Legal Resources
Legal News
Conference on law of the Lisbon Treaty
The Irish Centre for European Law is holding a conference on The Law of the Lisbon Treaty in the Royal Irish Academy, Dublin, on Monday, May 11th next.
The conference will be chaired by Ms Justice Fidelma Macken, and the speakers will include Prof Alan Dashwood, University of Cambridge; Dr Gavin Barrett, UCD; Mr Justice John Hedigan; Dr Angela Ward BL, UCD; Prof Dermot Walsh, University of Limerick and Dr Laurent Pech of NUI Galway and New York University.
Topics will include institutional changes, the Charter of Fundamental Rights, and police and judicial co-operation in criminal matters.
Seminar on Philanthropy
May 19th from 8am to 9.30am a roundtable seminar is being held by the Community Foundation for Ireland and the European Association of Philanthropy and Giving. The seminar will cover Philanthropy and the Wealth Adviser, aimed at solicitors and others involved in wealth management and estate planning.
The speakers will examine issues such as how to bring up philanthropy with clients, the role of community foundations, and issues of fees and potential conflicts of interest for lawyers, accountants, private banks, stockbrokers and others. The speakers include Paul Knox of JP Morgan, Mike Gaffney of KPMG and Tina Roche of the Community Foundation for Ireland, and the roundtable, which takes place in the HSBC Bank at 1 Grand Canal Square, costs €45.
Further details from www.eapg.org.uk or www.foundation.ie
New chair for Irish law centre
Mr Justice Nial Fennelly has retired as chairman of the Irish Centre for European Law, and Ms Justice Fidelma Macken has been elected chairman. Ms Justice Macken was a judge of the ECJ from 1999-2004.
NEW LEGISLATION
Financial Regulator’s Code of Conduct for Lending Institutions
The Financial Regulator has published two codes of conduct under section 117 of the Central Bank Act 1989:
• Code of Conduct for Business Lending to Small and Medium Enterprises (SMEs) (with legal effect from 13 March 2009).
• Code of Conduct on Mortgage Arrears (legal effect from 27 February 2009).
The codes build on existing codes in the area and will be particularly useful in difficult economic times, when both small businesses and consumers are facing increasing problems in meeting their financial responsibilities.
Business lending to SMEs
The code applies to all business lending by regulated entities to SMEs. The code does not apply to credit unions.
Business lending includes overdrafts, loans, term loans, leasing, hire purchase and invoice discounting.
The code will not apply to lending to other financial institutions; syndicated, club or multi-lender transactions; or special purpose vehicles established for the purposes of a particular transaction.
Applications for credit
A regulated entity must:
• Consider an application on its own merit,
• Inform borrowers how long the process is likely to take,
• Maintain records of all applications,
• Have appropriate procedures in place to assess a loan application, and
Where the application is approved, provide the borrower with confirmation of credit facilities granted and the terms and conditions, including those regarding default.
Security
A regulated entity must:
Not impose unreasonable collateral requirements for providing credit facilities,
Not impose unreasonable personal guarantee requirements
Explain clearly the possible implications for the guarantor of giving such collateral or personal guarantees,
Ensure any enforcement of a personal guarantee over a principal private residence is in accordance with the Code of Conduct on Mortgage Arrears,
Promptly return any security when all facilities have been repaid.
Declining/ withdrawing credit
A regulated entity must:
Have procedures in place for handling arrears,
Give the borrower reasonable time to resolve an arrears problem,
Endeavour to agree an approach that will assist the borrower to resolve the problem,
Advise the borrower of any possible impact of default on the other accounts of the borrower,
Complaints
Where a complaint is made and has not been resolved within five business days, the regulated entity must have in place a written procedure that ensures, at a minimum, that the regulated entity will:
Acknowledge the complaint within five business days of receipt,
Advise the complainant of the name of their point of contact within the organisation,
Provide a regular update of the progress of the investigation.
Attempt to investigate and resolve a complaint within 40 business days and, where it goes beyond this time, to inform the complainant of the anticipated timeframe for resolution,
Advise, within five business days of the completion of the investigation, of the outcome and explain the terms of any offer or settlement being made.
Provision of information
A regulated entity must:
• Ensure all information provided is clear and comprehensible,
• Provide a fair and balanced description of the credit facilities being offered,
• Inform the borrower in advance of any changes to the terms and conditions of the credit facilities,
• Advise a borrower that the debt may be passed to another organisation or debt collection agency or that the debt may be sold on,
• Explain the basis, on which interest is calculated,
• Notify borrowers promptly in relation to change in the interest margin,
• Advertise a general change in interest rates, and
• Issue regular statements to the borrower clearly displaying the interest rate applicable.
Code of Conduct on Mortgage Arrears
The code applies to the mortgage lending activities of all regulated entities operating in the state to consumers in respect of their principal private residence in Ireland .
Where a mortgage arrears problem develops, lenders must communicate promptly with the borrower, establish why the repayment schedule has not been adhered to, and establish how the situation should be rectified.
Where this action is unsuccessful, the lender must continue to make contact with the borrower and develop a plan for clearing the mortgage arrears that is consistent with the interests of both parties, taking into consideration the borrower’s repayment capacity, previous payment history and any equity remaining in the property.
