Seanad debates

Thursday, 29 November 2012

Personal Insolvency Bill 2012: Committee Stage

 

11:45 am

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I welcome the Minister for Justice and Equality, Deputy Shatter, to the House.

Section 1 agreed to.

SECTION 2

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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Amendments Nos. 1, 13, 14, 38, 39, 53, 59, 60, 94 and 120 are related and may be discussed together. Is that agreed? Agreed.

Government amendment No. 1: In page 11, subsection (1), between lines 7 and 8, to insert the following:" "excludable debt", in relation to a debtor, means any:(a) liability of the debtor arising out of any tax, duty, levy or other charge of a similar nature owed or payable to the State; (b) amount payable by the debtor under the Local Government (Charges) Act 2009; (c) amount payable by the debtor under the Local Government (Household Charge) Act 2011; (d) liability of the debtor arising out of any rates due to the local authority (within the meaning of the Local Government Act 2001); (e) debt or liability of the debtor in respect of moneys advanced to the debtor by the Health Service Executive under the Nursing Homes Support Scheme Act 2009; (f) debt due by the debtor to any owners? management company in respect of annual service charges under section 18 of the Multi-Unit Developments Act 2011 or contributions due under section 19 of that Act; (g) debt or liability of the debtor arising under the Social Welfare Consolidation Act 2005;"excluded debt", in relation to a debtor, means any:(a) liability of the debtor arising out of a domestic support order; (b) liability of the debtor arising out of damages awarded by a court (or another competent authority) in respect of personal injuries or wrongful death arising from the tort of the debtor; (c) debt or liability of the debtor arising from a loan (or forbearance of a loan) obtained through fraud, misappropriation, embezzlement or fraudulent breach of trust; (d) debt or liability of the debtor arising by virtue of a court order made under the Proceeds of Crime Acts 1996 and 2005 or by virtue of a fine ordered to be paid by a court in respect of a criminal offence;".

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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All of these amendments deal with the issue of excluded and excludable debts in the three new debt resolution processes. Amendment No. 1 is designed to bring more coherence to the treatment of certain types of debt hitherto dealt with in the Bill as being excluded from the new debt resolution processes. All of the debts mentioned in these amendments, with the exception of the reference to any "debt or liability arising under the Social Welfare Consolidation Act 2005", are already mentioned in the Bill.

I am now providing for the concept of excludable debts. Essentially, these are seven types of debt, mostly owing to the State in some form, that require the express consent of the creditor to be included in either a debt relief notice, a debt settlement arrangement or a personal insolvency arrangement. The personal insolvency practitioner must contact the creditor and if their consent is forthcoming, these debts can be proposed in the arrangement. The creditors will then be able to vote at the creditors' meeting. If the creditor does not consent, the debt remains excluded and must be paid or resolved outside any of the new arrangements. With the co-operation offered by the Revenue Commissioners, this can offer certain additional flexibility in seeking to agree debt resolution. Excluded debts fall into four categories. These debts cannot be proposed for resolution in a debt relief notice, a debt settlement arrangement or a personal insolvency arrangement. They must be resolved outside the new processes.

Amendment No. 13 is essentially a drafting amendment and proposes the deletion of the reference to excluded debt from the interpretation section of the debt relief notice. This is required as a consequence of amendment No. 1, which inserts new definitions in respect of excluded debts and excludable debts in section 2. Amendment No. 14 is a drafting amendment connected to the amendments concerning the proposed changes in section 2 relating to certain categories of debt. It makes clear the position regarding the status of an excludable debt, the context of the definition of qualifying debt for a debt relief notice.

Amendment No. 38 proposes the insertion of a new section providing for the explicit consent of a creditor to have his or her excludable debt as defined in section 2 included in a debt relief notice. The new section would provide that a debt relief notice shall be issued in respect of an excludable debt only where the creditor concerned has consented or is deemed to have consented in accordance with this section to the issue of a debt relief notice. In circumstances where the debtor has an excludable debt and wishes to have that debt included in his or her debts for the purpose of a debt relief notice, the approved intermediary is required to contact the creditor in question and request his or her confirmation in writing as to whether he or she consents to a debt relief notice being issued in respect of the excludable debt. The creditor is required to comply with the approved intermediary's request within 21 days and failure to respond within the specified time is deemed, under subsection (4), to be a consent to the inclusion of the excluded debt in the debt relief notice. The proposed debts in this regard are also subject to the aggregate amount of qualifying debt for the debt relief notice of ¤20,000.

Amendment No. 39 is required as a result of the amendments relating to the new treatment of excludable debts in the debt relief notice process. It would add a new section 26(2)(d)(iii), requiring the schedule of the debtor's debts to include with regard to an excludable debt a statement on whether the creditor has consented to the issue of a debt relief notice in respect of that debt.

Amendment No. 53 inserts a new section providing for certain creditors to consent to the inclusion of their particular debts in a debt settlement arrangement in respect of excludable debt as defined in section 2. The new section 54 provides that an excludable debt should be included in a proposal for a debt settlement arrangement only where the creditor concerned has consented or is deemed to have consented in accordance with the provisions of the section to the inclusion of that debt in such a proposal. It provides that where a personal insolvency practitioner proposes to include an excludable debt in a debt settlement arrangement, he or she is required to notify the creditor concerned of that fact without delay. The notification is to be accompanied by information about the debtor's affairs, including his or her creditors, debts, liabilities, income and assets as may be prescribed, as well as a request in writing that the creditor confirm in writing whether the creditor consents for the purpose of this section to the inclusion of the debt in a debt settlement arrangement.

As in the case of a debt relief notice, the creditor concerned is required to comply with the request within 21 days of receipt of the notification under the appropriate subsection. Failure to comply within the specified time results in there being a deemed consent to have the debts included in the arrangement. Where a creditor consents or is deemed to have consented to the inclusion of an excludable debt in a proposal for a debt settlement arrangement, the creditor is entitled to vote at a creditors' meeting called to consider that proposal. Where the debtor concerned is the subject of a protective certificate and a creditor to whom this section applies brings an application to the court under section 51(1) that the terms of the protective certificate should not apply to them, the time period for consent should not commence until the date on which the appropriate court determines the application. Subsection (7) provides that in this chapter, a permitted debt means an excludable debt to which subsection (1) applies, that is, where consent is given or deemed to be given.

Amendment No. 59 is a drafting amendment arising as a consequence of amendment No. 60. Amendment No. 60 proposes the deletion of paragraphs (c) and (d)of section 60(2) as the references to certain types of excluded debt are now dealt with in section 2. The deletion of the paragraphs means the cross-reference in paragraph (b) is no longer necessary and accordingly should be deleted.

