Friday, 17 July 2015
Civil Debt (Procedures) Bill 2015: Second Stage
I am very pleased to introduce the Civil Debt (Procedures) Bill 2015 and look forward to hearing Senators' contributions to it. Importantly, this Bill provides for the abolition of imprisonment of debtors and fulfils a commitment made in the programme for Government in this regard. Contrary to some submissions that have been made, it comprehensively allows for the abolition of the imprisonment of debtors. There was some concern that it had not been dealt with and I introduced an amendment in the Dáil yesterday that made absolutely sure that it was a comprehensive abolition of imprisonment of debtors, so it does fulfil that commitment made in the programme for Government in this regard. The purpose of the Bill is to provide for the introduction of additional measures to the existing suite of measures for the enforcement of debt. It is very important to see this as part of a suite of measures that is available to creditors. These new court-based options will provide for the enforcement of debt, which is a normal part of any economy. It is very much in line with what happens in other countries. It has specified upper and lower limits by means of attachment of earnings or deductions from certain social welfare payments where the debtor has the capacity to repay the moneys owed, which is a very important point. Consumer debts owed to financial institutions or licensed moneylenders and arising from loans are excluded from the scope of the Bill. As Senators will note, the Bill does not apply to recovery by financial institutions of debts arising from money lent to customers. It applies to creditors such as smaller sole traders, subcontractors and other small businesses which have supplied goods and services and provides them with new avenues to get paid what is owed to them by those who can afford to pay. Very strict criteria about affordability are built into the Bill. Equally, it applies only to modest debts which fall within the lower and upper limits respectively of €500 to €4,000.
The provisions in the Bill arise from the recommendations made by the Law Reform Commission, LRC, in its 2010 report entitled "Personal Debt Management and Debt Enforcement". That report made a number of recommendations for reform of the existing personal insolvency and debt enforcement regimes. Key elements of the report were implemented through the enactment of the Personal Insolvency Act 2012. Much of the focus of the reforms implemented to date in the area of civil debt has been centred on personal insolvency and those who cannot pay. Senators will be aware of the Government's announcement in May of a major initiative relating to mortgage arrears in this connection and also of the fact that the Personal Insolvency (Amendment) Bill is currently before this House.
However, the LRC report also identified the need to reform the existing debt enforcement regime to ensure balance - and this is a very balanced Bill - in the creditor-debtor dynamic and recommended the introduction of a number of reforms specifically aimed at improving the current range of court-based options available to creditors in recovering moneys owed to them. These reforms are aimed at debtors who have capacity to pay their debts but fail to do so - the "won't pay" debtors. This would include Irish Water charges and the charges of energy and telecommunications companies. Measures specific to compliance with Irish Water charges and provisions for eligibility and payment of the water conservation grant after 2015 have been addressed separately, as Senators are aware, by the Minister for the Environment, Community and Local Government in the Environment (Miscellaneous Provisions) Bill 2015.
Clearly, the most desirable situation is for creditors and debtors to reach an amicable agreement for settlement of debt. However, in some cases the debtor - who may actually be in a position to pay the debt - simply refuses to engage with the creditor or does not adhere to the agreed repayment schedule to satisfy an outstanding debt. The creditor has little option in such circumstances but to take legal action to secure repayment of the debt. Many Members of this House will recognise that scenario and will be acutely aware of situations across the country where small suppliers of goods and services - often small or sole traders and other small businesses - simply cannot get paid by individuals whom they have supplied even in circumstances where there is little or no doubt but that the individual can afford to pay. This Bill gives those creditors, as well as others where the debts are modest ones falling within the range I have outlined, two new court-based options in addition to the suite of options already available to secure payment of a debt.
At present, the position is that, once a creditor has obtained a judgment order from the court, the judgment can be enforced. The main ways of enforcing judgments for civil debt are by registration of the judgment first followed by execution against goods, garnishee order, instalment order or judgment mortgage. For smaller debts, instalment orders or execution against goods are the most common methods of enforcement. Along with the economic reality of serious indebtedness and the need to provide for legislative options for those who are insolvent and bankrupt, it is equally an economic reality that creditors must have options available to them to recover money owed to them, particularly where the debtor has capacity to repay and will not do so. Those who provide goods and services are entitled to seek repayment from their customers. If this was not the case, businesses would simply not survive. Indeed, many small businesses will have failed because they have not been able to collect money owing to them.
However, I am mindful that in introducing new measures relating to enforcement of debt that there is a need to protect vulnerable debtors from the aggressive actions of certain creditors. The Civil Debt (Procedures) Bill provides for a number of important safeguards which will ensure that debtors are given adequate protections in this regard. It is important that I outline those safeguards for the information of the House:
First, the debtor will be offered an opportunity to make representations to the court on his or her behalf before the court may make a decision on the matter. We must remember that there will have been many opportunities before the situation ever came before the courts where the debtor had an opportunity to pay the bill. Second, in making a decision, the court will be required to take into account the debtor's capacity to repay the debt in terms of the amount of the attachment or deduction which would be ordered. The proposals provide that the debtor's situation must be assessed by the court deciding on enforceability so that the attachment of earnings or deduction from social welfare cannot cause him or her undue hardship or encroach on basic income sustainability to ensure basic living costs can still be met by the debtor. The debtor will be obliged to provide a statement of means to the court which will then be examined by the court in assessing his or her capacity to pay. Where the debtor is not an employee but is on social welfare payments, this statement of means will have attached to it a verification statement from the Department of Social Protection setting out exactly what payments are being made to the debtor and the deductions, if any, already being made from them.
