Mattie McGrath (Tipperary South, Fianna Fail)

The Government is very conscious that businesses in Ireland and, in particular, small businesses have been significantly affected by the very difficult economic situation the country is currently experiencing. Equally, this Government is very much aware that small and medium sized businesses are key to maintaining employment in the immediate future and to growing the national economy as we move through the current global financial crisis.

It is clear small businesses have faced difficulties in terms of the availability of credit and cash flow, and this has manifested itself in terms of problems being faced in making and receiving payment for goods and services. As a result, the Government has taken specific measures to assist small businesses and the enterprise sector to ensure access to credit. The Minister for Justice, Equality and Law Reform, Deputy Ahern, therefore accepts the objectives of the Bill in principle, but proposes the reading be deferred for a period of six months to ensure his Department, in consultation with the Department of Enterprise, Trade and Employment, can complete a review, including a detailed impact assessment of the proposed expansion, with a view to bringing forward suitable proposals in the autumn.

There are a number of concerns about the details of the Bill, as drafted. It could have a number of negative consequences for individual consumers and small businesses alike. The intent of the small claims procedure has always been one of a pro-consumer mechanism to resolve minor claims in a relatively speedy and efficient way, without the need for legal representation. This is very important and we must maintain it at all times.

The Government is anxious to maintain the pro-consumer aspects of the procedure and would not wish to see it being used by businesses to pursue small claims against individual consumers. Such a development could make consumers even more vulnerable in the current economic circumstances.

There is merit in allowing for certain small claims by one business against another business. This is particularly the case when many small businesses have encountered difficulty in securing payment for goods and services provided on credit terms. However, it might be appropriate to restrict the measure to small businesses. It would, for example, be totally inappropriate to create a situation whereby large-scale businesses, such as utility companies or banks, could use the small claims procedure to pursue consumers or small businesses for relatively small debts.

The Minister for Justice, Equality and Law Reform, Deputy Ahern, will consult the Tánaiste and Attorney General in regard to the appropriate mechanisms to ensure that widening the scope of the small claims procedure can be targeted appropriately. I compliment the staff of the small claims section in south Tipperary for the work they have done in resolving many disputes.

Subject to legal advices, primary legislation may not be necessary. The existing small claims procedure was introduced by amending the rules of the District Court. It remains to be clarified whether an amendment to the rules will be sufficient to allow for the inclusion of small businesses within the small claims procedure. The majority of small businesses are limited liability companies. It appears Irish case law may require limited liability companies to engage legal representation in domestic proceedings. Detailed legal advice is required on this matter.

Failure to attend to this consideration could overly complicate the small claims procedure and we must avoid that at all costs, and could result in negligible savings to the small companies concerned. The Minister for Justice, Equality and Law Reform, Deputy Ahern, will seek the advice of the Attorney General to ensure legal representation will not be required for small firms using any extended small claims procedures.

As we all know, small businesses in Ireland are the backbone of our business community. In these very challenging times, we have seen many large companies pull out of Ireland, blaming a lack of competitiveness. We know small businesses are providing jobs and need our support. I hope the Minister and his officials do not delay the difficult examination of the proposed Bill which they must do, so it can come before the House in early autumn.

Many small business will disappear if we do not give them the support they need and ensure our banking system provides them with the lifeblood of their business and livelihoods, which is credit. I condemn the banks, because they are not doing that and are not meeting the needs of small businesses in rural Ireland. By not doing so, they are not allowing businesses to expand or continue at their current level. In many cases, businesses are being forced to shed staff, which is bad for all areas, be they rural towns, villages or wherever. The sooner the Minister can comply with the different measures and introduce the Bill the House, the better. I commend it.

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