Amendment No. 94 would insert a new section providing that if a certain creditor is to consent to the inclusion of particular debts in a personal insolvency arrangement in respect of excludable debt, as defined in the new section 2, its provisions are contained in a similar architecture to that proposed in amendment No. 53 relating to the debt settlement arrangement process. Amendment No. 120 provides for the replacement of section 115(3)(a). The amendment essentially improves the text by making clear how the debtor's income is to be calculated. It also takes account of the new provisions regarding excluded and excludable debts and how these are to be treated in the context of a variation in a personal insolvency arrangement.

I understand this is particularly legislation and the provisions sound particularly complex. By and large, they are provisions to tidy up and make more clear various elements of the legislation. They refer to excluded debt and make provisions for what is referred to as excludable debt, which creates the possibility of those debts being dealt with under the various forms of non-judicial debt resolution delineated in the Bill.

11:50 am

Photo of Paul BradfordPaul Bradford (Fine Gael)
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We have points of order and information but I have a point of suggestion. It is useful when a Minister comes in on Second Stage with a substantive contribution that we have a copy of the script. Perhaps as we work through the Bill and when there are other groupings of amendments with fairly detailed changes, it would be helpful to provide a note. We have gone through seven or eight very interesting, substantive and important proposals and although we were interested in the comments, it was difficult to fully grasp the purpose of the proposed amendments. We will be here for some time and the Minister has indicated from the start of this process, in the Dáil, committees and here, that he is willing to give us the time required to get the legislation as good as possible. Perhaps we could try to deal with each of the individual pieces of information that the Minister presented to us.

It has taken five or six minutes for the Minister to go through the amendments and we should deal with them separately where possible. I have no difficulty with what the Minister said but we might need some time to deal with the amendments individually. Perhaps some of my colleagues have particular questions on the changes already proposed by the Minister. Perhaps we could have a note supplied on the more substantive amendments that would guide us in trying to assist the Minister in making the necessary improvements.

I realise that is a difficulty for the Minister's staff but what he read into the record is substantive. Our time for reflection would be aided by some text on the amendments in terms of double-checking the Minister's speech. That is merely a suggestion.

12:00 pm

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I thank the Senator for his suggestions.

Photo of David NorrisDavid Norris (Independent)
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I compliment the Minister on his clear and cogent explanation. A large number of amendments were linked together and it was difficult to physically leaf through them to find them but I found the Minister's logic and in terms of the delivery it was clear and lucid. I had no difficulty in following it and I hope this will mark the progress of the Bill through the House. His approach is very helpful.

My one comment on this is that there seems to be an assumption, if I am getting it right, that the organs of the State have the possibility of being more forgiving than the general public when it comes to excludable debt. The Minister might comment on that. I have not seen any sign, not from my personal experience but by observance, that the tax authorities, in terms of local government charges, household charges or any of those things, are particularly forgiving or that they want to be given the capacity to waive those charges. Perhaps they have and I am misconstruing the attitude of the authorities but I would have thought they are just as inflexible as anybody else.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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In reply to Senator Bradford, it would not be usual on Committee Stage to distribute scripts on each amendment. It would create an enormous burden for staff of the Department and is not practical in the context of us progressing matters today. I am not sure how far we will get today but for tomorrow we might examine if we can provide some additional information if there is an issue that is particularly complex. I should say that the background notes provided by my officials are very helpful but as they know they are background notes and I do not always rigidly adhere to them, and frequently provide additional explanation.

Photo of David NorrisDavid Norris (Independent)
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I understand the Minister has some legal qualification. He has locus standi.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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The Minister without interruption.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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On occasions I am sure the odd thing I say is not necessarily always greeted from behind me with enthusiasm. By and large, the background notes I get are very helpful but I would frequently add additional information as I am going through them. I see them as an important roadmap to what I am saying but we will see if we can do something in that regard for tomorrow.

I come back to these amendments. They provide a more succinct terminology for the different types of debts that were already addressed in a particular way within the legislation. On the issue Senator Norris raised, as Members will see in regard to amendment No. 1, the excludable debts of a debtor referred to means: liabilities of debtors arising out of any tax, duty, levy or other charge of a similar nature owed or payable to the State; amounts payable by debtor under the Local Government (Charges) Act 2009; amounts payable by debtor under the Local Government (Household Charge) Act 2011; the liability of a debtor arising out of any rates due to a local authority; debt or liability of a debtor in respect of moneys advanced to the debtor by the Health Service Executive, HSE, under the Nursing Homes Support Scheme 2009; debt due by the debtor to any owner's management company in respect of annual service charges; and a debt or liability of the debtor arising under the Social Welfare Consolidation Act 2005.

What is the purpose of that? If people owe taxes or money to a local authority, the HSE or a property management company it is of great importance they meet their obligations. If those debts exist they are debts that are part and parcel of the overall financial profile of an individual whether they are trying to receive the assistance of a debt relief notice or trying to enter into a debt settlement arrangement or a personal insolvency arrangement. They are very specific debts. Most of them in the list I mentioned, and I will come to one that is an exception, are debts owing to the State. The State has a duty in the interests of other citizens to recover moneys due but there are circumstances in which the reality may be that money is not recoverable and it may be to the benefit of the State and therefore to taxpayers generally and the citizens of this State that if a full sum is not recoverable a portion be recovered that may not otherwise be recovered, even if that portion is paid over a period of years. It envisages a process that these debts cannot automatically be included in any arrangement or under a debt relief notice, DRN, they cannot be automatically written off but it creates a possibility that the State or a State agency may decide to engage in the matter and participate. It also gives them an entitlement to simply say:

No. This is a debt. It must be paid. If there is to be an arrangement make an arrangement with all other creditors but remember in the background that our debt has some degree of priority and will not be included in that.
Members will see that included within the list is a debt due by the debtor to any owner of a management company in a multi-unit development. That is the only one referred to as an excludable debt that is not owed to the State or a State agency. At one stage we were excluding that debt in its entirety. I am interested in what Members of the House may say on that issue. We excluded it from being a settleable debt because if someone is an owner-investor in a multi-unit development it is not that he or she owes the money to one person. If it is going towards the management of that unit the money such people owe is to facilitate the management and upkeep of the unit in which they maintain their apartment and if they do not pay up, it impacts not on the State but on every other apartment owner.

