Eugene Regan (Fine Gael)

I move amendment No. a1:

In page 3, before section 2, to insert the following new section:

"2.—The Act of 1940 is amended—

(a) by the repeal of sections 6 and 9, and

(b) by the insertion of the following sections after section 5:

"6.—Where a debtor is liable, by virtue of an instalment order, to pay a debt and costs either in one payment or by instalments and such debtor fails to make such payment or fails to pay any one or more of such instalments accruing due while such an order is in force at the time or times appointed in that behalf by such order, the creditor may, at any time while such order is in force or within 12 months after it has ceased to be in force, apply to a Justice of the District Court for an Attachment of Income Order.

7.—"Attachment of Income Orders" means an Order made under section 8 or section 17.

8.—(1) On application to the relevant court, by a creditor named in a court order, the court may make an attachment of earnings order.

(2) An attachment of earnings order—

(a) shall be an order directed to a person who (at the time of the making of the order or at any time thereafter) has the debtor in his or her employment, and

(b) shall operate as a direction to that person to make, at such intervals as may be specified in the order, deductions of specified amounts.

(3) An attachment of earnings order shall not be made without the consent of the debtor unless the court is satisfied that the debtor has, without reasonable excuse, defaulted in the making of any payment under a court order.

(4) An attachment of earnings order shall—

(a) specify the normal deduction rate, that is to say, the amount of the debtor's earnings which the court considers reasonable to be applied in satisfying the court order, but such rate should be no greater than is necessary for the purpose of—

(i) securing payment of the sums falling due from time to time under the court order, and

(ii) securing payment within a reasonable period of any sums already due and unpaid under the court order and any costs incurred in proceedings relating to the order which are payable by the debtor,

(b) specify the protected earnings rate, that is to say, the rate below which, having regard to the resources and the needs of the debtor, the court considers it proper that the debtor's earnings should not be reduced by a payment made in pursuance of the attachment of earnings order,

(c) contain such particulars as the court considers appropriate for the purpose of enabling the debtor to be identified by the person to whom the order is directed.

(5) The particular of an attachment to earnings order may be agreed on consent by the debtor and the creditor in advance the hearing of an application under this section and may be ruled on by the Court as an order under this section.

(6) Payments under an attachment of earnings order shall be in lieu of payments of the like total amount under the court order that have not been made and that, but for the attachment of earnings order, would fall to be made under the court order.

9.—(1) A court registrar or court clerk as may be specified by an attachment of earnings order shall cause the order to be served on the employer to whom it is directed and on any subsequent employer of the debtor and such service may be effected by leaving the order at, or sending the order or a copy of the order by pre-paid registered post to his or her place of business or residence in the State.

(2) Where an attachment of earnings order or an order varying it is made, the employer for the time being affected by it shall comply with it within 10 days of it being served on him or her.

(3) On any occasion where a person makes, in compliance with an attachment of earnings order, a deduction from a debtor's earnings, he or she shall give to the debtor a statement in writing of the total amount of the deduction.

(4) Where an attachment of earnings order is served on any person and—

(a) the debtor is not in his or her employment, or

(b) the debtor subsequently ceases to be in his or her employment, that person shall, within ten days from the date of service or, the date of cesser, give notice of that fact to the court.

(5) An order made under subsection (1) shall be confidential and the employer shall not make it known to any person other than those persons necessary for the payment of wages, and such persons shall themselves have a duty not to disclose the existence of an attachment of earnings order.

10.—Upon application to the court for an attachment of earnings order, or at any subsequent time which the court deems fit, the court may—

(a) order the debtor to give to the court, within a specified period, a statement in writing signed by him or her of—

(i) the name and address of any person by whom earnings are paid to him or her,

(ii) specified particulars as to his or her earnings and projected earnings and as to his or her resources and needs, and

(iii) specified particulars for enabling the debtor to be identified by any other employer, including any future employer,

(b) order any person appearing to the court who has the debtor in his or her employment to give to the court, within a specified period, a statement signed by that person, or on his or her behalf, of specified particulars of the debtor's earnings and projected earnings.

11.—Where an attachment of earnings order is in force—

(a) the debtor shall notify the court in writing, within 10 days of every occasion, in which he or she leaves any employment, or becomes employed or re-employed,

(b) the notice referred to in paragraph (a) shall include particulars of his or her earnings and projected earnings from the relevant employment,

(c) any person who becomes an employer of the debtor and has knowledge that an order is in force shall, within ten days of acquiring that knowledge, notify that court in writing that he or she is the debtor's employer, and include in the notification a statement of the debtor's earnings and projected earnings.

