This briefing summarises recent legislation, cases and trends relevant to ongoing efforts to resolve the mortgage arrears crisis.

Recent Legislation

Recent legal and regulatory developments relevant to the mortgage arrears crisis have included:

Key Points:

In some circumstances a plaintiff/claimant can bypass a defendant (even an insolvent one) and seek a declaration against the defendant's insurer.

The High Court has confirmed that, if a defendant is insolvent, the plaintiff may seek a declaration that the defendant's insurer is liable to indemnify the defendant, at least when:

On 29 January 2016, the Irish bankruptcy term was reduced from 3 years to 1 year. This Briefing sets out further detail, and summarises recent developments in the area of bankruptcy and personal insolvency.

BACKGROUND:

Key Points:

A Senate Economics References Committee has recommended that the Commonwealth enact uniform national security of payment legislation, albeit with a target of around 2018 for implementation.

Security of payment (SOP) reform discussion papers were released by the Queensland and New South Wales Governments in the run up to Christmas. That timing happened to coincide with the publication by the Senate Economics References Committee of its report "'I just want to be paid': Insolvency in the Australian Construction Industry".

Key Points:

Complex cross-border issues can be dealt with relatively easily under the Cross-Border Insolvency Act as long as flexibility is built into the relevant orders.

Key Points:

You can lead a director to the safe harbour, but you can't make him drink.

The Government's new approach to insolvency is long on rhetoric about risk taking and the need to remove the stigma of business failure.

However, it is short on detailed consideration of exactly why we have legal rules for corporate and personal insolvency.

Those rules aim to balance the interests of creditors against the need to encourage business start-ups.

The Australian Government has accepted certain recommendations of the Productivity Commission's long-awaited Report on Business Set-up, Transfer and Closure, in an attempt to change the focus of Australia's insolvency laws from "penalising and stigmatising business failure”, according to the Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP.

It has expressed a willingness to legislate to introduce at least two main changes:

Key Points:

It's unclear that safe harbours by themselves will provide genuine opportunities for restructuring distressed businesses.

The Productivity Commission's upcoming report on corporate insolvency will address two burning issues: ipso facto clauses and how to encourage directors to save financially-stressed companies.

There's been a drop-off, but Peter Bowden says things might be about to change.

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This briefing sets out a high level review of issues relevant to secured lending in Ireland.

LENDING IN IRELAND

Commercial lending is generally not a regulated activity in Ireland, although lending to natural person ‘consumers’ may trigger a licencing requirement. Banks licensed in other EU Member States may be compelled to use their passport to carry on a lending activity in Ireland that would otherwise be unregulated.