The new Companies Bill 2012  with Brian Walker BL

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The new Company Secretary “Qualification Test”.  In future, directors will be obliged to ensure that the person appointed company secretary has certain necessary skills.

The New Companies Bill 2012, 1429 sections of new law. But what’s relevant for private companies? How to quickly work your way through this new law to the core issues?

Brand new rules coming in for liquidations in the High Court under the new Companies Bill

The new Section 510 Application to the local Circuit Court for “Examinership Lite”, a full rundown on the practice and procedure.

Existing private companies will lose their memorandum and articles of Association and must adopt a new constitution or re-register as a different company type.

Alternatives to the memorandum and articles of Association, the benefits of having a well thought out and structured shareholders agreement in place. A “How-To” section with useful suggestions and ideas on drafting a new shareholders agreement under the new Bill.

Practice and procedure at the companies registration office. New rules on converting from one company type to another. Merging, dividing, acquiring or reorganising companies under the new provisions?

All company directors are getting new statutory duties and in particular the new duty on directors to act “Honestly and Responsibly”. What does this mean and the consequences for directors?

Are you up to date on the latest cases on personal liability from the Supreme Court and the High Court, PSK, Dev Oil? What Kelly J said in Connolly and Seskin Properties when a company suffered a legal wrong. What happens when company directors, shareholders disagree? What the courts say about company disputes?

Venues

Cork, Imperial Hotel, Monday 20^th May

Tralee, Brandon Hotel, Tuesday 21^st May

Limerick, Clarion Hotel, Wednesday 22^nd May

Galway, Menlo Park Hotel, Thursday 23^rd May

Athlone, Radisson Hotel, Friday 24^th May

Monaghan, The Four Seasons Hotel, Monday 27^th May

Sligo, Glasshouse Hotel, Tuesday 28^th May

Letterkenny, Wednesday 29^th May

Derry, City Hotel, Thursday 30^th  May 

Cavan, Cavan Crystal Hotel, Tuesday 4^th June

Castlebar, Breaffy House Hotel,Wednesday 5^th June

Mullingar, Mullingar Park Hotel, Thursday 6^th June

Wexford, Ferrycarrig Hotel, Wednesday 12^th June

Dundalk, Crowne Plaza Hotel, Thursday 13^th June

Dublin City, Radisson Blu  Hotel,Monday 17^th June

Portlaoise, The Maldron Hotel, Tuesday 18^th June 

Ennis, Old Gound Hotel, Wednesday 19^th June

Tallaght, The Maldron Hotel, Thursday 20^th June

Stillorgan, Sillorgan Park Hotel, Tesday 25^th June

SPEAKERS

 The Honourable Ms. Justice Mary Laffoy

Judge of the High Court.

 Lyndon MacCann SC

Senior Counsel

 Helen Dixon

The Registrar of Companies.

 John Glennon

Examiner of the High Court.

 Neil Hughes

Insolvency Practitioner.

 Senator Feargal Quinn

Seanad Eireann

 Ian Drennan

The Director of Corporate Enforcement.

 Colm Deignan

Chartered Accountant

 Brian Walker BL

Barrister at Law

VENUE

 The Ballsbridge Hotel, (Jury’s Hotel).

Ballsbridge.

Dublin4

 Tuesday 7th May 2013

 9.00am-4pm

7 CPD credits

Conference Programme 

An overview of the Companies Bill 2012, the largest Bill in the history of the State, 1429 new sections of new law that introduces a whole new corporate governance code and yet another new “Big Rulebook” that will be very relevant to over 500,000 company directors in 2014!

 Brand-new entities and concepts, new procedures for the company limited by shares, the CLS, the designated activity company, the DAC, the new PLC, the Societas Europae, guarantee companies, the CLG, the unlimited companies, ULC, PUC or PULC, external and unregistered companies,

 The New Constitution. The  Conversion Procedures/Changeover Rules. This is not discretionary, it’s mandatory, over 160,000 private companies will lose their old-style memorandum and articles of Association and will need to move over to the new style constitution.

 The new section 205 provisions, what happens when shareholders fallout? Will the new regulations make a difference?

 New applications under the companies acts in the High Court? How might the courts deal with these applications in the future?

 Is the new Section 54, enforcement of orders and judgements against companies a step too far in piercing the veil of incorporation?

 Lots of changes at the Companies Registration Office, Helen Dixon, the Registrar of Companies will set out what practitioners need to do to comply.

