For the benefit of Senators, we have four lists of amendments. There is a yellow list and three additional white lists.
Enforcement of Court Orders (Amendment) Bill 2009: Committee Stage.
Section 1 agreed to.
NEW SECTION.
Will we have time to obtain those lists? This is silly stuff.
The House has agreed to take Committee Stage now.
I understood from the four lists that the first amendment we would take would be amendment No. 1, a Government amendment, followed by Senator Regan's amendment No. a1 and then followed by my amendment No. 1a. If I could take the Chair through those amendments, amendment No. 1 on the Government list mentions page 3, subsection (1), line 12, which comes before Senator Regan’s amendment of page 3, section 2. In fairness, the Government amendment comes first. This is a reflection of the procedural shambles if it is not even clear which amendment comes first.
Amendment No. a1 comes before amendment No. 1. We are dealing with section 2 of the Bill and amendment No. a1 inserts a new section so it goes before section 2.
Could we not just have a consolidated list of the proposed amendments we are being asked to deal with?
There is nothing I can do.
My point is simple and reasonable and I am sorry it is causing frustration to the Chair. It is not unreasonable for a Member of the House to have one sheet of paper that shows a list of the amendments we will be dealing with. This is not the fault of the Leas-Chathaoirleach and this is not directed at him by any means but there are four lists of amendments and we are being asked to figure out their order. One would not run a youth club like this, let alone a parliament. People should be able to see what we are supposed to be doing.
I will do my best to help every Senator here at every stage. We must proceed. There is nothing else I can do at this stage. The House has agreed to proceed.
Is it not normal procedure in this House to have a list of the groupings of the amendments? That always has been the practice in the Dáil and the Seanad.
I will arrange for the groupings of amendments to be circulated. The groupings are only a help for Senators.
I assume this is happening because the Bills Office has been placed under intolerable time pressure. It points up the folly of taking all Stages on the same day. It makes management of the amendments during the debate extremely difficult for all sides. Is there not a procedure that when amendments are being debated, a list of the amendments is supplied?
There is always a list of amendment groupings but there is no one here at the moment to circulate it. The groupings are only for assistance anyway.
Would it be possible for the Leas-Chathaoirleach to read out the order in which it is proposed to take the amendments? We could then write them down and at least we would have some idea of what we are doing.
The Clerk of the Seanad has informed me that there are no groupings of amendments and that they are being taken individually. The first amendment we are taking is amendment No. a1 in the name of Senator Regan.
I move amendment No. a1:
In page 3, before section 2, to insert the following new section:
"2.—The Act of 1940 is amended—
(a) by the repeal of sections 6 and 9, and
(b) by the insertion of the following sections after section 5:
"6.—Where a debtor is liable, by virtue of an instalment order, to pay a debt and costs either in one payment or by instalments and such debtor fails to make such payment or fails to pay any one or more of such instalments accruing due while such an order is in force at the time or times appointed in that behalf by such order, the creditor may, at any time while such order is in force or within 12 months after it has ceased to be in force, apply to a Justice of the District Court for an Attachment of Income Order.
7.—"Attachment of Income Orders" means an Order made under section 8 or section 17.
8.—(1) On application to the relevant court, by a creditor named in a court order, the court may make an attachment of earnings order.
(2) An attachment of earnings order—
(a) shall be an order directed to a person who (at the time of the making of the order or at any time thereafter) has the debtor in his or her employment, and
(b) shall operate as a direction to that person to make, at such intervals as may be specified in the order, deductions of specified amounts.
(3) An attachment of earnings order shall not be made without the consent of the debtor unless the court is satisfied that the debtor has, without reasonable excuse, defaulted in the making of any payment under a court order.
(4) An attachment of earnings order shall—
(a) specify the normal deduction rate, that is to say, the amount of the debtor’s earnings which the court considers reasonable to be applied in satisfying the court order, but such rate should be no greater than is necessary for the purpose of—
(i) securing payment of the sums falling due from time to time under the court order, and
(ii) securing payment within a reasonable period of any sums already due and unpaid under the court order and any costs incurred in proceedings relating to the order which are payable by the debtor,
(b) specify the protected earnings rate, that is to say, the rate below which, having regard to the resources and the needs of the debtor, the court considers it proper that the debtor’s earnings should not be reduced by a payment made in pursuance of the attachment of earnings order,
(c) contain such particulars as the court considers appropriate for the purpose of enabling the debtor to be identified by the person to whom the order is directed.
(5) The particular of an attachment to earnings order may be agreed on consent by the debtor and the creditor in advance the hearing of an application under this section and may be ruled on by the Court as an order under this section.
(6) Payments under an attachment of earnings order shall be in lieu of payments of the like total amount under the court order that have not been made and that, but for the attachment of earnings order, would fall to be made under the court order.
9.—(1) A court registrar or court clerk as may be specified by an attachment of earnings order shall cause the order to be served on the employer to whom it is directed and on any subsequent employer of the debtor and such service may be effected by leaving the order at, or sending the order or a copy of the order by pre-paid registered post to his or her place of business or residence in the State.
(2) Where an attachment of earnings order or an order varying it is made, the employer for the time being affected by it shall comply with it within 10 days of it being served on him or her.
(3) On any occasion where a person makes, in compliance with an attachment of earnings order, a deduction from a debtor's earnings, he or she shall give to the debtor a statement in writing of the total amount of the deduction.
(4) Where an attachment of earnings order is served on any person and—
(a) the debtor is not in his or her employment, or
(b) the debtor subsequently ceases to be in his or her employment, that person shall, within ten days from the date of service or, the date of cesser, give notice of that fact to the court.
(5) An order made under subsection (1) shall be confidential and the employer shall not make it known to any person other than those persons necessary for the payment of wages, and such persons shall themselves have a duty not to disclose the existence of an attachment of earnings order.
10.—Upon application to the court for an attachment of earnings order, or at any subsequent time which the court deems fit, the court may—
(a) order the debtor to give to the court, within a specified period, a statement in writing signed by him or her of—
(i) the name and address of any person by whom earnings are paid to him or her,
(ii) specified particulars as to his or her earnings and projected earnings and as to his or her resources and needs, and
(iii) specified particulars for enabling the debtor to be identified by any other employer, including any future employer,
(b) order any person appearing to the court who has the debtor in his or her employment to give to the court, within a specified period, a statement signed by that person, or on his or her behalf, of specified particulars of the debtor’s earnings and projected earnings.
11.—Where an attachment of earnings order is in force—
(a) the debtor shall notify the court in writing, within 10 days of every occasion, in which he or she leaves any employment, or becomes employed or re-employed,
(b) the notice referred to in paragraph (a) shall include particulars of his or her earnings and projected earnings from the relevant employment,
(c) any person who becomes an employer of the debtor and has knowledge that an order is in force shall, within ten days of acquiring that knowledge, notify that court in writing that he or she is the debtor’s employer, and include in the notification a statement of the debtor’s earnings and projected earnings.
12.—(1) Where an attachment of earnings order is in force, the relevant court shall, on the application of—
(a) the employer concerned,
(b) the debtor, or
(c) the person to whom payments are being made under the order,
determine whether payments (or any portion thereof) to the debtor of a particular class or description specified by the application are earnings for the purpose of the order, and the employer shall give effect to any determination for the time being in force under this section.
(2) Where an application under this section is made by the employer, he or she shall not incur any liability for non-compliance with the order as respects any payments (or any portion thereof) of the class or description specified by the application which are made by him or her to the debtor while the application or any appeal in consequence thereof or any decision in relation to the application or appeal is pending, but this shall not, unless the court otherwise orders, apply as respects such payments (or any portion thereof) if the employer subsequently withdraws the application or abandons the appeal.
13.—(1) Where a debtor is in the service of the State, a local authority for the purposes of the Local Government Act 1941, a harbour authority within the meaning of the Harbours Act 1946, a health board, a vocational education committee established by the Vocational Education Act 1930, or a committee of agriculture established by the Agriculture Act 1931, or is a member of either House of the Oireachtas—
(a) in a case where a debtor in the service of the State is employed in a department, office, organisation, service, undertaking or other body, its chief officer (or such other officer as the Minister of State, by whom the department, office, organisation, service, undertaking or other body is administered, may from time to time designate) shall, for the purposes of this Act, be regarded as having the debtor in his or her employment,
(b) in a case where a debtor is in the service of such an authority, board or committee, its chief officer shall, for the purposes of this Act, be regarded as having the debtor in his or her employment,
(c) in any other case, where a debtor is paid out of the Central Fund or out of moneys provided by the Oireachtas, the Secretary General of the Department of Finance (or such other officer of the Minister for Finance as that Minister may from time to time designate) shall, for the purposes of this Act, be regarded as having the debtor in his or her employment, and
(d) any earnings of a debtor paid out of the Central Fund or out of moneys provided by the Oireachtas shall be regarded as paid by the chief officer referred to in paragraph (a) or (b), as the case may be, the Secretary General of the Department of Finance or such other officer as may be designated under paragraph (a) or (c), as the case may be, as may be appropriate.
(2) If any question arises in proceedings for, or arising out of, an attachment of earnings order as to what department, office, organisation, service, undertaking or other body a debtor in the service of the State is employed in for the purposes of this section, the question may be referred to and determined by the Minister for Finance, but that Minister shall not be under any obligation to consider a reference under this subsection unless it is made by the Court.
(3) A document purporting to contain a determination of the Minister for Finance under subsection (2) and to be signed by an officer of the Minister for Finance shall, in any such proceedings as are mentioned in that subsection, be admissible in evidence and be deemed, unless the contrary is shown, to contain an accurate statement of that determination.
(4) In this section references to a debtor in the service of the State include references to a debtor to whom earnings are paid directly out of moneys provided by the Oireachtas.
14.—(1) The relevant court may, if it thinks fit, on the application of the creditor or the debtor, make an order discharging or varying the antecedent order.
(2) Where an order varying an attachment of earnings order is made under this section, the employer shall, within ten days of it having been served upon him or her, comply with its terms.
(3) Where an employer affected by an attachment of earnings order ceases to have the debtor in his or her employment, the order shall, in so far as that employer is concerned, lapse (except as respects deductions from earnings paid after the cesser by that employer and payment to the person in whose favour the order was made of deductions from earnings made at any time by the employer).
(4) The lapse of an order under subsection (3) shall not prevent its remaining in force for other purposes.
15.—(1) An attachment of earnings order shall cease to have effect upon the discharge of the court order.
(2) Where an attachment of earnings order ceases to have effect, the clerk or registrar of the relevant court shall give notice of the cesser to the employer.
16.—(1) Where an attachment of earnings order has been made, any proceedings commenced under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor shall lapse and any warrant or order issued or made under that section in any such proceedings shall cease to have effect.
(2) An attachment of earnings order shall cease to have effect upon the making of an order under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor.
17.—(1) The Minister for Social and Family Affairs shall make regulations to address circumstances where—
(a) a person who is entitled to income support, and
(b) has defaulted on the discharge of a court order,
so as to enable the court to make an order directing the Minister to deduct sums from any amounts, not below the protected welfare rate, payable to the debtor by way of income support, in order to secure the payment of any sum which is or forms part of the court order.
(2) The regulations shall specify the protected welfare rate, that is to say, the rate below which, having regard to the resources and the needs of the debtor, the Minister considers it proper that the debtor's income support should not be reduced by a payment made in pursuance of the attachment of earnings order and for the purpose of this section the protected welfare rate shall be prescribed by the Minister, to be reviewed annually.
(3) The regulations may include provision—
(a) that, before making an application, the court shall make an enquiry as to the debtor’s means,
(b) allowing or requiring adjudication as regards an application, and provision as to appeals and reviews,
(c) as to the circumstances and manner in which and the times at which sums are to be deducted and paid,
(d) as to the calculation of such sums (which may include provision to secure that amount payable to the debtor by way of income support do not fall below prescribed figures),
(e) as to the circumstances in which the Minister is to cease making deductions,
(f) requiring the Minister to notify the debtor, in a prescribed manner and at any prescribed time, of the total amount of sums deducted up to the time of notification,
(g) that, where the whole amount to which the application relates has been paid, the court shall give notice of that fact to the Minister.
(4) In this section,"Minister" means Minister for Social and Family Affairs.".".
This amendment arises from the High Court judgment of Ms Justice Laffoy of 18 June 2009. She pointed out the constitutional flaws in the Enforcement of Court Orders Act 1940. While the Bill addresses some of the deficiencies in the Act, this amendment addresses one of the essential findings of the court, that there is no provision for adequate intermediate steps before the last resort of imprisonment is invoked by the courts or by a creditor.
It is an issue of proportionality because it interferes with the constitutional right of an individual to liberty. In her judgment she has expressly pointed out the futility of a procedure that puts people in prison, where the creditor does not benefit. In the judgment, she stated that a statutory procedure for enforcement of debt, under which the debtor may be imprisoned without there being a positive requirement that the court determine whether non-payment is due to inability to pay before making an order for arrest and imprisonment, is not only futile in terms of securing the creditor's remedy, but imposes unnecessary expense on the creditor and the State.
If the warrant for imprisonment of the plaintiff had been executed in this case, the plaintiff would have spent a month in Mountjoy Prison. The credit union 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 the sum it claimed, or even a 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. Not only would the process have had no practical value in securing payment of the outstanding debt, or any part of it, it is difficult to see how it could be said to have any deterrent value.
The issues are efficiency, interference with the right to liberty, whether the measures in the Bill provide a proportionate response to that interference with liberty and whether the principle of proportionality is respected in providing for procedures that ensure that the deprivation of liberty and the imprisonment of a debtor is genuinely a last resort.
The Bill attempts to amend section 6 of the 1940 Act and deals with a number of issues that were raised by the judge in the court case. The Bill is designed to deal with the fall-out from that judgment and the implications for the recovery of debt. The amendment proposed, however, is a substitute for section 2. It is designed to provide for a procedure whereby an attachment of income is ordered as a substitute for imprisonment, which is to the benefit of creditors, eliminates the use of imprisonment to force the individual to pay a debt and is more efficient. The proposed amendment provides that:
Where a debtor is liable, by virtue of an instalment order, to pay a debt and costs either in one payment or by instalments and such debtor fails to make such payment or fails to pay any one or more of such instalments accruing due while such an order is in force at the time or times appointed in that behalf by such order, the creditor may, at any time while such order is in force or within 12 months after it has ceased to be in force, apply to a Justice of the District Court for an Attachment of Income Order.
This is defined in the amendment as an order under sections 8 and 17. On application to the relevant court by a creditor, the court may make an attachment of earnings order, which is defined as "an order directed to a person who...has the debtor in his or her employment". It is further stated that the order "shall operate as a direction to that person to make, at such intervals as may be specified in the order, deductions of specified amounts". The amendment provides that an attachment of earnings order "shall not be made without the consent of the debtor unless the court is satisfied that the debtor has, without reasonable excuse, defaulted in the making of any payment under a court order".
The amendment is self-explanatory. Subsection (4) of the proposed new section states:
An attachment of earnings order shall—
(a) specify the normal deduction rate, that is to say, the amount of the debtor's earnings which the court considers reasonable to be applied in satisfying the court order, but such rate should be no greater than is necessary for the purpose of—
(i) securing payment of the sums falling due from time to time under the court order, and
(ii) securing payment within a reasonable period of any sums already due and unpaid under the court order and any costs incurred in proceedings relating to the order which are payable by the debtor,
(b) specify the protected earnings rate, that is to say, the rate below which, having regard to the resources and the needs of the debtor, the court considers it proper that the debtor's earnings should not be reduced by a payment made in pursuance of the attachment of earnings order,
(c) contain such particulars as the court considers appropriate for the purpose of enabling the debtor to be identified by the person to whom the order is directed.
It continues:
(5) The particular of an attachment to earnings order may be agreed on consent by the debtor and the creditor in advance [of] the hearing of an application under this section and may be ruled on by the Court as an order under this section.
In many ways this procedure facilitates mediation or settlement. It provides for a meeting of minds on the debt. The procedure of the attachment of earnings or income order would enable the court to play a part in resolving such disputes.
Subsection (6) states:
Payments under an attachment of earnings order shall be in lieu of payments of the like total amount under the court order that have not been made and that, but for the attachment of earnings order, would fall to be made under the court order.
