Wednesday 22 January 2020

Debt crisis stretches courts to their limit

Dearbhail McDonald Legal Editor

THE debt crisis enveloping Irish homes and businesses has led to a surge of bankruptcies, company closures and repossessions in the courts.

In the past year, bankruptcies more than doubled to 17 and there was a 66pc increase in the number of companies that were wound up by court order. These figures are set to rise even further this year.

So far this year, 12 people -- all of them men -- have been declared bankrupt, including the disgraced former Anglo Irish Bank chief Sean FitzPatrick.

The debt crisis is also having a major impact on families. A shortage of cash has led to fewer applications for divorce or judicial separation.

The crippling cost of the economic crisis was laid bare in the 2009 annual report from the Courts Service. It warned yesterday that it is stretched to "maximum capacity" because of the extra workload brought on by the recession.


In the Circuit Criminal Court, theft and robbery cases rose by 28pc to 1,586, while drugs offences were up by almost a quarter, to 954.

The report revealed that High Court possession orders increased by 23pc compared to 2008. Meanwhile, there was a 35pc increase in the number of court-ordered repossessions of family homes and commercial properties in the Circuit Court.

There were 985 new cases in the High Court last year in which the possession of lands or premises was sought, compared to 759 in 2008. Of those, 293 orders were made, compared to 238 the previous year.

Earlier this week, the Master of the High Court, Ed Honohan, warned that there were almost 600 repossession cases on the Master's list waiting to be sent forward for trial.

However, the number of possession summons issued so far this year is 229, compared to 493 in the first six months of last year. This is partly as a result of the Government's one-year moratorium on possessions.

The burgeoning debt crisis was most evident in the civil courts, including the Commercial Court, the division of the High Court that processes business claims in excess of €1m.

The Commercial Court witnessed a 53pc surge in new cases compared to 2008, with more than half of these relating to multimillion-euro debt claims by the end of last year.

There was almost a 50pc increase in the number of claims for debt recovery in the High Court, with a rise of 33pc in debt-recovery actions in the Circuit Court.

Overall, there has been a 40pc increase in the workload of the courts since 2006 when house prices began to fall and Ireland's economy began to falter.

The Chief Justice, Mr Justice John L Murray, yesterday said the economic downturn had forced the Courts Service to confront new and difficult challenges and to expand existing services.

"These challenges are all the greater because of an inevitable decrease in the funding available to resource its work," Judge Murray said.

"However, this change in circumstances has not prevented the service from achieving considerable success."

He added: "By adopting a practical, consensus and partnership approach to problem-solving, both internally and externally, the service continued to make much progress."

The Courts Service itself has fallen victim to the downturn, with a 10pc reduction in its annual budget. Staff numbers fell from 1,081 in 2009 to 1,000 by the end of this year.

"In 2009, we showed measurable, increased productivity and value for money in the delivery of services," said Courts Service CEO Brendan Ryan.

"The average cost to the service of a case was reduced from €138 in 2006 to €117 in 2009 -- an improvement of 15pc."

He added: "Waiting times decreased in many instances, or stayed unchanged, despite substantial increases in the number of cases coming before the courts and the constant demands on the workforce."

Irish Independent

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