Roderic O'Gorman (Dublin West, Green Party)
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293. To ask the Minister for Enterprise, Trade and Employment if he is aware of the financial losses suffered by consumers due to the sudden closure of businesses recently (details supplied) where individuals are left without recourse for redress; if he will consider strengthening consumer protection laws to prevent such occurrences, including enhanced safeguards against reckless trading and fraudulent practices; the immediate measures the Government will take to better protect consumers in such cases; and if he will make a statement on the matter. [6007/25]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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I am aware of the losses suffered by some consumers by the manner in which DK Windows and Doors ceased operations, and I understand their frustration and upset.

The State’s legislative framework provides for a corporate rescue toolkit to ensure orderly and timely debt restructuring for companies facing financial difficulties. Under examinership a business is protected from creditors in a bid to return it to financial health; under receivership certain assets are sold to repay debts; and liquidation, as happened in this case, occurs when a company is unable to continue operating as a viable going concern.

The State’s liquidation process is a well-established mechanism for the winding up of companies on both a voluntary and compulsory basis and can take the form of either a court-ordered insolvent liquidation or a voluntary solvent or insolvent liquidation.

Under the Irish framework, the general order of priority means that consumers are generally ranked as unsecured creditors, thereby ranking behind secured creditors, such as Revenue (on behalf of the exchequer), employees owed wages and banks owed money on a secured loan. The stark reality of an insolvent liquidation, where the value of the company’s assets is less that its liabilities, is that invariably there will not be enough funds to satisfy all creditors’ demands leaving the consumer unable to recover their monies.

An appointed liquidator is independent in their role and the exercise of their duties. They have a statutory role to identify, take possession of and redistribute the assets to the creditors. To do so, the liquidator must realise the value of the assets for the benefit of the insolvency estate. Neither I as the Minister nor my Department can intervene in this process.

Limited liability is designed to encourage and foster honest enterprise by permitting individuals to engage in entrepreneurial activity while limiting personal exposure to financial loss in the event of commercial failure. However, the law demands that, in return for the privilege of limited liability, those availing of it act in good faith and abide by minimum requirements of governance, transparency and commercial probity.

Company law provides for robust compliance and enforcement mechanisms and sets out the clear legal duties that directors’ have in respect insolvency, as well as specific provisions in relation to reckless and fraudulent trading. The Corporate Enforcement Authority (CEA), in particular, promotes high standards of corporate behaviour: It promotes compliance with company law; investigates instances of suspected breaches of company law; takes appropriate enforcement action in response to identified breaches of company law; supervises the activities of liquidators of insolvent companies; and operates a regime of restriction and disqualification in respect of directors of insolvent companies. Where a breach of company law has been established, the CEA will take action as appropriate.

The Competition and Consumer Protection Commission (CCPC) is the statutory body under the remit of my Department with responsibility for promoting compliance with, and enforcing, competition and consumer law in Ireland. The CCPC is independent in the performance of its statutory functions.

Officials in the CCPC have advised that consumers affected should get the details of the liquidator and make a claim in writing setting out:

• Details about the product they have paid for;

• Exactly how much money they are owed, and

• What they would like the liquidator to do, for example, arrange for delivery of the item or full refund.

However, there is no guarantee that claims will be successful. In addition, the CCPC advise that if consumers paid the deposit by debit card or credit card, that they contact their bank or card provider to see if it will reverse the transaction using the chargeback process.