The amendment provides a procedure for compliance with the attachment of earnings order. The proposed section 9 provides:
A court registrar or court clerk as may be specified by an attachment of earnings order shall cause the order to be served on the employer to whom it is directed and on any subsequent employer of the debtor and such service may be effected by leaving the order at, or sending the order or a copy of the order by prepaid registered post to his or her place of business or residence in the State.
As I go through this amendment I must point out that it is a complex and important issue we are trying to deal with through this Bill. The amendment is complex but it also highlights the fact that we should not be rushing this legislation. It is futile and bad legislative procedure. If time was allowed both the Minister and the Department would be well served by giving adequate consideration to these amendments. I appreciate that the Minister is intent on rushing this and other legislation through the House. The Leader is following the directions of the Minister, but it is an abuse of the process of the House, as my colleague in the Dáil has said with regard to other legislation introduced by the Minister, to rush the legislation in this fashion.
Section 9 of the amendment provides that:
(2) Where an attachment of earnings order or an order varying it is made, the employer for the time being affected by it shall comply with it within 10 days of it being served on him or her.
(3) On any occasion where a person makes, in compliance with an attachment of earnings order, a deduction from a debtor's earnings, he or she shall give to the debtor a statement in writing of the total amount of the deduction.
(4) Where an attachment of earnings order is served on any person and—
(a) the debtor is not in his or her employment, or
(b) the debtor subsequently ceases to be in his or her employment, that person shall, within ten days from the date of service or, the date of cesser, give notice of that fact to the court.
(5) An order made under subsection (1) shall be confidential and the employer shall not make it known to any person other than those persons necessary for the payment of wages, and such persons shall themselves have a duty not to disclose the existence of an attachment of earnings order.
The provision on confidentiality is important. The amendment also provides that:
Upon application to the court for an attachment of earnings order, or at any subsequent time which the court deems fit, the court may—
(a) order the debtor to give to the court, within a specified period, a statement in writing signed by him or her of—
(i) the name and address of any person by whom earnings are paid to him or her,
(ii) specified particulars as to his or her earnings and projected earnings and as to his or her resources and needs, and
(iii) specified particulars for enabling the debtor to be identified by any other employer, including any future employer,
(b) order any person appearing to the court who has the debtor in his or her employment to give to the court, within a specified period, a statement signed by that person, or on his or her behalf, of specified particulars of the debtor’s earnings and projected earnings.
The amendment also provides for notification of changes of employment and earnings in subsection (11), providing that:
Where an attachment of earnings order is in force—
(a) the debtor shall notify the court in writing, within 10 days of every occasion, in which he or she leaves any employment, or becomes employed or re-employed,
(b) the notice referred to in paragraph (a) shall include particulars of his or her earnings and projected earnings from the relevant employment,
(c) any person who becomes an employer of the debtor and has knowledge that an order is in force shall, within ten days of acquiring that knowledge, notify that court in writing that he or she is the debtor’s employer, and include in the notification a statement of the debtor’s earnings and projected earnings.
Another provision in the amendment is with regard to the power to determine whether particular payments are earnings. Section (12) states:
(1) Where an attachment of earnings order is in force, the relevant court shall, on the application of—
(a) the employer concerned,
(b) the debtor, or
(c) the person to whom payments are being made under the order,
determine whether payments (or any portion thereof) to the debtor of a particular class or description specified by the application are earnings for the purpose of the order, and the employer shall give effect to any determination for the time being in force under this section.
Subsection (2) states:
Where an application under this section is made by the employer, he or she shall not incur any liability for non-compliance with the order as respects any payments (or any portion thereof) of the class or description specified by the application which are made by him or her to the debtor while the application or any appeal in consequence thereof or any decision in relation to the application or appeal is pending, but this shall not, unless the court otherwise orders, apply as respects such payments (or any portion thereof) if the employer subsequently withdraws the application or abandons the appeal.
Section 13 relates to attachment orders in respect of debtors who are in the service of the State, local authorities and other such bodies . Subsection (1)(a) provides that “in a case where a debtor in the service of the State is employed in a department, office, organisation, service, undertaking or other body, its chief officer shall . . . for the purposes of this Act, be regarded as having the debtor in his or her employment”. Subsection (1)(b) specifies that “in a case where a debtor is in the service of such an authority, board or committee, its chief officer shall, for the purposes of this Act, be regarded as having the debtor in his or her employment”. Subsection 1(c) states that “in any other case, where a debtor is paid out of the Central Fund or out of moneys provided by the Oireachtas, the Secretary General of the Department of Finance . . . shall, for the purposes of this Act, be regarded as having the debtor in his or her employment”. Under subsection 1(d), “any earnings of a debtor paid out of the Central Fund or out of moneys provided by the Oireachtas shall be regarded as paid by the chief officer referred to in paragraph (a) or (b), as the case may be, the Secretary General of the Department of Finance or such other officer as may be designated under paragraph (a) or (c), as the case may be, as may be appropriate”.
Subsection (2) of section 13 states:
If any question arises in proceedings for, or arising out of, an attachment of earnings order as to what department, office, organisation, service, undertaking or other body a debtor in the service of the State is employed in for the purposes of this section, the question may be referred to and determined by the Minister for Finance, but that Minister shall not be under any obligation to consider a reference under this subsection unless it is made by the Court.
Subsection (3) provides that:
A document purporting to contain a determination of the Minister for Finance under subsection (2) and to be signed by an officer of the Minister for Finance shall, in any such proceedings as are mentioned in that subsection, be admissible in evidence and be deemed, unless the contrary is shown, to contain an accurate statement of that determination.
Subsection (4) provides that:
In this section references to a debtor in the service of the State include references to a debtor to whom earnings are paid directly out of moneys provided by the Oireachtas.
Section 14 relates to the discharge, variation and lapse of attachment of earnings orders. Subsection (1) provides that:
The relevant court may, if it thinks fit, on the application of the creditor or the debtor, make an order discharging or varying the antecedent order.
Subsection (2) specifies that:
Where an order varying an attachment of earnings order is made under this section, the employer shall, within ten days of it having been served upon him or her, comply with its terms.
Under subsection (3), "Where an employer affected by an attachment of earnings order ceases to have the debtor in his or her employment, the order shall, in so far as that employer is concerned, lapse". Subsection (4) provides that: "The lapse of an order under subsection (3) shall not prevent its remaining in force for other purposes."
Section 15 relates to the cesser of attachment of earnings orders. Subsection (1) states that: "An attachment of earnings order shall cease to have effect upon the discharge of the court order." Under subsection (2); "Where an attachment of earnings order ceases to have effect, the clerk or registrar of the relevant court shall give notice of the cesser to the employer." I take this opportunity to remind the Minister of State that he may indicate at any time his agreement to allow Committee Stage on another day so that he has time to study this amendment.
Section 16 provides for alternative remedies. Under subsection (1):
Where an attachment of earnings order has been made, any proceedings commenced under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor shall lapse and any warrant or order issued or made under that section in any such proceedings shall cease to have effect.
Subsection (2) provides that:
An attachment of earnings order shall cease to have effect upon the making of an order under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor.
Section 17 provides for the attachment of welfare orders. Such persons should not face the threat of imprisonment for non-payment of debt. Subsection (1) states that:
The Minister for Social and Family Affairs shall make regulations to address circumstances where . . . a person is entitled to income support, and . . . has defaulted on the discharge of a court order, so as to enable the court to make an order directing the Minister to deduct sums from any amounts, not below the protected welfare rate, payable to the debtor by way of income support, in order to secure the payment of any sum which is or forms part of the court order.
Under subsection (2):
The regulations shall specify the protected welfare rate, that is . . . the rate below which, having regard to the resources and the needs of the debtor, the Minister considers it proper that the debtor's income support should not be reduced by a payment made in pursuance of the attachment of earnings order . . . [F]or the purpose of this section the protected welfare rate shall be prescribed by the Minister, [and will] be reviewed annually.
Subsection (3) stipulates that:
The regulations may include provision [as follows] . . . that, before making an application, the court shall make an enquiry as to the debtor's means . . . allowing or requiring adjudication as regards an application, and provision as to appeals and reviews . . . as to the circumstances and manner in which and the times at which sums are to be deducted and paid . . . as to the calculation of such sums . . . as to the circumstances in which the Minister is to cease making deductions . . . requiring the Minister to notify the debtor, in a prescribed manner and at any prescribed time——
I apologise for interrupting Senator Regan. I call a quorum.
Notice taken that 12 Members were not present; House counted and 12 Members being present,
I was dealing with subsection (3) of section 17, dealing with the regulations to be prescribed by the Minister for Social and Family Affairs. To reiterate, the regulations may include provision as follows:
[T]hat, before making an application, the court shall make an enquiry as to the debtor's means . . . allowing or requiring adjudication as regards an application, and provision as to appeals and reviews . . . as to the circumstances and manner in which and the times at which sums are to be deducted and paid . . . as to the calculation of such sums . . . as to the circumstances in which the Minister is to cease making deductions . . . requiring the Minister to notify the debtor, in a prescribed manner and at any prescribed time, of the total amount of sums deducted up to the time of notification . . . [and] that, where the whole amount to which the application relates has been paid, the court shall give notice of that fact to the Minister.
The Minister of State indicated that the Courts Service estimates that in the first six months of this year approximately 4,300 applications were made to the District Court for enforcement orders and in the same period 186 people, less than 5% of the total, were imprisoned. We know that many people are imprisoned for failing to pay minor sums. The fatal flaw in this legislation is the absence of a procedure to facilitate such persons to avoid such a scenario through attachment of earnings. This is the constitutional point made by Ms Justice Laffoy in her judgment and one that appears to have been overlooked by the Government in its rush to address the matter. While I understand the importance of addressing the many other flaws in the 1940 Act, the failure to take account of this finding of the judge is the fundamental flaw of the Bill.
The amendment is designed to provide for a procedure to substitute for imprisonment. It would render imprisonment a genuine last resort and comply with the findings of Ms Justice Laffoy in the High Court. I referred to the figures indicating that 2,000 people are imprisoned for non-payment of fines or debts in any one year and that 40 to 50 people are in prison at any one time for failure to pay a fine or debt. This problem can be avoided.
Senator O'Donovan's point that the courts are reluctant to order committal is correct. However, the courts frequently do so because they do not have available to them intermediate procedures providing facilities, such as attachment of earnings, that would assist people to resolve the issue. In addition, such facilities would enable creditors to obtain some satisfaction for the debts due to them in circumstances where they do not have an interest in seeing a debtor imprisoned and do not seek punishment but instead seek some return of the moneys due to them or a contribution to the debt. That is the purpose of the exercise. The Minister has failed to appreciate this fundamental finding of Ms Justice Laffoy in the High Court.
I ask the Minster of State to consider accepting this amendment which complements the other remedies in the legislation dealing with the rights of an individual against whom procedures are initiated for non-payment of debt.
I support this substantial amendment as it offers a practical and human alternative to the last resort of imprisonment proposed in the Bill. I concur with many of my colleagues on this side who have expressed serious reservations about the manner in which this legislation is being forced through the House. The in-depth consideration the Bill requires is not possible in the time available. Such consideration is not only desirable but absolutely necessary. Last week, following only a cursory examination of other legislation, the Local Government (Charges) Bill, Senators discovered a number of unintentional flaws which needed to be rectified. I am pleased to note the majority of these flaws are being addressed as we speak.
Between 2003 and July 2008, 1,138 people were imprisoned for non-payment of debts at an average cost of €270 per person per day. This Dickensian practice has no place in a modern society. Many questions attach to this outdated approach. Rather than being the last resort, as it has been described, imprisonment remains at the heart of the legislation. It is an overly simplistic solution to a very complex problem.
While the House has discussed the elements of responsibility attaching to a debtor, we have had little discussion about the element of responsibility attaching to those who do the lending in the first instance. Every lending institution has a moral responsibility to lend correctly and carry out due diligence before making a loan. I and many others have had concerns in the past two or three years about the development of predatory lending practices by most credit institutions. We have all seen the fall-out from these types of practices.
Colleagues who are customers of a certain credit card company will, like me, have received cheques in the post for €4,000, €6,000 or €8,000 offering to finance a new kitchen or nice holiday abroad. These cheques are signed and legally binding. All one must do is pick up the telephone to have the cheque authorised before proceeding to spend the sum in question. This type of predatory, irresponsible lending has resulted in many people appearing before our courts. With a sanction as serious as a jail term for non-payment available to such predatory lenders, these high-wire trapeze artists have available to them a level of security and a safety net that will continue to encourage them to take risks in lending.
It is interesting to note that in the United Kingdom, our nearest neighbour, the Debtors Act 1869 abolished sending people to prison for being in debt. More than one and a half centuries later, the United Nations Committee on Human Rights is still recommending that Ireland does the same.
Senator Alex White remarked on the expertise of the free legal advice centres, FLAC, in this area. We must give due regard to FLAC's report and the conclusions it draws. The report states that debt enforcement in this country has a devastating and largely pointless human cost. A survey carried out among people accessing FLAC found that those taken to court for not repaying debts refer to having nightmares, experiencing worry, stress and illness and even resorting to medication. The report also concluded that imprisonment to enforce a private contract debt is "entirely inappropriate", as well as being highly questionable.
The key issue is that alternatives to imprisonment are available. As Senator Regan noted, attachment of the debt to a person's salary or social welfare payment is one such option. Other countries have resorted to the use of community service, which as an option we should consider given that it is at least as substantial a deterrent to non-payment of debt as a prison sentence. It also has the social benefit of having necessary work carried out in the community.
In introducing the recent fines legislation, the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, stated he wanted "to reduce, as far as possible, a dependence on imprisonment for default on payment of fines". He emphasised that while very few persons are in prison at one time solely for non-payment of a fine, he is determined to back legislation to reduce those numbers further. The Minister seems to conclude that it is undesirable to imprison people for non-payment of a fine, but I wonder why he does not also consider it particularly undesirable when it involves a civil debt.
I listened to the earlier stage of the debate in my office and it seems there is not much uniformity of opinion across the Government benches on this issue. Senator O'Donovan thinks it is ridiculous to imprison someone for a debt as small as €500 because of the cost involved. Quite rightly, he has major concerns about the stigma and emotional damage attaching to a prison sentence. Senator Walsh sees a system of attaching debt to salaries to be "highly desirable", as he described it. Senator Boyle, while not including himself in this group, said a vast number of people believe imprisonment for non-payment of debt is inherently wrong. He suggested that we must come up with more appropriate legislation. In recent months, we have been promised many times that this legislation will come before us shortly.
The conflicting opinions in the contributions make one wonder about the wisdom of rushing this legislation through the House. Benjamin Franklin said, "Take time for all things; great haste makes great waste". In this instance, this rushed legislation will provide for great waste, first, of hard-earned taxpayers' money in unnecessarily jailing people while most of the time we have a 107% occupancy rate in our prisons. Second, there is the waste of people's basic human dignity while we treat them as criminals when a far more appropriate sanction could be found with a little time and imagination.
I wish to support the proposed amendment, which is eminently sensible since it proposes a different regime as an alternative to the sanction of imprisonment being imposed upon a debtor. Rather than imprisonment, it envisages an attachment of income or welfare order that would be made to address circumstances where somebody is unable or unwilling to pay debts. It is in keeping with the recommendations of FLAC, as other speakers have mentioned. In its report published on 6 July, FLAC said:
The State should examine how effective non-penal remedies should be employed in order to enforce compliance with civil debt judgments. Amongst the solutions considered should be attachment of earnings legislation.
That is what is proposed here. The idea of attachment of earnings seems a much more sensible and practical method of enforcing compliance with debt orders. It is sensible and practical because it ensures that money is paid as a result of the attachment, rather than putting people in prison with the consequence that they will be unable to earn any money or repay any debts.
It is instructive to re-examine Ms Justice Laffoy's judgment for some of the background to the need for an amendment such as this. She refers early on in her judgment to Article 11 of the UN International Covenant on Civil and Political Rights. It states that "No one shall be imprisoned merely because of their inability to fulfil a contractual obligation". The principle is clear in international law that people should not be imprisoned merely because of their inability to fulfil a contractual obligation. We are clearly in breach of that. Although there are improvements to the current situation in this Bill, which were necessitated by the McCann judgment, the fundamental principle upon which the current system is premised — that people can be imprisoned for non-payment of debt — remains in place. That is the fundamental objection we have to this Bill; it does not envisage any other method of enforcing compliance with contractual obligations.