12.—(1) Where an attachment of earnings order is in force, the relevant court shall, on the application of—

(a) the employer concerned,

(b) the debtor, or

(c) the person to whom payments are being made under the order,

determine whether payments (or any portion thereof) to the debtor of a particular class or description specified by the application are earnings for the purpose of the order, and the employer shall give effect to any determination for the time being in force under this section.

(2) Where an application under this section is made by the employer, he or she shall not incur any liability for non-compliance with the order as respects any payments (or any portion thereof) of the class or description specified by the application which are made by him or her to the debtor while the application or any appeal in consequence thereof or any decision in relation to the application or appeal is pending, but this shall not, unless the court otherwise orders, apply as respects such payments (or any portion thereof) if the employer subsequently withdraws the application or abandons the appeal.

13.—(1) Where a debtor is in the service of the State, a local authority for the purposes of the Local Government Act 1941, a harbour authority within the meaning of the Harbours Act 1946, a health board, a vocational education committee established by the Vocational Education Act 1930, or a committee of agriculture established by the Agriculture Act 1931, or is a member of either House of the Oireachtas—

(a) in a case where a debtor in the service of the State is employed in a department, office, organisation, service, undertaking or other body, its chief officer (or such other officer as the Minister of State, by whom the department, office, organisation, service, undertaking or other body is administered, may from time to time designate) shall, for the purposes of this Act, be regarded as having the debtor in his or her employment,

(b) in a case where a debtor is in the service of such an authority, board or committee, its chief officer shall, for the purposes of this Act, be regarded as having the debtor in his or her employment,

(c) in any other case, where a debtor is paid out of the Central Fund or out of moneys provided by the Oireachtas, the Secretary General of the Department of Finance (or such other officer of the Minister for Finance as that Minister may from time to time designate) shall, for the purposes of this Act, be regarded as having the debtor in his or her employment, and

(d) any earnings of a debtor paid out of the Central Fund or out of moneys provided by the Oireachtas shall be regarded as paid by the chief officer referred to in paragraph (a) or (b), as the case may be, the Secretary General of the Department of Finance or such other officer as may be designated under paragraph (a) or

(c), as the case may be, as may be appropriate.

(2) If any question arises in proceedings for, or arising out of, an attachment of earnings order as to what department, office, organisation, service, undertaking or other body a debtor in the service of the State is employed in for the purposes of this section, the question may be referred to and determined by the Minister for Finance, but that Minister shall not be under any obligation to consider a reference under this subsection unless it is made by the Court.

(3) A document purporting to contain a determination of the Minister for Finance under subsection (2) and to be signed by an officer of the Minister for Finance shall, in any such proceedings as are mentioned in that subsection, be admissible in evidence and be deemed, unless the contrary is shown, to contain an accurate statement of that determination.

(4) In this section references to a debtor in the service of the State include references to a debtor to whom earnings are paid directly out of moneys provided by the Oireachtas.

14.—(1) The relevant court may, if it thinks fit, on the application of the creditor or the debtor, make an order discharging or varying the antecedent order.

(2) Where an order varying an attachment of earnings order is made under this section, the employer shall, within ten days of it having been served upon him or her, comply with its terms.

(3) Where an employer affected by an attachment of earnings order ceases to have the debtor in his or her employment, the order shall, in so far as that employer is concerned, lapse (except as respects deductions from earnings paid after the cesser by that employer and payment to the person in whose favour the order was made of deductions from earnings made at any time by the employer).

(4) The lapse of an order under subsection (3) shall not prevent its remaining in force for other purposes.

15.—(1) An attachment of earnings order shall cease to have effect upon the discharge of the court order.

(2) Where an attachment of earnings order ceases to have effect, the clerk or registrar of the relevant court shall give notice of the cesser to the employer.

16.—(1) Where an attachment of earnings order has been made, any proceedings commenced under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor shall lapse and any warrant or order issued or made under that section in any such proceedings shall cease to have effect.

(2) An attachment of earnings order shall cease to have effect upon the making of an order under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor.

17.—(1) The Minister for Social and Family Affairs shall make regulations to address circumstances where—

(a) a person who is entitled to income support, and

(b) has defaulted on the discharge of a court order,

so as to enable the court to make an order directing the Minister to deduct sums from any amounts, not below the protected welfare rate, payable to the debtor by way of income support, in order to secure the payment of any sum which is or forms part of the court order.

(2) The regulations shall specify the protected welfare rate, that is to say, the rate below which, having regard to the resources and the needs of the debtor, the Minister considers it proper that the debtor's income support should not be reduced by a payment made in pursuance of the attachment of earnings order and for the purpose of this section the protected welfare rate shall be prescribed by the Minister, to be reviewed annually.