Often there are management companies administering these matters on behalf of the apartment owners within a multi-unit development. In some instances a committee is set up by two or three of the apartment owners who take that job onto themselves and do not involve a management company. The concern was that if we included that debt within it, it could unfairly impact on others in the multi-unit development who might, as a consequence of some individual's failure to make payments, find themselves having to make a higher payment which might impact on their own financial circumstances. It also could be difficult, where there are many owners within a multi-unit development, to get their agreement that a debt can be settled in this way but it would be open to them, where there is an appointed committee or an agent, to authorise them to engage in this way.

There is a case for making that an excludable debt which may, in cases where ¤3,000 or ¤4,000 is owing because someone has not paid their management charges for two or three years, give rise to a greater possibility that some of the arrears due will be paid over a period of time or it may not. It is debatable whether that should be in the excludable or the excluded category but on balance we thought we should put it in the excludable category.

Senator Norris is right in saying that the Bill is providing a new mechanism for debt settlement by the State or State agencies should they choose to opt into it in circumstances where there is money due. In effect, that is what it is doing and it is a new mechanism that falls short of taking an individual into bankruptcy, for example, should there be assets there and money due and an individual's failing to make payment.

The excluded debts are of a particular category. Liability of the debtor arising out of a domestic support order effectively envisages where a court order is made in family law proceedings for the support of a spouse, a child, a cohabitee or a civil partner in circumstances under the 2010 Act. Once the court has made an order that order cannot be compromised.

There are usually court mechanisms if people are in financial difficulty or their financial circumstances have changed and they are unable to meet their obligations. There are usually provisions within legislation, such as the Family Law (Maintenance of Spouses and Children) Act, 1996, the Family Law Act, the Family Law (Divorce) Act of 1996 or what I call the civil partnership and cohabitees Act. I would have had a row with the person who added the long spiel at the end of the title if I had been the Minister. Within those Acts, where financial orders can be made there are mechanisms for variations in changing circumstances. There is also the constitutional matter that when courts make an order it cannot be compromised externally.

On Report Stage, I want to give consideration to the need to define more exactly what is meant by domestic support order. We tend to call them maintenance orders, periodical payment orders or financial relief orders. There is a range of terminology in the family law area and we do not use the term domestic support order. We may need a definition of domestic support order.

Amendment No. 1 refers to "the liability of the debtor arising out of damages awarded by a court". That is a court order and people are bound by it. The courts are independent and we cannot interfere with individuals' obligations pursuant to a court order. The amendment refers to "debt or liability of the debtor arising from a loan (or forbearance of a loan) obtained through fraud, misappropriation, embezzlement or fraudulent breach of trust;". I do not think that anyone would suggest that type of debt should not be met if assets or funds are available to meet it. It should not be compromised. If a court order is made under the Proceeds of Crime Acts, pursuant to proceedings taken by the Criminal Assets Bureau, it should not feature in the debt relief notice or debt settlement arrangement or a personal insolvency arrangement. Every criminal in the country who has had an order for the seizure of assets made would suddenly announce they were insolvent and wanted the benefit of a debt relief notice and personal insolvency arrangement.

12:10 pm

Photo of David NorrisDavid Norris (Independent)
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There would be mass liquidation of riding stables.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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That is the delineation and much of it is a tidying up process. What is new is the excludable debt compared to the excluded debt and it provides a greater degree of flexibility in dealing with debt issues than existed in the Bill in its undeveloped state. It has arisen from what we heard in debates on Second Stage in the Lower House, submissions received and ongoing discussion at Government level and with various agencies. We believe the amendments are appropriate.

Photo of David NorrisDavid Norris (Independent)
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The Minister has cleverly anticipated virtually all of what I intended to say in my supplementary contribution. The Minister seems to agree section 2(1)(f) stands out like a sore thumb with the only non-State entity involved. That is reasonable, particularly in light of the fact that management companies are very often defective and do not provide the services they pretend to provide. Still, they pursue the unfortunate owners of the apartments. It is the only element that has a social dimension, without being part of the State, and I wonder if others that fall into the same category had been considered.

The Minister indicated he intends to consider the domestic support order. I wonder if he intended to produce a definition because it seems to be a portmanteau and it would be useful if the Minister considers including definitions on Report Stage.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I thank the Minister for his contributions to date and I agree with the point made by Senator Norris. I am satisfied with the attempt to define excludable and excluded. At present, there is flexibility at local authority level on rates. While debts cannot be written off from a legal perspective, a council may decide not to seek payment of rates. Section 2(1)(g) refers to the Social Welfare Consolidation Act and debts due to the Department of Social Protection. There is some flexibility within the Department that certain repayments will not be sought by the Department and can be written off.

From a legal perspective, I am confused by a reference to the liability of the debtor arising out of any tax and duty. My understanding is that the Revenue Commissioners are priority creditors. We often hear about the absolute priority status of the Revenue Commissioners in respect of queries made on behalf of constituents. How does that work with the debt being deemed to be excludable rather than excluded? Under the various Finance Acts covering the Revenue Commissioners, the Revenue Commissioners have priority creditor status. Can we go beyond that and set it aside and categorise Revenue debt as excludable rather than excluded?

Photo of David NorrisDavid Norris (Independent)
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I have set my mind to thinking of other socially desirable objectives. Destitute loan sharks should be excluded, or perhaps automatically included. People in financial distress have taken out loans from loan sharks, who are endemic and particularly so in our cities, and have run up enormous bills. The loan sharks should not get their money back. They should certainly be excludable.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I have been so focused on the amendments we are taking that I was incorrect on one issue. The Bill has a definition of a domestic support order and it covers all the matters to which I referred. We will not need to amend it further. It includes the Civil Partnership and Certain Rights and Obligations of Cohabitants Act.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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It is so long since I looked at it that I forgot about the definition section. Regarding Senator Bradford's point, Revenue Commissioner debt remains a priority debt. Such debt remains in its current position but the provision enables someone in serious financial difficulty and trying to conclude a debt settlement or personal insolvency arrangements, who has a Revenue Commissioner debt, to ask the personal insolvency practitioner to write to the Revenue Commissioner to propose that whatever settlement is entered into should include the Revenue Commissioner debt. The Revenue Commissioners can refuse and say that it wants the full sum due and will not participate. Before making that decision, it will receive the financial profile of the individual. The Revenue Commissioners may receive that and decide the individual will go bankrupt and that there may not be enough assets to recover a large portion of the debt and that there is no downside to agreeing to some settlement. It provides an option but the Revenue Commissioners debt still has the same importance and the same obligation exists to discharge it.