It is also worth noting page 18 of Ms Justice Laffoy's judgment, which refers to the personal background of Caroline McCann, the applicant in the case. She was described in the judgment as being a single woman in her mid-30s, with two children — boys of 14 and ten — who lives with her mother in council housing. She was one of nine children who left school at 14. The judge referred to her literacy as being poor. She was unemployed and owed €18,000 to the credit union. She had a history of alcohol abuse and psychiatric illness. This was the woman whom, prior to her brave challenge, the system would have imprisoned for a month with no consequent improvement in her ability to pay the debt owed to the credit union. Senator Regan has already read out the judge's comment as to the complete pointlessness of imprisoning somebody in Caroline McCann's situation. That sort of situation would be fairly standard for many of those who come before the courts as debtors, or people who are brought before them and ultimately subjected to a committal order without having engaged in the process. FLAC has described the links between ill health and literacy in terms of building up debt. We must be mindful of those facts and also mindful of the personal backgrounds of the debtors we are speaking about.
We need to examine other methods of enforcing such orders. The method proposed by Senator Regan should commend itself to the Minister of State as being a far preferable, more practical and more humane approach to securing compliance with court orders. This amendment in its complexity and in the different issues it seeks to address, deserves more time than we have here. It deserves a gap between Second and Committee Stages so that we might all have more opportunity to look at it in more detail and reflect on how it relates to the Laffoy judgment. In particular, the Bill deserves more time from the Minister of State. I fail to see how it is possible to give it the consideration it deserves in the truncated time allowed, which is subject to a guillotine. It is a shame, given the real situations facing people like Caroline McCann, who will be affected by this legislation.
I also support Senator Regan's amendment. In particular, I echo what Senator Bacik said about the detail and care that has gone into drafting this amendment. It cannot be said that Opposition parties have not taken care with the details of the alternatives to imprisonment for non-payment of debts that are being brought forward. Rather than simple debating points, great clarity, care and substance have gone into this proposal and others that have emanated from this side of the House. Although I am waiting to hear it, I cannot see what objection can be made to this amendment. Even speakers on the Government side have acknowledged the necessity and importance of alternatives to imprisonment being in place for non-payment of debts.
I wish to clarify that I was not disagreeing earlier with Senator O'Donovan's support for the exercise of compassion by District Court judges. However, it is no longer enough for us to rely on that as a means of resolving such complex, delicate and difficult issues. It should not be left to District Court judges to determine whether a matter should be put back for another two or three weeks, adjourned to the autumn or assessed by a judge as to whether somebody will pay up at some point. It should not be left to him or her to make that determination.
It has been said so many times by the Supreme Court and the High Court that the Oireachtas is here to legislate. It is for the Oireachtas to bring forward proposals on how these matters should be dealt with. They ought not be left to the discretion, or compassion where it exists, of the District Court. They should be clarified in law by the Oireachtas. For those reasons I strongly support Senator Regan's amendment. It is a practical and clear proposal which would form the basis for an alternative to imprisonment in many cases. We are familiar with attachment of earnings orders in other areas. We know that attachment orders can be made in family law proceedings. We are familiar with how they can be introduced and what role they can play from many comparable cases.
I await with some interest the basis on which the Minister of State will be rejecting this amendment, as that is what I anticipate he will do. It is a pity, because care and attention has clearly gone into this aspect of the matter. It should not be rejected in the manner in which I anticipate it will, although I may be proven wrong. I support the amendment and endorse what has been said by my colleagues about it.
I am in a difficult situation on this side of the House. As a young lad, my father often told me that "those who are bound must obey, and those who aren't can run away". I am probably under the cosh of the Whip, unless the Minister of State has a change of heart. If he has such a change of heart, I will not oppose it.
Credit must be given to Senator Regan for the very fine detailed amendment he tabled, and there is much merit to it. I also think the learned District Court judge was wrong in making that decision in the case in question. Most other District Court judges I know would not have made that decision, ach sin scéal eile. We are where we are, and the High Court has made its decision. When I spoke this morning about the decision being appealed to the Supreme Court, it was not on the basis that I felt the decision was wrong, but because I thought we could get to the end of the constitutional road on the issue involved.
I would love to see a situation arise so that committal for non-payment of debts could be abolished, and I have 15 years of experience advocating in front of District Court judges on this. Senator Cannon spoke about banks and those institutions that were hoisting money on us a few years ago. The wheel has turned. I remember when I did my law degree, my father had died and there was not much money at home, so I went to the bank with my mother for £100 to come to Dublin and do some more exams. The bank manager said he would give me the money, but he wanted the deeds of the farm in exchange. It was a small, mountainous farm, but it was only £100 and how things have changed since 1975. Only two years ago, money was being thrown at people who were scarcely 19. I have no sympathy for the banks in that respect, but I do have sympathy in extreme cases.
I came across a situation where a woman with five children was forced to leave her family home. She left due to fear and intimidation, and she was thwarted by her ex-husband every which way. She was not entitled to a council house because she was technically the joint owner of a property. She was unable to get maintenance because he gave up his day job and decided to do something where he was earning cash which could not be proved. There are people who would exploit things if the threat of a prison sentence, as a very last resort, was not hanging over them. I am not saying Senator Regan's amendment does not suggest that either.
I would like to see a good debate in this House on various issues. It is probably wrong to rush this legislation through in the way that it has been ordered, although I was not here for the Order of Business. When an initial judgment has been granted in the District Court to a creditor, that judgment is still valid whether we pass this Bill this week or next week, or even next September. The judgment will not lapse because the Statute of Limitations does not run against judgments. This Bill could have been dealt with better if there was a more prolonged debate on it. I know the sincerity of the Senators. I may be voting against them in a minute, but I understand where they are coming from. There are valid points being made, but there is not enough time for the Minister of State or his officials to take them on board and put clear water between Second Stage and Committee Stage. It would have been better if we had that time, but we are where we are and unfortunately I find myself somewhat bound.
I could not agree more with Senator O'Donovan. He has made quite a valid point in saying we have insufficient time to debate such legislation. He speaks about putting some clear water between Second Stage and Committee Stage, while Senator Alex White earlier asked for breathing space. This is exactly what we need in discussing this Bill and I cannot understand why the Leader has adopted a position where he is trying to ram it and other Bills through the House this week. There is more than enough time to deal with these matters and I cannot understand why that position is being adopted today.
I support the amendment so ably proposed by Senator Regan. Section 2 of the Bill proposes to amend section 6 of the Enforcement of Court Orders Act 1940. The aim of that appears to be to ensure a debtor will be obliged or strongly encouraged to attend a court. This is in direct contrast to the current situation, where it would appear that only one in five debtors take part in debt enforcement proceedings at all.
Section 2 contains a full revision of the existing section 6 of the Enforcement of Court Orders Act 1940 and also proposes to insert a new section 6A into the existing Act. It would be helpful if section 6(2) included a clear statement that the debtor may seek a variation of the existing instalment order at the hearing which he or she is required to attend. This is the position of FLAC, and it is very reasonable. The vast majority of debtors acknowledge their debt obligations but they should not face the additional pressure of imprisonment for failure to reply to an instalment order.
Nearly 2,000 people are sent to prison every year for failure to pay fines or debts, an alarming figure. There should be an enforcement order for these items, as is stated in the amendment. I look forward to the reply of the Minister of State and I hope he will accept the amendment proposed by my colleague. We all know there is chronic overcrowding in many prisons. There are 3,853 prisoners in custody compared to a bed capacity of 3,642. This represents an occupancy level of up to 106%, which is crazy, yet we are still sending people to prison who owe small debts. This is absolutely ludicrous.
I fully support Senator Regan's amendment. I look to the Minister of State's response on this proposal, which I hope will be favourable. Much thought has been put into it. Senator O'Donovan stated there are some very valid points in it. If it is not accepted in full, perhaps the Minister of State might propose an amendment himself on Report Stage to encompass some parts of this amendment.
As the Minister was not given the opportunity to reply on Second Stage, we have had to wait for information until now that we could have received at that time. In the meantime, I would like to ask the Minister of State a few extra questions in support of this amendment, which aims to prevent people from being sent to prison for minor reasons. That is the main thing. It does not apply to those who have no intention of ever paying their debts. When this legislation was being drafted, what kind of information was acquired about those who are sent to prison in these circumstances? What amounts of money are people being imprisoned for not paying? Has any research been done into those who are jailed? Are they just unfortunate? Did they lose their jobs, for example? Do they no longer have the ability to earn an income? How did they find themselves in the stressful situation of having to go to court? Are they the kind of people who, in normal circumstances, would try to pay their debts? Alternatively, are they serial offenders? Do they have a history of chancing their arm and not paying their debts? Do they tend to break the law and get into all kinds of trouble? The outcomes for the two different groups would be very different. It would be almost wrong to jail people who find themselves in this position by accident, as opposed to those whose behaviour it is much more difficult to change. There are other ways of getting the money back from people who have some assets or a steady income from any source, such as a social welfare payment or a cheque from an employer. Putting people in prison can only be considered as the most expensive way for the State to collect its debts.
The fact that just one in five people turns up when summoned to court in these circumstances should not automatically be seen as an indication that four in five people choose to throw caution to the wind. People might not attend for a range of reasons. They might feel shame because the District Court sits in their own communities, they might not understand what is asked of them or they might decide to bury their heads in the sand. Many people might not attend because they suffer from depression or anxiety, which might have been the cause of their huge debts in the first instance. There are many circumstances that result in people not going to court. When they were drawing up this Bill, the Minister of State and his officials should have gathered information from the Courts Service, in the interests of ensuring the legislation is useful. To be honest, the manner in which we have operated for over 300 years cannot be said to have worked effectively, given that we are still trying to amend it. We need to examine who is being jailed and why, with specific reference to the amounts concerned.
It has been mentioned that the Law Reform Commission is considering this whole area. While I accept that a jail sentence represents the only way forward for a small minority of people, I suggest that the commission should examine whether another option should be pursued in the majority of cases. This issue relates to what I said about the issue of maintenance on Second Stage. Some people do not apply to the courts for maintenance because they know it can lead to difficulties even if the application is successful. If a person's estranged partner decides to ignore a court order for payment, or to be extremely difficult when the time comes to hand over the money, the amount of maintenance that is not paid to the person will nevertheless be considered as part of his or her income when he or she goes looking for social welfare assistance. Such people often decide not to bother going to the courts. The State does not take too much interest in such matters. The result of the State's failure to put in place a means of chasing people who should be making maintenance payments is that it has to make those payments, in the form of social welfare payments, instead. I do not think the Department of Social and Family Affairs makes any great effort to ensure maintenance payments are made. The Minister of State needs to outline his views on this issue.
When we talk about these matters, we should also reflect on the broader picture around us. Banks and lending agencies are invariably involved in most of the cases that result in people being jailed. As far as we are aware, no bank executives or managers of any great consequence have faced any investigation of any significance that could result in them facing criminal prosecution over the past 12 months. In the United States, by contrast, Bernie Madoff and Allen Stanford, who perpetrated frauds worth many billions of dollars, were arrested, investigated and brought before the courts. It is clear that they were well connected and had plenty of friends. Many people, right down the line, who dealt with millions and hundreds of thousands of dollars have been investigated in the US. To the best of my knowledge, no one of any consequence has been investigated by the Garda fraud squad and no prosecutions have been brought by the Office of the Director of Corporate Enforcement. We are familiar with the case of a chief executive officer of a bank who gave himself a loan of €87 million. Members have spoken about the "golden ten" in Anglo Irish Bank, for whom loans in excess of €300 million were arranged by the bank. The terms of the loans were changed so that the people in question would not be responsible for having to repay them. Although a number of similar cases have emerged throughout our financial system, no prosecutions have been brought.
It is almost laughable that we are being asked to support legislation that will jail people for the sake of €50, at a time when people are able to avoid repaying €300 million by changing terms and conditions with their friendly bank managers. The Government has made no effort to restore this country's credibility. In some respects, it is happy to see Ireland being painted as a semi-corrupt banana republic, where anything goes as long as one is big enough and has sufficient connections. That is another issue that should be dealt with before any Minister or Minister of State comes in here to talk about jailing people on the basis of minor infringements involving small amounts of money. The Government should address the fact that neither the Office of the Director of Corporate Enforcement nor the Garda fraud squad seems to have the resources and legislative back-up — I hope they have the ability — to help to restore the credibility of the Irish financial services sector following the frenzy of poor lending and other practices of the last four or five years. I ask the Minister of State to respond to some of the issues I have raised if he gets an opportunity to do so.
I acknowledge the detailed and specific amendment that has been tabled by Senator Regan. As I said in my opening speech, at this time the Government has limited the Bill before the House to the introduction of the protections and safeguards that were identified by the High Court in the McCann case. The Government intends to return to this subject, with the benefit of the Law Reform Commission's review, at a future stage.
I acknowledge the views of Senators who have suggested that deeper reforms are necessary. I believe the rigorous work that has been undertaken by the commission will greatly assist us in striking the balance that is necessary in these matters. I appreciate the concern that has been expressed about the speed with which this Bill is being introduced. I remind the House that the High Court judgment I have mentioned, which drew our attention to the specific gap this legislation is designed to fill, was issued less than three weeks ago.
Many Senators asked questions about the imprisonment of people for the non-payment of debt. While nobody wants that to happen, it is important that we maintain a balance in this legislation between the rights of creditors and debtors. The Law Reform Commission, which is reviewing this matter, as I said, will issue its recommendations in due course. All of its recommendations will be considered by the Minister. A couple of Senators suggested this Bill does not provide for an alternative to imprisonment. They claimed the only option that will be available will be to throw people into jail, but that is not true. The specific aim of this legislation is to ensure that people who cannot afford to pay their debts will not be subject to imprisonment. Those who can afford to pay but simply choose not to, however, will continue to face imprisonment. It is important that this Bill allows imprisonment to continue to be seen as a threat in such circumstances. It is not the first option, by any means. Specific alternatives, including mediation and variations to instalment plans, are provided for in this Bill. We have spoken about the role of the Money Advice and Budgeting Service. The legislation is specific in that regard. It is to deal with one narrow issue that has changed in the past three weeks.
On the question of attachments, the substantive basis of the amendment, the whole area of attachments to earnings and to social welfare had been considered by the Government both in this Bill and in the Fines Bill, which is before the Houses. The conclusion, however, was that it would be problematic and difficult to operate fairly. The amendment also acknowledges that it would be necessary to include attachments to social welfare payments and this might not be the best time to try to do that. There would also be practical difficulties that would need to be overcome where persons in temporary employment are concerned.
The position in family law is that attachment is a well-established practice. It may be possible to formulate another model closely along those lines. Specifically, Senator Regan referred to the figures in my opening statement to the effect that there were 4,300 applications to the District Court for enforcement orders in the first six months of the year, and in the same period 186 people were imprisoned. It is worth nothing, however, that approximately half of those imprisoned at any time related to maintenance debtors where this option of attachment exists already. Therefore, it is far from being a panacea.
Senator Bacik referred to the report from FLAC which says:
The State should examine how effective non-penal remedies should be employed to enforce compliance with civil debt judgments. Among the solutions considered should be attachment of earnings legislation.
The Senator stopped there but the next line says: "However, any such measure must be regarded as a last resort." It is important we look at it in that context.
As I said earlier, the Law Reform Commission will be reporting and it has the opportunity to examine this among other issues in the context of non-judicial methods of dealing with debt enforcement. The Government would prefer to await that report before dealing specifically with the area of attachments. The purpose of the legislation, as brought before the Seanad today, is specifically to remedy the situation following the High Court case in the middle of June. In that regard I will not be accepting the amendment.
The legislation does not remedy the issues raised by Ms Justice Laffoy in her judgment. I will read what I consider to be, perhaps, the most relevant part in relation to this very issue of liberty and imprisonment. It is at page 82 of the judgment:
The application of elements of the test to section 6 illustrates that it is disproportionate interference with the constitutionally protected right to liberty for the following reasons:
(a) The objective of imprisoning a debtor for failure to comply with an instalment order is to procure the discharge of arrears of instalments. A statutory procedure under which a debtor, unable to discharge the arrears, is imprisoned because of the absence therein of procedures (including procedures which give effect to the debtor’s right to fair procedures under the Constitution, which ensures that the judge ascertains that the debtor is unable to discharge the arrears), cannot be said to be rationally connected with the objective. Such a procedure is arbitrary, unfair and not based on rational considerations. It is an unreasonable and unnecessary interference with the debtor’s right to personal liberty [That, to a certain extent, has been remedied in the Bill].