 Mergers, divisions, Acquisitions and Reorganisations, novel new statutory provisions allowing private companies to merge so that their assets and liabilities can be transferred under the companies acts.

 Directors Compliance Statements, certain large private companies, PLCs, DAC’s, CLG’s and charities may have to comply with this new requirement.

 The New Summary Approval Procedure.

 Directors New Statutory Duties, the new duty on directors to act “Honestly and Responsibly”. The consequences if they don’t and possible personal liability?

 The new Company Secretary “Qualification Test”, directors will be obliged to ensure that the person appointed company secretary has certain necessary skills.

 Opportunities for  solicitors, accountants and company secretaries to offer more corporate compliance, legal and company secretarial services when the new single director company is established. How to prepare for this?

 The Office of the Director of Corporate Enforcement. Mandatory Reporting.

 Registered Persons, companies in future must register persons authorised to bind the company.

“Examinership Lite”, SMEs will in future be able to apply locally in the circuit court for a less expensive remedy as an alternative to liquidation. Neil Hughes will explain how the new rules will work in practice, what practitioners will be required to do and what the judges will be looking for?

 New definitions of corporate insolvency. What options will be available under the new rules?

 High Court  Liquidations, the current situation from the perspective of the Examiner of the High Court, what’s happening at present and what official liquidator’s might do to improve efficiencies?. The new rules for official liquidations proposed in the Companies Bill?

  SPEAKERS

 The Honourable Mrs Justice Mary Laffoy

Judge Laffoy is a senior judge of the High Court having charge of the Chancery List that deals with the various applications under the companies acts. Having been called to the Bar in 1971 and following a distinguished career as a senior counsel working in many of the major cases of the day, particularly in the areas of conveyancing, commercial and company law, when she was appointed to the High Court in 1995.

 Lyndon MacCann SC

A highly acknowledged specialist in the area of commercial and company law, he is the author of the Bloomsbury professional annotated companies acts 1963 to 2012, McCann’s casebook on company law and numerous other works spanning the last decade which reflect the changing face of company law inIreland. He is a former member of the Company Law Review Group.

 Helen Dixon, The Registrar of Companies.

Helen Dixon holds a Masters in Governance fromQueensUniversityinBelfastand has been at the helm at the companies registration office since 2010.Helen is also a member of the Company Law Review Group. The CRO of tomorrow will be a busy place that acts as a central repository for the statutory filings of over 180,000 companies.

 John Glennon, MBA

Examiner of the High Court.

John Glennon has been the Examiner of the High Court since 2010 and he supervises the liquidation of companies wound up by order of the High Court. The Examiner’s office deals with all accounts and enquiries and countersigns all payments and investments. The Examiner also acts as Registrar to the court assigned to deal with matters proceeding before the Examiner known as the “Examiners List” which is usually heard on a Monday morning.

 Neil Hughes, Insolvency Practitioner.

Neil is a chartered accountant and has specialised in insolvency and corporate recovery for many years. In particular he has extensive experience of examinership matters and has acted as examiner on numerous occasions.

He is the co-author of ‘Examinership in Practice’ and he has lectured widely on the subject of corporate recovery.

 Senator Feargal Quinn

Senator Feargal Quinn has been an independent member of Seanad Éireann since 1993. He is no stranger to company law, having started his first retail shop in 1960 inDundalkto later become one of the most well-known retailers in the State. Senator Quinn is a member of the Oireachtas Joint Committee on Jobs,Enterpriseand Innovation. This committee will shortly have the task of dealing with the statutory provisions of the new Companies Bill and will oversee most of its passage through the very important committee stage.

Ian Drennan, ACCA

The Director of Corporate Enforcement.

Ian Drennan was appointed Director of Corporate Enforcement in August 2012. He was previously the Chief Executive of the Irish Auditing and Accounting Supervisory Authority and previously worked at the Department of Finance and the Comptroller and Auditor General’s office.

 Brian Walker BL

A practicing barrister in the law library with over 35 years experience in the area of company law and company secretarial practice, having previously worked with the accountancy firms of KPMG and PricewaterhouseCoopers. 

 Colm Deignan, Chartered Accountant

Colm has spent over thirty years helping clients overcome problems. He was a partner in a large multi-disciplinary practice. He has carried out over thirty Valuations of trading companies who for one reason or another needed to realise value for shareholders and has successfully mediated family re-organisations involving the dividing up of a diverse group of businesses amongst family members. 