Loan sharks are a particular type of animal and do not apply here. If I borrow money from someone and I owe money, it is a debt. If I am insolvent, the debt will feature in a debt settlement resolution. If my debts are no more than ¤20,000, there is a possibility that, if I do not have any real assets, the debt may be written off under a debt relief notice provision. If we are into a debt settlement arrangement or personal insolvency arrangement, the individual or the institution that might be regarded as a loan shark is simply another creditor.

What is relevant is whether it is owed and how much is owed.

It is a different issue if someone alleges a debt is due and it is not actually due. With regard to loan sharks, there is nothing floating around that is of relevance to the debts we are talking about, which are excludable debt and excluded debts.

12:20 pm

Photo of David NorrisDavid Norris (Independent)
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There seems to be, theoretically, envisaged a possibility where some debt resolution should be made so that these loan sharks, who are people who charge up to 100% and 200% interest, might actually find their bills paid. I do not take the general sanitised view of debt. I think there is a case to be made that they should never be paid and certainly that they should not be paid out of taxpayers' funds. I would hope there is a mechanism, perhaps in the Bill, or that one should be contemplated where these kinds of people will never be paid out of taxpayers' money. Every instinct in me would revolt at the idea that these people, who are a leech on society, would be given money that people can barely afford to pay in tax.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I pose a question. It may not be entirely relevant to the amendment but the Minister can say whether it is or not. The Minister mentioned that Revenue debt is a priority debt. I accept that. How are employees who are owed unpaid wages, for example, by a company that has become insolvent classed in terms of priority?

I raise another point in the context of the promised workplace relations Bill which the Minister's colleague plans to introduce. There are situations where someone is insolvent in all but name but a receiver has not been appointed. There are also situations where employees cannot claim money, whether unpaid wages or redundancy payments, from the insolvency fund. Has the Minister looked at resolving those issues? Could they be addressed in the workplace relations Bill?

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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The latter issues raised by Senator Cullinane are for my colleague, the Minister for Jobs, Enterprise and Innovation and his Department. Some of what the Senator is referring to would arise under company law rather than personal insolvency law. If the Senator forgives me, I will not head into that area because it is not what we are dealing with here. Money owed to employees, however, also has a certain priority. That is not being touched by this.

I am loth to upset Senator Norris in his exploits in "Jaws" and "Jaws 2". I am not quite sure how we define loan sharks. It is important to remember that excluded debt does not mean that people are excluded from being paid. Excluded debt is debt that must be discharged and cannot be diluted or resolved in a debt settlement or personal insolvency arrangement. There may be certain disreputable individuals whom Senator Norris believes should never be paid. I cannot deal with that in this Bill.

What is boils down to is quite simple. If a debt settlement or personal insolvency arrangement is proposed the personal insolvency practitioner, of whom we will say more later, organises a meeting between a debtor and a number of creditors. The debtor may not be happy with the arrangements being proposed. For example, he may believe some individual is particularly disreputable and should not get paid or should not get paid as much as they are looking for because, perhaps, their interest rates are exorbitant. In that case the debtor may not agree to the arrangement being put in place. We cannot, in the Bill, determine who is an appropriate creditor to be paid because we think he is a decent person and which creditor should not be paid because we do not like him. One cannot deal with insolvency legislation that way.

Photo of David NorrisDavid Norris (Independent)
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I am not going to push the issue, but I am grateful to the Minister for his explanation. Of course, I was thinking of the excludable, which allows flexibility.

The Minister need not reply to this, although if he wants to he may. Could he look at criminalising loan sharking? I am sure a definition could be given, perhaps in terms of the interest rates charged. This may be possible under his Department. It is a socially very undesirable phenomenon and it is spreading. If there is a possibility of the Government addressing this it would have widespread support.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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A Bill to that effect was introduced in the Dáil but it was voted down.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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May I tease out Senator Norris's point? Would the Minister consider that in the current climate and in the recent past, many banks might fall into the category of loan shark?

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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Minister, have you anything more to say on the amendment?

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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No, I think we have visited the zoo long enough. I am conscious that much work remains to be done. I know Senator Norris is fishing in troubled waters but I do not wish to torpedo this conversation.

Photo of David NorrisDavid Norris (Independent)
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Can the Minister please stop mixing his metaphors? One moment he is in an aquarium and the next he is in a zoo.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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So long as we do not drown it is important that we get on with the business.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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The Minister gave the term shark legs by calling it an animal. We must be careful.

Photo of Ivana BacikIvana Bacik (Independent)
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It has fins rather than legs.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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It is a mammal, I am told.

Amendment agreed to.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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Amendments Nos. 2 and 132 will be taken together by agreement.

Government amendment No. 2: In page 11, subsection (1), lines 36 and 37, to delete ?security in or over property of the debtor? and substitute the following: ?security (other than a guarantee or pledge referred to in section 35(8) of the Credit Union Act 1997) in or over property of the debtor?.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Amendment No. 2 amends the definition of security in section 2 in order to provide clarity in relation to the status of guarantees or pledges of the type referred to in section 35(8) of the Credit Union Act 1997. There has been some confusion as to whether such guarantees or pledges should or should not be capable of constituting security for the purposes of the Bill.

The new definition provides that a reference to a secured creditor, for the purposes of Part 3 of the Bill, does not include a creditor whose only security in respect of a debt comprises a guarantee of the debt, including a guarantee of the type referred to in section 35(8) of the Credit Union Act 1997. Such an amendment is appropriate as the policy intention of the Bill is that credit unions should be treated the same as other creditors for the purposes of the new insolvency processes.

Amendment No. 132 addresses the issue of set off in relation to credit unions savings. The policy intention is that a debtor's savings with a credit union should be set off against any borrowings from that credit union for the purposes of the debt relief notice, debt settlement arrangement or personal insolvency arrangement process. This is a commonsense and obvious provision and it is important that there is no ambiguity in relation to it.

Amendment agreed to.

Government amendment No. 3: In page 12, subsection (1), to delete lines 10 to 15 and substitute the following: " "specified creditor", in relation to a protective certificate, means a person specified in a protective certificate as being the person to whom a particular debt is owed; "specified debt", in relation to a protective certificate, means a debt that is specified in that protective certificate as being subject to that certificate;".

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Amendment No. 3 is a technical drafting amendment. I am advised by Parliamentary Counsel that the amendment is necessary to improve the text and make clear which creditor and which debt is concerned by any protective certificate that is issued.