The court will be thus in a position to make a fully informed assessment of what the debtor can or cannot afford to pay. Yesterday, I introduced an amendment to make sure that the details like PRSI numbers are confidential, which is very important. I have also allowed for variation or termination of the order if the debtor's circumstances change materially. If the income increases or decreases, it is possible to go back to court to allow for a variation that reflects the circumstances. Finally, the court may adjourn proceedings for such period or periods as the court thinks reasonable if it appears to the court that the judgment debtor is likely to be able to pay the debt within a reasonable period. The court can decide that given all of the circumstances, there should be an adjournment to take reasonable considerations into account if the person says they are going to pay the debt. There is a lot of flexibility available to the court to reach the best solution.
I would like also to say a few things about the provisions of the Bill which allow the court to order appropriate deductions from payments to a social welfare recipient in satisfaction of a debt. Affordability is absolutely critical here and will be judged by the court on the basis of accurate information provided by the Department of Social Protection to the court. Deductions may be ordered only from net scheme payments. It does not apply to all payments but only to payments which are prescribed by the Minister for Social Protection as being suitable for deductions on the basis of being stable ones with long-term recipients and taking into account any deductions which are already being made. Deductions may also be ordered only from a recipient's personal rate. This is a very important point when it comes to children and families. They can only be ordered from the portion of the person's social welfare payment which does not include payments or elements of payments which might be in respect of their dependants. At the end of the day, it may be that in assessing affordability, a court will be in a position to order only very small deductions from the payments of social welfare recipients or indeed in some cases none at all and there is a strong set of safeguards in place to ensure balance and fairness in these situations.
I will refer briefly to some of the other recommendations of the LRC which have influenced the development of the policy relating to the Civil Debt (Procedures) Bill. The LRC report acknowledged the need for creditors to recover their debts, particularly where the debtor has capacity to repay and refuses to engage meaningfully with the creditor. The report also made a number of recommendations for wide-scale reform of the current debt enforcement regime, including the setting up of a debt enforcement office. I should mention at this juncture that the Civil Debt (Procedures) Bill does not propose to implement this particular recommendation. Rather, it focuses on improving on the existing court-based enforcement measures.
Debt enforcement by means of attachment of earnings orders was examined by the LRC. Its report noted that in Ireland attachment of earnings orders are mainly used in the enforcement of judgments except in the context of family law where they are used for enforcing court orders.As part of its consultation process, the LRC sought views on this issue and found that the introduction of such a measure was widely supported - it is important to note this. The LRC also noted that this method is used to enforce judgment debts in a large majority of the systems it surveyed in other jurisdictions. We are not doing something that is totally different from what has happened in other jurisdictions in relation to the enforcement of debt. In fact, when it did the consultation, it got wide support and also found that it was happening in other jurisdictions.
It was noted that future income, of course, is often the single most reliable source of funds to satisfy proven debts, particularly in the case of consumer debtors. Potential efficiency was also cited as an argument for the introduction of such a mechanism. The LRC also looked at the possibility of making deductions from social welfare payments as a means of debt enforcement but was of the view that this was a policy matter, which we are now addressing, which lay outside the scope of its review. However, it did identify a number of principles which it considered to be important in the development of any policy in this area. I have addressed them to a degree already, but I will summarise them. The principle of enforcement should be appropriate and proportionate in all cases and decisions on the enforcement of a judgment must be based on an accurate and comprehensive assessment of the debtor's capacity to repay the money owed and, while recognising the creditor's right to have their judgment debt satisfied, must be vindicated and respected. There should be safeguards to ensure that the debtor's standard of living is not reduced below a basic level. So all of these principles have been taken into consideration in the development of the Bill and I thank the officials from the Department of Justice, who have put such a huge amount of work into this legislation, and the office of the Attorney General, which has given very detailed advice on it.
One of the key recommendations of the LRC in this area is the abolition of imprisonment of debtors. Under existing law, arrest and imprisonment remains a possibility as an enforcement mechanism of last resort in cases where a creditor has proved beyond all reasonable doubt that the judgment debtor has failed to comply with an instalment order due to his or her wilful refusal or culpable neglect. The commission also noted that the removal of imprisonment for failure to comply with a judgment debt in ordinary civil proceedings could be without prejudice to the retention of imprisonment in other scenarios such as the enforcement of family maintenance orders.
