little unsophisticated. It certainly bears further scrutiny and examination. I have always been deeply uncomfortable with the notion that the sanction of prison should be used as a means of enforcing a debt. I accept that the Minister of State has said it is intended that this sanction should be used as a last resort. I agree with Senator O'Donovan that District Court judges, most of whom are extremely humane, will always try to avoid sending people to prison. While it is important that our judges are compassionate, I do not think the law should rely on the compassion of judges. The law should be clear. It should be possible for people to ascertain what it means, to have a stake in it and to support it. We should not simply leave it to the discretion of District Court judges, who may or may not be compassionate in particular circumstances. To send people to prison for not paying their debts offends against many people's sense of what it right, fair and appropriate.

While I welcome many of the changes that are proposed in the legislation, I lament the fact they do not go far enough. They deal with just one aspect of the problem. We need to remind ourselves that vulnerable citizens are involved in many, if not most, of these cases. We saw that in the McCann case. Some people have serious difficulties with basic interaction with the courts. I accept that has been addressed to some extent in this Bill. Clearer information should be given to people about the extent to which they are exposed when their cases are heard before the courts. I welcome the important development in this legislation, whereby the right to legal aid is clarified.

I do not know why Senator Walsh always feels tempted to start a discussion on tribunals. I do not think many of those who have appeared before the tribunals have availed of legal aid. The Senator always takes a cut at the Bar when he gets a chance. I assure him that many barristers work for an awful lot less than the amount to which he constantly refers in the context of the tribunals. Many barristers and solicitors who do good work under the legal aid scheme are not paid anything like the sort of figures conjured up by Senator Walsh from time to time.

I welcome the Minister of State. A former Minister for Justice, Equality and Law Reform once said that if one is not radical, one is redundant. Unfortunately for him, he was made redundant. The essence of what he was saying was that when one has a chance to do something about an issue, one should think about it radically. At the very least, one should examine such matters broadly to see if they can be changed. This legislation gives us an opportunity to consider the imposition of fines in a different manner.

Historically, people have been thrown into jail when they have incurred debt. When one could not get access to the money, goods or services of one's debtors, one made them pay up by threatening them with imprisonment or by throwing them into jail and forcing their families to pay up. We are using the opportunity presented by this legislation to maintain the status quo that has existed for the past 200 or 300 years. There is nothing radical about saying we will throw people into jail if they do not pay up. The Government should have used this opportunity to consider whether there is a different way of proceeding in cases of this nature.

People end up in debt in two ways — indirectly, when they lose their jobs or their ability to earn money and thereby pay their debts; and directly, when they decide they do not care less about their debts. People in the first category can be pursued through the courts when their debts need to be recouped. People in the second category contributed to the housing crisis in the United States when they defaulted on their first mortgage payments. Similarly, certain people in this country defaulted on their second or third car financing payments. It is clear that many people who end up in this position have decided to throw caution to the wind so they can get what they want. They have no interest in discharging their debts one way or another. I suggest that people in this latter group are probably in the minority. The legislation before the House might be needed to threaten such people with jail if they do not pay their debts. I emphasise that those who could not care less are in the minority.

Many Senators have spoken about the tendency for people to say "over my dead body will I give up any of my money" when their families, marriages or partnerships break up. In many cases, people do not go to court to get maintenance payments or orders against their former spouses or partners. They know that if payments are ordered but not made, they could be left in a much more difficult position. For example, they might not qualify for social welfare payments on the basis of the so-called maintenance orders that are made by the courts. It is often easier for them to forget about their ex-partners and get the State to pay for their upkeep and that of their children instead. The Government should have proposed the reform of this system.

