Mr. Paul Joyce:

However, it raises an important point. Perhaps one of the reasons for loan sales is to save money for the institutions that lent the money in the first place, properly dealing with these accounts and entering into legally binding arrangements such as personal insolvency arrangements and so on. Properly dealing with the accounts in arrears for more than two years in a systematic way would probably have monetary consequences for the institutions themselves. That might lead to needing a certain amount of extra supervision by the Central Bank and the Department, but I cannot see in principle that that would be enormous.

I think the Deputy is absolutely right on the constitutional issue. I am looking at a recent High Court decision under the personal insolvency legislation. As the Deputy knows, originally there was no right of appeal. When the Personal Insolvency Act was introduced in 2012 and came into operation in autumn 2013, creditors could decide at a meeting to accept or reject an arrangement. We were told back then that having an appeal mechanism that might result in the imposition of a solution upon a creditor was unconstitutional. At the time we all predicted that this would lead to very few arrangements, as it did. Eventually it was decided that the legislation needed to be amended, which happened late in 2015. At the beginning of 2016, a limited appeal mechanism to the Circuit Court was introduced but only in respect of a personal insolvency arrangement that involved arrears on a principal dwelling.

A limited appeal mechanism to the Circuit Court was introduced but only in respect of PIAs that involved arrears on principal dwelling houses. Since then, there have been some very interesting decisions in the High Court on appeal from the Circuit Court. The number of PIAs has begun to increase, but not quickly enough, unfortunately. It is running at approximately 3,200 but PIPs are becoming more expert, adventurous and creative with the legislation. The High Court decision in the Parkin case, for example, was 33 pages long and the judge very carefully went into the nuts and bolts of the constitutionality of imposing a write down on the lender in that case. The High Court does exactly what the Deputy describes. It talks about proportionality and cites case law, including Healy v. Ireland from quite a long time ago. Of course, there is a constitutional issue with the Deputy's Bill because it affects the property rights of creditors, notionally. The question is whether the public interest is sufficiently important to override that property right. There is a property right but in this particular case it was a PIA where there was a counterproposal from the lender, PTSB, that a split mortgage of 26 years duration should be put in place. That is what the appeal was about and the High Court ruled in favour of the applicant. It found that there was no certainty that a split mortgage would not return the borrower to solvency and, therefore, the arrangement as proposed went through. Again, this was an example of the courts, in a proportionate way, looking at legislation carefully. The High Court has very clearly drawn out the social objectives of the personal insolvency legislation on a number of occasions and has asked what the Oireachtas meant by this. It is a live issue. I would have thought that the appeal mechanism might have been challenged by a creditor at some point, from a constitutional point of view, but I am not aware of any challenge thus far, three years on.