Written answers

Tuesday, 8 November 2016

Department of Justice and Equality

Legislative Measures

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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92. To ask the Minister for Justice and Equality if she will address concerns regarding the Courts Bill 2016, in particular, the perception that this Bill will further undermine the right of distressed mortgage holders or land owners to seek protection through the courts; and if she will make a statement on the matter. [33473/16]

Photo of Frances FitzgeraldFrances Fitzgerald (Dublin Mid West, Fine Gael)
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The position is that the Courts Bill 2016 does not have implications for repossession proceedings in respect of principal private residences and will neither undermine nor erode the rights of such borrowers to due process and the remedies afforded by insolvency law. Under the Land and Conveyancing Law Reform Act 2013, the Circuit Court has been given jurisdiction to deal with repossession proceedings involving principal private residences, irrespective of when the mortgage was created, its rateable valuation or its market value. I regret that attempts are being made to create a contrary perception.

The Courts Bill 2016 is a short, technical Bill which is being introduced to address the implications of a Court of Appeal ruling in July last. In that case, the Court of Appeal ruled that where Circuit Court jurisdiction to hear cases involving property is based on the property's rateable valuation, that Court has no such jurisdiction if the property is not rateable under the Valuation Act 2001. While the Court felt obliged to reach this conclusion, it acknowledged that the ruling was likely to lead to consequences which were “both unfortunate and unintended”. The Court added that certain proceedings would have to be commenced in the High Court instead of the Circuit Court and that this would simply create additional costs for litigants “and will serve to deprive the parties of access to local courts in the manner in which the Constitution actually intended.” The Bill seeks to address these unintended consequences and to avoid disruption to the orderly management and discharge of court proceedings already under way, as well as any additional costs arising from a collapse or withdrawal of proceedings based on rateable valuation.

As the Deputy may be aware, a new, innovative mortgage arrears resolution service - Abhaile - was officially launched recently by myself and the Minister for Social Protection. The new nationwide service marks a departure in State assistance by providing free, independent expert advice and support on financial and legal issues. The number one objective is to help people to stay in their home wherever possible. The scheme started in late July and is already proving very effective. The scheme is designed to help keep families in their homes by identifying sustainable solutions in mortgage arrears cases. Under the scheme, eligible clients are given vouchers to obtain expert advice from financial and legal advisers in order to resolve their debt issues. In addition, they can get assistance in court where needed, have access to solicitors, and get help obtaining legal aid. A major Government information campaign will be launched in the coming weeks to raise awareness of the scheme. I believe that the introduction of the scheme will help people get out of debt and, wherever possible, to stay in their own homes and would strongly encourage anyone worried about mortgage arrears on their home to contact MABS, the Government gateway for accessing free expert help and advice.

This new service builds on the protections granted by the Land and Conveyancing Law Reform Act 2013 which assists homeowners in mortgage arrears by granting the Court specific powers to adjourn repossession proceedings in order to allow such a borrower to consult with a personal insolvency practitioner (PIP) with a view to making a Personal Insolvency Arrangement (PIA) under the Insolvency Acts and to instruct the PIP to make such a proposal. In addition, the Personal Insolvency (Amendment) Act 2015 has been enacted in order to further assist homeowners in mortgage arrears. The 2015 Act introduced a new "court review" process applicable in cases where creditors such as a lending institution refuse a proposal for a PIA drawn up to resolve the homeowner's debts, including the mortgage on their home.

Addressing mortgage arrears is necessary in order to assist homeowners in mortgage arrears to remain in their homes and avoid additional pressures on the rental or social housing sectors. The Government is committed to building on recent reforms and creating a framework that removes fear and brings predictability to a difficult process. Through a range of actions, including the launch of Abhaile, Government Departments and relevant bodies will continue to work to find ways to encourage those who have not been able to engage with their lending institutions to date to reach suitable long-term debt solutions with a view to avoiding repossessions.

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