The manner in which people are paid has changed over the last 200 years. Nowadays, many people have forms of income, goods or property that could be relatively easily accessed by the State, if necessary, if minor changes were to be made to the law. It may be more difficult to access such moneys in the case of the minority of people who are self-employed or who do piecemeal work. Most people have a regular income. Some of the clients about whom I am talking get their income from the State. It seems logical to take the Fine Gael approach — to seek an attachment to earnings order — in most cases. Our legislation should facilitate that to be more easily done. Most of these people are paid by the State, or are receiving monthly cheques or payments into their bank accounts from other employers. There is nothing to prevent the Government from trying to secure faster access to such direct payments when that is required. It may be possible to do the same thing in the cases of people who are self-employed or have an irregular income stream. Many such people own property or other things of value. If the State made more legislative changes over time it could get quicker access to a person's assets to make him or her pay up. The only option that the State has allowed itself over the last 250 years is to throw people into prison.

Other aspects of the legislation should be examined, such as attachment of earnings orders or how property and goods may be confiscated. There may be constitutional issues in that regard, and no doubt the Minister of State will point these out when he is responding. Nonetheless these are the areas the Government should be looking at. If somebody has no property, regular income or savings that may be accessed, he or she will never be in a position to pay, either under this legislation or any provisions that we might propose. In effect, these are lost cases. Therefore the argument for throwing people into prison is both old-fashioned and out of step with what might be regarded as the modern way to run a justice service. It is not just a question of affronting people's human rights, not even in terms of an extreme right wing perspective, as regards getting value for money and delivering a good service. We should move away from just throwing people into jail and look at other remedies in terms of getting access to their incomes or property and using those assets to pay off whatever debts they may have incurred. Normally, these are the people who are probably slow to pay up anyway. Many others, who just find themselves in difficult positions, are willing to do something to address their problems.

I welcome the Bill. However, I deplore the fact that the Minister of State, who is a decent man, is complicit in undermining the constitutional role of the Seanad, since we will not have proper time to investigate this issue fully and table appropriate amendments. I shall not go on about this, though, because it means I would be wasting my time.

This matter needed to be addressed for a very long time. The House will know that I have tried various methods to attack the situation whereby people were being put in jail for debt. For example, on the Broadcasting Bill I said — the then Minister of State in charge agreed — that it was appalling that people were being put in jail on a regular basis, including a woman in Cork with a family of young children, on the basis of non-payment of a television licence. The Minister of State then indicated that this Bill would be brought before the House and that it was more appropriate to deal with this type of question here.

I was surprised to have been the only Member of the Oireachtas to attend a very good briefing by FLAC. I commend the Free Legal Aid Service and I know some of its representatives are in the House today. It performed a very useful service by giving detailed and clear briefings to all of us. There may be many reasons why my colleagues could not attend, and I am aware they were circulated with the brief, which in some ways is just as good. However, by not being there they missed part of the human face. It was very striking to listen to the calm and dignified story of Ms Mary Coughlan, a remarkable artist. She spoke about her experience as an artist because the entertainment business suffers a series of fluctuations and people are not always careful. We know of so many tragic stories in show business, where people do not always read the small print in the legal documentation.

Ms Coughlan signed something quite blissfully having made, as she said, a transmission almost instantly from very poor rental accommodation to a magnificent palatial house in Baily, with tennis courts and all the rest until suddenly, one day, two years into her enjoyment of these premises, she found herself in debt. Suddenly there were bailiffs and she was threatened with jail. Only the intervention of Sir Richard Branson, who was on the point of signing her for a major record deal, saved her. He managed to negotiate with the bank, and she was very happy to give the name, National Irish Bank. One has only to look at the way NIB operated so disgracefully itself, so shame on it for pursuing someone such as that. The interesting point is that Ms Coughlan had neither the competence nor the muscle to extricate herself from this situation. Sir Richard Branson did and managed to negotiate what amounted to a 50% deal. He paid off half the debt and that excused the entire deal, but Ms Coughlan is still left with the aftermath because her credit rating is gone. She is paying €1,800 a month rent on a three-bedroomed house in Bray, which is significantly less than the mortgage she would be paying on a proper house for her family, with all the amenities. No bank will give her the money, however, because her credit rating is gone. That is an appalling situation and I hope this will be taken into consideration as well.