Amendment agreed to.

Section 2, as amended, agreed to.

Sections 3 to 5, inclusive, agreed to.

NEW SECTION

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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Amendments Nos. 4 and 134 are related and may be discussed together, by agreement.

Photo of Sean BarrettSean Barrett (Independent)
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I move amendment No. 4:


In page 13, before section 6, to insert the following new section:
"6.---No aspect of the Debt Relief Notice, Debt Settlement Arrangements or Personal Insolvency Arrangements may be used to remove from or otherwise impair the employment status of the debtor or their spouse who is compliant with the arrangements under this legislation.".

On the first day in the House the Minister promised to move towards reducing the years of penalty for bankruptcy, and I welcome his comprehensive efforts to do so today. Our concern in the amendments is that no aspect of the debt relief notice, debt settlement arrangements or personal insolvency arrangements may be used to remove or otherwise impair the employment status of the debtor or their spouse who is compliant with the arrangements under this legislation. In other words, we are trying to control the spillover effects. I am conscious of using that economics term in the presence of the Minister and Senators Bacik and O'Donovan, who are lawyers, but we are trying to limit and, perhaps, de-stigmatise. This is a legitimate activity which the Minister is keen to promote. It should not have any stigma attached to it.

Meddlesome human resources, HR, departments should not be allowed to put things on people's records in this context. We do not record whether Mr. Bloggs has been to the money advice and budgeting service, MABS, for example, and this is a development of MABS. This is people trying to discharge their debts, and there should be no HR implications by unscrupulous or, perhaps, excessively scrupulous employers. Will the Minister explain what happens to the records? Is there a danger this removal of a stigma could alter somebody's employment records? If somebody fulfils their employment contract, that should be enough for the employer. Perhaps there is another legal term but the proposal in this amendment is for the removal of doubt with regard to a person's employment status. I would welcome the Minister's guidance on the matter raised in amendment No. 4.

12:30 pm

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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Senator Barrett has tabled an interesting amendment. With regard to the three new forms of voluntary debt settlement mentioned in the amendment - the debt relief notice, debt settlement arrangement and personal insolvency arrangement - which form the centrepiece of the legislation, the Minister will be aware from the Second Stage contributions by Members from my party that we have a difficulty with the veto the financial institutions have in respect of them. We would have preferred binding third party independent adjudication in these matters.

Where people are engaged and compliant in respect of any of these new mechanisms, it would be important to protect them from any abuse by unscrupulous employers. I will listen to the Minister's response. There are employment rights bodies and legislation, and workers and employees obviously have recourse through them if they consider themselves to be victimised in any way. However, it is not impossible that because of people being stigmatised by virtue of being involved in any of these new arrangements there could be potential for unscrupulous employers to unfairly impair people's job opportunities within companies and so forth. Senator Barrett raises a fair point, although I am not sure if the amendment is the best way to fix it. I will listen to the Minister's comments on whether he believes the existing employment rights legislation would be sufficiently robust to protect workers who might find themselves in such an unfair position.

Photo of David NorrisDavid Norris (Independent)
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I support the two amendments. Amendment No. 4 appears to be general while amendment No. 134 specifies that people should not have their employment terminated nor should they be excluded from any trade or profession. In other words, they will not be kept out of employment as a result. This is perfectly reasonable and, in fact, it should be welcomed. This is not even bankruptcy and it is not fraud. It is an honourable attempt, made in public view, to settle a debt. It should not be used as a black mark against somebody's character. It suggests, in fact, an honourable attempt to struggle with difficult circumstances and to resolve any obligations or indebtedness. There are some situations in which an employer might wish to get rid of an employee and might search for an excuse of some type, and unless we include this amendment it might be used by them as legitimate grounds for raising questions about the employee's character. We must signal that it is an indicator of good character, honour and integrity it somebody attempts to resolve a debt, even though they are in such extraordinarily difficult circumstances.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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What Senator Norris said in conclusion is exactly what I had intended to say. Where persons enter into these arrangements, it is a sign of their intent to keep their financial house in order in so far as they can. It is strong proof that these people are responsible citizens. Although they have fallen on difficult financial times, they wish to resolve matters to everybody's satisfaction. I am not sure if the amendments are necessary. Most employers would certainly prefer to employ people who are responsible about their difficulties and face up to them in a mature fashion. People entering into these arrangements are exactly that type.

Senator Cullinane is permanently worried about unscrupulous employers and when I was a Member of the other House, some of my colleagues were continuously outraged and appalled. There are very few unscrupulous employers.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I accept that. I did not say there were many. The Bill we discussed last night sought to deal with a clear case of an unscrupulous employer who had victimised his employee. There are circumstances-----

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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Senator Bradford without interruption.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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If there was a word or fact checker in the House, it would be found that the words "unscrupulous" and "employers" are generally linked in Senator Cullinane's lexicon. I do not believe there are many of them. It is more, rather than fewer, employers that are needed in this country.

I appreciate the sentiments expressed by Senator Norris and Senator Barrett, but I am not sure if the amendments are necessary. The people engaging in these arrangements are being responsible and facing up to their problems and difficulties. Employers would willingly work with those people to assist them in any way they can and would have no difficulty with those people remaining on their books because they are facing their responsibilities. However, I look forward to the Minister's comments on it.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I thank Senator Barrett for raising this issue. It is worth spending a few minutes discussing it. The amendment is about debt relief notices, debt settlement arrangements and personal insolvency arrangements. It is designed to ensure that somebody who enters into one of them is not removed from their employment or their employment status is not jeopardised nor is that of their spouse, and to render it unlawful for an employer to terminate a contract of employment for entering into such an arrangement.

A number of basic things can be said about this. The debt relief notice, debt settlement arrangement and personal insolvency arrangement do not exist at present in our legal system. We will give birth to them when the Bill is enacted. It is highly unlikely that, at present, anybody would have a contract of employment which makes a specific reference to those mechanisms. It would also be very unusual for a contract of employment to make reference to somebody entering into some "debt settlement arrangement" of an unspecified nature which would result in them being rendered unemployed or give an employer a right to terminate their employment. What we have at present is bankruptcy legislation; we do not have the debt settlement resolutions. What the Senator is proposing does not relate to bankruptcy, and I will refer to bankruptcy presently.

I share the sentiments expressed. Part of the backdrop to the debt settlement arrangement or personal insolvency arrangement is an understanding that an individual has financial resources that will be available to them and primarily that the individual is in employment, be it self-employment or employed by an employer, whether that is a limited liability company or a sole trader, and that the employed individual has a stream of income.