Before outlining in more detail the provisions of this Bill, may I remind Senators that what the Government proposes here is a straightforward piece of legislation built from longstanding analysis and recommendations of the LRC, which provides two key enhancements for suppliers of goods and services to recover modest debts in the courts. Yes, it will be open to be used by utilities such as energy or telecoms, or Irish Water, but it will also be available for use by small businesses and traders around Ireland. It will not be directed at those who cannot pay, but those who can pay but choose not to, and it will not be directed at anyone unless the court decides that it is within their capacity to pay.
I will turn now to some of the detail of the Bill. Section 1 is the definition of the Bill. Among the terms defined is net scheme payments. That is obviously necessary in order to deal with the issues I have mentioned on social welfare payments and the exclusion of the banks, credit institutions, money lenders, credit card debt - they are all excluded. There are some other standard provisions there. Section 6 deals with the amounts that I have discussed - the €500, but no greater than €4,000. There is a section dealing with that provision which I mentioned that the court can allow for an adjournment if there seems to be a reasonable chance of the debt being settled. Section 9 deals with the attachment orders I have outlined and section 10 empowers the court to make an attachment of earnings orders. Of course, key to that is the debtor having an opportunity to make representations before the decision is made and the court cannot make an attachment of earnings order unless it is satisfied that the judgment debtor is a person to whom earnings fall to be paid and that due regard has been given to his or her particular circumstances, including, of course, financial circumstances.
The other sections go into detail on the powers of the court. For example, section 14 empowers the court, on application by the employer concerned, the judgment debtor or the judgment creditor, to rule on whether certain types of payments are earnings for the purpose of an attachment of earnings order in force. Issues will arise about particular payments and particular employments as to whether these constitute earnings and we have allowed for a section to empower the court to make a judgment on that. There are detailed sections on deductions from social welfare. We also look at the compliance issues.
Section 18 provides that the Minister for Social Protection shall not make deductions which would have the effect of reducing the net scheme payments below the basic social welfare rate. The other sections outline the various points that I have made on how the Bill will work. Section 23 provides for a number of penalties in respect of false or misleading statements or contraventions of the Act and the prescription by the Minister of Social Protection as to which social welfare payments come within the scope of the Bill. That is under section 24.
I will conclude by saying, and I think Senators will agree, there is a need for a balanced approach to civil debt to ensure the protection of creditor rights by making available a range of legal mechanisms which compel payment by "won't pay" debtors who knowingly refuse to pay their obligations. Therefore, it is important that any legislative initiatives in this area support and protect those who simply cannot pay their debts while dealing appropriately with those who have the capacity to pay but simply refuse to do so. I believe that the Civil Debt (Procedures) Bill strikes that balance in regard to the enforcement of modest debts owed to providers of goods and services through attachment of earnings or deductions from social welfare payments. I look forward to hearing Senators' views during the progress of the Bill through the Seanad.
I welcome the Minister, Deputy Fitzgerald, to the House for the Second Stage of this Bill. I acknowledge the work of Minister Fitzgerald and her officials in bringing forward the Bill. In the general scheme of things, we should welcome bringing striking a balance and bringing Ireland into line with other international jurisdictions in terms of what was outlined in the 2009 FLAC document, "To No One's Credit". We would all support that.
However, there have been issues raised by FLAC and others about this legislation which are a cause of concern. The Minister has mentioned the Law Reform Commission recommendations in this regard which, in their general thrust, form the largest part of this Bill. However, it would appear that the Law Reform Commission recommendations were adopted à la carteinto this legislation because other protections that had been proposed by the commission have been omitted. If I have time, I will get to them here on Second Stage or, alternatively, on Committee Stage.
Ultimately, it would appear that the legislation will give creditors the opportunity to apply to the court for an order enabling either an attachment of earnings or deductions from social welfare. Alarmingly, that includes utility companies, as the Minister has mentioned, including Irish Water, and Irish Water was referred to here yesterday. The end of imprisonment for non-payment of debt is being introduced and is a welcome step. This was debated in the Dáil last evening and the Minister mentioned that safeguards have been put in place against imprisonment for non-compliance of court orders on debt. FLAC raised concerns in this regard. Perhaps they have now been addressed and if they have, I very much welcome that.
The other issue is to whom the debts would apply. Financial institutions, credit unions, and mortgage and credit card companies and so on are excluded, but there has been speculation that the Bill is, partly at least, intended to recover payments for State levies, such as unpaid water charges through the attachment of a person's income or a deduction from his or her social welfare.Under the definition of "debt" in section 1, the attachment of earnings will not be available to a lender authorised by the Central Bank. That is fine, but what about unregulated lenders like loan sharks and so on? Are they included in this legislation?
The debt situation in Ireland is of concern. MABS has compiled a report covering the first quarter of 2015. Some 4,872 new clients approached it in that time, 63% of whom derived their primary income from social welfare payments and 37% of whom derived their primary income from self-employment. The latter are not included in this legislation. Is there a reason for that? The Minister mentioned hardware stores. I know of many in my county that were done out of money as a result of small builders going to the wall, yet that is not included in this legislation. It seems that the State is protecting itself, particularly in terms of new establishments such as Irish Water that are not covered by debt recovery measures under older legislation.
