David Norris (Independent)

I move amendment No. 19:

In page 14, lines 22 to 29, to delete subsection (2) and substitute the following:

"(2) Any default in the relationship/agreement between the Charity and the State Agency/Public body whereby the Charity would be at a loss, would not be counted as such where the Charity has little or no option but to comply with standards/practices set out by the particular body. In such a case, the individual trustees/Directors of the Charity cannot be held liable.".

I referred to my objective in this amendment on Second Stage. If I recall correctly, the Minister attempted to answer my concern by reference to insurance clauses and so on in the Bill. I have since had further communication from the briefing groups, which continue to have concerns in this area which are not met by the existence of the insurance clause. They are of the view that this clause does not eliminate the risk for trustees and directors for several reasons. First, the term "acting in good faith" limits the scope of the policy. If, for example, a charity continues to enter into agreements with the HSE knowing the HSE will probably default, which happened in the case of the day centre in Tolka Valley operated by Respond, the insurer can simply refuse to pay, claiming the director or trustee did not act in good faith. While one might ask why a charity would continually enter such agreements to deliver much needed services in the community, charities are forced to enter into agreements with State bodies in such instances. In other words, they are compelled to take action that might invalidate their insurance. In addition, it is doubtful whether insurance companies would supply the level of insurance required in the first place. The insurance companies might experience hesitation in circumstances where there was a prior indication of a possibility of defaulting.

Second, what would be the cost of such insurance? Considering that Respond, for example, has developments valued at €45 million, which is a very substantial sum, it would simply not be in a position to insure against withdrawal of State funding for such developments, which could happen, especially in the current parlous circumstances. Third, the insurance would not remove the debt. Charities would still be liable. This could involve substantial sums, perhaps up to several million euro.

Fourth, the insurance would not remove the potential of a criminal record for the director. This is a very serious matter. Even if it might just be a technical conviction, it would still be a criminal record. That would prevent the person going to the United States, for example. The impact this could have on voluntary directors could be disastrous. Two directors of the Respond charity are also directors of their family businesses. If criminal proceedings were taken against them, they would be forced to withdraw as directors from their family businesses. Finally, the reputation of a voluntary director would be tainted forever if he or she was found not to have acted in good faith by entering into agreements with State bodies where there existed a high risk of default by the State body.

For these very practical reasons this amendment should be viewed charitably by the Minister.