Much of this legislation was spurred by the McCann case in the High Court, as the Minister of State indicated in his speech. I commend not only the principle in this case but also the Northside Community Law Centre. It was only with the law centre's assistance that this remarkable and courageous woman was able to take her case.

The legislation is clearly intended to remedy some of the defects highlighted by the McCann case. Unfortunately, however, although the changes are welcome, they only really look at the last step in what FLAC describes as the complex and less than user-friendly procedure that takes place in open court and is need of comprehensive reform generally. I say to the Minister of State that the first step is very good, but we need an urgent and more comprehensive review of the entire situation. I recommend to his attention, as I am sure others have, the very detailed submission by FLAC, called To No One's Credit.

The changes in the Bill will mean that in some circumstances it will put an end to the imprisonment of a debtor in his or her absence from the court. That was an appalling business. However, the Government with the other hand is creating a situation with the Criminal Justice (Amendment) Bill where exactly that can happen, so there is an incoherence in its approach. The onus of proof is being altered so that it is now up to the creditor to establish the debtor's failure. In other words, it is important that guilt is no longer assumed on the part of the debtor. The Bill provides for some degree of legal aid. Section 2 sets out to amend section 6 of the Enforcement of Court Orders Act 1940 and the intention is that a debtor will be obliged or encouraged to attend the court etc.

Since there is so little time, it would be helpful if, because under this new legislation the judge is capable of varying an instalment order, there should be a clear statement to the effect that a debtor "may" seek such a variation. This should be made clear to debtors at all times, but in the Bill this does not necessarily happen. However, I very much welcome the fact the intention in law is to ensure people are informed of the situation in clear and ordinary language. Subsection 6(3) empowers the District Court judge, where the debtor fails to attend, to issue a warrant. Again we have one of these classic "may" versus "shall" situations and perhaps my colleagues have spoken on this. However, this is a dangerous area and I appeal to the Minister of State to examine and amend it.

I do not know whether the appalling manner in which business is handled in this House means that this cannot necessarily be amended here. Nonetheless, I ask the Minister of State to introduce an amendment because the consequences could be very serious. If the judge may do something, that implies, linguistically, that he or she may not do it. If neither of these options is exercised, then it appears the debtor could still be imprisoned or an order could be sought to that end.

Senator Norris's time is up.

I will end on this point. Although the judge may decide again to vary the instalment order at the resumed hearing, no specific obligation is imposed on the judge at the outset to inform the debtor that he or she may seek a variation of the hearing. The Cathaoirleach's bell is not quite in rhythm with the prose.

The Senator's time is up, rhythm or no rhythm.

This would be a helpful reminder for many debtors. I am doing the vocals, and the Cathaoirleach is doing the drumming.

I will not criticise the Cathaoirleach's percussion techniques. Given the nature of the recent High Court decision that brought this amendment Bill into being, this Bill has to be narrow in focus. There is a legal situation that must be remedied and the Bill has been put forward in this regard. That does not mean there is no need for wider and more comprehensive legislation. The Members of the House are right to put those reservations on board and seek such legislation at the earliest opportunity.

Imprisoning people for debts is something many Members of this House and members of society believe is an unnecessary punishment in the times we live in, although in some circumstances it cannot be avoided. There is a certain irony, given the times we live in, that there are those in our society, particularly in white collar crime, who have accrued far higher levels of debt but who remain untouched and unpunished. Given what is likely to happen in our judicial systems and, hopefully, in our prosecution systems in the next few years, I will let that inference lie because this House has no business referring directly to those matters.

The history of penal institutions in this country once saw debtors' prisons as separate buildings. We have come a long way from that, and the degree of people being imprisoned for debt is now a lower proportion of those imprisoned. In line with the request made in this House on many occasions, particularly on the Order of Business on many days, about the nature of imprisonment, we must ask questions about how we can bring the level down to the nth degree. We also need to have a debate on debt, what qualifies as debt, how people are brought into judicial proceedings and what they are being asked to repay.