I went through the figures relating to the people who approached MABS in the first quarter of this year. Approximately 80% would not be covered by this legislation, as most of their queries related to personal loans with financial institutions, credit cards and mortgages. Comprising the other 20% were queries relating to utility companies like providers of telephone and electricity services. Water has not been charged yet, but it will be included under this Bill. Of the 4,872 new clients, 221 approached MABS regarding moneylenders, although I am unsure as to whether those were regulated or unregulated lenders. Will people with overdrafts, hire purchase loans for cars and so on be covered by this legislation? Are landlords and catalogue companies included? I would like the Minister to expand on the types of debt that will be covered.
Questions arise about ability to pay, which is an issue that the Minister mentioned. I agree with her, in that there are people who have the ability to pay but, for political or other reasons, choose not to. They take an ideological stance, which is their right. However, I am unsure as to how a court will determine ability to pay. The procedure involves the District Court. Section 7(1) outlines that the court will assess the capacity to pay and the debtor will be offered an opportunity to make representations to the court on his or her behalf. However, the section makes no reference to the court defining what constitutes a reasonable living expense. The Minister mentioned that deductions in earnings would allow for reasonable living expenses. The supplementary welfare payment is €186 or so for an individual. Presumably, this figure will be considered the reasonable living expense. Nothing requires the District Court to include such considerations in its determination on an attachment of earnings, though. The Free Legal Advice Centres, FLAC, are concerned that the District Court will not have the necessary expertise on financial, budgetary and over-indebtedness matters to deal with them appropriately. This issue must be addressed and I would be interested to hear the Minister's comments on same.
As to deductions from social welfare payments, those payments are often nothing more than survival payments. Given the society that we live in, is it right to reduce the money given to those who are in survival mode? I am not sure that it is.
I welcome aspects of the Bill. The Law Reform Commission, LRC, has made recommendations regarding a number of matters, for example, employees' deductions being made through their employers. This will be a major issue down the road, with employers branding or castigating employees based on court orders requiring the former to deduct money from the latter's wages because of bills that were left unpaid. People will be branded wrongly, leading to them becoming nuisances for their employers, who will take the easy way out and discharge them. Nothing in the Bill would protect the employee in that instance even though it is a key recommendation of the LRC. That is a mistake. If an attachment order was made against an individual and he or she applied for a job, the new employer would have to deal with the order within ten days of the person getting the job. Will attachment orders become the subject of an interview question? Issues such as this have not been thought out or address in the Bill. As a result, we will introduce amendments on Committee Stage. While we support aspects of the Bill, we will vote against it in its current format, given its lack of protections.
I thank the Minister for the comprehensive outline and I welcome the Minister of State, Deputy Ó Ríordáin, to the House yet again.
I welcome the Bill. No more than any Bill that deals with the cruel issue of indebtedness and so on, it is evolving. It has given some credence to the series of recommendations that the LRC has made in this regard. Most people do not want to see someone going to jail for not paying a television licence fee, for example. The revolving door is an issue and has presented challenges to the Prison Service, with people going to jail only to be released a couple of days later. When the fines in question only amount to a few hundred euro or so on, this does nothing for anyone's dignity.
In this Bill, we are bringing our system into line with what obtains in most European countries, and on that basis I welcome it. I listened to Senator Ó Domhnaill, who has genuine concerns. His final point on someone at a job interview facing, as part of that suite of questions, queries about whether he or she was the subject of an attachment order was a fair one. I do not know how to address it other than to make it illegal to ask such questions. I would be interested in the Minister of State's suggestion as to how to get around it.
Everyone is unique, and each situation can be unique to that individual. One cannot legislate to protect everyone in all situations, but what the Bill proposes is an advancement of the common good. People who can afford to pay should pay. As the Minister rightly pointed out, if people in business had no way of collecting debts, the system as we know it would break down. However, that story differs from someone who cannot afford to pay a debt.It is the whole issue of wanting to pay versus not wanting to pay. What is proposed here is a balancing act. I look forward to Committee Stage where we can discuss the minutia and ensure the very interesting points that have been brought up here are dealt with. Perhaps the Government can introduce some amendments to address those concerns. As I said when we discussed the insolvency legislation yesterday, this is all evolving. The Government introduces legislation and if it is proved that elements of it are clearly not working, it is up to us to amend it. That is something we were not afraid to do with the personal insolvency legislation. I have no doubt that if the Government parties are re-elected in whatever form the next time, we will not hesitate in introducing amendments if that is deemed necessary.
Most fair-minded people do not want to see people going to jail over not paying debts. There are many ways of dealing with it outside imprisonment. Our prisons have suffered considerable overcrowding over the years, much of which is down to people going in on the revolving door process. If we can reduce that, it will create a much healthier prison life and environment, which is something we would all like to see anyway. We all want to see our prisons not overcrowded and having some element of dignity. If we can eliminate the use of prison resources, bringing people in on remand for two days or whatever and then releasing them over the non-payment of small fines, that would be a good day's work.
