I move amendment No. 1:
In page 3, between lines 11 and 12, to insert the following:
"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,
(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 prepaid 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 provides for attachment of earnings to discharge or contribute towards the payment of a debt. It arises from an efficiency argument as it would save court and Garda time and protect the interests of the creditor in receiving some satisfaction for a debt that is due. It would also obviate the need to invoke the rather draconian measure of imprisonment which gives no satisfaction to a creditor in the discharge of a debt.
It also arises based on the premise of the Bill which is to deal with the implications of the judgment of Ms Justice Laffoy on 18 June 2009 in the Caroline McCann case which specifically refers to the concept of attachment. Ms Justice Laffoy mentioned the proportionality test set out in the judgment in Heaney v. Ireland which states that intervening in the liberty of a person may be justified depending on whether it is proportionate. The test of proportionality is that the means chosen must:
(a) be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations;
(b) impair the right as little as possible, and
(c) be such that their effects on rights are proportional to the objective.
Ms Justice Laffoy states:
Having in place an effective statutory scheme for enforcement of contractual obligations, including the payment of debt, is unquestionably a reasonable and legitimate objective in the interests of the common good in a democratic society. The means by which effectiveness is achieved may reasonably necessitate affording a creditor a remedy which entitles him or her to seek to have a debtor imprisoned, but such means will constitute an infringement of the debtor's right to personal liberty guaranteed by Article 40.4.1° unless they pass the proportionality test.
It is a very straightforward principle. I do not wish to repeat what was said on Committee Stage, but this is rather important. She goes on to state:
The application of elements of the test to s. 6 [of the 1940 Act] illustrates that it is a 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 the arrears of instalments. A statutory procedure under which a debtor who is 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 ensure 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.
As I have said before, the Bill goes some way towards dealing with the issues arising in section 6 of the 1940 Act. The second set of circumstances to which I referred is the application of elements of the test to section 6. She finds it is a disproportionate interference with the right to liberty.
The purpose of the amendment is to attach the income or resources or payments which may be accruing to a debtor from a third party for use in discharging the debt. This process should be undertaken before the draconian measure of imprisonment. The second reason given by the judge is:
(b) 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.
In other words, it is disproportionate. That is the basis of this amendment.
I do not propose to go over the arguments advanced on Committee Stage with regard to this comprehensive amendment which was drafted to provide for attachment of earnings but also to qualify that in a way that is not unduly onerous for a debtor while giving some satisfaction to a creditor. It emerged in the response from the Minister of State, who was speaking in the House on Committee Stage, that the procedure of attachment is not novel but applies particularly in the area of family law.
The issue does not appear to me to be insurmountable, notwithstanding the urgency of the legislation and the speed with which it is being pushed through the Oireachtas. The Minister could encompass this provision which would appear, on any fair reading of the judgment of Ms Justice Laffoy, to be necessitated by that judgment. Since the Bill is designed to deal with the implications of that judgment, why is this aspect being ignored? I appreciate the suggestion that the matter is rectified by the proposed addition to the 1940 Act of section 6(8)(b), under which the judge must establish that “the debtor has no goods that could be taken in execution under any process of the court by which the judgment, order or decree for the debt was given”. This does not satisfy the requirement arising from the judgment and, in this regard, the Bill is flawed.
In the current economic climate, where significant numbers of people are, for different reasons, being forced into debt and related financial difficulties, the absence of a procedure whereby they can be relieved of the threat of imprisonment and can be guided to find a way to make a contribution from their earnings or social welfare is unacceptable. Such a process would be far more appealing than the prospect of imprisonment and the associated hardship and ignominy. I commend the amendment to the House. Given the imperative arising from the judgment of the High Court on these constitutional principles, the purpose of the Bill to follow through on that judgment, and the present economic circumstances, this amendment is worthwhile, appropriate and timely.