Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)

I welcome the opportunity to speak on this Bill. Bille rí-thábhachtach atá i gceist leis An Bille um Fhorfheidhmiú Orduithe Cúirte (Leasú) 2009. Tá muid ag déileáil anseo le gnáth daoine agus tá sé tábhachtach go dtuigeann muid gur daoine leochaileacha atá i gceist. Is daoine iad seo don chuid is mó nach raibh os comhair na cúirte go dtí seo ach a mbeidh os comhair na cúirte amach anseo. Daoine iad atá in ísle brí don chuid is mó. Is minic nach dtuigeann siad cad atá os a gcomhair nó cén fáth gur tógadh os comhair na cúirte iad.

Ní thuigeann daoine, b'fhéidir, cé chomh leochaileach agus atá na daoine seo. Measaim go bhfeicfidh muid i bhfad níos mó daoine sa gruachás céanna ná bhí le feiscint le blianta anuas. Anuraidh, cuireadh 279 i bpriosún de thairbhe na fiacha a bhí orthu gan a bheith íoctha agus cuireadh breis agus 200 i bpriosún na blianta roimhe sin. Cheana féin i mbliana tá suas le 186 curtha i bpriosún. Ba chóir dúinn déileáil leis an fhadb seo sa Bhille seo. Fáiltím roimh an Bille mar is Bille maith é don chuid is mó, ach ba chóir dúinn déileáil i bhfad Éireann níos tapúla leis na fadhbanna a bhaineann leis an mbun reachtaíocht. Tá súil agam go mbeidh an Law Reform Commission in ann déileáil leo go tapaidh agus go dtiocfaidh reachtaíocht nua ar aghaidh cuíosach tapaidh ina dhiaidh sin.

The Enforcement of Court Orders (Amendment) Bill provides welcome changes to the fundamentally flawed and draconian Enforcement of Court Orders Act 1940. Last year, 276 people were put into prison for non-payment of debt. As the Minister stated, the corresponding number thus far this year is 186, although we have only recently passed the half way stage. It is clear most of these costly incarcerations and the subsequent personal anguish, deepening poverty and the ongoing discrimination experienced by many of those affected could have been avoided had aspects of the 1940 Act been reformed more quickly.

I welcome that we are addressing one part of this today, albeit on foot of a recent court judgment. It is a pity we have been obliged to wait until now. I welcome that the Law Reform Commission will address this area and hopefully it will do so quickly and without a timeframe, given the significant level of indebtedness in society today.

We must be prepared to address that legislation as soon as the Law Reform Commission makes its findings. Within a number of months I hope there will be a change in our attitudes towards indebtedness and the non-payment of fines and debt. In a study launched last week conducted by FLAC, Free Legal Advice Centres, entitled To No Ones Credit, three out of four debtors surveyed claimed not to have understood the full consequences of the proceedings or the options available to them. That is a catastrophe and indicates how the legal system stands and sometimes works against rather than for the citizen.

In the current economic climate, many have found themselves falling deeper and deeper into debt due to job losses, reduced wages, short-time working and business failure, combined with an increased tax burden. Given this, the onset of spiralling debt is blatantly predictable. It is paramount the Government provides in its legislation an alternative to costly imprisonment for non-payment of debts and fines. The current reforms address a way in which debtors might improve their chances of avoiding imprisonment, which I welcome. I also welcome the clarity of the Minister's suggestion in section 7. However, imprisonment remains the preferred option in the end and I do not believe this should be the case. It is a lazy and costly solution. Ultimately, imprisonment does not result in a guarantee of payment to the creditor. Has consideration been given to community service as the primary penalty for small cases of non-payment of debt? In such lesser cases the seizure of goods and assets should or may be an end as well and should not necessarily be followed by a succession of crippling demands after the goods have been seized. That may be an option.

Noeleen Blackwell from FLAC rightly pointed out that debt enforcement in this country has devastating and largely pointless human costs. I condemn the Government decision, which I have raised several times regarding money lenders charging interest rates of up to 195%. I refer to the comments of Noeleen Blackwell. She stated there is a system of modern day loan sharks with a licence to rob. She called on the Government to bring forward urgently further legislation to reduce the maximum interest that may be charged and to ensure that anyone who has no choice but to default on a loan from a money lender, retail credit firm or hire purchase company, because they are simply unable to make the repayments, is protected from financial demands for payments well in excess of the value of the purchased item.

I will provide several examples and I refer to the money lenders register. Some 49 companies are registered by the Financial Regulator to engage in the business of money lending under the Consumer Credit Act, some of which are reputable companies and act within the law and some of which are simply catalogue companies of larger companies. I have no beef with these. However, of the 49 licensed companies, some 32 charge rates of more than 100%, 17 charge rates of more than 150% on loans and one company, namely, Southside Finance Limited, charges a rate of 188.45% on loans, on top of which it charges seven cent in the euro as a collection charge. That is highway robbery in any language. Anyone who ends up approaching that company must be in dire straits and I do not understand how such companies are regulated or how they are allowed to charge such a rate. There are other companies including, in the Taoiseach's area of Tullamore, Green Fields Financial Services which charges a rate of 187.22%. I could list more but that is the scale of the business.