Without a stream of income a person will not be able over a period of years, as the debt settlement arrangement or the personal insolvency arrangement envisages, to pay off the debt. This envisages that a person is currently insolvent and does not have the income to discharge his or her debts in full, but has some income in practical terms and that, on the basis that he or she will not be sued for those debts and that his or her creditors are providing some accommodation, which may involve either or both debt forbearance and debt forgiveness, he or she will over a period of years be in a financial position to pay off all or a portion of his or her debt and then exit the debt settlement or personal insolvency arrangement. It would be a contradiction of the whole ethos of what is being proposed that, by virtue of entering into it, a person would be fired.

We do not have these models at the moment - there are not contracts of employment that would give the employer the right to fire. Let us remember that we have in existence very good legislation in the Unfair Dismissals Act, which contains various protections for employees. I have not looked at the unfair dismissals legislation for some time but it was an area in which in years gone by I would have done some work. As far as I can recall, it does not contain a provision that a person entering into a debt settlement arrangement or personal insolvency arrangement can be fired over a debt relief notice. It could not be in our domestic legislation because these things did not exist and were not in anyone's head when that legislation was enacted. An employee who enters into any such arrangement has very basic and direct protection under the unfair dismissals code.

When the legislation is enacted it is important that we do not have people entering into contracts of employment which of themselves allow someone to be dismissed because he or she is party to such an arrangement. As Senators Cullinane and Bradford said, many people who enter into these arrangements will be people who, through no fault of their own, find themselves in financial difficulties. They are in good faith entering into arrangements in the hope that they can resolve their debt problems. Of course not everyone will be in that category - let us not be naïve about it. Some people will enter these arrangements having led a profligate lifestyle, spent excessively and not cared where they were going to get the money from, and have entered this arrangement as the least worst alternative because for them bankruptcy is the other alternative. Not everyone who enters these types of arrangements will necessarily be the innocent individuals who fell on hard times. Some people will have made bad decisions which had nothing to do with the Celtic tiger and nothing to do with the misbehaviour of banks. They simply led a profligate lifestyle and decided they did not have obligations to their creditors and their life has caught up with them. There are also people in that category. However, I do not believe that applies to most people. In the context of the economic and fiscal difficulties that have hit this State and impacted unexpectedly on so many people's lives, the vast majority will be people in good faith trying to resolve their problems.

The manner in which these amendments are drafted gives some cause for concern. Given existing provisions in the unfair dismissals legislation, I do not believe we need these provisions at all. I emphasise that the purpose is to help people who have some prospect of a stream of income to resolve their debt circumstances while benefiting creditors to the degree that they recoup some of the debt owed to them. Between now and Report Stage I will consult the Attorney General or Parliamentary Counsel on the Senator's proposal and get further advices on whether such a provision is necessary and, if so, how it might be better framed because there are certain difficulties with it. I do not want to be pedantic. When I was in opposition I always hated it when I had a good idea and Ministers went on at length as to how some proposal was marginally technically defective because 50% of the time it was nonsense and the other 50% of the time it was true. Often instead of talking about substance people got lost down that particular tunnel. I want the Senator to understand that I am dealing with this in good faith.

Section 134(1) makes reference to someone having entered into an arrangement. It does not define what that arrangement involves. Section 134(2) refers to the personal insolvency arrangement and debt settlement arrangement but does not deal with the debt relief notice. While I understand the Senator's intention, it does not quite work in a legal sense in the way it is framed. I would like to raise that issue with the Parliamentary Counsel and get some further advices before Report Stage as to whether a provision is necessary. While there is no particular reason many employers would do this, I would not like to find after the enactment of this legislation that employers have some generic provision in future employment contracts giving them a right to sack someone who entered into one of these arrangements. I believe there would be certain problems regarding the implementation of that type of provision and I would like us to look at that issue in more detail.

While the Senator does not deal with this, for the sake of completeness it is worth referring to the bankruptcy area. It is not widely appreciated that the current Bankruptcy Act 1988 contains no prohibition on continuing to employ someone who has been rendered bankrupt. Such prohibitions are imposed by sectoral legislation or in the regulations of professional bodies. In the context of bankruptcy, it is not within my authority to address or delete provisions in other legislation. In so far as they exist in the area of bankruptcy, that is an area that should also be visited. For example, professional bodies exclude certain people from continuing in employment who are bankrupt. I am very familiar with the legal profession where one of the bases for being struck off or ceasing to practise as a solicitor is if one is rendered bankrupt. Within the codes of practice for the bar, barristers' rights to practice are terminated if they are rendered bankrupt.

I do not want to engage in special pleading for the legal profession, but it is a good example. If there is a competent lawyer, who was well representing his or her clients and who has never done anything fraudulent and there is no question surrounding his or her legal expertise and capacity, but that person has made bad personal financial decisions and has become bankrupt, there is no public benefit in telling that lawyer, whether it be a solicitor or a barrister, that in the one area in which he or she has skill and expertise to make a living, he or she will be prevented from earning that living because he or she has been rendered bankrupt and by stopping him or her from practising, he or she will be stopped from generating any stream of income from which any outstanding creditors may benefit, if that was a possibility. It makes absolutely no sense. Those sorts of provisions in codes of conduct in the past were based on an assumption that if a professional individual was rendered bankrupt in some way, it posed a risk to funds held on behalf of the client or - because bankruptcy was so disapproved of - it was some indication that there might be a hint or a whiff of criminality of some description, or if not that they were clearly not people of "appropriate reputation" to be engaged in that type of professional work. We live in a different world and where there is no legislation on this issue, it would be important for professional bodies to revisit the codes of conduct.

In this regard in the context of the legal profession, it is not appropriate in the insolvency legislation to pick out a particular profession and detail which profession should not do this. If we did that we would be at risk of leaving out some profession that has these sorts of rules. Next term, the Dáil Select Committee on Justice, Defence and Equality will deal with Committee Stage of the Legal Services Bill.

There is an issue on whether provision should be made in legislation that requires that it be unlawful to have a provision in the code of conduct of either of the professions that restricts somebody from practising for no reason other than being rendered bankrupt. That is an interesting issue.

I thank Senator Barrett for raising this issue. On the basis of saying that I want to consult further with the Parliamentary Counsel, I ask him not to put the amendments to a vote.

