Mr. Paul Egan:

I am chairperson of the Company Law Review Group, CLRG. We are joined online remotely by Professor Irene Lynch Fannon, chair of the corporate insolvency committee of the CLRG, and Ms Deirdre Morgan, secretary of the CLRG is seated beside me. I thank the committee for facilitating Professor Lynch Fannon’s joining the CLRG's presentation in light of her being abroad at present. We might take advantage of the good Internet connection and have her speak earlier in the meeting than later.

The Company Law Review Group is the statutory advisory body charged with advising the Minister for Enterprise, Trade and Employment on the review and development of company law in Ireland. It operates under section 958 of the Companies Act 2014.

The review group consists of individuals with an expertise, an interest and a stake in the development of company law, including: the State, its agencies, and regulators, such as the Department of Enterprise, Trade and Employment, Revenue, the Corporate Enforcement Authority and Irish Auditing and Accounting Supervisory Authority, IAASA, which is the accounting regulator; practitioners such as lawyers and accountants; and users and stakeholders such as business groups and trade unions.

The CLRG is unique and is not replicated in neighbouring jurisdictions. It has the advantage of gathering together all these stakeholders to identify issues, review the law and design solutions for consideration by the Minister. The past two and a half years has seen two particular initiatives that originated at CLRG and which led to the prompt enactment of statutes, namely, the 2020 Act, which amended the Companies Act in the light of Covid thus allowing for virtual meetings, and the Companies (Rescue Process for Small and Micro Companies) Act 2021, which introduced the small company administrative rescue process, SCARP. Ultimately, policy is designed by the Minister, not by the CLRG, but we are very happy to contribute to the development of that policy.

Our statutory functions are specified in section 959 of the Companies Act 2014. These include a requirement to monitor, review and advise the Minister on the Companies Act and the amendment of the Act; the introduction of legislation on the operation of companies and commercial practices; the rules of court; judgments of courts; issues arising from the State’s EU membership; international developments; and other related matters. In so doing we must seek to promote enterprise, facilitate commerce, simplify the operation of the 2014 Act, enhance corporate governance and encourage commercial probity.

The review group operates a two-year work programme, which is determined by the Minister. In the information materials provided to the committee this morning, the current work programme for 2022 to 2024 and the previous work programme for 2020 to 2022 are included. The CLRG works through expert committees that focus on particular aspects of law such as insolvency, governance, enforcement and public companies. We also have a standing committee to deal with urgent items requiring an immediate response.

The busiest committee has been our corporate insolvency committee, which is chaired by Professor Irene Lynch Fannon. The committee has produced five reports since 2018, as well as feeding into other reports. The issues that gave rise to this Bill have been subject to lengthy and detailed analysis by the corporate insolvency committee and the full CLRG. Our March 2021 report is the most relevant. The report reviewed existing legislative provisions regarding the provision of information to creditors generally and, in particular, employees. This took account of the 2017 CLRG report on the protections for employees and unsecured creditors, and the Duffy Cahill report of 2016. In summary, the review group considered but did not recommend what is proposed in section 2 of the Bill, which is the expansion of the class of preferential payments. Professor Lynch Fannon and I will be happy to explain the review group’s reasoning in our question and answer session. The review group has not considered what is proposed in section 3.

We look forward to discussing these matters with the committee. Our responses will aim to explain the consensus, or near consensus, of the CLRG on these matters. The review group has, since its establishment, sought to arrive at a consensus in its reports to reflect the diverse perspectives and interests of company law stakeholders.