Where a third repayment is missed, the lender may issue a formal demand for either the full amount or for possession of the property and must advise the borrower in writing of the total amount of arrears, any excess interest and the conditions of charging for that interest, and the consequences of failing to respond, together with an estimate of the costs to the borrower of such proceedings.
Where the arrears situation persists, the lender may reserve the tight to enforce the mortgage agreement. However, it must wait at least six months from the time arrears first arise before applying to the courts to commence enforcement of any legal action.
The lender must notify the borrower when it commences enforcement proceedings.
Addressing a mortgage arrears problem
The lender must:
Address each arrears situation on its merits.
Take into consideration the borrower’s overall indebtedness,
Explore repayment measures with the borrower, such as:
— changing the monthly repayment amount,
— deferring repayment for a short period,
— extending the term of the mortgage, and
— capitalising the arrears and interest.
Provide the borrower with a clear explanation of the alternative repayment arrangement that is being agreed.
Continue to monitor the repayment arrangement.
Advise the borrower that it is in his/her own interests to ensure that his/her income is being maximised and that a budgeted approach to expenditure is maintained. Where circumstances warrant it, the lender must refer the borrower to his/her local Money Advice and Budgeting Service (MABS).
Liaise with a third party nominated by the borrower at the request and written consent of the borrower.
Make the borrower aware of other options, such as trading down, voluntary sale or alternative refinancing.
Repossession
Repossession should not be sought until every reasonable effort has been made to agree an alternative repayment schedule with the borrower, except in circumstances where the borrower is deliberately not engaging with the lender.
Repossession may only come about by voluntary agreement with the lender, through abandonment of the property by the borrower without notifying the lender, or by court order.
Even where legal action is being taken to obtain an order for repossession, the lender must maintain contact with the borrower and, if agreement can be reached, the lender must enter into repayment arrangements and put a hold on proceedings in the event of agreed regular repayments being maintained.
The lender must inform the borrower that, irrespective of how the property is repossessed and disposed of, the borrower will remain liable for the outstanding debt, including any accrued interest and other charges.
The codes can be downloaded from www.financialregulator.ie
"This article originally appeared in the April 2009 issue of the ‘Law Society Gazette’. Reproduced by permission of the editor."
MEDIATION SAVES TIME AND MONEY
Mediation saves time, money and business relationships, according to this year’s Irish Commercial Mediation Association’s (ICMA) annual conference on 6 March.
The ICMA also announced findings from a survey sent to the managing partners of more than 3,500 law and accountancy firms, as well as barristers and other professionals. The respondents said that the key advantage of commercial mediation was in cost savings, stating that their clients could save up to 70% compared with litigation.
Other key advantages mentioned were speed, control of the process, confidentiality and the preservation of business relationships. Respondents ranked mediation as their first preference in dispute resolution, putting it before conciliation, arbitration and litigation.
Due to growth in awareness and use of mediation, along with the sharp rise in the number of disputes, ICMA predict that the number of disputes that will be settled through commercial mediation will double over the coming year.
The Law Reform Commission has acknowledged the benefits of mediation and recommended that the principles are placed on a statutory footing. It has also recommended that a pilot court mediation scheme be established in the District Courts.
ICMA spokesperson Austin Kenny said: “Although commercial mediation is still relatively new in Ireland , there has been a significant increase in the number of cases dealt with through mediation in the last year. Cases are typically dealt with in a three—to—six—week period from commencing the process, which is significantly quicker then going to trial.
“The parties, through their direct involvement in the process, can often end up with a more creative solution than litigation can provide. The process creates the opportunity for important relationships to he repaired that could otherwise be damaged by litigation. In some cases an apology and/or explanation, rather than money, is central to disputes being resolved.”
Statistics available from the Irish Commercial Court indicate that almost 65% of cases referred to mediation last year were successfully settled. The ICMA survey showed a slightly higher success rate of approximately 70% over the last three years.
"This article originally appeared in the April 2009 issue of the ‘Law Society Gazette’. Reproduced by permission of the editor." .
NEW FINES BILL
A new Fines Bill, aimed at reducing the numbers imprisoned for non-payment of fines has been published by Dermot Ahern April 21st . It will allow for the payment of fines by installments, will provide for the indexation of fines and include provision for assessment of a person’s capacity to pay. It will give the courts power to make a recovery order, that is, to treat an unpaid fine in the same way as the non-payment of a civil debt (a personal debt). It will also give the courts power to impose a community service order for non-payment of a fine by the due date.
However, there are no proposals to end the practice where people can be imprisoned for the non-payment of a civil debt, despite calls from Opposition parties and the UN Committee on Human Rights to end the use of imprisonment to enforce civil debts.
This provision runs counter both to the International Covenant on Civil and Political Rights and the European Convention on Human Rights. The Government is being challenged in the courts at present in a push to have this provision changed, where the Irish Commission on Human Rights has been granted permission to appear as amicus curiae
“Last year the State imprisoned 276 debt defaulters for failing to repay creditors. Fifty-four people were locked up for failing to pay their TV licence fee. The average sentence in these cases was 20 days, meaning it cost the taxpayer circa €1.3 million to jail debt defaulters and over €250,000 to jail people who didn’t pay the TV licence fee,” stated Fine Gael spokesman on Justice , Charlie Flanagan
The Labour Party spokesman Pat Rabbitte described the Bill as “a modest step forward”, but what was really needed was a Sentencing Bill which would deal with consistency in sentencing, fines and the issue of imprisonment for civil debt.