I thank Senators for their very constructive contribution on these proposals. We will have another look at this on Report Stage to get definitive advice whether there is a need to do this. If the advice is that because of provisions in the unfair dismissals legislation that currently exists, there is no need to do this, I will not come back with an amendment. If there is a risk that despite the content of the legislation, employers could think they have an absolute right under the terms of their employment contracts to terminate the employment of an employee who enters into these arrangements, we will need to address it. It could effectively defeat the implementation of arrangements entered into for debt settlement resolution to the benefit of both debtors and creditors.

12:50 pm

Photo of Sean BarrettSean Barrett (Independent)
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I appreciate the Minister's openness and I thank him for considering the amendments I tabled.

Amendment No. 4 is in my name only and I will not press it as the Minister indicated he will seek the advice of the Parliamentary Counsel and act on it.

I have used the phrase "or otherwise impair the employment status of" which is more difficult to determine than why Mr. or Mrs. Bloggs was not promoted. It is to remove any stigma attached to the debtor or the spouse.

Amendment No. 134 in the names of Senators Crown and me is related and was discussed with amendment No. 4. Senator Crown was the lead Senator in tabling that amendment. I will await his comments.

Photo of John CrownJohn Crown (Independent)
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The argument is somewhat repetitive of the argument on amendment No. 4. I would like to point out that our country disproportionately relies on foreign direct investment in the export sector and on the employment practices of multinational companies. Many multinational companies have clauses stating that persons who become bankrupt, engaged with bankruptcy services or enter into arrangements with creditors, find themselves specifically excluded. I acknowledge the point made by the Minister that there are limitations to what our jurisdiction can impose on internationally-accepted employment practices. In tabling this amendment it was principally, but not exclusively, due to that fact.

I am sorry if I sound like a broken record, but suggestions are being made by others that being involved in this process is intertwined with personal responsibility. Of course, there are people engaged in this process because of their irresponsibility. Irresponsibility is not confined to the members of society who find themselves in this situation because they made bad personal debt-incurring decisions but may extend to those who gave them advice concerning it. We are very fond of blaming the bankers but the reality is that there were many self-interested parties other than self-interested bankers who were complicit in this national conspiracy to fling debt around like snuff at a wake. They included self-interested lawyers who often stood to gain from conveyancing and from self-interested politicians who refused to acknowledge the possibility that short-term corrections in the economy might have forestalled or prevented the disaster which occurred, but which might have been politically unpopular and were not taken because of the next election. I think the record should reflect that.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I thank the Minister for undertaking to seek advice from the Parliamentary Counsel.

From my perspective, I am not overly concerned about contracts of employment. I do not think it will be an issue on which employees will be fired. The amendment also refers to "or otherwise impair the employment status of the debtor or their spouse ". However there could be situations where unscrupulous employers, which I accept are a tiny minority, act in some clandestine way to prevent persons from being promoted or to interfere in any aspect of their employment, which may not be within a contract but could impair their position in a company by virtue of the fact that they are involved in any of these new forms of debt resolution. That would not be fair. That is more difficult to deal with but it was at the heart of amendment No. 4, which must be given consideration.

We support the Minister's efforts to destigmatise personal insolvency and that is what we are trying to achieve. People should not be stigmatised if they enter any of these new arrangements, nor should their employment status be impaired by it. I acknowledge the Minister cannot look into the future and see the possibilities of what may happen. I know it may be more difficult to deal with situations where a small number of unscrupulous employers act in a way that has been described by me and is implicit in the amendment before us.

I fully accept the point the Minister makes on contracts of employment. My question relates to the more clandestine way some employers may address the issue and the safeguards we can put in place to ensure that does not happen.

Photo of Mark DalyMark Daly (Fianna Fail)
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I support amendment No. 134 tabled by Senators Crown and Barrett. Employees of multinationals would be at a disadvantage relative to others. This also applies to members of the legal profession.

The Minister should look after all employees. As my colleague, Senator Cullinane, states, we are trying to destigmatise the position of those who have entered into arrangements to deal with their debts. On Second Stage we discussed the time it would take to reach a resolution and the numbers who would avail of the process. I am afraid it may take more time than we imagined to go through the process. I support this amendment.

Photo of Aideen HaydenAideen Hayden (Labour)
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The provision that any arrangement with creditors is sufficient to disqualify a person from employment has been well aired. I am also very conscious of contracts that would not necessarily relate to multinational companies. As far as I am aware, prison officers and members of the Garda are disqualified if they have any arrangements with their creditors.

With regard to engagement with the wider civil society, I am aware for the sake of argument in a number of legal documents relating to management companies that people are disqualified from being directors of a management company because they have similarly reached an arrangement with their creditors. That is excluding somebody from participating in civil society. I ask the Minister not just to consider contracts of employment but wider contracts that impinge on people's capacity to be full members of society after this process is complete.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Senator Cullinane is absolutely dedicated to upsetting Senator Bradford by repetitively referring to unscrupulous employers. I can see them having cavernous meetings at night with candles to concoct some conspiracy against the employees of Ireland.

There is a limit to what one can do by way of legislation. In that context, I deliberately focused on the issue of people losing their jobs. When it comes to people being promoted, there is a whole range of reasons they may or may not get promoted and whether or not their employment may be "impaired". However, we do have anti-discrimination legislation which exists, for a whole range of reasons delineated within it, so that people are not discriminated against in their employment. In a sense, however, that is another area.

The additional element that Senator Crown introduced is that of international contracts. There is a problem in that respect. Let us assume that an individual works for an American multinational. He is contracted under US law to work for that multinational and as part of that he is posted to Ireland for two or three years and the contract says what Senator Crown referred to. Irish law cannot interfere with that because it is a private contractual matter. It is a contract made under American law which will apply. One can assume that if it is a multinational and a contract is entered into, the contract will specify the law of which country is applicable to the terms of the contract. That is a regular provision. If the home-parent location is the US, it is highly unlikely they would say that Irish law would apply. However, we can make provision, if need be, for contracts to which Irish law is applicable. It will not solve the problem of multinational companies posting people around the world with provisions particular to that situation. At the end of the day, it is for individuals to enter into contracts with their eyes open, knowing what is in the provisions. In the context of addressing the issue raised by both Senators, however, I will be happy to get further advice from the Parliamentary Counsel.

On the issue of a broad range of legislation or regulations that may apply, for which my Department or others have responsibility, and that would impact on individuals, at the moment they would apply to bankruptcy but would not apply to the debt settlement process. The position of prison officers and gardaí has been raised. I will obtain greater clarity on that for Report Stage and will examine the matter. I thank Senators for raising what was an issue of importance and is worth teasing out further.

