Seanad debates
Thursday, 8 May 2025
EU Regulations: Motion
2:00 am
Mark Daly (Fianna Fail)
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The Minister, Deputy O'Callaghan, is most welcome to Seanad Éireann for the debate on the motion regarding the proposed approval by Seanad Éireann of a regulation of the European Parliament and of the Council amending Regulation (EU) 2015/848 on insolvency proceedings to replace its Annexes A and B.
Dee Ryan (Fianna Fail)
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I move:
That Seanad Éireann approves the exercise by the State of the option or discretion under Protocol No. 21 on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union, to take part in the adoption and application of the following proposed measure: Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2015/848 on insolvency proceedings to replace its Annexes A and B, a copy of which was laid before Seanad Éireann on 12th March, 2025.
Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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The reason I am here is to seek approval from Seanad Éireann to allow Ireland to opt in to a proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2015/848 on insolvency proceedings to replace its Annexes A and B. I have a detailed speech, but I will give a succinct overview of what is involved to save Senators from having to listen to me for ten minutes.
Essentially, what happened was that in 2015 the EU enacted a recast insolvency regulation. That regulation concerned judicial co-operation on a civil matter, namely insolvency because of that Ireland had to make a decision as to whether we should opt in or not. Due to the fact that it is an issue relating to insolvency and we recognise that there has to be co-operation between European Union states on the issue, we decided that we would opt in. We did so in 2015 under Protocol 21.
The recast insolvency regulation contains two annexes, namely, Annexes A and B. If Senators look at Annexe A, they will see that it identifies the types of insolvency that obtain in each country in the European Union. When they look at Ireland - it is obviously listed alphabetically - they will see that the type of proceedings in Ireland covered by the regulation are those relating to the winding up of entities or bankruptcies. Annexe B deals with the type of insolvency practitioners that are authorised in member states. When Senators look at Ireland, the will see references to liquidators and official assignees.
The reason the regulation is being amended is because Slovakia and six other EU countries have slightly amended their rules on EU insolvency. They have amended their domestic rules, rather, in terms of increasing the number of insolvency practitioners and the type of insolvency actions that are covered in insolvency in their countries. There is a minor change that is proposed to Annexes A and B. For instance, Slovakia wants to change the nature of the types of insolvency and wants to make changes in respect of insolvency practitioners. Similarly, six other countries want to change their arrangements. We think we should agree to the amendment. If we do not agree, it would make it difficult for us to collaborate with those other seven EU countries that have changed their laws in respect of insolvency.It makes sense that we recognise the need to amend the recast insolvency regulation. It also makes sense that we opt in to it. We cannot agree to those amendments unless we opt in. There are very many reasons we should opt in. First, these amendments and the recast insolvency regulation are an important and well established part of civil justice and co-operation between member states. Second, the regulation ensures a more coherent and predictable approach in cross-border insolvency cases. Third, the amending regulation is a useful, updating measure to ensure the effective and efficient operation of the recast insolvency directive throughout the EU.
Since it is a regulation that concerns company insolvency, and so that colleagues and Senators are aware, I can confirm that my colleague, the Minister for enterprise, has noted this technical amendment and he supports the opt-in. It is desirable that Ireland opts in to this. It makes sense. It is a minor amendment to the insolvency regulation. We have opted in before and want to remain part of it. We should opt in again.
Mark Daly (Fianna Fail)
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I thank the Minister for the summation. I call Senator Kelleher.
Garret Kelleher (Fine Gael)
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Ar an gcéad dul síos, cuirim fáilte roimh an Aire Dlí agus Cirt atá istigh sa Seanad inniu chun an t-ábhar seo a mhíniú agus a phlé linn. Gabhaim buíochas leis as an méid sin a dhéanamh.
I thank the Minister for his opening statement clarifying the advantages to accepting the proposal before us today. As the Minister outlined, the proposal relates to technical updates to Protocol 21 arising from new insolvency proceedings, new insolvency practitioners and changes to national insolvency law in seven member states of the European Union, including Slovakia, Belgium, Estonia, Italy, Luxembourg and Spain. The mutual recognition and enforcement of insolvency proceedings among EU member states is critical and just another example of the co-operation that is required. The primary focus of this is on institutions and companies, but we have seen the extent to which people have engaged in bankruptcy tourism, whereby they seek to receive preferential treatment in one member state over another. This needs to be looked at and fine-tuned.
From a Fine Gael perspective, I welcome the recommendation proposed by the Minister of Justice. I am also heartened to see the co-operation between the Minister and the Minister for Enterprise, Trade and Employment, Deputy Peter Burke, on the matter. We will support the proposal.
Robbie Gallagher (Fianna Fail)
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Cuirim fáilte roimh an Aire go dtí an Teach. I welcome the Minister to the House and thank him for outlining in great detail and simple language what we are discussing this afternoon. The recast insolvency regulation has been with us for over 20 years. There have been various amendments made to it in the intervening years. It is important that companies that want to invest in the EU and globally know that, from an EU perspective, we are all singing from the same hymn sheet, if I can use that expression, as regards legal requirements and so on. This gives security to companies that wish to invest in any member state. It is important that the criteria we adopt in Ireland are similar to those in place in as many EU countries as possible. The proposal makes perfect sense. Speaking on behalf of the Fianna Fáil grouping, we very much support it. I look forward to ever increasing co-operation with our EU colleagues. From a business perspective, the world is now a small place. Companies are very mobile and agile, and it is important that investors have certainty.