I look forward to the legislation going through the House and listening to the various arguments on Committee and Report Stages.
I welcome the Minister of State, Deputy Ó Ríordáin, to the House. I apologise that I was not here when the Minister, Deputy Fitzgerald, was giving her overview of the legislation. I was attending a meeting of the Joint Committee on Health and Children which was engaging with the Child and Family Agency.
While I appreciate the desire to have certain legislation passed through the Houses before the summer recess, it should not be at the expense of the democratic process. The Minister of State is aware, as are my Seanad colleagues, that our agenda has gone from meagre at various stages over recent months with thinly veiled time-fillers to the scenario we have now where there is insufficient time to scrutinise this Bill properly and fulfil our legislative duty.
I was unable to follow the Bill’s conclusion in the Dáil yesterday afternoon due to a meeting of the Joint Committee on Health and Children, legislative briefings and various meetings throughout the day. There was not even an updated version of the Bill until this morning. It was not available when I was putting my thoughts together on the Bill. Only for a briefing yesterday afternoon by departmental officials, which was extremely helpful, I would not have known or been able to welcome that the Bill has been amended to repeal the relevant provisions of the Enforcement of Court Orders Acts 1926 to 2009, which was preventing the Bill from truly abolishing the imprisonment mechanism for non-payment of civil debts. I really welcome that.
I strongly support extending the recognised principle of detention as a last resort for children to adults, with an urgency for the 18 to 24-year old cohort. I accept imprisonment is unavoidable in certain circumstances, particularly in the case of violent offences but our rates of committal to prison under sentence and the increasing number of committals for less than three and six-month periods means that Ireland has one of the most punitive criminal justice systems in Europe.
The statistics for imprisonment for non-payment of debt are interesting. According the Irish Prison Service annual report, 23 debtors were subject to a period of custodial sanction in 2014. This compared with 8,979 committals for non-payment of court ordered fines, the vast majority of which were for periods of less than three months, but none the less at significant cost to the State.
When will the Fines (Payment and Recovery) Act 2014 be commenced? While not completely removing the possibility of imprisonment for non-payment, the Act provides much-needed alternatives such as the payment of fines by instalment, by attachment and recovery orders if appropriate, and by the substitution of community service orders for the fines. It is simply absurd that five years after the Fines Act 2010 introduced a payment by instalment mechanism, the Courts Service is still unable to progress the facility and there are nearly 9,000 committals a year as a result.
I have a number of concerns about this Bill, which echo many of the same concerns flagged by FLAC in its submission. I had a chance to discuss some with the departmental officials at yesterday’s briefing. I have some concerns over the assessment of ability to pay. Why is there no statutorily enshrined guidance for the District Court in determining a debtor’s ability to pay his or her debt or the amount to be attached or deducted over a given period?
There will undoubtedly be unequal assessment depending on the court. This already happens with family law maintenance where orders can vary extensively depending on the court in question. There is a need for guidelines. The guidelines exist, as the guidelines on reasonable standard of living, reasonable living expenses for debtors. The Bill would be greatly strengthened by specific reference to the “reasonable living expenses” guidelines that the Insolvency Service of Ireland and the official assignee in bankruptcy must consider in accordance with section 23 of the Personal Insolvency Act 2012 to ensure a debtor’s income does not fall below an acceptable minimum standard.
The guidelines have their base in objective, academic work, principally of Dr. Micheál Collins at Trinity College working with the Vincentian Partnership for Social Justice which in turn used a well-established model developed by Loughborough University in the UK. They are used for debts big and small in the insolvency service including assessments for debt relief notices where the maximum reference debt is €20,000 but can be much smaller. If it is good enough for insolvency and bankruptcy deliberations, why is it not good enough in the context of civil debt?
I cannot but wonder if the reason it is not included in the Bill is that many, if not all, social welfare recipients subject to its assessment would fail to reach the threshold. The truth is that this Bill, while necessary and welcome in many ways, has a special interest in ensuring that outstanding water bills can be collected from the “refuse to pay category” in receipt of social welfare.
Is the point of social welfare not to provide the minimum of what people who are not in employment need to survive? How then can any deduction, even as low as the €1 and €5 per week as mooted in the briefing we had, not cause additional hardship to those already experiencing poverty? It is an apparent contradiction in that there is no provision for the deduction of fines from social welfare payments under the Fines (Payment and Recovery) Act 2014 and no plans to introduce such arrangements.
I am really concerned that the civil debt proceedings will be taking place in open court. At least with family law maintenance hearings only the parties to the case will hear all of the details of income and expenses. The civil debt situation is in open court. Anybody who has attended the District Court will know it is often very full. In the court the debtor must file details of their finances or face prosecution and the creditor can question the debtor in open court. If the reasonable living expenses guidelines I have suggested were used, then a debtor’s affairs would only be opened up for the general public in cases where the expenses were above what was considered reasonable. The expenses would be the same throughout all the courts of the land.