In recessionary times we know people are being asked to use lenders of last resort and the nature of debt compiled by individuals who are brought before some kind of judicial assessment is that people are being asked to repay debt that is many times the original principal because of high and unsustainable interest levels. As a result, we need better definition in our legal code to ensure that if this option is being considered, and it is one which should rarely, if ever, be considered, it is not on the basis that a person is being asked to pay for something he or she never borrowed in the first instance.

As we examine the ethics and morals of our financial institutions and those involved in the often odious business of moneylending, these questions should inform a debate such as this. Given the nature of putting in force corrective legislation on short notice on foot of a legal decision, we do not have the time and opportunity to do it before the end of this session. In requests for amendments and requests for legislation to deal with attachment of earnings, I hear a call for wider legislation in this area. As and when the House, with a Governments sponsored Bill, approves this legislation tonight, I ask that such legislation would come into being at the earliest possible opportunity.

I am disappointed that Senator Boyle is leaving.

Please do not comment on that.

I was taken by his remarks and I agree with what he said. He spoke of reservations, ethics, morals and responsibility. Let him accept the amendments from this side of the House. As Senators Alex White and Regan said, let us not have a rushed day here. His speech is nothing but an apology for the Government. He does not stand up for what he believes in and he should vote with this side of the House.

We need to remove the threat of imprisonment and we also need the threat of sanction. On this side we advocate ending the use of imprisonment in debt enforcement. Debt rescheduling and mediation should be the norm. I accept there must be a sanction overhanging the issue. Debt enforcement has implications and those who default must repay. I was involved with a credit union on a supervisory committee for a number of years and I understand the predicaments and precarious positions people get themselves into. In many cases we are talking about the most vulnerable in society, people who end up going to moneylenders and being forced into all sorts of difficulties.

The judgement we refer to has forced changes and the Bill reflects this. I compliment the Free Legal Advice Centre on its document and Senator Regan on his detailed amendments which will be before the House later and on his speech in the House this afternoon. I hate the word "debtors" because we are talking about people. The majority of people in debt acknowledge their debt and understand they must repay. Between 40 and 50 people are in prison on any given day to pay a fine, with a total of 2,000 people per year. I will return to the cost of that.

The Bill, which is a result of the McCann case, proposes that we amend section 6 of the Enforcement of Court Orders Act. Fine Gael, as Senators Regan and Twomey have pointed out, oppose the Bill as it retains imprisonment as the final option for non-payment of a civil or contractual debt and offers no alternative to imprisonment for debtors. We need an alternative. Senator Boyle spoke about being in recessionary times. People are under increasing pressure to make ends meet. On top of that, some people find themselves in debt in these economic times. More than 400,000 people are on social welfare and dependent on the State. They are trying to live a life with some type of food, clothing and the means to pay bills such as heating and energy costs and they end up in difficult and dire financial situations. All of us in our clinics and private lives have met people who are struggling.

Through Senator Regan we have proposed instalment orders which remove the threat of imprisonment while giving people the security that the debt will be repaid. I do not believe a person in debt should be imprisoned. We see what has happened with our banking profession where people have been allowed to get away scot free, and with some of our developers who have codded people. Last week in New York, Mr. Bernard Madoff was carted off to jail. In this country the friends of Fianna Fáil get the white flag and the red carpet is rolled out. It is a bit like Palm Sunday in reverse.

We have proposed an attachment to earnings order which removes the option from a person not to pay the fine. Under such an order, a fine would be deducted at source from a person's salary or social welfare in a fair and balanced way. It can be taken by percentage in an equitable way that is very much in keeping with what the Bill is meant to be about. We would see a maximum threshold being established and one would pay in proportion to one's income. For example, the courts may establish that no more than 5% of a persons' income could be taken in any given period. That might be significant in some people's wages, but it would remove the threat of imprisonment which outweighs the contribution.

