Feargal Quinn (Independent)

The Minister of State, Deputy Curran, stated in the course of his introduction, "The aim of this Bill is ensure that people who cannot afford to pay will not be subject to imprisonment and that those who can, but simply choose not to, may face imprisonment". We all support that objective. However, Senator Regan makes the valid point that we want to ensure this is good legislation. To rush through all Stages of the Bill with so little opportunity for debate is sinful. I urge reconsideration in this regard.

I expressed concern in this House some weeks ago regarding the position of a man who has deserted his family and against whom a maintenance order has been made. Could such a person exploit this legislation in some way to avoid making payments? Senator O'Donovan referred to an attitude taken by some people to the effect that their debts would only be repaid over their dead body. This approach is sometimes taken in cases of a personal nature. I ask the Minister of State to put my mind at rest on the issue.

Last year, 276 people were sent to jail for an average of three weeks for non-payment of civil debts. In one case, a debtor was sent to prison over a debt of €1,700. The cost to the taxpayer for the three-month sentence imposed on the individual in question was €20,000. The free legal advice centres, FLAC, carried out a survey which revealed that a high number of debtors - 79% - had dependent children. That most of those who were imprisoned for non-payment of debts were aged between 40 and 50 years dispels the myth that the most indebted group is in a younger age bracket.

The United Nations Committee on Human Rights drew attention to Ireland three times in this regard. In its view imprisonment is an inappropriate response to debt. While reform is necessary, the Bill has the potential to become a quick fix solution because it is not ideal for addressing the fundamentally flawed and outdated legislation which has been in place since 1940. I ask the Minister of State to put my mind at rest on this issue also.

A report by FLAC entitled, To No One's Credit, examines the debt enforcement procedures of the courts through the eyes of debtors caught up in the process. The report shows that new solutions are required to meet the current test of unprecedented personal over-indebtedness we have experienced in recent years. The money advice and budgeting service, MABS, has indicated it has an unprecedented number of new clients. It is estimated that only one in five debtors attends hearings to assess his or her ability to repay debts and decide whether imprisonment should follow his or her failure to pay. The reason for this low figure must in part be that such hearings take place in open court, usually near to where the debtor lives. In FLAC's experience, such a public place naturally puts off participation. Moreover, only 50% of participants in this process have legal representation. In light of these figures, the Minister of State has provided a good explanation for the steps being taken in the legislation.

The lack of access to advisory services at an early stage - before the person's financial circumstances worsen - is also a barrier. Only one in three of those who managed to engage with their problem at court level had any contact with court staff or officials. Among the findings of the FLAC report is that three out of four of those surveyed failed to understand the language of the legal documentation served on them. For this reason, the Minister of State should accept an amendment to preclude such circumstances from arising in future.

The FLAC survey also found that the overwhelming majority of those surveyed did not understand the consequences of the court proceedings being threatened by the lender. The enforcement of court order legislation is in need of a complete overhaul as opposed to adjustments forced upon the State by the High Court decision of Ms Justice Laffoy.

Non-payment of debt is expensive to the State and has a terrible effect on those involved. The system in place for debtors is inherently unfair. The wider debt enforcement overview will be reported upon by the Law Reform Commission later this year and I look forward to examining its recommendations for addressing this important issue.

The free legal advice centres have called on the Government to consider a South African style national credit Act to ban irresponsible lending to protect vulnerable debtors. Two years ago, the South African Government established an agency to implement new consumer laws in a bid to curb reckless lending and reduce over-indebtedness. This model should be examined more closely in light of the major problems being experienced here with loan sharks and other financial lenders to whom people are increasingly turning and who may legally charge interest of 180% on loans. Some of the problems are caused by such practices. The model could provide a means of avoiding cases coming before the courts in the first instance.