(b) In circumstances where a debtor has some resources to meet the debt, a statutory scheme which does not require the creditor to seek redress by attaching those resources does not impair the debtor’s right to liberty as little as possible.
That is proportionality, namely, interfering with the right to liberty as little as possible. The judge is saying expressly in the judgment that not providing for a statutory scheme which does not require the creditor to seek redress by attaching those resources is a disproportionate interference. It is similarly the case with the failure to impose on the creditor pursuing an application for an order for arrest and imprisonment the obligation to go through an Order 46B-type process, including personal services, etc. However, it is a fundamental point where the legislation is being rushed and therefore does not deal with one of the crucial findings of the judgment that it runs the risk of being struck down again by the High Court on constitutional grounds for the very reason that it does not provide for the type of provisions included in the amendment we have tabled.
On that issue of proportionality, the new section 6(7) as inserted by section 2 of the Bill provides for the remedying all of the procedural issues concerning proper notice for a debtor and so on, with the court being able to assess the means of the person. It provides under section 6(7) that on hearing the creditor and such evidence, "if any, as they may respectively adduce, a judge may, if he or she is satisfied that the debtor has failed to comply with the instalment order . . . treat the proceeding on the summons as an application under section 5 for a variation of the instalment order. Section 6(7)(b) provides for resolution by mediation and section 6(7)(c) provides for imprisonment, albeit with a stay of three months. Section 6(7)(d) provides for arrest and imprisonment. What is missing, and what the High Court judge expressly laid out in her judgement, is the requirement to ensure the proportionality of the interference with the individual’s right to liberty, namely, the attachment of earnings procedure.
The Minister of State has said it would be administratively difficult or impractical at this point to provide for such a procedure. However, in the next breath he said this procedure is well established in the family law area. I do not see the administrative difficulty of including this provision in this Bill which I believe is necessitated by the judgment of the High Court.
Again, on the figures referred to by the Minister of State in his opening statement of 4,300 applications for enforcement orders to the District Court and 186 people imprisoned so far this year as against 276 for the whole of last year and 201 the year before, the trend is rising as indicated by the significant increase signalled by the figure of 186 for the first half of this year. In the current economic circumstances, it is self-evident this situation is going to get worse if the procedures to provide for the imprisonment of people who do not pay their debts, which procedures are continued in this Bill, are not amended. The numbers will escalate with more people being imprisoned.
The reality, however, is that the prisons are full. I understand 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. On release the debtor still owes his or her debt. In some cases the cost to the State of imprisonment far outweighs the debt owed in the first place. There is chronic overcrowding, with 3,853 in custody compared with a bed capacity of 3,642, which represents an occupancy level of 106% according to Government figures. The overcrowding in our prisons creates all sorts of problems. I do not understand why the Minister is not more accommodating when a procedure is proposed and where the High Court has highlighted the problems that exist in this type of draconian measure, which is disproportionate to the "offence". The Government, particularly the Minister for Justice, Equality and Law Reform, are set against accommodating any new ideas that could improve this situation. It is very regrettable.
There is a necessity for the Minister to rethink this. There is a legal and constitutional obligation on him. This is the same Minister who insists on having a blasphemy offence because it is required by the Constitution. Here, a High Court judge, in a judgment which is not being appealed, has set out in express terms the constitutional problems with the existing legislation. One of those problems, attachment of resources, which is the language used in the judgment, is not being addressed in the Bill. Yet the Minister is not prepared to countenance any amendment to that legislation. It is most regrettable and unacceptable.
Listening to the Minister's reply and his earlier speech, we have not gone any way towards remedying the Laffoy judgment, as Senator Regan said. Senator Regan quoted from the judgment, which is cogent and makes clear that there is a flaw in this Bill. I am not a law person but I would not be surprised if we were back here when it is found that the Bill is unconstitutional. FLAC said the Enforcement of Court Orders (Amendment) Bill confines itself to remedying the constitutional difficulty.
The Minister's speech rightly refers to the creditor. We should acknowledge that the creditor deserves reference here but the Minister is forgetting that the debtor is here for a reason and is an individual. This is about people falling into debt, bad provision and people being unable to manage money or falling into difficulty financially for whatever reason. Yesterday I had in my office a recovering alcoholic who had a gambling problem and was in debt with the local credit union. The amendment allows for recompense to be paid to the credit union in the case of what Senator Regan proposes.
In terms of the attachment of income orders, the amendment is a very manageable and precise way of allowing people in debt to pay back money. The amendment adds a section, 8(2)(b), which specifies that an attachment of earnings order “shall operate as a direction to that person to make, at such intervals as may be specified in the order, deductions of specified amounts”. The amendment takes on board the person’s ability to repay.
I am a little concerned, as Senator Alex White said, and Senator Regan just referred to, about rushed legislation. I do not understand why we cannot take our time today and why we run the risk of the Bill being unconstitutional. Does the Minister of State, Deputy Curran, want to preside over this? I do not think he does. I do not think the Minister, Deputy Dermot Ahern, wants to, but that is what he is trying to do. The Fine Gael amendment seeks to rectify the situation by inserting the clause on failure to comply with the order. The second part of the amendment deals with compliance with attachment of earnings orders. It is very clear that there is an obligation on the debtor to repay.
When the Minister of State mentioned that in this economic climate the attachment of a court order or income order would be the wrong way to go, I laughed, with respect. At this moment his Cabinet colleagues are about to, if they have not already done so, sit down at the Cabinet table to discuss taxing social welfare. They are talking about taxing the most vulnerable people in society. The Government has already taxed the over-70s, with the removal of the medical card and it is purported to be about to unleash a massive attack on the women of Ireland by taxing child benefit, yet we are talking about putting people in jail.
Senator Regan gave figures. I take issue with the fact that the Minister said that in the first six months of this year there were 4,300 applications for enforcement orders but in the same period only 186 people were imprisoned. The figures in my mind do not justify what the Minister is trying to achieve in the Bill, given the cost of imprisonment. In the Government's Bill the entitlement to free legal aid under section 6A is a further cost on the State. If I am in debt I could cost the State a fortune, whereas Senator Regan's amendment is a fool-proof way of getting money back. I am not sure there is joined-up thinking.
I commented on how credit unions do their business. The Acting Chairman, Senator Boyle, was involved in the credit union movement in his area of Turner's Cross. Credit unions are able and willing to meet people. There is a provision for bad debt in all credit unions and banking institutions, and that is fair enough, but we should be talking about helping people to repay. As I said, I fully subscribe to the notion that one must have a sanction, but can the Minister justify to me that imprisonment is the way forward?
I was taken by the Acting Chairman's very measured contribution. I hoped his colleagues would listen to him because it was a very fine contribution.
The Chairman cannot contribute to the debate.
I appreciate that and I am not trying to bait the Chairman. The amendment would take cognisance of the earnings a person may receive. There is an obligation on the debtor to sign up to and participate in the repayment. In Senator Regan's amendment on the statement of earnings, there is a timeline, there are specified particulars on earnings and projected earnings regarding his or her resources and needs and it enables the debtor to be identified by present and future employers.
That leads me to my final point. I am a little concerned as to why there is no reference in the Bill to the money advice and budgeting service, MABS. In the Minister's Department he works with disadvantaged communities and groups, and MABS offers people a way of restructuring and repaying, and, more important, it allows people the independence to restructure what they owe. From talking to people employed in MABS, I know they are struggling to respond to the demand for their service. That means we have a difficulty as a society with people being able to repay their loans or debts.
The amendment seeks the removal of the provision that imposes a prison sentence and calls for the facilitation of repayments by debtors. Why does the Bill not provide for improving access to advice and assistance for people in debt? Why can we not allow them to make staged repayments? Ultimately the important point must be that our creditors are entitled to be repaid. As Senator Regan rightly said, the debt still stands after imprisonment. While the Bill is necessary, it represents a missed opportunity. I am not a legally minded person, I am only a person who served on the supervisory committee of a credit union and as a politician I deal with people every day. In my previous role as a supervisor, I met people who were in debt. They struggled and were embarrassed. Senator Boyle spoke about historical practice and the different types of prisons we had. Do we want to go back to that stage again where we put Jerry Buttimer, John Curran or Diarmuid Wilson into jail because they have not paid their debts? Maybe we should set up the barricades and stocks in Mountjoy Square and start to throw eggs at people to embarrass them as the fellow in Monaghan did a few months ago with the debts he owed.
Sounds good.
Is that what we want to do? I believe in a just and fair society. I want to see a society that respects all its people, and this Bill does not do that because it still provides for the use of imprisonment as a remedy for securing payment. I am not necessarily sure that the Bill will do that. I believe it is a missed opportunity.
In his reply the Minister of State referred to the legal difficulties of enforcing instalment plans. He also mentioned difficulties with social welfare payments in trying to get instalment plans. Are those difficulties administrative difficulties regarding social welfare? Are there also legal difficulties with regard to instalment plans? I do not have Senator Regan's level of skill in interpreting the High Court judgment. He seems to be suggesting that the process goes from discussion and mediation to jail. It seems to break with the High Court judgment. If that is the case, the legislation as it stands could well fail a Supreme Court test. What is the Minister of State's interpretation of the High Court judgment regarding not having instalments?
I am also disappointed at the Minister of State's response to Senator Regan's amendment. It is unfortunate that he is not willing to contemplate some form of attachment of earnings or welfare option within the Bill, given that it purports to improve the situation as far as debtors are concerned and to ensure no further breach of the Constitution in the way the court will deal with debtors. Having read Ms Justice Laffoy's judgment, she clearly identifies the flaws in the current procedure and points out on page 69 and again on page 82 a list of the defects and flaws in the current procedure. We clearly need some mechanism that would give a different sanction of last resort for a debtor against whom enforcement proceedings have been taken. Some alternative to imprisonment should be employed.
The Minister of State responded to me in particular by referring to paragraph 5.2 of the recommendations of the FLAC report. I had read the first part of those which stated "Amongst the solutions considered should be attachment of earnings legislation." The Minister of State said that the next line reads "However, any such measure must be regarded as a last resort." That is correct. FLAC has suggested that it should be the last resort, in a sense, to replace imprisonment as the last resort mechanism. The start of paragraph 5.2 states: "The State should examine how effective, non-penal remedies should be employed in order to enforce compliance with civil debt judgments." It also states any such attachment of earnings mechanism "must also be practical and workable and must ensure that debtors are protected from adverse outcomes such as excessive deductions, multiple orders and loss of employment."
Clearly there is a degree of complexity. It would be difficult to operate a scheme without sufficient safeguards to ensure debtors are protected. In his proposal, Senator Regan has taken great care to ensure that debtors would be protected in this way. In particular I note that the provision that there should be a protected welfare rate below which the debtor's income should not sink even where an attachment of welfare order has been made. An effort has been made to ensure those requirements have been met.
The point FLAC is making is contained in the preceding paragraph, 5.1, which states: "The sanction of imprisonment should be removed immediately from the Instalment Order procedure for those who are unable to pay their debts." That is its starting point in a chapter headed "Removal of imprisonment as an option in debt cases." It clearly recommends that the sanction of imprisonment should be removed. I have already referred to Article 11 of the United Nations International Covenant on Civil and Political Rights, which similarly provides that there should not be the imprisonment of persons simply for inability to fulfil a contractual obligation. That should be our starting point, from which we should be examining reform of the procedures and not simply putting this sticking plaster on a gaping wound. This is really a sticking plaster that is shoring up the sanction of imprisonment by ensuring we have minimal safeguards in place. It does not take account of any of the more comprehensive safeguards that could be adopted. It does not remedy, for example, one of the things FLAC identified as a real problem for people, which is that these proceedings are taken in public in the local District Court. There is no provision in the Bill as drafted to remedy many of the defects with the current procedure. A provision such as an attachment of earnings mechanism should have been introduced as a minimum to ensure that we comply with our international obligations and no longer imprison people for non-payment of debts.
I reiterate the startling point made by Senator Regan. It is not a point that can simply be grouped with all the other various points made on this side of the House and set aside by the Minister of State on the basis that this would be dealt with more comprehensively in subsequent legislation. I will only make this point because very often when we make five, six or seven points, the one point gets missed. I respectfully say to the Minister of State that Senator Regan's point absolutely requires clarity as to what the Attorney General is saying regarding this legislation purportedly dealing with the McCann case. The Bill definitely addresses the issue in the McCann case to do with distinguishing between ability to pay and mere refusal to pay. That is the biggest issue in the McCann judgment and I accept that it is addressed in the Bill.
However, the judge grouped her reasons for finding that there was a disproportionate interference with the constitutionally protected right to liberty into two sections, A and B, as Senator Regan has said. Under group A she deals with the question of the ability to pay versus wilful refusal, which I accept the Bill addresses. Under group B, outlining why the old section was a disproportionate interference with the constitutionally protected right to liberty, she stated: "In circumstances where a debtor has some resources to meet a debt a statutory scheme, which does not require the creditor to seek redress by attaching those resources, does not impair the debtor's right to liberty as little as possible." In other words "as little as it should", which would be a happier way of stating that.
It is quite clear that whereas the Bill as drafted addresses the core of the Laffoy judgment, it does not address the aspect that relates to the judge pointing to a disproportionate interference with constitutionally protected right to liberty for the debtor in circumstances where there is not a basis for attaching the resources of somebody who has resources, in other words, a debtor who has resources. A scheme needs to be put in place to provide for the attaching of such resources to right the situation. The Minister of State is not doing that in this Bill. There is a gap in this respect. I ask him to deal directly with this unanswerable point that has been made in respect of what the Laffoy judgment means. It is not being addressed in this legislation.
I will confine my comments as directly and specifically as possible to many of the points raised and will deal with them in no particular order. I will conclude by responding to the key point raised by Senators Regan and Alex White.
In regard to the FLAC report, the sanction of imprisonment should be removed immediately from the instalment order procedure for those who are unable to pay their bills. I contend that the aim of the Bill is to ensure that people who cannot afford to pay will not be subject to imprisonment. That is my contention and the Government's perspective, regardless of whether the Senators agree with it.
I reiterate that this is a relatively small Bill to address specifically the issues that arose in the McCann case in the High Court. I appreciate a number of other issues were raised. I said that the Law Reform Commission is preparing a report. It is the Government's position that this report will be considered in full. We understand it will deal with a range of issues, including non-judicial methods of dealing with debt enforcement. The Government has indicated it will await that report.
One or two Senators referred to imprisonment and I want to clarify the position. There is a perception that one of the reasons there is overcrowding in our prisons is that they are cluttered with debt and fine defaulters, but that perception is false. At any one time the number of such persons held in custody is only a fraction of the overall prison population and generally at any one time the number is in single figures. It is important to put that in the correct context.
The role of MABS was raised. While it is not mentioned specifically in legislation, I referred to it in my opening address. I am aware that the impact of the legislation is being communicated to MABS, which I acknowledge has a key role to play and it does so significantly.
The issue of a person with limited resources and goods and essentially the issue of proportionality was raised. Those with resources are probably dealt with in various ways, whether by way of a variation to the instalment order or in terms of MABS and so forth. Even in this section where there is reference to an imprisonment order, there is the option of deferral for a range of reasons.
The other aspect is separate, namely a person who might have finance and cash. That person could be dealt with by way of an instalment order or an amended instalment order.
I refer specifically to the subsection (8)(b) which refers to the option to seize goods. I am informed that the Attorney General has considered this question specifically and advised that subsection (8)(b) is sufficiently a proportional approach.
The area of attachment orders has merit and should be considered further. I do not believe it is the panacea people might expect it to be. I reiterate that it is worth noting that approximately half of those imprisoned at any given time relate to maintenance debtors, where the option of an attachment is already available. This aspect requires further consideration. The area of attachment in particular will be considered in the context of the findings of the Law Reform Commission report as well as other non-judicial methods of dealing with debt enforcement.
Does the Minister of State appreciate that if we had been allowed sufficient time, we could have dealt with this attachment procedure in this Bill and would not have to wait for it to be dealt with in further legislation?