I have concerns over employment protection issues. There is no protection in the Bill for a debtor, against whom there is an attachment of earnings order, from adverse or unfair treatment by his or her employer. This is different from a maintenance attachment in a family law context or dispute. I am concerned that an employer might infer that the employee is untrustworthy or unreliable.
FLAC has recommended that we amend the Unfair Dismissals Acts 1977 to 1993 to specifically prohibit dismissal on the grounds of being subject to an attachment of earnings order. Why does the Bill allow an attachment order to be obtained and notified to a person’s employer without any prior steps being taken to recover the debt? Surely an attachment of earnings order should only follow the debtor’s failure to meet the terms of an instalment order and where the varying of an instalment order downwards has been considered.
Those are my specific comments. I am raising them today rather than waiting for Committee Stage, given the fast pace at which the Bill will move through the House. I support the general principle and aim of the Bill. I have tried to outline where we could strengthen it to protect those who need to be protected.
I welcome the Minister of State, Deputy Ó Ríordáin, to the House and the opportunity to speak on the Bill, which I welcome. I particularly welcome its key principle, which is to seek an end to the imprisonment of persons for non-payment of civil debt.As Senators Conway and van Turnhout stated, this is a really admirable and noble principle and is hugely important. I absolutely concur with what Senator van Turnhout said about the Fines Act. It has exercised many of us, particularly those of us on the Oireachtas Joint Committee on Justice, Defence and Equality, as we have argued that the penal system should genuinely approach imprisonment as a sanction of last resort. It is extremely disturbing to see people continuing to be imprisoned for non-payment of fines years after the Fines Act passed through both Houses of the Oireachtas simply because it has not been commenced. I absolutely concur that we need to implement the Fines Act as a matter of great urgency to ensure people are not being imprisoned for the non-payment of fines. Clearly this is a different matter and this Bill concerns the non-payment of civil debts.
I had already made a note before Senator van Turnhout spoke to say something on the unfortunate speed with which we have been presented with so much legislation so late in the term. I say this every July, and I said it under the previous Government when I was in the Seanad between 2007 and 2011. Every July a glut of legislation comes through both Houses of the Oireachtas. We all know this. It is not a feature of any particular Government; it seems to be just a feature of our legislative system. It is most unfortunate. At the most recent meeting of the justice committee we took a decision on a unanimous cross-party basis to write to the Minister for Justice and Equality to express our concern about this in the particular context of justice legislation. More time should be given and legislation should be introduced on a more reasonable and phased basis throughout the year. There are many weeks during the terms when we have very little legislation before us and inevitably in July we are faced with a glut. The Seanad ends up sitting a number of days after the Dáil to deal with the quantity of legislation.
Having said all that, I welcome the Bill. I very much welcome the fact it will add to the options for the courts in particular to ensure people are no longer imprisoned for non-payment of civil debt. The speed with which the Bill is being passed means, as the Minister stated, the amendment tabled to section 26 in the Dáil on Report Stage yesterday is very welcome. It addresses a key concern highlighted by FLAC in its excellent paper on the Bill. It stated the options against imprisonment need to be strengthened through amendment of the Enforcement of Court Orders Act. As the Minister stated in her opening speech, this is being done through section 26 of the Bill, which was inserted on Report Stage in the Dáil and provides for the amendment of section 6 of the Enforcement of Court Orders Act to remove the possibility of imprisonment for non-payment of debts. I did not have the opportunity to attend a briefing on the Bill, nor did I know anything about the briefing yesterday afternoon, but it is positive that the amendment has been made.
We are all conscious that the provisions of the Bill apply only to debts of more than €500 and less than €4,000 in value. The Minister pointed out the debts to which the Bill will not apply and this is also important. The Minister spoke at length about how the Bill seeks to implement a number of recommendations of the Law Reform Commission on the enforcement of debt. She also pointed out the Law Reform Commission's report of 2010 made a range of recommendations, not all of which are addressed by the Bill. Some of them were implemented in the Personal Insolvency Act 2012 and other personal insolvency legislation.
An issue raised by a number of colleagues which should be dealt with in other legislation is protection for the debtor against adverse treatment by an employer as a result of an attachment of earnings order. As Senator van Turnhout stated, the Law Reform Commission's key recommendation is that the Unfair Dismissals Act be amended to prohibit the dismissal of an employee on the grounds he or she has become subject to an attachment of earnings order. This should be the subject of future legislation.
FLAC has pointed out the Bill represents the implementation of only some of the measures in the Law Reform Commission's report and the Minister has acknowledged this. It does not seek to implement the entirety of the report. In particular, she noted that the Bill does not propose to implement recommendations for wide-scale reform of the current debt enforcement regime, including the establishment of a debt enforcement office. Future legislation should address this issue. The Bill focuses simply on improving existing court-based enforcement measures. It is important to state that FLAC's report is more wide ranging, as is the Law Reform Commission's report. We need a broader suite of measures to deal with civil debt enforcement more generally, and the Minister has already commented on this.