From my experience, many credit unions are willing to reschedule members' loan repayments and the conditions of the payments if people's circumstances change. I have been at credit union AGMs where the chairman has issued on behalf of the board of directors an appeal to people in difficulty to talk to the credit union. I appeal to people in financial difficulty to talk to their credit union or bank. The credit union control committee is committed to assisting its members who are ordinary people. It was the credit union movement which commenced the money advice and budgeting service in Cork.

It costs almost €2,000 a week to keep one prisoner in jail. In 2008 the average civil debtor spent 21 days in prison at a cost of €6,000 to the State. By any man's language that does not make sense. We have proposed a balanced and fair system whereby the debt would be repaid and the granting of an attachment order by a judge would allow a portion of a defaulting person's wage or social welfare payment to be used in repayment of the loan. While sanctions are necessary, imprisonment is a step too far, especially when we consider what has happened in 21st century Ireland where there is now no acceptance by some people of their wrongdoing and where such people have been aided and abetted without having to pay the price, which is wrong. We are now discussing penalising ordinary people when we should be assisting them in repaying their loans.

I call Senator Wilson, who has four minutes.

On a point of order, the Leader of the House gave an undertaking that there would be no guillotining of any Bill. If people are not allowed to speak, I would deem that as guillotining the Bill. We have people who wish to speak and the Leader gave an undertaking earlier today that there would not be a guillotine on any Bill in this House. This is effectively guillotining the Bill.

My hands are tied by the Order of Business.

It shows how ludicrous is the ordering of business in the House.

It shows the Leader does not mean what he says.

My hands are tied.

On a point of order, did you, a Chathaoirligh, not indicate earlier today that it was your view——

(Interruptions).

This is a point of order. Excuse me, I am addressing the Chair of this House. Did you, Sir, not indicate to the House earlier that it was your view of the Leader's position that time would be given?

If there were amendments.

Amendments have been——

My view was that if amendments were tabled, he would afford time between this and the next Stage.

There are any number of amendments.

I must finish this Stage before we can move on to the next question.

On a point of order, the Leader said he would review the proceedings of the day depending on how things went. He would not give us a commitment to extend any particular section, but he appeared to say this morning——

I was certainly not giving a commitment and was not in a position to give it.

——that there would be a review.

My reading of it was that when we finished at 5.45 p.m. if there were amendments, a break would be given to afford that opportunity to the Members. That was my reading of his point.

Given what was said on the Order of Business, I wish to make the point that a number of speakers wish to contribute to this Stage.

The Senator is taking from another Senator's time.

Is the Cathaoirleach saying that only four minutes remain in this debate?

There are fewer than four minutes now. Only two minutes remain.

Does that include the response of the Minister of State?

No time was ordered for a response from a Minister on the Order of Business.

Is the Minister of State not responding?

The Minister of State is not responding.

So we have a change of procedure for Second Stage. We do not have a Minister responding and have a guillotine on Second Stage.

I must call Senator Wilson.

We have a refusal to allow Senators, who wish to speak, time to contribute to the debate.

I am not refusing.

It is very poor practice.

I am working within the business of the House as ordered earlier today. I call Senator Wilson.

On a point of order, it is normal on Second Stage that a Minister would give us the courtesy of a response to the points raised. That enables the Members to decide whether to submit amendments depending on whether the Minister of State were to give a satisfactory response to some of the questions. This is a real discourtesy to the House and is unacceptable.

My hands are tied by the Order of Business agreed earlier.

On a point of order, what did the Leader mean earlier when he said he would review the legislation as it developed? If more speakers are offering now, should that not form part of the review?

This is a guillotine.

It is effectively a guillotine, which we are told does not happen in this House.

My hands are tied. The Senator is taking time from another Senator who wishes to make a contribution. When we reach 5.45 p.m.——

Why does the Leader continually say on the Order of Business that we do not guillotine in this House?

