Government plan to introduce dedicated mortgage arrears court facing "significant constitutional issues"

A spokesperson for the Department of Justice says the government is now considering introducing special sittings within the existing courts

Government plan to introduce dedicated mortgage arrears court facing "significant constitutional issues"

Justice Minister Frances Fitzgerald | Image: Photocall

Government plans to introduce a special court to “sensitively handle" mortgage arrears and personal insolvency are facing “significant constitutional issues” according the Department of Justice.

The government legislation programme for autumn 2016 had indicated that the plan would go under 'Pre-Legislative Scrutiny' by November 2016.

However Fianna Fáil spokesperson on finance, Michael McGrath yesterday said the bill - the Mortgages Special Court Bill/Courts (Mortgage Arrears) - has yet to be published, “let alone reviewed by the Oireachtas Committee.”

Deputy McGrath said any further delays to the bill are “unacceptable” and called for it to be “brought forward, scrutinised and enacted as quickly as possible.”

A spokesperson for the Department of Justice said the department has been consulting with the Attorney General over certain “constitutional and legal aspects” arising from the plan.

He said some elements of the plan - including the introduction of private court sittings and the question of whether a court has the power to impose mortgage arrears solutions raise, "significant constitutional issues.”

The department is now examining the possibility of introducing special Circuit Court sittings to deal with repossession actions and mortgage arrears difficulties using existing courts legislation.

The government is currently engaging with the Court Service in the hope of introducing the special sittings before the end of March.

The spokesperson said special insolvency legislation passed in 2015 means that the courts are already capable of imposing a personal solvency arrangement with a view to keeping property owners in their home.

Under legislation passed in 2013 the courts are also empowered to adjourn repossession proceedings to allow time for a personal insolvency arrangement to be put in place.

In 2015 1,284 orders for possession of property were made in the Circuit Court - a 21% increase on 2014.

In the first quarter, January to March, of 2016 - the most up to date figures available from the court services - the Circuit Court granted a total of 284 possession orders - 219 of which were primary homes.