THIS week, the Free Legal Advice Centre (FLAC) unveiled its latest annual report. It makes for grim reading.
In particular, details are provided about the extent to which the debt crisis has spread through society. In 2007, FLAC dealt with 153 debt queries face to face. Last year, it dealt with 787.
In 2007, its telephone line handled 93 debt-related calls. By 2010, the figure was 912. The service is also handling a growing volume of social welfare and employment-related queries. Last year, there were 9,500 calls to the phone line and 11,500 to the various centres — a near bottomless pit of worry.
“We receive a lot of calls about family law matters which are underpinned by money concerns,” says FLAC director Noeline Blackwell. “A comprehensive debt settlement system is an absolute priority. We need a system of looking at all debts together in one assessment.”
The idea of imprisonment for people for non-payment of debts, except in extreme circumstances, is abhorrent to her. Blackwell references Bruce Springsteen: “There are people in Ireland with debts that no honest man can pay.”
The system, however, does not take this into account when sending to jail many people who have failed to attend court on foot of an order, largely out of complete fear and bewilderment. The Court Service estimates that the attendance rate of those committed to court for unpaid debts is one quarter. People are being imprisoned not for unpaid debts, but for “contempt of court”, says the Department of Justice&.
FLAC was founded in 1969 by four law students, who have all enjoyed successful careers: future attorney general and EU commissioner David Byrne; High Court judge Vivian Lavin; Ian Candy, later a judge in Hong Kong, and Denis McCullough SC.
The four were still law students when the service was launched on the Gay Byrne radio show.
The service grew rapidly in the 1970s, exposing a generation of young middle class lawyers to social problems that would have been outside their normal range of experience.
Much of their time was spent campaigning to secure access to the courts for family law clients, a position helped greatly when the European Court of Human Rights ruled, in a case taken by Cork woman Josey Airey, that a right to a free hearing includes a right to legal representation. This eventually led to the establishment of the state-backed legal aid service.
Today, around 650 lawyers act as advisers in 52 FLAC centres around Ireland, including 35 in Dublin. There is only one stand-alone FLAC office, in Dorset Street, Dublin. The remainder are in Citizens Information Centres and local community centres. The service employs about dozen paid staff.
The service costs around €1 million to run and is funded through a mix of support: Chuck Feeney’s Atlantic Philanthropies is a major backer, though this is due to dry up soon; 15% of costs are met by the legal profession, and between 30% and 40% by the state.
Blackwell started out as a solicitor in Tipperary in the mid-1970s at the age of 21. In her eight years there, she gained a wide range of experience. Some clients were reluctant to deal with a woman, but her boss, Kieran Flynn, backed her up.
“I learned to listen, to be careful with people and to make decisions.” She recalls a man from the Glen of Aherlow telling her: “It is a great day when you put on your pants and you don’t have to see the doctor, the solicitor, or the taxman.”
People go to solicitors when they are in trouble, or when they are expecting trouble.
She advises people interested in a career in human rights to study the law on property and equity which is “at the forefront of human rights law”. In the mid-1980s, in the teeth of recession, Blackwell set up her own practice in Drumcondra.
“There were a lot of repossession applications back then. I would go to court looking for adjournments to prevent repossessions. The difference then was that people with mortgage debt did not have a lot of debt on top of that. The feature of the current crisis has been the multiplicity of debts. This is why the legal system is incapable of dealing with the situation.”
Blackwell was increasingly drawn into family law and refugee/immigration law in the 1990s. She joined Amnesty International, eventually becoming its chairwoman. “I was particularly interested in how the state shapes the law and in making sure that the people have a voice,” she says.
In 2005, Blackwell took up the job as FLAC director, closing her practice after two decades.
At the time, the credit bubble was in full swing. Two years previously, FLAC’s head of research, Paul Joyce produced a prescient report, An End Based on Means, that warned of the consequences for borrowers if the credit boom was not curbed.
Joyce and colleagues were alerted throughout the 1990s to the deficiencies in the debt enforcement system amid signs of a surge in credit. As then director of consumer affairs Willie Fagan warned: “APR, the credit interest rate, stands for ‘Any Price is Right’.”
In 1998, then justice minister John O’Donoghue, faced with a private members bill, promised legislation updating the law on enforcement of court orders to include a new system of attachment of earnings as an alternative to imprisonment. However, nothing happened. FLAC continued to press the government for a reform in the law on personal debt.
By the time Joyce published his second report, To No One’s Credit, in 2009, FLAC’s worst fears were coming to pass. “The recession hit with a bang. Credit closed almost overnight. It was perfectly obvious that the Dickensian system of debt enforcement was entirely unfit,” Noeline says.
In June 2009, High Court judge Mary Laffoy came to the rescue with a judgment in the McCann case which shifted the onus of proof on to the creditor to prove that the debtor is a “won’t pay” as distinct from a “can’t pay” person before they can be committed to prison. This was enshrined in law in the Enforcement of Court Orders Act 2009.
“This judgment has been of use with respect to civil debts, but it obscures the fact that people are still going to jail for non-payment of fines,” Blackwell says.
The Fines Act 2010 deals with the latter situation, but is yet to be kickstarted due to problems with the courts’ IT system.
FLAC is continuing to press for a new system of debt enforcement that avoids expensive recourse to the courts and prison sentences for debtors.
It proposes the establishment of an Enforcement Office, a system of attachment of earnings and would allow for consolidated attachment where debts are owed to many creditors.
Blackwell remains to be convinced the new administration will act on these suggestions. “We have a Programme of Government commitment to reforming bankruptcy law and to non-judicial settlements for commercial debt, but this is probably unworkable since commercial and private debt is often mixed together, with houses being mortgaged for businesses.
“The debt crisis has been with us three years, yet nothing has been done to ease the situation.”
The International Monetary Fund has set a deadline on progress in reforming bankruptcy law. However, Blackwell believes an “overarching plan” is required to cope with the larger crisis.
She understands the concerns among some in government about the idea that debt forgiveness could encourage delinquency, but says: “You can construct a system with in-built safeguards.”
And if there’s no meaningful reform? “I dread to think. There seems to be a sickening in society... It is very distressing for our volunteers to have to say to people: ‘there is no solution to your problem’.”
FLAC has opened specialist centres to assist people in employment and social welfare law during the crisis, while working closely alongside the MABS money advice service and the overstretched state-run legal aid centres.
Demand for these services looks set to remain buoyant for the foreseeable future.