Senator Alex White made the point, as have I, that the language used by Ms Justice Laffoy in her judgment is quite clear. There is no ambiguity in the language. She held that in circumstances in which a debtor has some resources to meet the debt a statutory scheme which does not require the creditor to seek redress by attaching those resources does not impair the debtor's right to liberty as little as possible. There is a proportionality issue involved. That is the expressed language used. I have read out the language used and Senator White has read out an excerpt from the judgment.
The point originally made by the plaintiff in the McCann case was that rather than ploughing ahead for committal, it would have made more sense to attempt to attach the debtor's resources, which were social welfare payments, thereby rendering the application for committal a genuine last resort, something required by the application of the doctrine of proportionality to the constitutional right to liberty.
An attempt to address this has been made in the Bill, to which the Minister of State referred, in the new section 6(8)(b). Subsection (8) states:
A judge shall not make an order under [the] subsection [in regard to imprisonment] unless he or she is satisfied, beyond reasonable doubt, on the evidence presented, that the creditor has established...(b) the debtor has no goods which could taken in execution under any process of the court by which the judgement, order or decree for the debt was given.
That does not deal with the issue. The reference to "no goods" is a reference in one way to that fieri facia procedure, whereby a sheriff returns a warrant of execution marked “no goods”. It is a specific procedure. In her judgment Ms Justice Laffoy referred specifically to attachment of monetary resources. The new section 6(8)(b) does not deal with that. It does not involve an attachment of monetary resources or income such as social welfare payments or employment income. It does not seek to envisage a garnishee type procedure where payments are falling due to the debtor and there can be an attachment. Given that this is what was suggested by the plaintiff in the McCann case and given that it was certainly what Ms Justice Laffoy had in mind and expressly set out in her judgment, this is the real difficulty in terms of the drafting of the Bill.
Notice taken that 12 Members were not present; House counted and 12 Members being present,
The Minister of State has not dealt with the issue satisfactorily. To refer to section 6(8)(b), which relates to the debtor having no goods that could discharge the debt, does not address Ms Justice Laffoy’s ruling on what, in effect, is a constitutional requirement if the provision for any order of imprisonment ultimately for failure to pay a debt is to be constitutionally valid. The Bill is fundamentally flawed in that regard.
Reference was made to the Money Advice and Budgetary Service, MABS. In the current, dismal economic situation one will have more actions taken for the recovery of debt. MABS statistics prove that. It is dealing with 19,000 customers. The number of calls to its helpline has increased by 53% in the first quarter of this year compared to the last quarter of 2008. MABS is struggling to respond to the demands for its service. Its ability to assist people in debt is handicapped by its inability to act as a negotiator with lenders. MABS should be properly resourced to deal with the increase in demand for its services, which should be expanded into debt settlement and mortgage renegotiation, which would lead to a more efficient system.
Those types of measures are called for, rather than the draconian measures that are provided for in the legislation. The approach we have suggested involving the attachment procedure would take less time and be less expensive for the taxpayer in terms of court time, prison time and Garda time. By resourcing a body such as MABS to deal properly with the problems encountered by people who are not always the best at managing their finances would assist in the whole process.
It is also evident that the stakeholders in the system recognise that the debt collection system is inefficient. The Irish Banking Federation has supported the calls from the FLAC and MABS for an overhaul of the enforcement system and the development of alternatives to imprisonment for non-payment of civil debt. We support the recommendations contained in the study by FLAC. They would be facilitated by the acceptance of the amendment in terms of the attachment of income and earnings as we have suggested in this amendment.
I underline the fact that it is not a question of the economic circumstances or the inefficiency of the debt collection system. What is fundamentally at stake is that the Government's intention in the Bill is to provide for a procedure that takes account of the Laffoy judgment in the McCann case. The Bill fails to do that in a fundamental respect. Nothing the Minister of State has said, invoking the advices that have been given or otherwise, deals precisely with that fundamental flaw. It will be exposed, if not in these Houses, ultimately in the courts if the Minister for Justice, Equality and Law Reform does not have regard to what is being said in this House on the matter.
I am grateful for the opportunity to speak again on this point because it is very important. Senators Regan and Alex White referred specifically to the passage in Ms Justice Laffoy's judgment which they say mandates the adoption of some form of attachment of earnings order. I took the opportunity to read again the relevant passages in the judgment. It is very clear that their analysis is correct. At the bottom of page 80 of Ms Justice Laffoy's judgment she examines the question of whether section 6 breaches the guarantee of personal liberty in the Constitution in Article 40.4. She says the core question is whether section 6 constitutes a disproportionate interference with the right to liberty. That is straightforward. She says one answers the question by applying the well established proportionality test first enunciated by Mr. Justice Costello in Heaney v. Ireland in 1994. She quotes Mr. Justice Costello’s statement that the means chosen must pass a proportionality test. They must be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations. In dealing with that she says it is reasonable and legitimate to have an effective statutory screening for enforcement of contractual obligations, including the payment of debt.
It is the second means, as Senator Alex White said, that is so important. Ms Justice Laffoy outlines that the means chosen must also impair the right to liberty as little as possible. She goes on to say that unless the means chosen fulfil the proportionality test for the enforcement of contractual obligations such as debt they would be in breach of the Constitution. On page 82 she goes on to say that the application of elements of the proportionality test to section 6 illustrates that it is a disproportionate interference with the constitutionally protected right to liberty for two reasons, (a) and (b). As Senator Alex White outlined, (a) is the reason that is targeted in the legislation. The Minister of State addressed that point. Ms Justice Laffoy states that the judge must be able to ascertain whether the debtor is in fact unable to discharge arrears and that without safeguards to ensure debtors are not imprisoned simply because they are unable to pay arrears, the procedure is arbitrarily unfair, not based on rational considerations and is an unreasonable and unnecessary interference with the debtor's right to personal liberty. It is paragraph (a) on page 82 of the judgment which this legislation seeks to address, a point with which we do not disagree. However, as Senator Regan rightly pointed out, it is in respect of paragraph (b) that this legislation does not meet Ms Justice Laffoy's clearly stated finding, namely, that section 6 as currently drafted disproportionately interferes with the right to liberty because where the debtor has some resources to meet the debt, a statutory scheme which does not require the creditor to seek redress by attachment of those resources does not impair the debtor's right to liberty as little as possible.
As Senator Alex White stated, the wording is a little unclear. However, when one reads the judgment a number of times in the context of the judgment of Mr. Justice Costello in the Heaney case, it is clear that what Ms Justice Laffoy is saying is that one cannot breach a person's right to liberty without first exploring whether he or she has the resources to meet the debt through the putting in place of a scheme to ensure the resources can be attached. Otherwise, one is breaching the persons right to liberty much more than the minimal allowed under the Constitution. In other words, there is no procedure in the pre-existing section 6 or in the Minister of State's draft of the new section 6 for checking before one moves to imprison the debtor whether he or she has the resources to meet the debt and whether they can be attached. That is the key problem with the current legislation.
Senator Regan's amendment seeks to address this by instituting another level of safeguard. This safeguard is not in substitution for but in addition to the safeguards already in the Bill. Ms Justice Laffoy's judgment clearly states that this is another way in which the current section 6 infringes the Constitution. It is disproportionate because it does not allow for the attachment of resources where a debtor has resources to meet the debt. We need to put in place a statutory scheme which requires the creditor to seek redress by first attaching those resources before encroaching upon a person's right to liberty. I apologise if I am labouring the point but it is a point that can perhaps be missed on first reading Ms Justice Laffoy's judgment. I had to read it a number of times. I believe the interpretation Senators Regan and Alex White have given is correct, namely, unless there is in place a statutory scheme to ensure debtors with resources can have those resources attached to pay their debts, the debtors' rights will be breached. In other words, one is not breaching their right to liberty in a proportionate manner, rather it is disproportionate. I hope that is somewhat clear. I apologise for having gone over it for a number of times. This is about proportionality. To put it bluntly, one can imprison a person but only if one does so in a proportionate manner. If one imprisons a person without first checking if he or she has resources that can be attached, then it is disproportionate to imprison him or her in the first instance. I do not believe I can put the point any more clearly than that. I await the Minister of State's response.
I am taken by the arguments made by my colleagues, Senators Regan, Alex White and Bacik. I would have thought it was fundamental in a democracy such as ours that we would pay all due credence to the prompts, guidance and judgments of bodies such as those mentioned in this instance, namely, the Irish Bankers Federation and FLAC.
As Senator Bacik said, this is about proportionality. I would have thought this was a sine qua non in our system. Sadly, in this instance the Government, for whatever reason, has not paid due attention to the Laffoy decision in the McCann case. Where attachment of income is possible, that is the prudent course to embark upon. What is the point of imprisoning a person and depriving them of income and ability to earn? It serves no great purpose.
Ms Justice Laffoy's decision, which is at the nub of this amendment, states that in circumstances in which a debtor has some resources to meet the debt, a statutory scheme which does not require creditors to seek redress by attaching those resources does not impair the debtor's right to liberty as little as possible. 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. That is what imprisonment should be — a last resort. This is required in the application of the doctrine of proportionality to the constitutional right to liberty. These are fundamental points of great importance to us all.
The judge is not entitled to make an order for committal unless he or she is satisfied beyond reasonable doubt, on the evidence established by the creditor, that the debtor has no goods which could be taken in execution under any process of the court by which the judgment order or decree for the debt was given. The process arising out of this Bill does not involve an attachment of monetary resources such as social welfare payments or income from employment. For example, it does not seem to envisage a garnishee-type procedure. Given that this is what was suggested by the plaintiff in the McCann case and given that it was what Ms Justice Laffoy had in mind in her judgment, a difficulty arises, as adequately and more eloquently outlined by my colleagues given their qualifications. This provision is fundamentally flawed and is the purpose of the amendment to this section of the Bill. I look forward to hearing the Minister of State's response.
I have listened carefully to what has been said. Without going over all the points raised, Senators' concerns relate to where a person has resources or limited resources. As I pointed out, there are a number of options in this regard, including instalment plans and mediation. I also mentioned the seizure of goods under section 8(b). Report Stage of the Bill will be taken tomorrow. I have undertaken to have the specific point raised clarified by the Attorney General. As I stated earlier, this particular point has been considered by the Attorney General and he is satisfied with it. In light of the arguments made, I will ensure the matter is again clarified by the Attorney General before Report Stage.
Amendment, by leave, withdrawn.
SECTION 2.
We now come to amendment No. 1 in the names of Senators Alex White, McCarthy, Ryan, Prendergast and Hannigan. This amendment is also tabled by the Minister of State.
Government amendment No. 1:
In page 3, subsection (1), line 12, to delete "section is" and substitute "sections are".
I am delighted the Minister of State is accepting this amendment, which is a rare occurrence these days. Notwithstanding the importance of this legislation and indeed of all legislation, this issue is relatively less important than the weighty questions with which we have been dealing. It is almost akin to a typographical error in the sense that two sections rather than one are being inserted. I am grateful the Minister of State has seen fit on this sadly rare occasion to table an amendment that is the same as the Labour Party amendment.
They are identical. It was a typographical error and both amendments are the same.
Amendment agreed to.
I move amendment No. 1a:
In page 4, between lines 5 and 6, to insert the following:
"(e) and provide information in ordinary language to the debtor in order that the debtor may seek a variation of an existing instalment order at the hearing which he or she is required to attend, and
(f) and provide information also in ordinary language to the debtor of the consequences of not appearing at any future Committal hearing, and the possibilities of variation being granted at those hearings.”.
Typographical errors are more likely when Bills are rushed. That is a lesson we can all learn. There were typos in my amendment that were spotted by the Bills Office, despite the enormous pressure the staff there are under. I am grateful to them that the version in front of us now is at least grammatically correct.
I am also grateful that the Minister of State indicated that Report Stage would be taken tomorrow. That was the first formal indication that Report Stage would not be taken today. I welcome that. It is important to all of us who are tabling amendments to improve the Bill. We want sufficient time to consider the amendments.
I say that as an introduction to this amendment which the Minister of State may consider overnight. I tabled it in light of the comments by Ms Justice Laffoy in page 16 of her judgment when she refers to the current procedure and states that if the debtor is seen as a user, there is nothing user-friendly about the procedure of the documentation used in the procedure for the enforcement of court orders. She then identifies specific defects in the procedure that could be remedied and this Bill is an attempt to do that.
I have tabled this amendment, however, in an attempt to improve the procedure while the more general criticisms I have of maintaining imprisonment as a sanction stand. If we are to introduce a Bill that contains the possibility of imprisonment for non-payment of debts, at least a better level of documentation should be provided. I am guided in this by FLAC's briefing paper on the Bill where it suggests that more information should be given to the debtor at an earlier stage than provided for in the Bill.
Section 2 inserts a new section 6 into the Enforcement of Court Orders Act 1940. The new section 6 would provide for a summons to be issued by a District Court clerk where a debtor who is liable to pay a debt has defaulted. That summons would contain details of the consequences of failure to comply with an instalment order, especially the possibility of imprisonment, under section 6(2)(b). Under section 6(2)(c) it would state the debtor may be arrested if he or she fails to appear before the District Court as directed, and under section 6(2)(d) the summons would be served on the debtor by personal service. We know the absence of requirement of personal service was one of the key defects identified by Ms Justice Laffoy.
FLAC has identified other defects that would persist even with the new section 6. It claims it would be helpful if section 6(2) included a clear statement that the debtor may seek a variation of an existing instalment order at the hearing he or she is required to attend. That is critical because, as FLAC has found, many debtors are not aware of the opportunity they would have at a hearing to vary an existing instalment order. Although this is the law at present, FLAC has pointed out that many debtors are unaware of this. As we know, fewer than 20% of debtors engage with the court at any stage during the enforcement process. It is of particular importance that they would be informed of the possibility of making a variation to the instalment order.
That is the first part of the amendment, to insert a new subsection to section 6(2) stating that the summons would provide to the debtor information in ordinary language in order that the debtor might seek a variation of an existing instalment order at the hearing he or she is required to attend. That is important because it is likely that debtors faced with a summons of this sort will take an ostrich-like approach and hope that if they bury their heads in the sand, it will go away. That approach is taken by many people to summonses for traffic offences and so on. They hope they will just go away and they certainly do not want to turn up in court, assuming in a fatalistic way that a certain procedure will run its course. If they are not informed of the possibility of varying instalments, there is no way they can know of the possibility of variation. There are many improvements that could be made to the procedure provided in section 6, including the possibility of variation at the hearing of the summons and later possibilities of variation, but there is not much point in making those improvements if debtors are unaware of them when they receive the summons. It is vital they would be given that information in the summons.
I have also suggested that when the summons is issued, the debtor should also be provided with information in ordinary language of the consequences of not appearing at any future hearing and the possibilities of variation being granted at those hearings. It is not enough to say at section 6(2)(b) that a debtor should be informed of consequences of failure to comply with an instalment order and the possibility of imprisonment, because that sounds as if a person may be imprisoned once he has defaulted. It does not give him the vital information that if he turns up in court, he may seek a variation and if he does not turn up, there is a greater likelihood, ultimately, of imprisonment. It is important the possibility of seeking a variation is emphasised at that early stage.
There is a provision later in section 6(5) that where a debtor is arrested and brought before a District Court, the judge shall explain to the debtor in ordinary language at that point about the entitlement to legal aid, that he must attend before the next hearing and the consequences. I am anticipating that the Minister of State will say we have already provided for a mechanism to give the debtor that information but we should think of the likely situations of those who will be brought before the court. Currently, if someone fails without reasonable excuse to appear before the court in answer to the summons, the creditor can apply to the judge and the judge may issue a warrant for the arrest of the debtor in the absence of the debtor and before the debtor has been informed in ordinary language under the procedure set out in section 6(5).
FLAC has identified a flaw in the procedure in that the debtor may be arrested still under the new proposed section 6 without having been informed of the possibility that he may seek a variation and of the precise consequences of failure to appear at hearings. The information provided for in section 6(2) in the summons is inadequate to give the debtor a full picture of the likely process he faces, especially the room he has to seek a variation of the instalment order, a critical factor for someone with a fatalistic acceptance of the consequences of inability to pay and consequent imprisonment. It is important there is some light at the end of the tunnel.
The issue of a warrant for the arrest of the debtor or, alternatively, the fixing of a new date for the hearing requires a hearing in open court and FLAC has suggested this is a problem for many debtors because it happens in the local District Court. The warrant is issued for the arrest and will be enforced by the Garda. That carries with it serious punitive connotations for an individual who in all likelihood has never been in trouble with the law but now faces an arrest warrant without having received all the information he should have been given.
