A recent test case* brought by an unemployed mother of two has resulted in the Government changing the law dealing with debt recovery enforcement procedure. The central issue in the claim before the High Court was that potential imprisonment for non payment of a civil debt was unconstitutional.
Laffoy J ruled that Section 6 of the Enforcement of Court Orders Act 1940 was unconstitutional as there were fundamental deficiencies in the section which breached the claimant's rights to fair procedures and personal liberty. Section 6 allowed imprisonment of a debtor without any express requirement that the District Court examined, in the first instance, that non payment was due to an inability to pay, before proceeding to making an imprisonment order. The section also placed the burden of proof on the debtor to prove the failure to pay the debt was not due to "wilful refusal" or "culpable neglect" on their part. In her decision** Laffoy J opined that fair procedures required, in circumstances where a debtor could be imprisoned, the burden of proof was on a creditor seeking such imprisonment to demonstrate such "wilful refusal" or "culpable neglect".
The upshot of the decision is that it is highly unlikely that committal orders will be issued by District Court judges pending a change to the legislation. It also raises issues surrounding the validity of those currently imprisoned on foot of such orders.
As a result of this uncertainty, the Government published on the 3rd July last, the Enforcement of Court Orders (Amendment) (Bill) 2009. The Bill makes amendments to section 6 and 8 of the Enforcement of Court Orders Act 1940. The purpose of the amendment to Section 6 is to ensure that if a debtor does not appear in court, a summons can be issued and if he/she still fails to appear, a warrant will be issued to arrest him/her and bring him/her before the court. This will enable the court to hear the debtor and satisfy itself whether he /she has wilfully refused to pay and that all other steps possible, including instalment payments and mediation, have been taken to recover the debt. The court will not make an order for imprisonment unless the court is satisfied that the debtor has the means to pay. It is also proposed that there will be a provision for legal aid in circumstances where the debtor is at risk of imprisonment.
It is expected that the Bill will be passed quickly, possibly before the summer recess, to remedy the uncertainty and legal difficulties created by the McCann decision. The provisions provide for a fairer enforcement regime for debtors who are in real financial difficulty, particularly in the current climate.
* Caroline McCann v Judge of Monaghan District Court, the Commissioner of An Garda Siochana, the Chief Executive of the Irish Prison Service, Minister for Justice, Equality and Law Reform, Ireland and the Attorney General
** The Judgment is not yet available