Seán Sherlock (Cork East, Labour)

The legislation is based on a challenge to section 6 of the Enforcement of Court Orders Act 1940, which provides that where a debtor has an instalment plan to pay a debt and fails to discharge that obligation, the creditor may apply to the District Court for the arrest and imprisonment of the debtor.

The Free Legal Aid Centres, FLAC, in its opinion, states the Enforcement of Court Orders (Amendment) Bill 2009 confines itself to remedying the constitutional deficiencies identified by the High Court in the McCann case and this is the most fundamental point. Political and legal arguments were well made by my colleague, Senator Alex White, on the Bill in question and particular reference was made to the instigation of an attachment of earnings procedure when cases come before the courts for non-payment of debt. I have made provision for this argument by way of proposed amendment to the Bill to reflect that view.

We should also take cognisance of the fact that the Minister for Justice, Equality and Law Reform has indicated that the Department will await the Law Reform Commission's consultation paper on debt enforcement before taking any further action in this area. Will the Minister give a commitment to legislate for this and, in particular, that aspect of the Laffoy judgment on attachment of earnings? The Law Reform Commission's report will be most welcome but if it does not give voice to legislation almost immediately then I suggest the inherent problems will continue.

I acknowledge FLAC's comments in that regard and it should also be noted that its report, To No One's Credit, published on 6 July, proposes a wide range of recommendations for change in this area. The FLAC position paper states: "These are welcome changes to the existing legislation but it must be said that they only address the last step in what is a complex and less than user friendly procedure that takes place in open court and is in need of comprehensive reform generally." The report points out that while the Bill contains welcome changes necessitated by the McCann judgment, it does not go far enough in that it still contemplates imprisonment as a sanction for debtors. Although it will improve the current position, it is akin to placing a sticking plaster on an open wound, namely, our shameful policy of continuing to imprison people who for genuine reasons cannot pay their debts as opposed to refusing to do so. We must make the distinction between those who cannot and those who simply will not pay their debts.

FLAC suggests that the State moves towards the removal of imprisonment as an option in debt cases and instead employs effective non-penal remedies to enforce compliance with civil debt judgments. I hope the Law Reform Commission would give greater voice to this aspiration. There is merit to this argument but the complete removal of the sanction of prison is not a vista that we would support at present, particularly with regard to family law matters.

In introducing the Bill in the Seanad, the Minister of State said:

The High Court found that the existing legislation lacked a number of necessary safeguards in circumstances where a person is at risk of imprisonment. The judgment stated that, while this process had traditionally been regarded as a civil matter, its effect was akin to a criminal one and the debtor was entitled to similar protections. There was particular concern that the 1940 Act did not appear to require a person to be heard by a court before being imprisoned. Following a default on an instalment order made by the District Court, a creditor could apply to the court for a committal order and even in the case of the non-appearance of a debtor, committal orders could be, and were, granted by the District Court.

The new section 6 addresses this and we will not seek to amend it in that regard. I believe we must give voice to the McCann judgment and deal with it immediately. However, whether the legislation deals with the Laffoy judgment in its entirety is another matter.

In the debate in the Seanad, my colleague rightly asked how a debtor could be imprisoned without any requirement that the District Court would first have to decide whether the non-payment was due to an inability to pay or a refusal to pay. This seems a fundamental point, but it was not an area of the law with which many of us were familiar until the judgment was made in this case. The judgment probably surprised people in that it deemed the area unconstitutional, which necessitated legislation. I could not understand how it could be justified as a law. It seemed to require a change. It seems basic that fair procedures should be available for a hearing before the courts dealing with the possible imprisonment of a debtor.

The Labour Party acknowledges this is serious legislation, as it involves the potential imprisonment of people for non-payment of debt. We also acknowledge that serious issues were raised in the judgment of Laffoy in the McCann case. We need to discuss those issues in greater detail. The question for the House is whether this legislation is drafted to take cognisance of the difference between those who cannot pay and those who will not pay and whether the application of criminal procedures against debtors who fail to discharge their debts is reasonable.

The fact that the imprisonment order made against Ms McCann would have been carried out if she had not taken the action shows that a person could be deprived of his or her freedom, regardless of whether he or she was deliberately flouting the law or could not simply pay their debts. In that case, the respondents had informed the court that they would vary the instalments, but that the debt would still stand. This was widely reported in the media at the time and The Irish Times of 27 June stated that Judge Neilan said he would remand all committal and many enforcement matters to the end of November, when it might be clear if the Laffoy decision would be appealed to the Supreme Court or if legislators would take action. We are taking action today, but it still remains unclear whether the Government has adequately dealt with the Laffoy judgment as it pertains to attachment of earnings procedures.

The question remains as to whether we should vote against the Bill on the basis that the findings within the Laffoy judgment are not implemented in their entirety in this legislation or whether we should revert to the 1940 Act. I suggest we should not revert to the 1940 Act but that a response is required. I feel the response is delivered in the legislation, although the Labour Party still finds the legislation somewhat flawed. It remains to be seen whether the lack of a provision in this regard will be challenged once the Bill is passed.