(3) The regulations may include provision—

(a) that, before making an application, the court shall make an enquiry as to the debtor's means,

(b) allowing or requiring adjudication as regards an application, and provision as to appeals and reviews,

(c) as to the circumstances and manner in which and the times at which sums are to be deducted and paid,

(d) as to the calculation of such sums (which may include provision to secure that amount payable to the debtor by way of income support do not fall below prescribed figures),

(e) as to the circumstances in which the Minister is to cease making deductions,

(f) requiring the Minister to notify the debtor, in a prescribed manner and at any prescribed time, of the total amount of sums deducted up to the time of notification,

(g) that, where the whole amount to which the application relates has been paid, the court shall give notice of that fact to the Minister.

(4) In this section,"Minister" means Minister for Social and Family Affairs.".".

This amendment arises from the High Court judgment of Ms Justice Laffoy of 18 June 2009. She pointed out the constitutional flaws in the Enforcement of Court Orders Act 1940. While the Bill addresses some of the deficiencies in the Act, this amendment addresses one of the essential findings of the court, that there is no provision for adequate intermediate steps before the last resort of imprisonment is invoked by the courts or by a creditor.

It is an issue of proportionality because it interferes with the constitutional right of an individual to liberty. In her judgment she has expressly pointed out the futility of a procedure that puts people in prison, where the creditor does not benefit. In the judgment, she stated that a statutory procedure for enforcement of debt, under which the debtor may be imprisoned without there being a positive requirement that the court determine whether non-payment is due to inability to pay before making an order for arrest and imprisonment, is not only futile in terms of securing the creditor's remedy, but imposes unnecessary expense on the creditor and the State.

If the warrant for imprisonment of the plaintiff had been executed in this case, the plaintiff would have spent a month in Mountjoy Prison. The credit union which its counsel described as a not-for-profit co-operative financial service provider governed by the Credit Union Act 1997, as amended, would not have received the sum it claimed, or even a brass farthing, from the plaintiff. The credit union would have borne the cost of the proceedings for the instalment order and the application for the order for arrest and imprisonment. The State would have borne the cost of two District Court sittings, the execution of the warrant and the accommodation of the plaintiff in Mountjoy Prison for one month. Not only would the process have had no practical value in securing payment of the outstanding debt, or any part of it, it is difficult to see how it could be said to have any deterrent value.

The issues are efficiency, interference with the right to liberty, whether the measures in the Bill provide a proportionate response to that interference with liberty and whether the principle of proportionality is respected in providing for procedures that ensure that the deprivation of liberty and the imprisonment of a debtor is genuinely a last resort.

The Bill attempts to amend section 6 of the 1940 Act and deals with a number of issues that were raised by the judge in the court case. The Bill is designed to deal with the fall-out from that judgment and the implications for the recovery of debt. The amendment proposed, however, is a substitute for section 2. It is designed to provide for a procedure whereby an attachment of income is ordered as a substitute for imprisonment, which is to the benefit of creditors, eliminates the use of imprisonment to force the individual to pay a debt and is more efficient. The proposed amendment provides that:

Where a debtor is liable, by virtue of an instalment order, to pay a debt and costs either in one payment or by instalments and such debtor fails to make such payment or fails to pay any one or more of such instalments accruing due while such an order is in force at the time or times appointed in that behalf by such order, the creditor may, at any time while such order is in force or within 12 months after it has ceased to be in force, apply to a Justice of the District Court for an Attachment of Income Order.

This is defined in the amendment as an order under sections 8 and 17. On application to the relevant court by a creditor, the court may make an attachment of earnings order, which is defined as "an order directed to a person who...has the debtor in his or her employment". It is further stated that the order "shall operate as a direction to that person to make, at such intervals as may be specified in the order, deductions of specified amounts". The amendment provides that an attachment of earnings order "shall not be made without the consent of the debtor unless the court is satisfied that the debtor has, without reasonable excuse, defaulted in the making of any payment under a court order".

The amendment is self-explanatory. Subsection (4) of the proposed new section states:

An attachment of earnings order shall—

(a) specify the normal deduction rate, that is to say, the amount of the debtor's earnings which the court considers reasonable to be applied in satisfying the court order, but such rate should be no greater than is necessary for the purpose of—

(i) securing payment of the sums falling due from time to time under the court order, and

(ii) securing payment within a reasonable period of any sums already due and unpaid under the court order and any costs incurred in proceedings relating to the order which are payable by the debtor,

(b) specify the protected earnings rate, that is to say, the rate below which, having regard to the resources and the needs of the debtor, the court considers it proper that the debtor's earnings should not be reduced by a payment made in pursuance of the attachment of earnings order,

(c) contain such particulars as the court considers appropriate for the purpose of enabling the debtor to be identified by the person to whom the order is directed.

