Maria Corrigan (Fianna Fail)

I will be as quick as possible.

I welcome the Minister of State and commend Senator Quinn on his introduction of the Bill, which is much needed at a difficult time for subcontractors, be they small companies or sole traders. As the Minister of State said earlier, we all have experience of being approached by people who are finding it difficult to obtain payment and whose businesses are on the line as a result, as are the livelihoods of any employees who work for them. This has a knock-on effect on our communities and on the economy, and a devastating impact on the families of the employees.

I welcome the announcement by the Minister of State that he intends to start a consultation process with the industry and that he will come back to the House within five months. The inclusion of a process for adjudication within the Bill is of particular value. I ask the Minister of State, in light of instances of which I am aware, to consider some of the following aspects.

One example is a situation in which a subcontractor has undertaken and completed work using materials he has already paid for. This results in an end product from which somebody else derives a benefit, yet the subcontractor himself does not get paid. In such a situation the person in possession of the product can operate it and derive a benefit from it while the subcontractor who has funded it through labour and materials finds himself going out of business. Will the Minister indicate whether it may be possible to consider a mechanism by which the debt that has not been discharged would travel with a finished product, so to speak, and the person deriving a benefit from that product would be liable for it? I would appreciate his consideration of that. The parallel application of it would be in the case of someone buying a house on which there were outstanding debts that were not discharged prior to the purchase of the house. That person would then become liable for any outstanding charges set against that house because they are deriving the benefit of residence in it.

I draw the Minister's attention also to international law in terms of the admiralty law whereby if one owns a boat and takes in supplies of food or fuel without paying for that fuel or food, it is possible for that boat to be held in limbo and not function until those debts are discharged. That is something consideration should be given to in that if someone has a product that can be operational but which has not been paid for, somebody would have the right to look for the function of that product to be halted until their debts are discharged.

There is another point to which I would like the Minister to give consideration. A trend developed in recent years whereby a shelf company would be established to oversee a particular project. When the subcontractors or any other individuals associated with work on the project send in their bills at the end of the project, it would be announced that the shelf company no longer had any money to pay the outstanding amounts. If the shelf company had no assets it would go into liquidation and there would be no recourse for payment, other than through the courts, for the people who had completed the work and paid for the materials. In situations where companies overseeing a project have no permanent assets, will the Minister indicate whether consideration could be given to the establishment of a payment bond that would be set aside by the company? I understand a similar process is followed in the United States in that somebody who is overseeing a project and commissioning out work must set aside a payment bond to ensure that if for some reason costs overrun and somebody cannot be paid, the money has been set aside to ensure no individual who pays for materials or gives their labour is left out of pocket.

In terms of other mechanisms to consider, I am struck by the fact that if all else fails and the Minister must go to the courts, he is in a quandary. The extension of the small claims court to small businesses was welcome but it is only for small amounts of €3,000 or less. If someone is owed €1 million or more they can go to the commercial courts but if they are owed any amount in between, neither of those avenues are open to them and they must go through the regular court system where one can wait approximately two years for the case to be heard.

If a small operator with nine or ten employees has an outstanding bill that he or she must pursue through the courts and it will take up to two years to have that debt discharged, by the time the case comes before the court that operator will be out of business and there will no longer be a debt to be discharged. That is not acceptable. I ask the Minister to give consideration to that because most of the people we are talking about in this debate are subcontractors who will fall within that band. They will not have either of those two fast-track options available to them when it comes to court and will be obliged to endure the two year waiting process.

I want to give an example of a company in my area that I was struck by and which raised questionable moral issues for all of us. The company in question carried out some work in good faith for a hotel refurbishment project. It paid for the materials and the labour. It presented a bill at the end of the project and was told there was no money available. It was a shelf company and the shelf company was going into liquidation. That company has between nine to 11 employees who work for it full-time. It tried to pursue the money but was unable to get it. While the shelf company went into liquidation, the hotel for whom this company had carried out the work continues to operate and is deriving the benefit of this company's materials and labour for which it cannot get paid. Within a few months that company with the nine to 11 employees will go out of operation yet the hotel will continue to operate. In fact, it is operating at a profit as a result of materials and labour paid for by somebody else.