Pro Bono group “New Beginning” to represent defendants in repossession cases

The National Pro Bono Centre is to open late this summer at Chancery Lane in London. This key resource will be home to England and Wales' national clearing houses for legal pro bono work, and will provide a fundamental centre for those seeking pro bono legal advice and representation. This unique connection between the three bodies - the Bar Pro Bono Unit, the ILEX Pro Bono Forum and LawWorks (the Solicitors' Pro Bono Group) will be crucial to improving collaboration and co-ordination in the pro bono sector.

For further information on the National Pro Bono Centre, please click here.

Legal rights organisation FLAC has given a cautious welcome to the Financial Regulator's consultation paper on the code of conduct for mortgage arrears. Noting that the document is a consultation paper only, FLAC said that it incorporated many of the interim recommendations of the Expert Group on Mortgage Arrears and Personal Debt published on 6 July 2010.

FLAC said that if the proposals recommended in the consultation paper are adopted, then borrowers will have a structured process for dealing with lenders if they are in difficulty with mortgages on their family homes. It will also require lenders to engage to some extent with those who contact them in anticipation of future difficulties. As recommended by the Mortgage Expert group, lenders will have a standardised process for collection of financial information and review of decisions.

If adopted, the proposed code will prohibit lenders from initiating repossession proceedings while reasonable negotiations are ongoing, or where a borrower is adhering to the terms of revised arrangements. Lenders will have to defer court proceedings for at least 12 months from the time arrears began or 12 months from the time that any new arrangement had fallen down. As is currently the case, the code will not apply where the borrower does not engage with the lender. In those cases, the code permits lenders to seek repossession whenever they wish.

Director General of FLAC Noeline Blackwell said that if the code is implemented, it will represent a welcome advance in the protection available to borrowers in difficulty with mortgage repayments on their family homes.

"However," Ms. Blackwell continued, "the proposed resolution process lacks independent oversight. It is still one which is still very much an internal process which allows the lender to determine what is a suitable mortgage repayment package. The only external recourse will be a complaint to the Financial Services Ombudsman. There is no suggestion that additional resources will be available to the Ombudsman to deal with those complaints, or any indication of what assistance will be available to borrowers who wish to bring complaints.
FLAC also said that the revised code, if enacted, is also only one step in what needs to be a much wider solution for borrowers who are often trying to cope with many debts at the same time. "Callers to our legal information line and to our network of centres are telling us that they are under pressure from many different creditors, and unable to deal with them all," Ms. Blackwell said.

As part of the consultation of the Financial Regulator, it is offering the public a rare chance to contribute its views on how financial institutions should handle mortgage arrears in future. FLAC welcomes this chance to hear the voice of borrowers who are most directly affected by the mortgage arrears crisis. Ms. Blackwell outlined how "the Regulator has asked for input from interested parties - there is no-one more interested than the members of Irish society in how mortgage arrears problems are handled".

To facilitate people in giving these vital opinions, FLAC is inviting the public to use its website to answer the questions posed by the Regulator's consultation paper. In addition, FLAC has developed some other questions which it feels will augment the consultation process, such as whether there is adequate support for homeowners in trouble or whether the Code should be legally enforceable. FLAC will then collate all responses received by 1 September and present them to the Financial Regulator by the closing date of 3 September.
"FLAC hears every day through its telephone information line and advice centres of the distress and despair felt by people in difficulty with mortgage arrears as well as other forms of debt. FLAC is seeking a holistic approach to debt which will take into account the totality of a person's debt situation," said Ms. Blackwell.

FLAC urges the public - whether affected by mortgage arrears or not - to read the Financial Regulator's proposals and comment on them. "It is vitally important that the Regulator be made aware of how the issue of mortgage arrears is affecting homeowners across the country. By making submissions, the public can, through FLAC or individually, inform the Regulator, in the hope that it will result in a more useful, effective and practical Code of Conduct," concluded Ms. Blackwell.
For more information on how to take part, please click here.

FLAC has responded to draft legislation published today by the Department of Justice & Law Reform, the Civil Law (Miscellaneous Provisions) Bill 2010.

It noted that the new bill proposes changes across a wide range of issues including family law, bankruptcy law and the provision of civil legal aid. FLAC is welcoming the proposed changes to the law concerning family maintenance payments. This will bring the law in this area into line with the general regulation of debt collection. According to FLAC, the bill proposes a new process whereby defaulting maintenance debtors will be brought before a judge to explain their failure to pay. FLAC said that callers to their telephone information line and their centres have noted that the gap in the legislation which currently exists is causing hardship.

Commenting on the changes, Noeline Blackwell, Director of FLAC, said that "when this new legislation is enacted, there will be a clear distinction made between those who cannot pay maintenance and those who actively choose not to. Imprisonment will be a sanction for a Judge to impose on those persons who are simply refusing to keep up maintenance payments. On the other hand, those who are experiencing economic difficulties will get a chance to explain this to a court and perhaps have existing orders varied."

While the bill contains some change to bankruptcy law, FLAC said that the small changes proposed were inadequate. According to Ms. Blackwell, "merely setting an outer limit of 20 years on the period during which a person might be bankrupt was entirely insufficient to deal with the real situations of over-indebted people in Ireland today."