Eamon Scanlon (Sligo-North Leitrim, Fianna Fail)

I welcome the opportunity to speak on this Bill. There is no doubt that it is a tough time to be in business. I am acutely aware that the current economic difficulties are having a profound effect on businesses, particularly small businesses. The importance of these companies to the economy ought not to be underestimated. They are key to maintaining jobs and improving growth as we emerge from the global financial crisis. By supporting small and medium-sized businesses, we are supporting the country's economic recovery.

One of the most pressing issues facing small businesses is a lack of access to credit and cash flow. This has made it very difficult to engage in the most basic of trading procedures, namely, paying bills and receiving payment for goods and services. The Government is well aware of the range of difficulties being faced by SMEs. In matters relating to payment, it has led by example with the introduction of measures to ensure prompt payments. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, recently announced a measure that will see Departments paying business suppliers within 15 days instead of 30 days. In addition, the enterprise stabilisation fund will provide €100 million over the next two years for SMEs.

I welcome any move that highlights the value of small and medium-sized businesses to the economy.

While I accept the spirit of the Bill, I nonetheless support the proposal by the Department of Justice, Equality and Law Reform to defer the reading for six months. This will allow the Department, in consultation with the Department of Enterprise, Trade and Employment, to complete a review of the situation. It will provide a detailed impact assessment of the proposed expansion and it is envisaged that suitable proposals will be brought forward in the autumn.

Although I accept the objectives of the Bill in principle, I have a number of concerns relating to the details. First and foremost, it must be remembered that the raison d'être of the small claims procedure is to provide a pro-consumer mechanism to resolve minor claims, in a relatively speedy and efficient way, without the need for legal representation. The way in which the Bill is currently drafted could have a negative impact on individual and small businesses. Essentially, I am concerned that businesses would use this procedure to pursue small claims against individual consumers. The last thing we need in these economic circumstances is to exacerbate the vulnerable position of consumers.

While I understand the benefits of businesses taking certain small claims, for example when difficulties arise in securing payment for good and services on credit terms, the procedure ought to be restricted to small businesses. I would not like to see a situation arising whereby a large scale business such as a bank could use the small claims procedure to pursue consumers or small businesses for relatively small debts.

The legalities of expanding the small claims procedure to include small businesses remain to be clarified. The existing mechanism was introduced by amending the rules of the District Court. It is not yet clear whether the small claims mechanism can be changed simply by amending the rules of the District Court or whether primary legislation will be required.

Furthermore, the majority of small businesses are limited liability companies and it appears Irish case law may require companies such as these to engage legal representation. It would be highly undesirable to overly complicate the small claims procedure. Therefore, I welcome the fact that the Minister for Justice, Equality and Law Reform, Deputy Ahern, will seek legal advice on the matter from the Attorney General.

Regarding the threshold of claims, the current limit is €2,000. These limits are kept under review by the Department of Justice, Equality and Law Reform. It should be noted that it, in consultation with the Department of Enterprise, Trade and Employment, is currently reviewing this threshold.

Before I came into the Chamber this evening, I spoke to a constituent who runs a small business and employs four people. His business is not currently making money, but he is surviving. His biggest worries at the moment are rates. He was able to pay half his rates in 2008, but finds he is now unable to pay the other half. His rate bill is some €9,000 per year. A number of Deputies mentioned this issue and I ask the Minister to request that local authorities take a pragmatic approach to small business employing people because they are finding it difficult to make such payments. Everybody likes to pay their bills. The people to whom I refer want to pay their bills but unfortunately, they have to decide whether to keep people working or pay rates or water charges, which is another serious issue.

I am very conscious of the importance of small and medium sized businesses to the economy. I recognise the need to support them in their efforts to maintain jobs. Given the absolute necessity for businesses to access credit and cash flow, I accept the objectives of the Bill in principle, but propose the reading of it be deferred for a number of months.

See this speech in context