The extent of indebtedness in our society is very large and well beyond anything that has gone before as a percentage of income. The numbers suffering over-indebtedness in the 26 counties is rising and the figure for non-housing and non-investment related unpaid credit balances rose from €3.9 billion in the second quarter of 1999 to €18.8 billion in the third quarter of 2008. That is the scale of the problem and that will be a source of difficulty given the recession job losses and with the availability of money becoming tighter. We will end up with many more people coming before the courts because they cannot afford to pay the debt into which they sank when times were easier for some.

People are not stupid either and some signed up knowingly. However, some did not understand the consequences and that was one of the findings of the report to which I referred earlier. Some such people may not have fully understood the consequences and this is one of the issues which must be fully addressed. Plain language must be used. The plain English campaign exists to ensure that documents are used which people can understand and it attempts to help them to understand legislation. When people sign contracts, they should understand the consequences and if they are illiterate, the full consequences should be spelt out to them chapter and verse.

Community service should be a primary penalty and it might be a mechanism which could be introduced. Perhaps if it was carried out, the State might be able to pay back some of the debt to the credit companies, based on the work done by the person on community service. This is worth looking at.

FLAC's senior policy officer stated when presenting the report: "The whole process of debt enforcement in Ireland almost seems designed to exclude the debtor from both understanding and fully taking part in it." He further stated: "Apart from the risk of individual human rights violations involved, which has been noted by the UN, our penal system does not in any way actually improve the debt problem in Ireland." This is the key point. The penal system does not improve the debt problem.

It has been a lengthy and arduous process in arriving at some reform. While the Bill provides considerable improvements to the enforcement process, along with many others, I remain of the opinion that the reforms proposed could be stretched further. The Bill's three main changes are all welcome and I fully support them. They include an end to imprisonment of a debtor in his or her absence. I particularly welcome this provision.

A constituent of mine has agoraphobia and she was in complete panic when she received a fine for non-payment of her TV licence. She had not been out of her home properly in over seven years. Her son had recently moved out and she did not attend the court hearing. She never communicated with the authorities, which would have been advisable, because she is not illiterate but she was in a panic about dealing with the system. Many people do not like the system and they are afraid of it. They are afraid of the law, the courts and the police. This woman telephoned me in a panic because she had received notice of a fine for non-payment of her TV licence and with costs, amounting to more than €500. The woman is literate and has her full faculties but this is the effect it had on her and the effect would be much worse for anyone who is illiterate or with no money or in the depths of depression. We need to take such examples into consideration.

The Bill provides that a person with a debt must be present in court or be represented. I welcome the new provision for the possibility of legal aid for debtors. I also welcome the reversal of the onus of providing proof during the court process from the debtor to the creditor. However, reform in this area must go further. Between 2001 and 2007, approximately 200 persons a year were imprisoned as a result of debt. If this is the average since 1940, it would amount to 14,000 people in total having been imprisoned for debt.

Many people have been effectively criminalised simply for being poor. I will withdraw my Committee Stage amendment No. 4 which slipped through the net, given the week we have had in the House. It did not get proper scrutiny. People associate prisons with criminals and stigma results regardless of whether a conviction is recorded. I will ask on Committee Stage whether previous failure to pay a debt is taken into account in these type of proceedings.

We must go further and rectify the wrong done to the hundreds of people who were, in their absence, unfairly committed to prison for contempt of court or failure to comply with a relevant court order in their absence. These people may be continuing to experience stigma and related discrimination as a consequence of their committal to prison. For example, an employer may discriminate against a person who has been in prison because there is nothing to prevent an employer from refusing employment to someone who has been in prison. Many employers would not make the distinction between committal and conviction.

I am tabling an amendment to section 2 in regard to the proposed new section 6(4) of the 1940 Act. As currently drafted, the Bill provides that an arrested debtor shall be brought before the court "as soon as practicable". Such a person has not committed a violent crime and will not receive a criminal conviction. It should be provided that such a person should be brought to court within hours if not minutes so that no debtor is forced to spend the night in prison pending the next District Court hearing.

This legislation is one small reform to the end point of an outdated system. The court enforcement procedure operates against a backdrop of an outdated, constrained and extremely expensive bankruptcy system. We also have no personal insolvency system akin to the individual voluntary arrangements made available in recent years in England or to the type of repayment schemes that exist elsewhere in Europe.

In addition, greater resources must be made available to the Money Advice and Budgetary Service offices which are increasingly inundated with requests for help and which are operating in a near vacuum when it comes to statutory supports and systems to recover personal debt in a fair and humane way. We should explore ways of making financial and credit institutions foot some of the funding that is required by MABS. The Government has increased funding for MABS but it is nothing like what it should be. Companies who are charging 188.7% interest should make some long-term contribution to the Money Advice and Budgetary Service.

See this speech in context