It continues:

(5) The particular of an attachment to earnings order may be agreed on consent by the debtor and the creditor in advance [of] the hearing of an application under this section and may be ruled on by the Court as an order under this section.

In many ways this procedure facilitates mediation or settlement. It provides for a meeting of minds on the debt. The procedure of the attachment of earnings or income order would enable the court to play a part in resolving such disputes.

Subsection (6) states:

Payments under an attachment of earnings order shall be in lieu of payments of the like total amount under the court order that have not been made and that, but for the attachment of earnings order, would fall to be made under the court order.

The amendment provides a procedure for compliance with the attachment of earnings order. The proposed section 9 provides:

A court registrar or court clerk as may be specified by an attachment of earnings order shall cause the order to be served on the employer to whom it is directed and on any subsequent employer of the debtor and such service may be effected by leaving the order at, or sending the order or a copy of the order by prepaid registered post to his or her place of business or residence in the State.

As I go through this amendment I must point out that it is a complex and important issue we are trying to deal with through this Bill. The amendment is complex but it also highlights the fact that we should not be rushing this legislation. It is futile and bad legislative procedure. If time was allowed both the Minister and the Department would be well served by giving adequate consideration to these amendments. I appreciate that the Minister is intent on rushing this and other legislation through the House. The Leader is following the directions of the Minister, but it is an abuse of the process of the House, as my colleague in the Dáil has said with regard to other legislation introduced by the Minister, to rush the legislation in this fashion.

Section 9 of the amendment provides that:

(2) Where an attachment of earnings order or an order varying it is made, the employer for the time being affected by it shall comply with it within 10 days of it being served on him or her.

(3) On any occasion where a person makes, in compliance with an attachment of earnings order, a deduction from a debtor's earnings, he or she shall give to the debtor a statement in writing of the total amount of the deduction.

(4) Where an attachment of earnings order is served on any person and—

(a) the debtor is not in his or her employment, or

(b) the debtor subsequently ceases to be in his or her employment, that person shall, within ten days from the date of service or, the date of cesser, give notice of that fact to the court.

(5) An order made under subsection (1) shall be confidential and the employer shall not make it known to any person other than those persons necessary for the payment of wages, and such persons shall themselves have a duty not to disclose the existence of an attachment of earnings order.

The provision on confidentiality is important. The amendment also provides that:

Upon application to the court for an attachment of earnings order, or at any subsequent time which the court deems fit, the court may—

(a) order the debtor to give to the court, within a specified period, a statement in writing signed by him or her of—

(i) the name and address of any person by whom earnings are paid to him or her,

(ii) specified particulars as to his or her earnings and projected earnings and as to his or her resources and needs, and

(iii) specified particulars for enabling the debtor to be identified by any other employer, including any future employer,

(b) order any person appearing to the court who has the debtor in his or her employment to give to the court, within a specified period, a statement signed by that person, or on his or her behalf, of specified particulars of the debtor's earnings and projected earnings.

The amendment also provides for notification of changes of employment and earnings in subsection (11), providing that:

Where an attachment of earnings order is in force—

(a) the debtor shall notify the court in writing, within 10 days of every occasion, in which he or she leaves any employment, or becomes employed or re-employed,

(b) the notice referred to in paragraph (a) shall include particulars of his or her earnings and projected earnings from the relevant employment,

(c) any person who becomes an employer of the debtor and has knowledge that an order is in force shall, within ten days of acquiring that knowledge, notify that court in writing that he or she is the debtor's employer, and include in the notification a statement of the debtor's earnings and projected earnings.

Another provision in the amendment is with regard to the power to determine whether particular payments are earnings. Section (12) states:

(1) Where an attachment of earnings order is in force, the relevant court shall, on the application of—

(a) the employer concerned,

(b) the debtor, or

(c) the person to whom payments are being made under the order,

determine whether payments (or any portion thereof) to the debtor of a particular class or description specified by the application are earnings for the purpose of the order, and the employer shall give effect to any determination for the time being in force under this section.

Subsection (2) states:

Where an application under this section is made by the employer, he or she shall not incur any liability for non-compliance with the order as respects any payments (or any portion thereof) of the class or description specified by the application which are made by him or her to the debtor while the application or any appeal in consequence thereof or any decision in relation to the application or appeal is pending, but this shall not, unless the court otherwise orders, apply as respects such payments (or any portion thereof) if the employer subsequently withdraws the application or abandons the appeal.