Nicole Ryan (Sinn Fein)
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As noted, this is a technical update. As it does not affect the types of insolvency proceedings or practitioners recognised in Ireland, Sinn Féin will support it. When we talk about insolvency, we talk about debt. We are talking about people's homes, lives and futures, as the Minister knows, so while this measure may be administrative in nature, we cannot ignore the debate in the broader context of how insolvency plays out in our State. Right now across the country, there are families who are struggling, as the Minister knows well. They are trapped in cycles of unsustainable mortgage debt. Many are victims of vulture funds, and one in four people who has fought back from mortgage arrears is being dragged back again, not through recklessness but by interest rates of over 6% and, in some cases, 8.5%. They are mortgage prisoners. They have done everything right in that they have paid, negotiated and restructured but they still find themselves being punished. Therefore, when we talk about harmonising insolvency proceedings across Europe, we have to talk about harmonising justice and fairness here at home, too.
We saw the most recent changes in legal aid for personal insolvency cases under Abhaile, changes that strip back many people from the right to have a barrister represent them in court, even when facing complex proceedings against heavily resourced banks and funds. Despite this, there is the fact that 65% of such cases, when properly resourced, result in rulings in favour of the borrower.
While the regulation is technical, as the Minister will know, justice is never just technical. Sinn Féin recognises the construct of international co-operation. We understand the need for mutual recognition of the framework across borders but we must also be the voice for those who sometimes cannot afford to hire a barrister, who can barely keep the lights on and who fear every brown envelope that comes through the letter-box. The opting in to the regulation may be a formality but the broader issue of debt insolvency and financial justice in this country is far from resolved.
Cathal Byrne (Fine Gael)
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I thank the Minister for his overview of this technical regulation. It is appropriate, given the changes at European level, that there be an opportunity in the Oireachtas to debate this. I mentioned when the Minister's colleague, the Minister, Deputy Byrne, was in the Chamber a few weeks ago the fact that while we are recognising insolvencies across the EU, access to credit is not available on a European level and it is not possible for a deposit-holder in Ireland to gain access to deposit rates in banks in Germany, Spain, Portugal or elsewhere across the EU. The same is the case when it comes to lending. Considering that we have greater integration when it comes to financial matters like insolvency and that we can recognise insolvency proceedings across the EU, individuals across the EU should have access to the financial markets in a greater way than is currently possible. It is important that this point be highlighted.
Dee Ryan (Fianna Fail)
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The Minister is very welcome to the Chamber. I thank him for that comprehensive overview of what is proposed. From our internal party discussions and the utterances of the Minister for Justice, the Minister for public expenditure, Deputy Chambers, and indeed the Taoiseach, I note we are very focused in government on improving agility within the business community here and competitiveness in a European context. We took very seriously the recommendations from the Draghi report of last summer. Again, it is a small technical step but it is one in aligning ourselves with, and ensuring greater cohesion across, member states.
Insolvency, while regrettable, is an outcome for a certain proportion of businesses every year. We must, as other Senators have mentioned, do everything we can to ensure it is dealt with as smoothly as possible and that those impacted by it are supported as much as possible. This is why I would like to commend the Minister for Social Protection, Deputy Calleary, on bringing forward the new jobseeker's pay-related benefit schemes earlier this year to ensure those who have been employed in the SME sector, as many in the workforce are, and who are impacted by insolvency are adequately compensated and supported at a level appropriate to what their outgoings may be over a period on a declining basis. This is at a time when such people are trying to get themselves back together and apply for further employment or, indeed, making the brave decision to start their own business.
I thank the Minister for his time and bringing forward this important motion.
Mark Daly (Fianna Fail)
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As there are no other speakers, I call the Minister to reply.
Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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Gabhaim buíochas leis na Seanadóirí agus aontaím leo. I thank all the Senators who have contributed.
I note what Senators Kelleher and Gallagher had to say in respect of the issue of insolvency. I agree it is really important that we have harmonisation across the EU when it comes to insolvency proceedings. If we are going to be able to do business with other countries within the EU without any barriers, it is very important we are able to have the same rules in order that we can apply insolvency laws in those same jurisdictions.
I note what Senator Nicole Ryan said in respect of mortgage debts. The courts in Ireland, fortunately, are still very slow to order repossessions of properties. If the Senator compares Ireland with other countries, she will see we are extremely low within the European Union. Notwithstanding that, I fully recognise that insolvency, on a personal basis, is something that is extremely challenging for individuals.
I thank Senator Cathal Byrne for talking about access to credit. That is outside my responsibility, but it is an important point in that, given the free movement of capital and services are supposed to be fundamental principles of the European Union, it seems strange that citizens in one EU country cannot apply to avail of credit or mortgage services from another EU country.
I thank Senator Dee Ryan for her contribution. Insolvency is a fact of life when it comes to business. Sometimes we are too critical or condemnatory of people whose businesses become insolvent. We need to recognise that the reason we have insolvency laws is so that we allow people to get through that period where their company or business has, or they themselves personally have, become insolvent. However, we cannot have a situation where that hangs over somebody for the rest of their life. We need to create mechanisms to allow that to be dealt with appropriately and to allow individuals to move forward with their lives.