The key principle of the Bill to ensure an end to the imprisonment of those unable to pay civil debt is very welcome and fits in absolutely with the recommendations of the justice committee, which in a previous report on penal reform recommended a decrease in the use of imprisonment, and, in particular, that imprisonment should be a sanction of last resort and should be reserved for serious and, in particular, violent offenders. Non-payment of civil debt is not something for which we should continue to imprison people.
Cuirim fáilte roimh an Aire Stáit. Deirtear i nGaeilge "cuir síoda ar ghabhar agus is gabhar i gcónaí é". Is léir go bhfuil síoda á chur ar an ngabhar áirithe seo ó thaobh an Bhille atá os ár gcomhair. Cuireadh an mír a bhaineann le deireadh a chur le daoine a chur i bpríosún ar bhunús nach bhfuil a gcuid fíneálacha íoctha acu isteach sa Bhille seo ar aon turas ionas go mbeadh Teachtaí agus Seanadóirí an Rialtais in ann tacaíocht a thabhairt don reachtaíocht seo. Seachas an mír úd, is beag atá ann gur fiú a mholadh.
The way the Bill has been dealt with by the Government has been a farce since the beginning. The Bill goes hand in hand with the Environment (Miscellaneous Provisions) Bill, which has been rushed through the Houses in the past fortnight. The Government is clearly desperate to deal with the Irish Water debacle before the recess so that, come the autumn, Irish Water will not be a subject of Oireachtas debate ahead of a possible election. It goes without saying that Sinn Féin does not support the primary objective of the Bill. While we welcome the abolition of imprisonment for debtors who cannot pay, the provisions in the rest of the Bill are Thatcherite, and it is disgraceful that the Labour Party, in particular, is supporting those Thatcherite elements.
The Bill is clearly aimed at the low-paid and those on social welfare. The process as outlined in the Bill will mean a creditor will first have to have obtained a judgment against a debtor in respect of a debt, and may then make an application to the District Court for an attachment of earnings order or a deduction from payments where the judgment concerned is for a liquidated sum of not less than €500 but no greater than €4,000. The debtor will then have to furnish the court with a statement of means so the court can determine the protected earning rate of a debtor. The statement of means is a massive burden for debtors to prepare. The protected earning rate safeguard is insufficient.
The bottom line is that the Bill creates a situation whereby companies can use the courts to take money from the pockets of debtors who owe a substantially small debt in the grand scheme of things. It is truly scandalous that the Government is proposing the Bill and, particularly, that the Labour Party Senators, Deputies and Ministers support it.
With regard to the €500 minimum debt for which an attachment order can be made, an unpaid water charge debt will take only two years to accumulate this amount. The Bill means a debtor will be dragged before a judge with no recourse to appeal. How does this differentiate, as the Government claims it does, between those who cannot and those who will not pay? It is intimidation by the Government and it is galling.
Furthermore, the Bill places an application on employers to comply with such attachment orders. The Bill compels employers to be Government debt collectors and do its dirty work. It means an employer must seriously damage the relationship he or she has with an employee by collecting the money. If the employer does not do so, the courts will fine him or her. Not satisfied with burdening employers with the role of debt collectors, the Government is stipulating that employers must go through the courts as part of normal employment behaviour. For an employer to determine whether particular payments are earnings, he or she must make an application to the court under the legislation. He or she may also be required to provide to the court a statement of specified particulars of his or her employees' earnings and expected earnings. As if employers do not have enough to do already, they will now have to deal with court documents and procedures. Where an employee against whom an attachment order has been made changes employment, the new employer must notify the court. Setting aside for a moment the excessive administrative burden the Government is imposing on employers, imagine the impact of this measure on an employee-employer relationship.
As my colleagues in the Dáil have stated, Sinn Féin supports the second aim of the Bill. We agree with the recommendations of the Law Reform Commission to provide for the abolition of imprisonment of debtors, except in the case of maintenance arising from family law. It is in line with international best practice and human rights. The fact that this has been sneakily attached in one section at the very back of the Bill is cynical. To disguise the entire Bill as a step forward in dealing with civil debt in a modern way is shameful. Sinn Féin will submit amendments to the Bill and we will not support it as it is.The only way Sinn Féin will support the Bill is if it is amended to delete all sections which advocate the flawed approach to the recovery of debt in such an adversarial way. The only section in the Bill that has merit is the common-sense provisions that abolish the imprisonment of debtors. The rest of the Bill misses the bigger picture. To allow companies, including Irish Water, to use bully tactics to recover debt in this way is unnecessary and ruthless.
Léiríonn an Bille seo agus an Bille eile atá ag teacht tríd maidir le cúrsaí chomhshaoil an teip atá ann ó thaobh an Rialtais seo maidir leis an cur chuige atá aige ó thaobh Uisce Éireann. Is mór an scannal é agus is mór an náire é do na Teachtaí agus na Seanadóirí atá ag tacú leis an dá Bhille seo.