Information and Reservations:

Venue                 :The Ballsbridge  Hotel

                                    Ballsbridge

                                   Dublin 4

                        car parking facilities will be available to the front and rear of the hotel

Time               :           Tuesday 7th May 2013

                                    9.00am-4.00pm

7 CPD Credits

 Fee                 :           € 245.00, includes breakfast pastries, coffees, teas, buffet lunch, conference documentation and free car parking at the hotel.

 If you would like to attend, you can book online at www.cpdseminars.ie for instant confirmation of a place or please complete and detach the booking form on the back page together with a cheque for the relevant amount and return to:

 Name             :           CPD Seminars

Address        :           57 Dame Street,

                                   Dublin2

Tel                  :           01-6790975

Fax                 :           01-6795262

Email              :           cpdseminars@eircom.net

Web               :         www.cpdseminars.ie

Who should attend?

Company directors, company secretaries, accountants, solicitors, in-house counsel, legal advisers, compliance professionals, auditors, CFOs, finance directors and controllers, CEOs, company chairmen,  non-executive directors, members and directors of state boards or charities and any other persons who have duties and responsibilities under company law.

 2. Being called a PIP. I suppose it could be worse, don’t fancybeing called an AI either, the Approved Intermediary, and I suppose it was worse in the first draft of the Bill. The PIP was referred to as a PIT, Personal Insolvency Trustee. I’d prefer being called a PIM, A Personal Insolvency Mediator and I might even get paid in advance for doing this work!

 3. It’s going to be painfully slow! Notwithstanding that the President very diligently signed this new legislation into law on St Stephens  Day last, 118 sections are still awaiting commencement orders and these are the meaty sections, the new specialist judges have yet to be appointed, the application form for the PIPs has yet to be published and the leaking of the reasonable guidelines on living expenses is painful. Why don’t they just put all this up on the website and get on with it!

 4. It has unleashed scores of tyre kickers! It’s already started and every Accountant in the country will have hours wiped out of a productive working day with prospective “new clients” bending your ear on whether or not they should apply for a DRN, DSA, PIA or asking your opinion as to whether they should go bankrupt and wonder should they do that here or go to England, Scotland, Wales or is there some other good location in Europe, where they can have the debt wiped away as pain-free as possible? Few people will want to pay us for this expert advice.

 5. Looks like we have over 25,000 creditors meetings to attend around the country in the first year alone. Last year I presented a seminar “How to Create a Row at a Creditors Meeting”, was thinking of doing another for the personal insolvency law, but don’t think there will be any need as tempers will flareup naturally at these meetings as creditors are given the bad news that debtors are not paying up and are looking for debt forgiveness. Good news for the hotel’s, lots of rooms will be booked for these creditors meetings, but doubt if we will be offered Tea,  Coffee and Biscuits?

 6. You Can’t Tell the Revenue Go Take a Hike! Not only are the Revenue Commissioners and the Collector General preferential creditors under the new Personal Insolvency Act 2012, their debt is classified as excludable, they have a powerful veto and this new law may not be suitable for somebody with a lot of Revenue Debt.

 7. There is no soft landing or a parachute if it fails! The consequences of failure could be quite extreme in that it triggers off an act of bankruptcy and many a non- expecting debtor could very easily find themselves in the bankruptcy courts if things don’t work out.

 8. The maximum duration of the debt settlement arrangement of the personal insolvency arrangement is six and seven years and this is far too long, anything can happen over this time period and the debtor is at the mercy of his creditors.

 9. The PIP has lots of rules, regulations and procedures to follow if they wish to become licensed and authorised under the new legislation. However, Section 172, says that the PIP shall not charge fees or costs or seek to recover outlays which are not incurred. The PIP is given no priority or guarantees on fees and an accountant or a PIP will have to spend at least 4 to 5 months working on these cases before they get a positive result and it’s far from clear as to how they will be paid, if ever!

 10. Advising clients on the new 55 page document, the guidelines on reasonable living standards and breaking the bad news to a client that they need to give up the vino, maybe go on a diet to cut back on their grocery bill, quit smoking and maybe cancel Sky Sports and cease paying their Christmas or Easter dues to the local church or popping a few bob into the collection box at Sunday Mass. This in future will all be regulated by the new statutory guidelines and who gets the job of enforcing all this, the PIP, the PIP is also in the firing line with the debtors creditor’s in that this arrangement will be sold to the creditors based on a dividend coming through each month and if this doesn’t happen, prepare to have somebody in your office to answer the phone on Monday morning to explain to creditors.