I have less than a minute for Senator Wilson.

A Chathaoirligh, we are seeing a guillotine now.

I am not guillotining. I am simply working within the order of the House.

You are presiding over a guillotine of Second Stage.

I am working within the order of the House as agreed earlier.

I welcome the Minister of State, Deputy Curran. The need for this important legislation came about as a result of a High Court judgment on 18 June in the case of McCann, who is from my constituency, v. Judge of Monaghan District Court et al. The Minister of State has outlined the findings of the High Court, as have other speakers. We are all agreed that nobody should go to jail because he or she cannot pay a debt.

That is what the Bill provides for.

Allow Senator Wilson to speak without interruption.

However, it is necessary to have some sanction for a person who owes a debt and deliberately refuses to pay it. I specifically refer to maintenance orders that have been provided by the courts.

The Senator's time has concluded.

There are people who have an obligation to maintain their families and refuse to do so on the grounds they cannot pay it. If it is proved they can, there should be a sanction up to and including imprisonment.

As it is now 5.45 p.m.——

A Chathaoirligh——

My hands are tied.

They are not tied that much.

I must put the question. As it is now 5.45 p.m.——

On a point of order——

——I am required to put the question——

On a point of order on how the House is run——

——in accordance with an order of the Seanad of this day: "That the Bill be now read a Second Time."

Question put.
The Seanad divided: Tá, 27; Níl, 21.

  • Boyle, Dan.
  • Brady, Martin.
  • Butler, Larry.
  • Callanan, Peter.
  • Callely, Ivor.
  • Carty, John.
  • Cassidy, Donie.
  • Corrigan, Maria.
  • Daly, Mark.
  • de Búrca, Déirdre.
  • Ellis, John.
  • Feeney, Geraldine.
  • Glynn, Camillus.
  • Hanafin, John.
  • Keaveney, Cecilia.
  • Leyden, Terry.
  • Ó Domhnaill, Brian.
  • Ó Murchú, Labhrás
  • O’Brien, Francis.
  • O’Donovan, Denis.
  • O’Malley, Fiona.
  • O’Sullivan, Ned.
  • Ormonde, Ann.
  • Phelan, Kieran.
  • Walsh, Jim.
  • White, Mary M.
  • Wilson, Diarmuid.

Níl

  • Bacik, Ivana.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Cannon, Ciaran.
  • Coffey, Paudie.
  • Coghlan, Paul.
  • Cummins, Maurice.
  • Fitzgerald, Frances.
  • Hannigan, Dominic.
  • Healy Eames, Fidelma.
  • McCarthy, Michael.
  • Mullen, Rónán.
  • Norris, David.
  • O’Reilly, Joe.
  • Phelan, John Paul.
  • Prendergast, Phil.
  • Regan, Eugene.
  • Ross, Shane.
  • Ryan, Brendan.
  • Twomey, Liam.
  • White, Alex.
Tellers: Tá, Senators Camillus Glynn and Diarmuid Wilson; Níl, Senators Maurice Cummins and Eugene Regan.
Question declared carried.

When is it proposed to take Committee Stage?

Is that agreed?

It is not agreed. We point out to the Leader what he said about guillotining debate on Bills. The guillotining of the debate has happened already because some speakers were not allowed to contribute to the debate on Second Stage. In effect, the Leader has guillotined the debate on this Bill. He should not say that he has not guillotined the debate on Bills in the past.

On a point of order, for the benefit of the House, will the Cathaoirleach repeat what he indicated to the House this morning as being his understanding of what the Leader said about the debate on this Bill?

I outlined what I was told this morning. I must be clear on that.

Will the Cathaoirleach repeat it for the benefit of the House? Will he repeat what he said earlier?

I have a proposal before me. I outlined to the House what I understood to be the case this morning. The question I have before me——

What was that?

Why does Senator Alex White not tell us?