In my short time here, I have listened to contributions from both sides that have been constructive. I have also listened to much rhetoric on the issue in the Dáil. While I do not like being party political about it, rhetoric such as "bully tactics", "ruthlessness" and "intimidation" coming from Sinn Féin are galling in the extreme.
Such accusations, coming from Sinn Féin in particular, are remarkable and do nothing to debate properly the issues at hand. The Senator should reflect on the choice of language that was provided for him, from wherever it came.
I thank the Senators who decided to be constructive in their contributions. The Civil Debt (Procedures) Bill represents a balanced measure which provides creditors with improved enforcement mechanisms for modest debts and provides strong safeguards for debtors. The Bill abolishes imprisonment, an important point to stress and something I assume people would generally be in favour of, and provides two new District Court measures for the recovery of modest debts between €500 and €4,000 in value. The provisions of the Bill will be available to a wide range of creditors, although some seem to be obsessed with Irish Water. The measures are fair and balanced and ensure consideration of a debtor's ability to pay a debt is the key element of the court process. The Bill ensures debtors will not be subject to an attachment or deduction order that would bring their income below a reasonable standard. The Bill does not target any particular group. Debt enforcement and the recovery of moneys owed is part of any normal economic activity. If it were not the case, how would businesses survive? The Bill ensures those who owe money and have the capacity to pay something towards the debt do so. Those who cannot pay are protected by the very significant safeguards the Minister outlined in her opening speech.
There have been a number of gross exaggerations, including a suggestion that compliance with an attachment of earnings order would be a bureaucratic nightmare for employers or undermine employer-employee relations. Employers have either in-house or outsourced access to payroll systems. In the operation of these systems, deductions and pay-over is an everyday occurrence, whether for taxes, union subscriptions or credit union payments. Attachment of earnings systems are working in a range of other jurisdictions and have not caused the sky to fall in regarding employer-employee relations. In such situations, employees are protected by employment law protections such as those against unfair dismissals.
Some Senators have suggested the legislation makes attachment and deduction orders a first resort rather than a last resort, which is untrue. Before a creditor can go to court for an attachment or deduction order, he or she must first have obtained a court judgment order in respect of the debt. Before this happens, the debtor will have had a full opportunity to make an arrangement with the creditor regarding payment of the debt. Following that, the creditor must go to court a second time to secure an attachment or deduction order. The debtor will have had another opportunity before this to make arrangements to pay the debt. The Bill specifically provides that the court may adjourn an attachment or deduction application if it believes the debtor will pay the debt within a reasonable period. If an attachment or deduction order is made under the legislation, it will be the culmination of a substantial series of processes within which there will have been extensive opportunities for a debtor to make arrangements to settle the debt. The Bill represents a balanced measure on the enforcement of debt and will be a welcome addition to the existing measures available to creditors to seek repayment of moneys owed to them.
I will address some of the more constructive questions that were asked. I was not here for all of Senator Ó Domhnaill's contribution, but will respond to his point about the establishment of a debt enforcement office. We regard this as an unnecessary layer of bureaucracy in the context of the measures. A number of the core issues regarding attachment of earnings and deduction of social welfare, which were raised in the LRC report, are reflected in the safeguards in the legislation.
Senator van Turnhout made a point about the courts guidance on reasonable living expenses, and many people are asking why, if it was included in the personal insolvency legislation, it is not included in this Bill. They are two different concepts. The personal insolvency legislation is framed on the assumption that the creditor is insolvent and is seeking to have some or all of his or her debt written off. The concept of "reasonable living expenses" has a different context in that scenario. This Bill deals with debtors' capacity to pay money they owe to creditors. The provisions ensure courts have sufficient information available on people's financial circumstances. Courts are also obliged to take into account any representations debtors may make about their circumstances. For example, obligations towards family members might be taken into account in assessing their ability to repay debts.
The courts already have a body of expertise on the matter. For example, the District Courts have considerable experience of living expenses regarding attachment orders which arise in the context of family law proceedings. It is preferable to allow the court full discretion in assessing a debtor's capacity to repay a debt. Every circumstance will be different, as the Senator will appreciate. Individual circumstances will vary from debtor to debtor, and the courts should be allowed to make their own decisions on these matters. There is nothing to prevent a court from having regard to the insolvency service's guidelines if it so wishes, and there is no need to make an explicit provision for it in the Bill.
- Ivana Bacik
- Terry Brennan
- Colm Burke
- Eamonn Coghlan
- Paul Coghlan
- Michael Comiskey
- Martin Conway
- Maurice Cummins
- Jim D'Arcy
- John Gilroy
- Aideen Hayden
- Fidelma Healy Eames
- Lorraine Higgins
- Caít Keane
- Tony Mulcahy
- Michael Mullins
- Mary Ann O'Brien
- Marie Louise O'Donnell
- Susan O'Keeffe
- Feargal Quinn
- Tom Shehan
- Jillian van Turnhout
- John Whelan