 Read yesterday that somebody said there will be professional exams required to become a PIP!  Anybody thinking of becoming a PIP?

 In 2008 the Law Reform Commission (LRC) published the Consultation Paper on Alternative Dispute Resolution (ADR). This was then followed by the LRC Report on ADR and a Draft Bill on Mediation and Conciliation in 2010. These publications have proposed recommendations as to changes that should be made to accommodate for alternative dispute resolution in Ireland.

The LRC report deals with the integration of mediation and conciliation in litigation practice, providing protection for the parties and it gives a definition of mediation and conciliation to clear up ambiguity.

The LRC Draft Bill compromises a legislative framework for mediation and conciliation in Ireland and provides a definition of these two forms of ADR under section 4(1) of the LRC Draft Bill.

Mediation is defined as a ‘facilitative and confidential structured process in which the parties attempt by themselves, on a voluntary basis, to reach a mutually acceptable agreement to resolve their dispute with the assistance of an independent third party, called a mediator.’

 In section 4(2) conciliation is defined as actively assisting ‘the parties in their attempt to reach, on a voluntary basis, a mutually acceptable agreement to resolve their dispute.’

 It is argued by Aideen Scannell in her article[1] on the LRC Draft Bill that the definition of conciliation in the Bill does not define the role of the conciliator and that it does not highlight the advisory nature of conciliation. Although, she states that the Bill does make it clear that the conciliator is there to give recommendations and settlement proposals, which is important as conciliation is more concentrated on finding a solution for the legally right party.

In contrast the Draft General Scheme of Mediation Bill 2012 does not mention conciliation.

The Draft Mediation Bill 2012 as published by the Department of Justice is concerned only with mediation so it appears we will have to wait even further for domestic legislation on conciliation.

 The LRC Draft Bill[2] and the Draft General Scheme of Mediation Bill 2012[3] require a solicitor and barrister to provide information and advice on mediation to their clients. There is also a requirement in the Draft General Scheme Bill that the solicitor must advise the client on the estimated costs and time that the litigation or mediation will take[4].

This is extremely beneficial to the parties as it allows them to consider other methods of dispute resolution rather than litigation. It also ensures that solicitors and barristers must be well versed in mediation. Training can also be provided to the parties by the mediator on the process of mediation[5].

 The Draft General Scheme Bill is modelled on the LRC Draft Bill and we need this to be made law as it contains a code of practice for mediators under section 9[6]. At the moment the European Code of Conduct[7] for Mediators is not binding, it is an optional code that the Law Society in Ireland has adopted but commitment to it is voluntary for mediation organisations.

Sarah Conway in her article[8] poses the question of whether mediators should be bound by a statutory code of conduct and whether there should be a statutory regulation of mediators as this could ‘preserve the quality of the process.’[9]

 Enforceability is an important aspect of the Draft General Scheme Bill under section 11 as it is up to the parties to determine whether the agreement is to be enforceable between them.

The question has been raised as to whether mediation agreements should be made enforceable just like litigation or arbitration. Sarah Conway in her article says that;

 ‘voluntary enforcement of the agreement is likely in most instances since it was achieved by an accord between the two parties.’[10]

 Further to this she argues that a legally enforceable agreement would be advantageous to the parties where the agreement involves an imposition of obligations on one or each of the parties. She refers to article 6 of the 2008 European Mediation Directive[11] where Member States are obliged, if both parties request, to ensure a mechanism where mediation agreements can be made enforceable.

 It has been debated whether the Irish courts should make mediation mandatory as was decided in Italy. Brian Hutchinson[12] describes mandatory mediation as a ‘mixed bag’. He says that the mediation process is most successful where the parties are willing.  

This gives the parties the ability to determine their own options for settlement.

Mr. Justice Peter Kelly supported this view at the recent Irish Commercial Mediation Association (ICMA) Conference[13]. He spoke of his strong views as a judge on mediation and how in 2004 he introduced ADR into the commercial court by way of rules of court having consulted with the commercial court judges in London, Scotland and Belfast.

Mr. Justice Kelly in his article on ADR[14] said that, ‘it is not possible to force people to go to mediation and if one does so, it is unlikely to be successful.’

He notes how his practice as a judge effects mediation. He writes that now he rarely makes an order under Rule 6(1) (xiii)[15] but simply suggests to the parties that they consider mediation. He is of the opinion that the success rates in these mediations tend to be higher than when a formal order is made.

