High Court Judgement Declaring District Court Debt Collection Procedure As Unconstitutional May Lead To Damages Claims By Jailed Debtors

A recent High Court Judgement in the case of Caroline McCann -v- Judge of Monaghan District Court and Others which ruled as unconstitutional the procedure adopted by the District Courts in imposing imprisonment orders against debtors may lead to hundreds of cases being brought against the State for damages for wrongful imprisonment and defamation.

This case involved an unemployed mother of two who had borrowed €18,000.00 from her local Credit Union, which she had been unable to repay. A District Court Order was made in 2005 jailing her for the non payment of the debt.

When the Garda sought to enforce the Order, Ms. McCann brought proceedings in the High Court challenging the Constitutionality of section 6 of the Enforcement of Court Orders Act 1940, the procedure commonly adopted to commit debtors for non payment of debts. Her complaints were as follows:-

Her right to natural and Constitutional justice was breached because the State failed to provide her with Legal Aid;
She was not provided with fair procedures in that she was not given the opportunity to appear to explain her inability to pay the instalment arrears;
She was not provided with an opportunity to re-enter the matter in the District Court to state her case prior to the warrant being issued to stop her impending committal to prison;
That section 6 was incompatible with the European Convention on Human Rights as there were no procedural safeguards in the Act to determine whether she had the requisite means to enable her to comply with the Instalment Order made or before her committal was ordered by the District Court.

In giving her Judgement, Judge Mary Laffoy found that the use of imprisonment in this type of situation breached Ms. McCann&’s rights to fair procedures and personal liberties under the Constitution. She held that the District Court had no jurisdiction to make the order to jail her and that as Section 6 failed to uphold the guarantees of fair procedures implicit in the Constitution it was invalid.

The Judge stated that it was difficult to identify any rational basis for treating a person facing the possibility of imprisonment for three months for the non payment of a debt any differently from a person facing a criminal charge. The Judge criticised the lack of a fully funded state legal aid scheme for debtors.

As Ms. McCann had claimed damages for both breach of her Convention and Constitutional rights, the Judge held that it was not necessary for the Court to express a view as to whether the Section was incompatible with the obligations of the State under the European Convention, due to the fact that she had found the relevant section to be invalid under the Constitution.

The Judge is to hear further submissions from the parties regarding Ms. McCann&’s right to damages for the breach of her constitutional rights or alternatively damages under the European Convention on Human Rights.

Damages for breach of Constitutional rights are now claimed with increasing frequency. In a previous case Sinnott -v- Minister for Education, the High Court awarded substantial damages for breach of a Plaintiffs Constitutional right to free primary education under Article 42. If a breach of a Constitutional right is established, it is now assumed that damages should be awarded. Aggravated or exemplary damages may also be awarded.

The Government has clearly been taken by surprise by the criticisms inherent in Judge Laffoy&’s Judgement and has taken speedy action in dealing with the ramifications of the Judgement in introducing the new Enforcement of Court Orders (Amendment) Bill 2009.

The new Bill will amend Sections 6 and 8 of the 1940 Act and addresses the flaw in the existing sections which provide that if a debtor fails to appear in Court to answer a Committal Summons, they could be imprisoned without any need to bring them before the Court to present their case. The new bill also provides for the granting of Legal Aid to debtors and a mediation scheme is also going to be introduced. The focus is now going to be on ensuring that imprisonment is a last resort as envisaged by the European Convention.

Between May 2003 and July 2008, 1,138 people were imprisoned under this Act and many may now be considering the possibility of taking legal action against the State for breach of their Constitutional and/or Convention rights. Traditionally wrongful imprisonment claims attracted substantial damages and it remains to be seen if this judgment will be a costly one for the state.