We must legislate to ensure that maintenance orders are enforced and upheld and ensure that the threat and potential for imprisonment remain. On the enforcement of maintenance orders, the current situation in this regard is unclear in light of the McCann judgment and until the implementation of this legislation. District Court clerks must maintain those orders, but the situation as to their standing is unclear. Is there an issue with regard to time constraints, from the time of the McCann judgment up to the implementation of this legislation? People seeking maintenance through maintenance orders wonder whether they will be affected adversely and whether the orders will be enforced. They want to know what direction the Minister will give to the Attorney General with regard to advice to court clerks on the matter of what they should do next about those orders once the legislation is passed. There is significant confusion and concern in this regard.

I understand that in one area in the west up to 200 maintenance orders have been put in abeyance as a result of the lack of implementation of the legislation. Will the Minister address that in his response? I may be missing the point, but if Judge Neilan made a judgment he would not do anything until such time as the legislation was passed, we need to find out exactly what the effect the passing of the legislation will have on the issuing of maintenance orders. We must legislate to ensure that maintenance orders are enforced and that the Minister maintains the potential threat of imprisonment where they are not paid.

The attachment of earnings procedure could still be incorporated in the Bill. The changes in the Bill will, in some circumstances, put an end to the sentence of imprisonment of a debtor in his her absence and alter the onus of proof in these cases so that it is now for the creditor to establish that the debtor's failure to pay instalments was either due to wilful refusal or culpable neglect. This is as suggested by FLAC. This shifts the balance away from the debtor to the creditor but allows for the possibility for the creditor to reclaim the debt or part of it. This concept, however, gives rise to some difficulty for the Labour Party. We seek to amend the legislation to reflect the fact that in her judgment Judge Laffoy spoke specifically about the issue of attachment of earnings procedures.

The Minister of State in his response to the Fine Gael amendment moved in the Seanad stated that the question of attachments of earnings - the substantive basis of the amendment - and of the whole area of attachments of earnings to social welfare payments had been considered by the Government, both in this Bill and in the Fines Bill. The conclusion, however, was that it would be problematic and difficult to operate fairly. The amendment also acknowledged that it would be necessary to include attachments to social welfare payments, but that this might not be the best time to try to do that. There would also be practical difficulties that would need to be overcome where persons in temporary employment were concerned.

I question the logic of such an approach. If the Law Reform Commission is going to consider the issue of debt and seek solutions by way of legislation, we must consider the range of options available. I contend the attachment of earnings procedure is one such option. This already operates within the family law system and I see no reason that it cannot operate within other areas of civil debt. In the Seanad the Minister of State said the attachment of earnings procedure presented a difficulty. If the difficulty is due to the cost factor or if it is an administrative difficulty, what is the logic of his argument? If the ultimate aim is to keep people out of prison, the cost of administration of such a scheme would be far less than the cost of imprisonment. There is logic in considering the attachment of earnings procedure and including it in the legislation. That would be the way to go. The Minister of State said people had been imprisoned for not adhering to maintenance orders, but with regard to civil debt, one could instigate such procedures.

Senator Bacik, when speaking in the Seanad and addressing the Fine Gael amendment said it is eminently sensible since it proposes a different regime as an alternative to the sanction of imprisonment being imposed upon a debtor, and rather than imprisonment, it envisages an attachment of income or welfare order that would be made to address circumstances where somebody is unable or unwilling to pay debts.

We agree with this approach and have tabled amendments to that effect. We still need to go back to the judgment of Ms Justice Laffoy, who refers to Article 11 of the UN International Covenant on Civil and Political Rights. It states: "No one shall be imprisoned merely because of their inability to fulfil a contractual obligation." The principle in international law that people should not be imprisoned merely because of their inability to fulfil a contractual obligation is clear and we are in breach of it.

Although there are improvements to the current situation in this Bill, which were necessitated by the McCann judgment, the fundamental principle upon which the current system is premised, namely, that people can be imprisoned for non-payment of debt remains in place. What was the point of imprisoning Ms McCann? It is fair to assume that the vast majority of those before the courts are people with little or no means or without the necessary life skills, in some instances, to manage household income.

The idea that someone would be subjected to a committal order without having engaged in any process before a judge speaks volumes about the arcane, archaic and outmoded and borrowed common law procedures which form part of this system. Even when someone receives documentation regarding the discharging of a debt, the chances are that they are intimidated by a language that is far from simple and is typical of a bygone age. I am glad this is being dealt with in the Bill.

The State must immediately begin the process of changing the arcane procedures regarding the discharging of debt. It is one thing for us to change the legislation, but the question then arises as to when the section 6 provisions will kick in and whether we will see a revolution in the courts regarding their arcane procedures and the type of language they use, and whether they will change overnight. I suggest they will not and that many people who present themselves to the courts will be as confused as ever. Until we develop a language for the law that reflects modernity - if I can use that word - we will still have situations like the McCann case.

See this speech in context