 Order 56A of the Rules of the Superior Courts[16] is a powerful piece of legislation which allows the court to invite parties to take part in mediation, although, it is secondary legislation[17]. Section 12 of the Draft Bill 2012 is essentially the same rule but would be given more enforceability and power as would be a statutory provision and a primary piece of legislation.

The Draft Bill 2012 could incorporate all the mediation legislation in Ireland into one solid act therefore leaving us with a clear definition of mediation and knowledge of the exact protocol for a mediation process.

 The Oireachtas Joint Committee on Justice, Defence and Equality produced a report[18] on the Draft Bill 2012.

One of the main concerns of the committee was the ‘withdrawal of a mediator’[19] and the obligation on the mediator to give reasons for withdrawal. The committee holds that this could undermine the mediation process. It was also noted that no other jurisdiction has the obligation to give reasons.

The Bill is presently being redrafted by the parliamentary draftsman, taking into consideration the recommendations of the Oireachtas Joint Committee. 

 With regard to limitation periods and prescription periods the Bill ensures that while mediation is ongoing the statute of limitations will be halted under section 14.

Under section 15 the court can ‘stay’ proceedings to facilitate the mediation process. This allows the parties to enter in and out of litigation to consider a settlement through mediation. 

 The factors to be considered in awarding costs in mediation are determined by section 17 of the Draft Bill 2012. If a party unreasonably refuses mediation this will be taken into account when awarding costs. Even if the refusing party wins in litigation they could be landed with costs for both sides.

The case of Dunnet v Railtrack[20]  reflects the Woolf reforms in the UK. This case is the authority for the courts to penalise a party in costs for unreasonably refusing to mediate.

At present there is no Irish case on costs for mediation but in the ex tempore case of McCarthy v O’Sullivan[21] Murphy J, in a derivative action, gave leave to proceed an application in an Order 15, Rule 39 matter. Murphy J made it clear to the parties that there would be a costs sanction if they did not engage in mediation. This was a formal order pursuant to Order 56A.[22]

 The Irish courts are experiencing a huge backlog of cases and mediation has a huge part to play in reducing the number of cases passing through the courts[23].

It is widely known that Mr. Justice Kelly is in favour of mediation and he encourages parties to consider other forms of dispute resolution rather than litigation. In the case of Nesselside Builders Limited v Carlow County Council[24] Mr. Justice Kelly advised the parties to consider mediation as it could have been a very expensive civil action. The mediation was successful and the case was withdrawn from the Commercial List.

 European Mediation Legislation

 The EU Mediation Directive 2008[25] focuses on cross border mediation in civil and commercial matters. It is up to the Member State to legislate on mediation domestically.  Ireland transposed the Directive into national law by the use of the EC Mediation Regulations 2011.[26]

The directive is without prejudice and offers a broad sense of guidelines, which is appropriate considering the well established EU law principle of subsidiarity.

 ADR and ODR Proposals

 The proposed legislation by the EU for ADR[27] and the Online Dispute Resolution (ODR)[28] has recently[29] been accepted by the European Parliament. The legislation will soon be adopted by the end of 2015 at the latest. If Ireland is to fully comply with these new proposals we must have a regulatory system in place for ADR.

This legislation is aimed at domestic and cross border consumers purchasing online or off online. The ADR rules will ensure that consumers can be provided with quality alternative dispute resolution organisations to solve all kinds of contractual disputes.

The ADR proposal is to ensure a high level of consumer protection and to make fair alternative dispute resolution widely available to consumers.

Article 6 of the ADR proposal requires that member states must ensure that the persons acting in the ADR processes are competent, possess the specific expertise and are completely impartial.

Article 16 states that Member States should monitor the ADR entities and there also needs to be an authority to regulate them.

If this is to be established there needs to be a domestic authority in Ireland to regulate persons carrying on ADR processes and the enactment of the Draft Bill 2012 could prove very useful in ensuring this standard.

 The ODR proposal states, under article 5, that an EU wide online platform will be set up to deal with consumer disputes from purchases made online. The web site is proposed to be in all official EU languages and will link up the national ADR agencies on the site.

The ODR proposal contains a provision for electronic feedback and a network of online facilitators. Complaints shall be submitted by a form online according to article 7.

Article 8(3) states that the length of the procedure, whether the presence of the party is needed and the binding effect of the outcome must be communicated to the party.

Under article 13, traders should provide information to consumers about this online ODR facility for their consumer complaints.

