Ms Nessa Cahill:

I am happy to do that. The first issue the Deputy raised is the threshold for invoking section 608 of the Companies Act. I hope I was not unclear earlier but that provision does not refer to fraudulent intent. It does not hinge on the intent of the transaction at all. What it refers to is the fraudulent effect of the transaction and there is a significant difference between the two. The courts have emphasised strongly that it is not about looking at what the parties intended but the effect of the transaction.

It is important to note also that there is a carve-out to that provision in the Companies Acts, which requires the court to consider whether it is just and equitable to make such an order. That includes considerations of whether the transaction was to a person who acquired the asset bona fide believing that it was a genuine transaction. There are different elements to section 608 and they are important. I hear fully what the Deputy said about the importance of companies being able to transfer assets freely without the risk of them being unwound. There are a number of layers to section 608 but fraudulent intent is not one of them. It is very important to be conscious of that. The question is the deprivation of assets out of the company that has become insolvent.

The second question the Deputy raised has to do with cost. He is correct that we say in the report that it appears to us, and anecdotally, to be likely that one of the reasons the Companies Acts provisions are not used is to do with cost. The Company Law Review Group, which studied these matters in much more detail than myself and Mr. Duffy, also identified that as being anecdotally the reason some of the Companies Acts provisions, which are carefully crafted provisions, are not used. It identified cost as also being the issue.

One of the solutions we flag in the report, and we do not purport to draft this or to show exactly how it would be put into practice and into legislation, is the possibility that the Minister, as a significant creditor, if there is a big shortfall in the payment of workers, could then step in and fund the liquidator to recover assets of this nature. That is just one way we see as possibly enhancing the use of these provisions. It would not be an answer or an option in every case.

Policy-wise, it may not even be an attractive option, but we have put it forward as a potential way of dealing with the issue of the cost associated with applications of this nature. The Company Law Review Group talked about issues of potential third-party funding for litigation, but we do not address that in our report.