I have listened with interest to the arguments made by Deputy Rabbitte in support of this amendment and I can understand the reasons for it. However, I have to say straightaway that I have basic problems both of principle and of practicality with the amendment and I would find it impossible to accept it. I will explain what are the difficulties.
Amendment No. 197 is clearly based on the philosophy that a person who has been involved in insolvency should repay the debts his company incurred before being allowed to start again. However, it seems that the underlying principle here is already provided for in those sections of the Bill which provide that a company director may be made personally liable for the company's debts in a range of circumstances. Thus, we have section 116, for example, which allows for personal liability where a director has been a party to fraudulent or reckless trading. That section will allow a liquidator, creditor and so on to pursue a director personally for his company's debts in appropriate cases. Indeed, where a director has been made personally liable in this way the court can go on to make a disqualification order against him as well as having made him personally liable.
There is also the point that new section 130, as inserted by amendment No. 176, will apply to the type of case that the Deputy has in mind. Section 130(2) provides that where the liquidator of an insolvent company thinks that the involvement of any of the directors concerned in another company, whether this is a new company or not, may put the interests of its creditors in jeopardy, he must inform the court of this and the court can then make whatever order it thinks fit. That provision is pitched in a deliberately wide way to allow flexibility to the court and we are not restricting in any way the kind of order the court can make here. I am not saying the court would make an order of personal liability against the director concerned under section 130 (2) but I could not rule it out either.
A further problem with the proposed amendment is that if a person were automatically to carry previous debts to a new company, I would expect the creditors of the old company to go after the new one immediately. The effect of this, of course, would almost certainly be to plunge the new company into insolvency straightaway before it had even started. There is also the problem that there would usually be more than one director of the old company involved here who might become involved in several different companies subsequently. There would be considerable uncertainty as to which of these companies should, as it were, carry the debts involved.
I have stressed all along on this Bill that what I am after is a balanced piece of legislation, one that responds to the abuses we all know exist but in a considered and measured way. This is as true of Part VII as it is of any other Part of the Bill. Thus, on the one hand, we have section 128 as replaced by amendments Nos. 174 to 177, which will enable the court to make a declaration restricting the right of anyone concerned in an insolvency to start up in business again without meeting a certain number of conditions. This will ensure a degree of protection for the creditors of any new company the person concerned will become involved with. On the other hand, we have the strong measures in Chapters 2 and 3 of this Part, which will deal severely with anyone who is disqualified by the courts from being a director and so on. A person who is disqualified will effectively lose his livelihood, at least as far as being involved in company management is concerned. I feel strongly, therefore, that the range of provisions we have here goes as far as it is necessary to go in countering the abuses we set out to tackle in the first place. As I said at the outset I cannot, for these reasons just given, accept the amendment.