1:00 pm

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I understand Senator Barrett will withdraw the amendment.

Photo of Sean BarrettSean Barrett (Independent)
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Yes. I thank the Minister for his response.

Amendment, by leave, withdrawn.

Sections 6 to 8, inclusive, agreed to.

SECTION 9

Government amendment No. 5: In page 15, subsection (1), between lines 12 and 13, to insert the following:?(h) in accordance with Part 5?(i) to authorise individuals to carry on practice as personal insolvency practitioners, (ii) to supervise and regulate persons practising as personal insolvency practitioners, (iii) to perform such functions as are assigned to the Insolvency Service under that Part,?.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I propose to add a new paragraph to section 9 to make provision for the functions of the insolvency service under the new Part 5, to authorise individuals to carry on practice as personal insolvency practitioners, to supervise and regulate personal insolvency practitioners, and to perform other functions assigned to the service under that Part which includes the investigation of alleged misconduct by personal insolvency practitioners.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I fully support the amendment which makes eminent sense. Just about an hour ago, I had a conversation with Mr. David Duffy, the chief executive officer of AIB, who attended an internal Fine Gael meeting. I spoke to him afterwards and it would appear that AIB is already setting up processes for engaging with these personal insolvency agents. It is a good thing that such an initiative is taking place before the legislation is enacted and becomes active. At least, these institutions are putting procedures in place to make this work. It appears, certainly in the case of AIB, that there is a commitment to ensure that this legislation works.

In the UK, mortgage brokers who became agents, similarly to what is being proposed here, did not quite work out. It was not as successful as it should have been.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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The Senator should discuss the amendment.

Photo of Martin ConwayMartin Conway (Fine Gael)
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Yes, I am coming to it. The type of supervisory measure proposed in the Minister's amendment is worthwhile and welcome.

Photo of Mark DalyMark Daly (Fianna Fail)
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My colleague opposite has raised a curious question which was raised here a number of weeks ago by Senator Jim Walsh and myself concerning the engagement by the banks. The banks are already ahead of the curve in going out to meet these personal insolvency people to get them on side. There seems to have been a lot of meetings between the banks and the Department on how this will work. If the banks are part of the problem, they had better be part of the solution. Can the minutes of the lobbying done by the banks on their own behalf be made available so that we can know what they were looking for and, in the end, what was or was not included in the Bill? Perhaps the Minister could clarify that.

Photo of Aideen HaydenAideen Hayden (Labour)
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I welcome this amendment. A number of organisations have expressed significant concerns about the regulation of personal insolvency practitioners, or PIPs. Would the Minister consider going somewhat further? There are concerns about those acting in their capacity as PIPs and their professional qualifications and training. Could the personal insolvency service offer a training function and continuing professional training, as other professions are required to undertake? This would ensure that the highest possible professionalism applies to the PIP service.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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The Minister does not have to reply but if he wishes to do so, he is more than welcome.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I would like to reply briefly to both Senators, starting with Senator Hayden. There are detailed provisions on PIPs that we are putting into Part 5 of the Bill. We can discuss those provisions when we get to them to ensure that we do have a proper regulatory structure. We promised that we would provide for those provisions.

Senator Daly raised the issue of contacts with financial institutions. The Government has had substantial contact with financial institutions dealing with debt to discuss their approach to debt issues, including the enormous difficulties impacting on those in mortgage arrears. In that context, over 80,000 people are currently benefiting from debt forbearance arrangements that the financial institutions have entered into. Despite the enormous fiscal and economic cataclysm that has hit the country, including the collapse in property values since the Celtic tiger and - taking heed of Senator Crown's comment earlier - the encouragement given by financial institutions and previous Governments to people to purchase properties at exorbitant prices, there has been a surprisingly small number of cases of repossession of homes.

We are anxious to ensure that the architecture provided in this legislation is properly worked by the financial institutions. As I mentioned on Second Stage, there is express provision in the personal insolvency arrangement to try to protect people living in reasonable family homes to ensure that if they are insolvent, arrangements can be agreed and mechanisms entered into that create the possibility for them to retain their homes. All these issues have been the subject of conversation with the financial institutions to ensure that they properly prepare themselves for the workings of this legislation. It is very important that they either retrain existing staff or acquire staff who have the skills to engage in the sort of processes that the legislation envisages in the context of the debt settlement resolution provisions. That is essentially what has been going on. I want to thank Senators for supporting this proposal, which is a prelude to the new Part 5 to be inserted in the Bill.

Photo of Mark DalyMark Daly (Fianna Fail)
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I thank the Minister for his reply and I understand what he is saying about the engagement with the banks. My specific question was about the engagement with the banks on this particular Bill and what they asked to have put in, so that we could discern what elements were, or were not, put in at the banks' request.

That information is not available to the public so perhaps the Minister will tell the House if it is to be made public. We do not want to feel the banks wrote the legislation. My colleague, Senator Conway, pointed out that the banks are already engaging about section 9. They knew it is going to be included, they were ahead of the curve and they are already canvassing these guys.

1:10 pm

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Does the Senator have any idea what he is talking about as regards section 9 and the banks? He has not a notion of what he is talking about.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I must interrupt as it is 1.30 p.m. and in accordance with the Order of Business I must ask the Senator to report progress.

Photo of Mark DalyMark Daly (Fianna Fail)
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The Minister is making an accusation but I am trying to convey that Senator Conway pointed out that he discussed this with the banks. We have raised the issue of the banks in the Seanad.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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This section is about the regulation of the personal insolvency agency.

Photo of Mark DalyMark Daly (Fianna Fail)
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Is the Minister saying the information will not be made available outlining what the banks tried to have included in the Bill and what they did not want included in the Bill?

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I ask the Senator to report progress as it now 1.30 p.m.

Photo of Mark DalyMark Daly (Fianna Fail)
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Will the Minister not answer?

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I have answered the question in morbid detail.

Photo of Mark DalyMark Daly (Fianna Fail)
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I would like the answer in writing. I would rather await the morbid detail and get it in writing.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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This is Government legislation, not the banks' legislation.

Photo of Mark DalyMark Daly (Fianna Fail)
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What did the banks ask to have included in the Bill?

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I ask the Senator to resume his seat.

Photo of Mark DalyMark Daly (Fianna Fail)
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Will the Minister provide that information?

Photo of Paul BradfordPaul Bradford (Fine Gael)
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We look forward to seeing Senator Daly at 10 a.m. tomorrow when this Bill will resume.

Progress reported; Committee to sit again.