Don’t be fooled by the Freedom of Information Act – it’s not free and you frequently get little or no information

THE OVERHAUL of the personal insolvency regime is one of the most important pieces of legislation to be introduced in this State. Just over one in five mortgages provided to buy a home were in some kind of distress at the end of June. This legislation, if operated fairly by lenders without unreasonable use of their veto, should help people to resolve debts they will never be able to repay.

The Bill reduces the bankruptcy term from a draconian 12 years to three and, perhaps most importantly, sets up an out-of-court debt settlement system where mortgage debt of up to €3 million can be written down to affordable levels. Minister for Justice Alan Shatter has said more than 21,000 people could use the legislation in the first year of its operation.

You would have thought, given the importance of the reliefs being introduced, that the Government would at least show how the legislation was designed, including the ideas that were embraced, particularly from the banks, and those that were dismissed.

Not so. After the much anticipated draft heads of the Personal Insolvency Bill were published last January, I submitted two requests under the Freedom of Information Act – one to the Department of Justice and the other to the Department of Finance, the two departments that have worked on the new legislation – seeking copies of any letters, emails, notes and minutes of meetings relating to representations made to them about the legislation. Both requests were refused; not a single record was released.

Following the publication of the Personal Insolvency Bill 2012 at the end of June, I submitted the same two requests again.

The Department of Justice again refused to release any records, citing two reasons. The first referred to the section of the FOI Act which exempts records relating to communications within Government. There were, reportedly, conflicting views between the departments early this year about how unsustainable mortgage debt should be treated in the out-of-court settlements.

The second reason was that FOI gem – “deliberative process” – the catch-all clause in the Act that Government bodies often use when they don’t want to release records. An appeal was lodged for an internal review of the refusal. The appeal was rejected. The next step is to submit an appeal to the Information Commissioner. That could take some time.

Over at the Department of Finance, they insisted on the payment of €104.75 up front, given the search and retrieval efforts involved in tracking down the relevant documents. That was paid. At this stage the fees involved in this whole exercise have surpassed the €200 mark. It’s not exactly a large sum but don’t be fooled by the Freedom of Information Act – it’s not free and you frequently get little or no information.

After delays of several weeks, a large envelope with the Department of Finance postmark arrived late last month. Slowly going through the contents, hope evaporated.

Of 63 records listed in a schedule, the department refused to release 52. Just two records were granted in full with no redactions – a letter from a law firm to the Oireachtas justice committee and a report of public hearings held by that committee.

Ten records were part-granted, but most contained information in the public domain.

Among the records not released, according to the schedule, were 10 relating to contacts with the department from Bank of Ireland, AIB, Ulster Bank, KBC Bank, Start Mortgages and GE Money, and a further five from the industry’s representative body, the Irish Banking Federation.

The lobbying campaign by the banks was particularly intense between the publication of the draft legislation in January and the Bill itself in June.

It is known the banks were unhappy at plans to keep the cap on mortgage debt that could be written off at €3 million and that the departments resisted pressure to reduce it to the banks’ preferred figure of €1 million, but what else did the banks want in or out?

More than a dozen records, including minutes of meetings at the department and correspondence between Finance, Justice and the Central Bank, were also refused.

As this legislation moves towards the statute book, the public would benefit from greater transparency around how the new personal insolvency regime was built, particularly given the scale of the problems it is designed to fix and the number of people affected. Sunlight is said to be good medicine; the Government should let the light in.