I am not the Leader. I am trying to chair these proceedings as best I can. What is before me is the question that Committee Stage be taken now.

On a point of order, the Cathaoirleach indicated clearly that his understanding of the position was that if amendments were proffered time would be given so the House would have an opportunity to have a sos——

That was my understanding this morning.

I thank the Cathaoirleach, that was his understanding. Will the Leader respond——

A Chathaoirligh——

I must move on.

This is very relevant. What did the Leader's words mean this morning when he said he would review the proceedings? Our understanding was that if amendments were tabled there would be a break and we would come back to deal with the amendments. All Stages should not have been ordered for today anyway. Will the Leader clarify what he said this morning?

That is a matter for the Leader and the Government. The Leader has proposed that we take Committee Stage now.

What do the Leader's words mean?

I have a question for the House. On a point of order, if the Cathaoirleach told the House what he said——

I am sorry, but this is a point of order. The Leader told the House that there would be no guillotine. Then the Order of Business, as agreed by this House, indicated there would be no guillotine, so what is happening here is illegal.

Further, on a point of order, the Leader indicated earlier that there would be a review. I have tabled an amendment, that I had to compile during Second Stage. I do not think the Minister has had time to review my amendment nor the other amendments from the parties. All the amendments have not been circulated.

The Leader orders the business of the House and when I asked when it was proposed to take Committee Stage he said "Now".

This is an appalling way to treat the House.

As far as I am concerned——

(Interruptions).

Members, please.

Is the Cathaoirleach happy——

The Cathaoirleach is required to obey the ruling and the decision of this House this morning, namely, that there would be no guillotine and that there would be time for amendments. That was agreed on the Order of Business.

The Order of Business made no such provision. What I have before me——

How can the Cathaoirleach preside over the House being run like this?

Senators, please.

On a point of order, is the Cathaoirleach happy for the House to be run in this manner? No breaks are scheduled between Second Stage and Committee Stage. All Stages are being taken and no amendments have been circulated.

As far as I am concerned, the Leader has put forward the business.

Is that not lowering the reputation of this House?

I must concur with the proposal of the Leader that Committee Stage be taken now.

Question put: "That Committee Stage be taken now."
The Seanad divided: Tá, 27; Níl, 21.

  • Boyle, Dan.
  • Brady, Martin.
  • Butler, Larry.
  • Callanan, Peter.
  • Callely, Ivor.
  • Carty, John.
  • Cassidy, Donie.
  • Corrigan, Maria.
  • Daly, Mark.
  • de Búrca, Déirdre.
  • Ellis, John.
  • Feeney, Geraldine.
  • Glynn, Camillus.
  • Hanafin, John.
  • Keaveney, Cecilia.
  • Leyden, Terry.
  • Ó Domhnaill, Brian.
  • Ó Murchú, Labhrás.
  • O’Brien, Francis.
  • O’Donovan, Denis.
  • O’Malley, Fiona.
  • O’Sullivan, Ned.
  • Ormonde, Ann.
  • Phelan, Kieran.
  • Walsh, Jim.
  • White, Mary M.
  • Wilson, Diarmuid.

Níl

  • Bacik, Ivana.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Cannon, Ciaran.
  • Coffey, Paudie.
  • Coghlan, Paul.
  • Cummins, Maurice.
  • Fitzgerald, Frances.
  • Hannigan, Dominic.
  • Healy Eames, Fidelma.
  • McCarthy, Michael.
  • Mullen, Rónán.
  • Norris, David.
  • O’Reilly, Joe.
  • Phelan, John Paul.
  • Prendergast, Phil.
  • Regan, Eugene.
  • Ross, Shane.
  • Ryan, Brendan.
  • Twomey, Liam.
  • White, Alex.
Tellers: Tá, Senators Camillus Glynn and Diarmuid Wilson; Níl, Senators Maurice Cummins and Eugene Regan.
Question declared carried.
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