I did not table an amendment on this but it occurs to me that there is a second gap where information should be provided but there is no provision for it. Under section 6(3), the judge can decide that instead of issuing a warrant, he or she will give the debtor another chance and fix a new date for the hearing at which the debtor will be required to attend and direct that he or she be notified of that date. To make this workable and give the debtor a fair chance of being aware of the full process, notification should also include within it information about the consequences of failure to comply with an order or attend the court. In addition, the debtor should be informed of the possibility of seeking a variation of the instalment order. If, as FLAC has said, it is vital that debtors are given as much information as possible as early as possible in the process, any notification of a new hearing date should also include information for the debtor about the process itself and the consequences of failure to comply.
As I said, many of the improvements will be empty unless debtors are made aware of them and of the possibility of their being able to influence the proceedings by convincing the judge to vary the instalment order. Of course, debtors also need to know what sanctions are ultimately likely to be imposed. I would be grateful if the Minister would consider some amendment to ensure a greater level of notification as early as possible in the process and, in particular, before any arrest warrants have been issued. Arrest warrants bring people into a different cycle of the process and will be viewed by anyone subject to arrest as bringing them into a criminal process, even if there are safeguards in place for the subsequent process. They are being brought to court subject to an arrest warrant and that is something we should seek to prevent at all costs. We should try to prevent the issuing of an arrest warrant by ensuring that people get as much information as possible in that early summons and therefore are encouraged to attend court. We would be providing a carrot as well as a stick. That is why it is so important they are informed of the possibility of variation.
I support Senator Bacik's amendment and support it for the reasons she has outlined. The point she made at the end of her contribution was a particularly compelling one: in the spirit of ensuring that debtors and persons subject to court procedures have all relevant information available to them, the risks of their situation and the possibilities of resolution should be outlined at every available opportunity, within reason. That is what Senator Bacik described as using a carrot as well as a stick. The proposed section 6(2) outlines four different items which should be included in such a summons: that it be issued by a District Court clerk; that it contain details of the consequences under the section of failure to comply with an instalment order and, in particular, the possibility of imprisonment — nobody could object to this; that it state that the debtor may be arrested if he or she fails to appear before the District Court as directed — again, no one could object to this being included; and that the summons be served on the debtor by personal service — there is a separate amendment dealing with that aspect.
The point covered in Senator Bacik's amendment is important. As I indicated, where a person is at risk, the extent and seriousness of that risk should be outlined in the summons. Clearly the possibility of imprisonment is one such serious risk. Therefore, the effort to ensure that the person's risk and exposure is communicated to him or her is entirely consistent with the policy, which appears in this proposed new section, that the summons should also communicate to the debtor that he or she can use the opportunity of the hearing to seek a variation of the instalment order. It is arguable that in many, if not most, cases this would encourage people to attend court if they see a real opportunity to improve the situation. Carrot and stick is a fair characterisation of this approach. The summons makes clear what the risk is, but the person is also told there is an opportunity to improve the situation by turning up in court. It is a good and clear proposal and I see no reason it ought not to be included in the Bill.
I also support the second aspect of the amendment, which proposes that the summons provide information in ordinary language to the debtor of the consequences of not appearing at any future committal hearing and the possibility of variation being granted at those hearings. This backs up the first part of the amendment. The point made by Senator Bacik with regard to section 6(3) is important because, as identified by FLAC, it appears that if the amendment is not made there will be only a provision whereby people who are arrested would receive notification in ordinary language of the consequences of not appearing at the hearing and the possibility of variation at the hearing. What FLAC is proposing, which is fair, is that all persons at risk of imprisonment should receive notification of the consequences of not appearing and the possibility of variation of the order. It seems inconsistent to provide for this in one case and not in the other, that is, in section 6(5) but not in section 6(3). What does the Minister of State have to say about that? Will he explain why a decision appears to have been made to include such a provision in one set of circumstances but not in the other?
In general terms, I support the amendment. The desirability of a debtor's having all information available to him or her, particularly with regard to the risks but also with regard to the possibilities available to improve the situation necessitate the inclusion of such provisions in the Bill. I support the reference in the Bill to ordinary language, which is the phrase that is used, although "plain English" was the phrase the Minister of State used in his speech. The Bill itself refers to ordinary language. That is an objective we all support. There have been improvements over the years with regard to the language used in those documents. They should contain ordinary, readily understandable language, not jargon or incomprehensible or inaccessible language such as would put people off or pose the risk of the recipient's not understanding the true situation facing him or her or the application to be made in court. The risk of imprisonment is obviously made worse by an inability to understand the words on the page. Many people who are not in a position to obtain legal advice will, understandably, be put off by the language used, which may of itself be a disincentive for people to come to court. They may think what is written in the summons sounds awful. It will be headed "Dublin Metropolitan District Court" or similar, and recipients will think that things look bad for them if they do not understand it. Even the language that is used may of itself be a disincentive to people to come to court and to make whatever effort they can to improve their situation.
This is a very good amendment. The provisions of the Laffoy judgment laid down the requirement for the person concerned to be apprised of the full consequences of a failure to comply with a summons. Page 82 of the judgment refers to the failure to impose on the creditor pursuing an application for an order for arrest and imprisonment the obligation to go through the 46B-type procedure, including personal service of an order with a penal endorsement and so on. I accept that the provisions of section 6(2) seek to take account of that judgment, but Senator Bacik's amendment, with the inclusion of the two additional paragraphs, is very appropriate.
Given the consequences of failure to comply with a summons, it is essential that the language used therein is easy to understand. It is also appropriate that the full consequences of non-appearance at a committal hearing and the possibility for variation of an existing instalment order are clearly set out. A later amendment of mine seeks to ensure that an individual who is the subject of an instalment order is fully apprised of what is involved and of the consequences of non-appearance. These two paragraphs, as proposed in amendment No. 1a, would add to the safeguards within the provisions of this Bill. I appreciate that the subsection as drafted goes some way to meeting the requirements and observations of Ms Justice Laffoy’s judgment. However, this amendment would enhance those safeguards.
There are several issues to deal with and I will try to be as specific as possible. The possible consequences of non-appearance are addressed in section 6(2)(b) and 6(2)(c). Paragraph (b) sets out the consequences under the section of failure to comply with an instalment order, including the possibility of imprisonment. Paragraph (c) stipulates that the debtor may be arrested if he or she fails to appear before the District Court. Thus, the specifics of the Laffoy judgment in terms of the requirement to set out the seriousness of the consequences of non-appearance are dealt with in the Bill.
In regard to the variation of an attachment order, I regret it is not possible, from the necessity of balance, to accommodate the provision as set out in Senator Bacik's amendment. I pointed out on Second Stage that the Government must also have regard to the interests of creditors. The receipt of the summons serves to bring the matter into sharp focus.
I referred to the importance of using simple and direct English in summonses. Following the passage of this legislation, the concerns expressed by Senators in this regard will be conveyed to the District Court rules committee. It is a principle that should apply to legislation in general.
I am disappointed by the Minister of State's response, particularly his refusal to contemplate the insertion of information for debtors about the possibility of a variation of attachment orders. I ask for further clarification in respect of the concept of balance to which he referred. I contend that simply setting out in the legislation the procedure that is to be followed will not interfere with any rights of the creditor.
There is clearly a strange anomaly in the different levels of information that will be provided to different categories of debtors at different stages. The only situation in which a judge is obliged to tell a debtor anything under section 5(6) is where the debtor fails to appear under section 6(3) and a warrant is issued for his or her arrest, in which case the judge must then explain that the debtor is entitled to apply for legal aid and must attend the court, and must explain in ordinary language the consequences of non-appearance. However, there is no provision for a debtor who comes before the District Court either because he or she simply turns up on foot of a first summons or, under section 6(3)(b), on foot of a second notification. A debtor who turns up in court in either of those circumstances is apparently not to be given information under section 6(5). Such persons will be told under section 6(6) that they are entitled to apply for legal aid and of the consequences of non-appearance, including the possibility of imprisonment. In other words, a different level of information is provided under this subsection.
It is interesting that neither an arrested debtor nor a non-arrested debtor is to be informed at any stage of the possibility of variation, yet under section 6(7), the judge may treat the proceedings on the summons as an application for a variation. Anyone who has been present at or done work in the District Court knows how difficult it is to follow what a judge is saying because of the way the court is set out and so on, particularly where there is no lawyer present. Therefore, debtors who come to court may not realise what is happening. Even if they come to understand that the proceedings are being treated as a variation, they will have had no opportunity to prepare for that and will have had no knowledge that such an eventuality might arise.
I see no problem with simply informing persons of the procedure that may be adopted at a hearing of the summons. I do not see why different levels of information are provided, depending on the way in which the debtor comes to court. It would be entirely in line with the Laffoy judgment and with the public policy behind this legislation to ensure that the maximum level of information be provided to debtors as early as possible in the process, that is, through the summons served on them at the start of the process. If information is provided at that stage in a balanced, neutral way and accessible way, in language that is easily understood, they will be encouraged to appear before the court, which is, after all, the purpose of the legislation, and to answer their creditors' demands. It is very much in the interests of all, including creditors and the State, that we encourage debtors to appear before court. A summons simply informing them they are to be arrested and possibly imprisoned without offering any prospect for a positive outcome from the hearing is much less likely to encourage them to appear before court than a summons that contains fuller and more balanced information. As I said, it is not in any creditor's interest if debtors are discouraged from appearing before the court. Creditors want debts to be repaid, rather than that debtors be imprisoned, and that is what the legislation purports to achieve. We are trying to improve the relevant provisions so that the procedure for enforcement of debts becomes more robust.
As I said, concerns in regard to the use of clear language will be referred to the District Court rules committee. To reiterate, the proposed provision regarding information on a variation to an instalment order is not being accepted because of the necessity to ensure a balance between the interests of creditors and debtors. The Senator spoke about what happens when debtors go to court. A variation during the course of a hearing is only one possible outcome, others being imprisonment with deferral, mediation and so on. A variation arises out of the proceedings of the hearing itself and it is not intended that all the possible consequences and details of the hearing will be part of the summons. There is a balance to be struck between the interests of creditors and debtors.
I understand but I do not accept the notion of balance the Minister of State is advocating. A person has the right to apply to have the order varied. No question arises in that respect. The point is, however, that the person will not be provided with this information in the summons. The balance for which the Minister of State argues is that it would create imbalance if the debtor were to be provided with information that is available to him or her in any case. He does not argue that the person should not have this information but that he or she should not be told in the summons that he or she can apply for a variation in the order. It is ludicrous to suggest that this information be withheld from someone in the interests of maintaining balance between debtor and creditor. If that is the case being made by the Minister of State, it is not acceptable and I do not buy it.
While I may not agree with the following scenario, I could understand if a particular opportunity, entitlement or right were withheld from someone on the basis that it is necessary to do so to keep the scales balanced as between a debtor and creditor and that the former would only be given a certain latitude in a certain circumstance. In this case, however, the Minister of State is arguing for the implementation of some balance by means of not informing a person of a matter that is his or her right when he or she comes before a court. If this is a person's right, why can he or she not be told about it in the summons?
I referred to the use of ordinary language. There is no point trying to reduce this matter to being one of ordinary language alone because it is only one aspect of the argument being made by Senators on this side. While we all agree on the need to have ordinary language, it does not dispose of the point under discussion.
As the Minister of State indicated, the District Court rules committee will have to meet to draw up a new rule and perhaps advise as to how precisely the summons will be constructed. Notwithstanding this, the legislation mandates the inclusion in the summons of certain matters, not all of which are being left to the District Court rules committee. It provides, for instance, that the summons include details of the consequences of a failure to comply with the instalment order and, specifically, the possibility of imprisonment. The section also mandates that the summons should state that the debtor may be arrested if he or she fails to appear before the District Court, as directed. The legislation therefore mandates the inclusion of certain matters in the summons. I cannot understand the reason the legislation cannot, in the same spirit, provide that the summons include a provision, in plain or ordinary language, that a variation will be possible if and when the person comes to court.
By reason of the lengthy debate on this legislation, I somewhat misrepresented the position in respect of the proposed section 6(5) because it does not, as I stated, include a provision on variation. In mixing up the threat of imprisonment with the issue of a right to a variation, I may have misled my colleagues, although I note that no one spotted the oversight.
In light of the Minister of State's response, I fail to understand the reason the summons should not state that a variation may be sought and, further, that mediation may be sought. It is interesting that the Minister of State referred to balance. Like Senator White, I fail to comprehend the argument being made in this matter. The legislation stipulates what is required to be included in the summons under section 6(2). This information appears to consist of many sticks and no carrots. It provides for the consequences of failure to comply, namely, the possibility of imprisonment and arrest. The section provides for all the State's sticks but does not include carrots which would induce or encourage somebody to come to the court.
I fail to understand how it is in the interests of a creditor to withhold from a debtor the information that a variation of an instalment order may be sought if the debtor comes to court. That is not to say the judge will grant such an order. The judge will still adjudicate in an impartial manner and if he or she considers that the debtor is, as one judge has said, playing ducks and drakes with the court, he or she will not grant a variation.
We are discussing a person who is facing imprisonment for non-payment of a debt, a fundamental premise of the Bill of which many of us have been critical. However, given that imprisonment for up to three months remains a sanction, as a bare minimum we should seek to encourage people to try to avoid imprisonment, if possible, and, as a first step, to try to avoid the issue of an arrest warrant. It is not in anyone's interests that an arrest warrant is issued or that people face imprisonment.
I indicated earlier that what is being done borders on criminalisation. I have since re-examined Ms Justice Laffoy's judgment and on page 70 she states that there is no rational basis for treating differently a person facing three months for non-payment of debt and a person facing three months for a criminal charge. The judge is pointing out that the person is going to prison and therefore faces the most severe consequence the State can offer. In that context, I fail to see how one can talk about balance because the information that can be provided in the summons is rather imbalanced, as the section stands. Even if one accepts the concept of balance, I fail to see how it impedes in any way the right of a creditor to include in the summons information about the possible positive as well as negative outcomes of the court hearing. The negative outcomes, namely, the imprisonment consequence, are provided for, which is appropriate given the importance of informing the debtor of this potential consequence. It is also important, however, that the debtor be told that it is not inevitable that he or she will be imprisoned and that other outcomes are possible. I ask the Minster of State to reconsider his position on the matter.
Senator Bacik raised a point regarding negative consequences. The Minister of State, in his contribution on Second Stage, specifically referred to the large number of applications for enforcement orders and so forth and the small number of people who turn up in court. People faced with enormous debt are in over their heads and do not know what to do. When they receive a summons containing negative information outlining harsh consequences, it is understandable that many of them bury their heads in the sand and do not show up in court. This is borne out by the facts cited by the Minister of State in that they fail to show up in court and run away from the problem because they consider it insurmountable in the circumstances.
Senator Bacik's amendment proposes that debtors be offered some light by informing them in the summons that if they come to court and explain the circumstances giving rise to the debt problem, the order may be varied. The amendment is very good and the more we discuss it, the more it recommends itself to the Government.
Senator Bacik referred to sticks. It is important, when the summons is issued, that the seriousness of non-attendance is clearly identified. The Senator referred specifically to an alteration to the instalment order. In discussing mediation I failed to point out, although the matter is not strictly relevant to the legislation, that consideration is also being given to preparing an information leaflet to accompany a summons. The information included in the leaflet would be broader in nature than that normally included in a summons. The matter will be the subject of legal advice.
We have had a long discussion on the amendment.
I will conclude in two brief sentences. While I am pleased to learn that such a leaflet is being proposed, why not insert it in the legislation? The preparation of a leaflet appears to undermine the Minister of State's objection to my amendment.
An information leaflet may be different in some respects from a summons, which refers to obligations. I could be flippant and say we will send out a copy of the legislation but that would serve no purpose. An information leaflet is different from what is required in a summons notice.
Amendment put.
The Committee divided: Tá, 19; Níl, 26.
Tá
- Bacik, Ivana.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Coghlan, Paul.
- Cummins, Maurice.
- Fitzgerald, Frances.
- Healy Eames, Fidelma.
- McCarthy, Michael.
- Norris, David.
- O’Reilly, Joe.
- Phelan, John Paul.