Section 13 relates to attachment orders in respect of debtors who are in the service of the State, local authorities and other such bodies. Subsection (1)(a) provides that "in a case where a debtor in the service of the State is employed in a department, office, organisation, service, undertaking or other body, its chief officer shall ... for the purposes of this Act, be regarded as having the debtor in his or her employment". Subsection (1)(b) specifies that "in a case where a debtor is in the service of such an authority, board or committee, its chief officer shall, for the purposes of this Act, be regarded as having the debtor in his or her employment". Subsection 1(c) states that "in any other case, where a debtor is paid out of the Central Fund or out of moneys provided by the Oireachtas, the Secretary General of the Department of Finance ... shall, for the purposes of this Act, be regarded as having the debtor in his or her employment". Under subsection 1(d), "any earnings of a debtor paid out of the Central Fund or out of moneys provided by the Oireachtas shall be regarded as paid by the chief officer referred to in paragraph (a) or (b), as the case may be, the Secretary General of the Department of Finance or such other officer as may be designated under paragraph (a) or (c), as the case may be, as may be appropriate".

Subsection (2) of section 13 states:

If any question arises in proceedings for, or arising out of, an attachment of earnings order as to what department, office, organisation, service, undertaking or other body a debtor in the service of the State is employed in for the purposes of this section, the question may be referred to and determined by the Minister for Finance, but that Minister shall not be under any obligation to consider a reference under this subsection unless it is made by the Court.

Subsection (3) provides that:

A document purporting to contain a determination of the Minister for Finance under subsection (2) and to be signed by an officer of the Minister for Finance shall, in any such proceedings as are mentioned in that subsection, be admissible in evidence and be deemed, unless the contrary is shown, to contain an accurate statement of that determination.

Subsection (4) provides that:

In this section references to a debtor in the service of the State include references to a debtor to whom earnings are paid directly out of moneys provided by the Oireachtas.

Section 14 relates to the discharge, variation and lapse of attachment of earnings orders. Subsection (1) provides that:

The relevant court may, if it thinks fit, on the application of the creditor or the debtor, make an order discharging or varying the antecedent order.

Subsection (2) specifies that:

Where an order varying an attachment of earnings order is made under this section, the employer shall, within ten days of it having been served upon him or her, comply with its terms.

Under subsection (3), "Where an employer affected by an attachment of earnings order ceases to have the debtor in his or her employment, the order shall, in so far as that employer is concerned, lapse". Subsection (4) provides that: "The lapse of an order under subsection (3) shall not prevent its remaining in force for other purposes."

Section 15 relates to the cesser of attachment of earnings orders. Subsection (1) states that: "An attachment of earnings order shall cease to have effect upon the discharge of the court order." Under subsection (2); "Where an attachment of earnings order ceases to have effect, the clerk or registrar of the relevant court shall give notice of the cesser to the employer." I take this opportunity to remind the Minister of State that he may indicate at any time his agreement to allow Committee Stage on another day so that he has time to study this amendment.

Section 16 provides for alternative remedies. Under subsection (1):

Where an attachment of earnings order has been made, any proceedings commenced under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor shall lapse and any warrant or order issued or made under that section in any such proceedings shall cease to have effect.

Subsection (2) provides that:

An attachment of earnings order shall cease to have effect upon the making of an order under section 8(1) of the Act of 1940, for the enforcement of the court order against the debtor.

Section 17 provides for the attachment of welfare orders. Such persons should not face the threat of imprisonment for non-payment of debt. Subsection (1) states that:

The Minister for Social and Family Affairs shall make regulations to address circumstances where ... a person is entitled to income support, and ... has defaulted on the discharge of a court order, so as to enable the court to make an order directing the Minister to deduct sums from any amounts, not below the protected welfare rate, payable to the debtor by way of income support, in order to secure the payment of any sum which is or forms part of the court order.

Under subsection (2):

The regulations shall specify the protected welfare rate, that is ... the rate below which, having regard to the resources and the needs of the debtor, the Minister considers it proper that the debtor's income support should not be reduced by a payment made in pursuance of the attachment of earnings order ... [F]or the purpose of this section the protected welfare rate shall be prescribed by the Minister, [and will] be reviewed annually.

Subsection (3) stipulates that:

The regulations may include provision [as follows] ... that, before making an application, the court shall make an enquiry as to the debtor's means ... allowing or requiring adjudication as regards an application, and provision as to appeals and reviews ... as to the circumstances and manner in which and the times at which sums are to be deducted and paid ... as to the calculation of such sums ... as to the circumstances in which the Minister is to cease making deductions ... requiring the Minister to notify the debtor, in a prescribed manner and at any prescribed time-----