Paul Kehoe (Wexford, Fine Gael) | Oireachtas source

I thank the Deputies for raising this issue. The Legal Aid Board recently notified some changes to professional fees payable to lawyers and personal insolvency practitioners in cases that are legally aided under Abhaile. I should emphasise these measures do not reduce the protections afforded to borrowers under Abhaile, as has been claimed by the Deputy.

Under section 115A of the Personal Insolvency Act 2012, if creditors refuse a reasonable personal insolvency proposal by a borrower to resolve his or her mortgage arrears, the borrower’s PIP can apply to the court for review. The court has power to impose the proposal on creditors if satisfied that it is fair and reasonable to all parties.

Where legal aid is approved for a court review under Abhaile, the Legal Aid Board pays set fees to the PIP, the solicitor, the junior counsel and, where needed, the senior counsel representing the borrower. Under Abhaile, the Legal Aid Board has already approved legal aid for more than 1,000 court review applications. Some 64% of these were decided in favour of the borrower in the year ending June 2018.

Two reasonable changes have been introduced to the fees for all professionals. First, the full fee will not be payable in undefended cases, that is, where no creditor opposes the court review. Second, personal insolvency cases often involve parallel applications by both partners where a couple has the same home mortgage. In practice, the vast majority of parallel applications are treated by the courts as single cases. There is no reason for taxpayers to cover two full fees in such cases. A full fee will be paid for one spouse and a reduced fee, equal to 10% of the full fee, will be paid for the second spouse in order to represent the actual extra work involved. There is no change to the legal aid fees payable to the PIP and the solicitor for a defended personal insolvency court review.

Barristers’ fixed fees are being reduced, but only to bring them into line with fees payable to them in other areas of civil legal aid where complex legal or procedural issues arise. It is not correct that borrowers will be left without barristers to argue their case.

Barristers will not be approved automatically. In undefended cases, for example, there may be no need for a barrister, but the Legal Aid Board has expressly underlined that counsel will be approved where a creditor is raising legal issues that need to be argued by a barrister or in exceptional circumstances.

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