- Prendergast, Phil.
- Regan, Eugene.
- Ross, Shane.
- Ryan, Brendan.
- Twomey, Liam.
- White, Alex.
Níl
- 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.
- 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.
Tellers: Tá, Senators Ivana Bacik and Alex White; Níl, Senators Labhrás Ó Murchú and Diarmuid Wilson.
Amendment declared lost.
I move amendment No. 2:
In page 4, between lines 5 and 6, to insert the following:
"(3) Where a judge of the District Court is satisfied that the debtor is avoiding personal service, the judge may make such order as is appropriate to compel the attendance of the debtor before the Court.".
It has been correctly stated during the course of these debates that creditors also have rights. Most of the force of the argument on this side of the House has been to seek to ensure the rights of debtors and the position faced by debtors are properly provided for in legislation. Every single opportunity should be afforded to a debtor who, unfortunately, finds himself or herself in that difficult position to make good the debt and not face the ultimate consequences that still obtain in those circumstances. However, many people who are creditors also face genuinely serious difficulties in extracting money owed to them by debtors. One of my colleagues on the other side of the House made the point that not all creditors are large financial institutions or large retailers. People running small businesses and other individuals are owed money and find it difficult to have it repaid to them. We must acknowledge this.
When we are seeking to scrutinise this Bill, especially in the context of the Laffoy judgment, we should make no apology for concentrating on the position that faces debtors in circumstances where they are threatened with imprisonment. This amendment deals with a situation that seems to arise by virtue of section 6(2)(d) where one of the requirements of the summons about which we spoke earlier is that it be served on the debtor by personal service. I have no difficulty that it should be served by personal service, but it does not include any provision for substituted service with which we are familiar in the system generally. Where there is no provision for a substituted service, there is a possibility or risk that a few people might seek to avoid service of a summons on them. From the kind of provisions that are in this Bill, it follows that there should also be a provision where the court would have some form of residual discretion to compel the attendance of a person who might be seeking to avoid personal service. One way of doing that is to provide for substituted service, something that is used frequently across the system. I will be interested to hear what the Minister of State has to say on this.
I support Senator White's amendment. If it is a normal situation concerning a debt and a civil action, there is a system whereby a service is deemed a good service. However, this situation contains the risk of imprisonment. Following the logic of the High Court judgment of Ms Justice Laffoy, it is imperative that a person who is subject to that risk is apprised of what is at issue, the responsibility involved and the implications. I do not think the procedure of deeming service good is an option. Given that this a criminal type of procedure, this may be the only remedy and alternative procedure available. The amendment makes sense in the particular circumstances of this situation.
It is important to recognise the different rights of the different parties in this Bill. This amendment looks at the procedure more from the creditor's point of view by seeking to ensure that where personal service is being avoided by a debtor, a different order may be made by a judge to compel the attendance of the debtor before the court. That seems to be very much in the interest of the creditor and it is a balanced approach to improve the Bill.
I have no problem with this concept. Subject to correction, I am of the view that under the District Court rules, a judge can order a substituted service on any issue regarding people who might avoid service. From my experience, I know that people use all sorts of methods to try to avoid the service of a summons, especially if they know there is bad news coming down the track. I recall one incident where a particular debtor was avoiding service by hiding from the postman and so on. The creditor got a bit shrewd and decided to get a jury envelope and stamp "congratulations" on it. When the debtor opened the envelope, he found the summons inside and got the fright of his life. It was dragging on for months and months and it added a bit of hilarity to the District Court in question many moons ago. I do not wish to denigrate the amendment in any way, but I believe this situation is covered in the Bill as it stands. The District Court judge may decide to allow the person to be served by ordinary pre-paid post, as opposed to registered post, for example. I also believe, subject to correction, that personal service will continue to be possible.
When one listens to the discussions of the eminent legal professionals in the House, it is difficult to be sure. I understand fully the concerns that have been expressed by Senator Alex White about people who may try to avoid personal service. However, I will not accept this amendment. I will revert to it tomorrow when we talk about other forms of court service. I am specifically interested in the best remedy when problems of this nature arise. While I will not accept the amendment, I will ensure that the issue of avoidance of personal service is dealt with.
The Minister of State's comments are very helpful. I would like to respond to the perfectly reasonable points made by Senator O'Donovan. I draw his attention and that of the Minister of State to an aspect of this debate. Senator O'Donovan is right to point out that there are other means of service. It is within the jurisdiction of judges to make those kinds of orders. However, it seems that the language used in the proposed new section 6(2) of the 1940 Act, to be inserted by this Bill, is mandatory. The proposed new section 6(2)(d) of the 1940 Act states that “a summons referred to in subsection (1) shall . . . be served on the debtor by personal service”. That does not seem to provide for the kind of flexibility that Senator O’Donovan perfectly reasonably argued for. I will not press this amendment, in view of what the Minister of State has said. I hope he will review this issue and, if he deems it appropriate, introduce a further amendment on Report Stage.
Perhaps I should bow to the superior knowledge of the law of my colleague, Senator Alex White.
Not necessarily.
An old Latin maxim that was used in the interpretation of statutes —inclusio unius est exclusio alterius — suggests that my colleague could be right and I could be wrong.
That is very impressive.
It means that if one specifies one method of doing something, one excludes all the alternatives. B'fhéidir go bhfuil mé mícheart.
I assure the House that I understand the issue. I want to clarify the situation in respect of those who deliberately avoid personal service in advance of Report Stage. We will deal with it then or at some other time.
Amendment, by leave, withdrawn.
Government amendment No. 2a:
In page 4, line 11, to delete "may" and substitute "shall".
This short amendment will strengthen this provision slightly. In effect, the use of "shall" channels the courts towards using the provisions of section 6(6), 6(7) and 6(8).
I welcome this amendment. In its briefing paper, FLAC pointed out that the use of "may" in the Bill as it stands seemed inadvertently to give a judge the discretion to do neither of the two things proposed in section 6(3), which clearly would have been a flaw in the legislation. I emphasise, in a constructive spirit, that this amendment is welcome. It is noteworthy that the free legal advice centres spotted this apparent anomaly in the original drafting.
I wish to be as co-operative as possible while the Minister of State tries to make progress with this Bill. I share Senator Bacik's observation on this amendment, which I support.
It is very helpful that the Government has tabled this amendment. We should not forget that, as Senator Bacik pointed out, this is an amendment of some substance. It is not merely a technical matter. Senator Bacik was right to point out that the amendment changes the force of this section, perhaps not dramatically but certainly for the better.
I thank Senators for their comments and for their support of this amendment, which provides for the use of the word "shall" to channel the courts, in effect, towards the subsections I mentioned earlier.
Amendment agreed to.
I move amendment No. 2b:
In page 5, between lines 26 and 27, to insert the following:
"(c) if he or she considers it appropriate, where another person is indebted to the debtor or the debtor is in receipt of payments from such third person by reason of employment or otherwise, make an order that all debts or payments owing and/or accruing from such third person to the debtor shall be attached to answer the judgment or order, but where such third person disputes a liability to the debtor, instead of making an order that execution shall issue in that case, may order that any issue or question necessary for determining any such liability be first tried before the court.”.
This amendment, which represents a variation on the theme of attachment of income or earnings orders, proposes the inclusion of a new section 6(7)(c) in the 1940 Act. I have tabled it to more clearly set out the stages through which procedures of this nature should progress. Subsection (7)(a) provides for a variation of the instalment order and subsection (7)(b) provides for resolution by mediation. I suggest that subsection (7)(c) should then provide for the attachment procedure. We can then move on to measures like the threat of imprisonment etc., which are provided for in the subsequent subsections. We had hoped to avoid some of those measures. That would have happened if my more comprehensive amendment had been accepted. I do not intend to reiterate what has been said. This Bill needs to include attachment of earnings provisions if it is to comply with the High Court judgment and I propose this amendment as a variation on that formulation.
I support amendment No. 2b. As Senator Regan said, the argument in favour of the need to include some attachment of earnings procedure in this legislation has been rehearsed. Like Senators Alex White and Regan, I explained that the correct interpretation of Ms Justice Laffoy’s judgment means that some procedure of this kind is required to ensure that the debt enforcement mechanisms are proportionate and nobody’s right to liberty is breached disproportionately by this Bill. I do not want to go back over the ground we have covered, other than to say I support this amendment as an alternative means of achieving the aim we have outlined.
I formally express my support for the amendment.
I do not propose to accept the amendment. When we discussed the issue of attachment in the context of an earlier amendment, I gave a commitment to revert to the House on the matter tomorrow.
Does the Minister of State's commitment extend to this amendment as well?
No, it does not. It relates to the first amendment only. I envisage that the whole area of attachment orders etc., will be addressed in the Law Reform Commission's review. The legislation before the House is narrow in its scope. The most important point that has been made about the issue of attachment is that it is a necessary requirement. In that context, the constitutionality of the legislation will be considered by the Attorney General.
I will pursue the amendment on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 3:
In page 6, line 39, after "order" to insert the following:
", being the amount specified in that behalf in the order under subsection (7)(c) or (d)”.
I am proposing the insertion of a phrase, as specified in my amendment, at the end of section 6(10)(b) so that it will read: “Where a debtor is imprisoned on foot of an order made under subsection (7)(c) or (d), he or she .... is entitled to be released immediately upon payment by him or her or on his or her behalf to the District Court clerk concerned or to the Governor of the Prison for the District Court clerk, of the sum of money consisting of the amount of all instalments of the debt and costs which have accrued before, and are unpaid at the date of such order, being the amount specified in that behalf in the order under subsection (7)(c) or (d).” I am sure the Minister of State does not intend that anything else is intended. This amendment would clarify that the amount the debtor has to pay to secure his or her release under section 6(10)(b) is the amount specified in the District Court order. If we do not make that clear, the question of whether the relevant amount under section 6(10) is different from the relevant amount under section 6(7) might arise. I am proposing to tidy up this section to clarify that point.
I support this sensible amendment, which would clarify the meaning of section 6(10). It is worth emphasising that with debts of this nature, the debt remains in place even after any term of imprisonment has been served. In that sense it is very different from a fine. Where people are imprisoned for non-payment of a fine, their imprisonment effectively discharges the fine since the imprisonment order is made where they are in default of paying the fine. Where somebody is imprisoned under this Bill or the current procedure for non-payment of a debt, the debt remains in place. It is important that the level of debt that is owing is made clear to him or her and that no greater debt is assumed to be owing as a result of lack of clarity in the legislation.
I, too, support the amendment. There is need for greater clarity in the Bill in these circumstances, where vulnerable people are perhaps in over their heads. Where the procedure has run its course and matters are resolved, it should be laid out crystal clear that the matter is closed and there should be no ambiguity about the amount owing.
I understand where the Senator is coming from but I am advised that the amendment is unnecessary because it is already implicit in the order, where the debtor is imprisoned on foot of an order made under subsection (7)(c) or (7)(d).
It may be implicit but it is best in these matters that these types of issues are explicit. There is certainly residual doubt in my reading of the two paragraphs. It would hardly cause a difficulty for the Minister of State to amend the Bill to ensure that there is a "belt and braces" effect, so that his confidence that it is already covered may be augmented and confirmed absolutely beyond doubt to the effect that the only amount of money is that as comprehended by the original order. I see no reason that it cannot be included.
I am advised that it is unnecessary. To include it, from the drafters' viewpoint, would not achieve greater clarity because it forces one to refer back to the previous sections.
In support of Senator White's amendment, there is reference in subsection (10) to the order. However, the language, "entitled to be released immediately upon payment by him or her . . . of the sum of money consisting of the amount of all instalments of the debt and costs which have accrued before, and are unpaid at the date of such order" does not specify the amounts which are the subject of the order. I believe there is ambiguity there. One could argue it is implicit, but for the sake of clarity it should be specified, perhaps, as Senator White has suggested.
The advice is still the same to the effect that it is unnecessary, and I am not accepting the amendment.
Amendment, by leave, withdrawn.
I move amendment No. 4:
In page 6, to delete lines 45 to 48 and substitute the following:
"(12) Failure by a debtor to comply with subsection (5)(a)(ii), without reasonable excuse, constitutes contempt of court, and the District Court judge may deal with the matter accordingly.”.
This is a rather odd formulation in the Bill in respect of contempt of court. I am not sure whether I have seen this before, but I would like it to be explained and perhaps justified. Subsection (12) states that if "a debtor fails to comply with subsection (5)(a)(ii), without reasonable excuse“ the District Court judge may deal with the matter as if it were a contempt of that court. I do not understand why that formulation is being used, particularly when it is associated with “may” rather than anything more mandatory. To say, “the District Court judge may deal with the matter” is an unsatisfactory formulation, is unclear and leaves far too much to the imagination. It is either a contempt of court or it is not. If there is a better formulation than mine or one that is more desirable or advisable, I am certainly willing to debate that with the Minister of State. I propose that we reword the subsection as follows, for the avoidance of doubt: “(12) Failure by a debtor to comply with subsection (5)(a)(ii), without reasonable excuse, constitutes contempt of court, and the District Court judge may deal with the matter accordingly.” The fact that the term “may deal” is included in that context seems to be all right because there has to be an element of discretion by the judge. It strikes me that the phrasing of that subsection, the notion that legislation states that a court may deal with contempt of an order “as if it were” contempt of court, is flawed. Contempt of an order is contempt of court so the section needs to be redrafted, accordingly, unless I am missing something.
I support the amendment. It is somewhat like the amendment that the Government has introduced on the judge issuing a warrant where the word "may" has been changed to "shall". This is inviting the judge to sit on his or her hands. It is not a question of limiting the judge's discretion, but it means he or she has to deal with the matter. The phrase "may deal with the matter as if it were", is not satisfactory. The amendment, as proposed, adds clarity to the formulation and the drafting.
I support the amendment. There is a serious lack of clarity in subsection (12) and Senator Alex White's amendment is trying to make sense of it. If one looks at it carefully, it makes no sense: "If a debtor fails to comply with subsection (5)(a)(ii), without reasonable excuse, the District Court judge may deal with the matter as if it were a contempt of that court.” Subsection (5)(a)(ii) is the provision under which a debtor is arrested and brought before the District Court under subsection (3)(a), and the judge fixes a new date and explains to the debtor in ordinary language, under subsection (5)(a)(ii), that he or she must attend before the court at the date next fixed for the hearing of the summons. Presumably the meaning of subsection (12) is to the effect that the only debtor to whom it applies will be one who has been arrested and brought before the District Court under a warrant under section 6(3)(a) and who has failed to attend before the court at the date next fixed for the hearing of the summons. There is a strange gap in the language. Subsection (5)(a)(ii) simply provides, from my reading, for the explanation to the debtor that he or she must attend before the court and does not impose upon him or her an obligation to do so. Again, we are dealing with a relatively serious matter here, where a person may be dealt with as if he or she were in contempt of court. It is important, therefore, to have clarity in the language. A reconsideration of the drafting is required at least to ensure that it is watertight. I am not sure that it is so at present.
From the viewpoint of clarity, I do not want any misunderstanding. In reading out the phrase, the Senator added a bit that I do not have. He said, "for the avoidance of doubt, failure by a debtor to comply", whereas the amendment before me reads "Failure by a debtor to comply". I want to get clarity in that regard.
The amendment, as set out in the list of amendments, does not include the phrase, "for the avoidance of doubt". The version I have does, but that is a case of my gremlins, not those of the Minister of State.
That is all right. I do not wish to further confuse the matter.
The Minister of State has clarified the amendment, if not theBill.
I do not want to be accused of adding in something or taking something out. As the Senator reads the amendment, it is: "Failure by a debtor to comply with subsection (5)(a)(ii), without reasonable excuse, constitutes contempt of court, and the District Court judge may deal with the matter accordingly.” I believe the objective is the same, namely, to provide a workable option for the sanction against the person who refuses to co-operate with the court. Having been given the opportunity to look at this amendment, I believe it is necessary and I am willing to accept it. That is why I was fussy about the actual wording.
I am very grateful to the Minister for taking that on board. I will not speculate on whether he would have accepted the amendment had it included the words, "for the avoidance of doubt".
Amendment agreed to.
Government amendment No. 5:
In page 8, between lines 26 and 27, to insert the following subsection:
"(3) The following section is substituted for section 9 of the Act of 1940:
"9.—(1) Where a person is in prison under an order of a court made on account of the failure of the person to pay a sum of money, the Minister may, at any time and for any reason which appears to him or her sufficient, direct that the person be released either (as the Minister thinks proper) immediately or after payment of a specified part of that sum of money.
(2) The Minister may, before releasing a person under this section, if he or she considers it appropriate and proper in all the circumstances consult with the judge who made the order for imprisonment of the person.
(3) Where the Minister directs that a person be released from prison, the person shall be released in accordance with the direction.
(4) In this section ‘Minister' means Minister for Justice, Equality and Law Reform.".".
The amendment is self-explanatory. The current provision obliges a Minister who is considering the release of a debtor in any circumstances to consult the District Court judge who ordered the debtor's imprisonment. The only condition currently is that the consultation may be practicable. The Attorney General has recommended the proposed amendment be incorporated to provide a workable procedure for the future. It allows the Minister of the day to consider whether consultation with the judge is appropriate. Unlike in criminal cases where temporary release is part of the system, the existing provision for release of debtors has traditionally been vary rarely used, I presume to avoid any accusation by creditors of political interference. I would not envisage widespread use in the future.
I am very surprised by this amendment. I think of a previous amendment in a Bill we dealt with only last week where a sitting High Court judge is asked to be an advisor to the Taoiseach on matters relating to surveillance. I find this merging of the Judiciary and the Executive inappropriate. This issue should not be politicised. We have had experiences in the past of ministerial interference in the release of prisoners. The law should stand, the penalties apply and the orders of the court complied with, and I do not believe the Minister should mess around in this area.
I certainly do not believe the Minister may, "if he or she considers it appropriate and proper in all the circumstances consult with the judge who made the order for imprisonment of the person". I find that fundamentally flawed and unconstitutional and it is in conflict with the separation of powers. If there are extenuating circumstances in an individual case there can be procedures whereby an individual can obtain some redress, but this is not the procedure. It is extraordinary that a Minister should consult with a judge as to the order he or she has made for imprisonment of a person and negotiate with the judge as to whether the person should be released. It is perverse and absurd.
I also wanted to take issue, particularly with the proposed section 9(2). I have no problem with the general principle that a Minister may direct that a person be released because that is a function of the Executive. Returning to Ms Justice Laffoy's judgment, she said there is no rational basis for treating people differently if they are imprisoned for non-payment of a debt or facing a criminal charge, and in either situation it is the Executive's function to direct that they be released. There is a point about the need for remission for a person who is imprisoned for non-payment of a debt, but that is a separate issue.
My concern is the subsection Senator Regan has commented on. It is most improper and must be unconstitutional to provide that the Minister may consult with the judge who made the order for imprisonment of the person before releasing a person. We have been given these amendments and are speaking on the hoof, and I have not looked again at the two obvious cases that spring to mind.
One is the Gallagher case in which it was held to be an Executive function to direct the release of a person who was detained in the Central Mental Hospital on foot of a special verdict of not guilty by reason of insanity. For a time it had been thought it was a judicial function to direct when a person could be released from that detention but the Gallagher case established that it was an Executive function, a matter for the director of the Central Mental Hospital, and ultimately the Minister, to decide whether a person could be released from that detention following the special verdict.
I am also thinking of the Finn case some years ago in which the Supreme Court said review dates were in breach of the constitutional doctrine of separation of powers. Judges had been in the practice of providing for a sentence of seven years but with a review date of three years and the person would be brought back to them after three years and could then be released by the judge. Again, the Supreme Court said once the judge has pronounced sentence, it is then a matter for the Executive to decide upon the release date of the person. That allows for the operation of remission and so forth.
We are not talking about imprisonment on foot of a criminal conviction here; the Gallagher case did not concern criminal conviction but was detention on foot of a special verdict of an acquittal, albeit an acquittal and a finding that the person was insane. Here there is a real danger in inserting in legislation a provision that a Minister can consult with the judge who made the order for imprisonment before releasing a person. It seems to trespass on the judicial function even if we are not in the context of criminal convictions. I still do not see how it can be constitutional, nor do I see any practical necessity for it because section 9(1) provides that the Minister can "for any reason which appears to him or her sufficient, direct that the person be released". The matter is obviously within the Minister's discretion more properly.
I share the surprise of my colleagues on this provision, particularly 9(2). It begs more questions than it answers. The first and most obvious question is why the Minister is being given the power to consult with a judge. What is the purpose? Senator Bacik is correct that there is already a role for the Executive in releasing persons from detention in different contexts. Why would the Minister consult with the judge? What would the Minister ask the judge? What sort of consultation would they have and for what purpose? Would it involve meeting with the judge? I am sorry if it sounds crass, but where would the Minister meet the judge? In what context would they meet? Would it be a formal meeting? Would it be documented? Who would have access to documentation on it? How would the deliberations between the judge and the Minister be recorded? Would the parties involved have access to documentation on the meeting between the Minister and the judge? Would a person who is in prison and regarding whom consideration was given to his or her release and, following consultation between the Minister and the Judge, a decision was made not to release that person, be entitled to know what the judge said to the Minister that persuaded the Minister not to release the person?
I appeal to the Minister to re-examine this. Apart from the fundamental objection to it regarding the separation of powers, this opens all kinds of possibilities and problems for Ministers in future regarding what would or would not happen or could happen. I am not suggesting for a minute any question of possible impropriety, although that could happen. I do not suggest it could happen with anybody currently in office. However, if we are providing in statute for consultation to occur, whether through meetings, letters or otherwise, between a Minister and a judge, it would be dangerous for that to become in any way a precedent in our system. I appeal to the Minister to reconsider this provision. No case has been made for it and it could cause the most serious problems in the future in how it might play out.
The period of imprisonment for debtors is relatively short, as I recall. It is three months. In those circumstances if the Minister were to contact a judge and was considering releasing the person, presumably it would be only three months since any such hearing would have occurred, but three months is three months. A District Court judge presumably has many cases coming in and out through his or her court and I wonder what implications this has for what records would be kept by a District Court justice on these cases.
I am reminded that within the past year we debated another Bill in the House which was taken by the Minister of State, Deputy Conor Lenihan. As far as I recall, in that legislation we removed an ancient provision whereby a District Court judge was required to take a note of the deliberations in court. As I understand it, that has been removed by legislation passed by these Houses in the past year or so. There is now no provision for a record or a note to be kept by a District Court judge of what has happened in his or her court. Obviously some record is taken of decisions made. What will the judge be able to tell the Minister? This is the nub of the issue as far as I am concerned. What will the Minister ask the judge? Will he or she ask about the character of the person concerned? What would be the factors that would enter into the equation from the judge to the Minister that might persuade the Minister to release the person or keep the person in custody? This seems to be highly fraught with considerable danger for all concerned and I counsel in the strongest possible terms against its inclusion.
I also ask the Minister of State to reflect on this section again between now and Report Stage. I have concerns because I was of the view that such interference, which would normally apply in road traffic cases involving criminal sanctions and possibly non-payment of fines, and the lobbying that went on by Deputies and Senators to have somebody released or the fine reduced were more frowned upon than supported. I believe that many District Court judges would go frantic over the notion that they could be called to account on every decision. Here we are dealing with a civil issue of money owed between a debtor and a creditor. I see no great raison d’être for the Minister to involve himself or herself by asking a District Court judge to account for himself or herself and have somebody released. Based on the circumstances outlined by the Minister of State in his speech, it would be expected that a person would be given at most 28 days’ imprisonment for non-payment of an enforcement order and the usual length is three weeks, or 20 days. If one allows for time, the person would probably be released in the normal course of events. It is very rare for someone to be sentenced to six months’ imprisonment for non-payment of a debt on foot of a committal order.
I thank the Senators for their contributions.
And support.
In my last point I said I did not envisage this provision having widespread use. The consultation with the judge is merely repeated from the 1940 Act. The amendment reduces the likelihood of any future consultation being undertaken. The Attorney General recommended that the proposed amendment be incorporated to provide a workable procedure to be followed in the future.
The 1940 Act was introduced three years after the Constitution was adopted. We have learnt some things in the intervening 70 years, of which we should take account. I do not understand how it is possible to simply transpose that section with a certain reformulation providing that a Minister may consult the judge who gave the order for imprisonment. While I will not repeat what has been said, I find it extraordinary. I ask the Minister of State to reconsider the proposed amendment.
It has been 69 years since the 1940 Act was passed and things have certainly moved on. I was not aware this provision was in the 1940 Act. I am surprised to hear it and I do not imagine it has ever been used, certainly not in recent times and since the judgments that clarified separation of powers on imprisonment. We need to review the matter and not simply replicate it in the new legislation.
I accept it is relevant that it is in the 1940 Act. However, given the opportunity we have as legislators to take it out, we should grasp that opportunity, unless a case can be made for it. If the Minister has a case for its inclusion, this is the time for that case to be made afresh. Senator Bacik said she doubts if the provision has ever been used and she is probably right. However, if it has never been used it should definitely be dropped. Is the Minister of State aware that it has ever been used? While he may not know I will ask and he can do his best to answer. Is it the practice for the Minister for Justice, Equality and Law Reform to consult District Court judges and, if it happens, does the Minister of State have any idea how often it happens?
Obviously I do not know if the section of the 1940 Act has been used. However, I reiterate that this comes with the advice of the Attorney General. As I said at the outset, the purpose of this legislation was not to revisit all the other issues that arose here today. I believe there will be more substantial legislation on foot of the Law Reform Commission's proposals in due course.
Amendment put.
The Committee divided: Tá, 26; Níl, 18.
Tá
- 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.
- 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.
- Healy Eames, Fidelma.
- McCarthy, Michael.
- O’Reilly, Joe.
- Phelan, John Paul.
- Prendergast, Phil.
- Regan, Eugene.
- Ross, Shane.
- Ryan, Brendan.
- Twomey, Liam.
- White, Alex.
Tellers: Tá, Senators Déirdre de Búrca and Diarmuid Wilson; Níl, Senators Maurice Cummins and Eugene Regan.
Amendment declared carried.
Section 2, as amended, agreed to.
NEW SECTION.
I move amendment No. 6:
In page 8, before section 3, to insert the following new section:
"3.—The Enforcement of Court Orders Act 1926 is hereby amended by the insertion of the following section, after section 17:
"17A.—All instalment orders made under the aforementioned section must be served, personally, on the judgment debtor and must contain a notification of the consequences of failure to comply with such an order, including the possibility of imprisonment pursuant to section 6 of the Enforcement of Court Orders (Amendment) Act 1940, as amended by section 2 of the Enforcement of Court Orders (Amendment) Act 2009 and the District Court Rules applicable to such proceedings may make.”.”.
The amendment provides for an amendment to the Enforcement of Court Orders Act 1926, as distinct from the 1940 Act. It is designed to deal with the type of issue raised by Ms Justice Laffoy in her judgment. It relates to personal service and the alerting of an individual to the possibility of imprisonment if he or she fails to comply with the order. This relates not to a summons, as such, but to an instalment order in the first instance. The amendment proposes a new section in the 1926 Act, that, "All instalment orders made under the aforementioned section must be served, personally, on the judgment debtor and must contain a notification of the consequences of failure to comply with such an order, including the possibility of imprisonment pursuant to section 6 of the Enforcement of Court Orders (Amendment) Act 1940, as amended by section 2”. The order must be served personally on the judgment debtor and must contain a notification of the consequences of failure to comply with such an order, including the possibility of imprisonment pursuant to section 6 of the Enforcement of Court Orders Act 1940, as amended by section 2 of the Bill. The idea is that this endorsement of the order will inform the debtor that failure to comply could result in the issuing of a committal summons, as a result of which the instalment order could be varied. The court may order mediation or attachment, as is proposed in the Bill. The court may also order imprisonment with or without a stay of execution.
The reason the amendment is important is that Ms Justice Laffoy highlighted it as a weakness in the system. In page 82 of the judgment she says similarly the failure to impose on the creditor pursuing an application for an order for arrest and imprisonment the obligation to go through an order 46B type process, including personal service of an order with penal endorsement, does not impair the debtor's right to liberty as little as possible. Again, it is a reference to the proportionality test. It is in the light of that ruling of Ms Justice Laffoy that one has to go back to the instalment order itself and ensure it is personally served on the debtor, and that does require an amendment to the 1926 Act. I commend the amendment to the House.
I support the amendment. We have already discussed at some length the need to ensure that debtors are informed at the earliest possible opportunity of the consequences of failure to comply with orders and other information about the procedure. Again, the amendment seeks to do that at a different stage of the process where instalment orders are to be served on the debtor. The amendment should recommend itself to the Minister of State for that reason alone.
I support the amendment, which is appropriate. It is consistent with what we have been arguing, namely, that in the case of a debtor who faces serious consequences, up to and including imprisonment, the creditor who is seeking payment, as it were, and is pursuing the debtor ought to be put through the hoops and ought to ensure that every possible opportunity is given to the debtor. The debtor's position must be protected. Obviously the creditor has rights too but the notification of the consequences of the failure to comply with the instalment order at that early stage of the process should be communicated to the debtor, and that is what is set out in the amendment. It is entirely appropriate that the amendment should be incorporated into the Bill. We have debated the issue of ensuring that all of the risks to a debtor of not complying with the requirement to repay the debt should be communicated to that person at the earliest possible opportunity. If the amendment is accepted that regime would be in place. I support the amendment for those reasons.
I accept the logic behind Senator Regan's amendment but we are primarily concentrating on amending the relevant portions of the 1940 Act, rather than the 1926 Act to which he referred. I do not intend accepting the amendment at the moment but the matter will be examined as part of the ongoing Law Reform Commission's review.
Senator Regan made a point, which I intend to pursue, on the court ruling of 18 June. I will examine the specifics to ascertain if the legislation we are passing is sufficient without having to make an amendment. If an amendment is required I will arrange to introduce it on Committee Stage of the Bill in the Dáil. I would envisage the broader issue being addressed as part of a greater review of the legislation, but the detail to ensure that the legislation we are passing conforms with what was required by the ruling will be dealt with and, if necessary, an amendment will be brought forward on Committee Stage in the Dáil.
The fact is that when we speak about the 1940 Act we also speak about the 1926 Act, because the principal Act is the Enforcement of Court Orders Act 1926. The first section of the 1940 Act outlines that the "principal Act" means the 1926 Act. In all the amendments we are speaking about the 1926 and 1940 Court Orders Enforcement Acts. The 1940 Act amends the 1926 Act.
The Bill seeks to address the weakness of the notification procedure to a debtor at a later stage in the process, namely, at the stage of the committal summons. That is not surprising. I understand where the Minister is coming from, given that the main criticisms in the judgment concern the committal proceedings rather than the procedure leading to the instalment order. It is worth considering that once a committal summons is served on a debtor, under the amendments proposed by the Bill, the possibility of legal aid arises. Personal service and a warning of imprisonment at an earlier stage could avoid the necessity for the summons and the entire procedure that we are now trying to remedy. It would also avoid the cost of going through the legal aid process and the expense incurred in that regard. I ask the Minister of State to reconsider this amendment, albeit concerning the 1926 Act, which is the principal Act.
I will reconsider it. I specifically asked my officials to examine it, particularly with relevance to the High Court ruling of 18 June and to make sure that the legislation complies with it. If necessary, an amendment will be brought forward when the Bill is taken in the Dáil.
Is the amendment being pressed?
It will be pressed on Report Stage.
Amendment, by leave, withdrawn.
Section 3 agreed to.
Title agreed to.
Bill reported with amendments.
When is it proposed to take Report Stage?
Tomorrow morning.
Question put: "That Report Stage be taken tomorrow."
The Seanad divided: Tá, 27; Níl, 17.
Tá
- 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.
- 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.
- Ross, Shane.
- Walsh, Jim.
- White, Mary M.
- Wilson, Diarmuid.
Níl
- Bacik, Ivana.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Coghlan, Paul.
- Cummins, Maurice.
- Fitzgerald, Frances.
- Healy Eames, Fidelma.
- McCarthy, Michael.
- O’Reilly, Joe.
- Phelan, John Paul.
- Prendergast, Phil.
- Regan, Eugene.
- Ryan, Brendan.
- Twomey, Liam.
- White, Alex.
Tellers: Tá, Senators Déirdre de Búrca and Diarmuid Wilson; Níl, Senators Maurice Cummins and Eugene Regan.
Question declared carried.