 Richard Susskind in his book ‘Tomorrow’s Lawyers’[30] predicts that ODR

‘will prove to be a disruptive technology that fundamentally challenges the work of traditional litigators (and of judges).’

Although in the long run he believes it will be the most popular way to solve ordinary non- complex disputes.

This goes to show that we are moving forward in our thinking of alternative dispute resolution and there is much need for regulation in this area.

 Conclusion

 The report of the Joint Committee on Justice, Defence and Equality[31] stresses that the absence of regulation is one of the main difficulties with mediation in Ireland. Regulation is needed as if something were to go wrong in a mediation process such as a mediator compelled to give evidence in court or where there is a breach of confidentiality, regulation could aid this. Regulation is the way forward to secure the rights of the parties and to maintain the standard of mediators.

 Ireland needs the Draft Mediation Bill to be made into law as it will establish a solid legislative framework for mediation. Domestic legislation on mediation is essential if Ireland wishes to keep in line with the EU law on ADR. Finally, a clear definition of mediation will promote its use as a form of dispute resolution in civil and commercial disputes in general.

 Bibliography

 Books:

 -          Richard Susskind, ‘Tomorrow’s Lawyers, An Introduction to Your Future’, (Oxford University Press, 2013).

 Articles:

 -          Mr. Justice Kelly, ‘Alternative Dispute Resolution and the Commercial Court’ (2010) Arbitration and ADR Review.

 -          Brian Hutchinson, ‘Transposition of the Mediation Directive by May 21, 2011’ (2011) 18(4) C.L.P. 70.

 -          Sarah Conway, ‘Recent Developments in Irish Commercial Mediation – Part I’

(2009) 27(3) I.L.T. 43-48. 

-          Sarah Conway, ‘Recent Developments in Irish Commercial Mediation Part II’

(2009) 27 I.L.T. 58-62. 

-          Arran Dowling-Hussey, ‘The Mediation Directive: Was the Wait Worth It?’

(2008) 26 I.L.T. 235. 

-          Aideen Scannell, University of Limerick, ‘The Law Reform Commission’s Draft ‘’Mediation and Conciliation Bill’’ will lead to more questions than answers.’ (2012) February 11^th.

Legislation:

 -          Directive 2008/52/EC of May 21, 2008, on certain aspects of mediation in civil and commercial matters (OJ L136/3).

 -          European Communities (Mediation) Regulations, 2011, S.I. 2011/209.

 -          Rules of the Superior Courts (Mediation and Conciliation) 2010, S.I. 2010/502.

 -          Proposal for a Directive on alternative dispute resolution for consumer disputes 2011/0373 (COD).

 -          Proposal for a Regulation on online dispute resolution for consumer disputes 2011/0374 (COD).

 -          Draft General Scheme of Mediation Bill 2012.

 -          Rule 6(1) (xiii) of Order 63A of the Rules of the Superior Courts.

 Law Commission:

 -          Law Reform Commission, Report on Alternative Dispute Resolution: Mediation and Conciliation  (LRC 98-2010).

 -          Law Reform Commission’s Draft ‘Mediation and Conciliation Bill’ 2010.

 -          Law Reform Commission, Consultation Paper on Alternative Dispute Resolution (LRC CP50, 2008).

 Reports

-          Oireachtas Joint Committee on Justice, Defence and Equality, ‘Report on hearings of the Scheme in relation to the Mediation Bill’. June 2012. (31/JDAE/007).

 Cases:

 -          Dunnet v Railtrack (2002) 1 W.L.R. 2434.

-          Nesselside Builders Limited v Carlow County Council (2007) 8157P.

-          McCarthy v O’Sullivan (2012) March, High Court, Ireland.

  Websites (links)

 -           European Code of Conduct for Mediators http://ec.europa.eu/civiljustice/adr/adr_ec_code_conduct_en.pdf.

 -          Aideen Scannell, University of Limerick, ‘The Law Reform Commission’s Draft ‘’Mediation and Conciliation Bill’’ will lead to more questions than answers.’ (2012) February 11^th.

 -          Courts Annual Report http://www.courts.ie/Courts.ie/library3.nsf/(WebFiles)/1EAFA33B0C5E24F980257A3E0037FCC9/$FILE/Courts%20Service%20Annual%20Report%202011.pdf

 Conference

 -          Irish Commercial Mediation Association (ICMA) Conference 2013, March 21^st,

The Aviva Stadium, Dublin.

 [1] Aideen Scannell, University of Limerick, ‘The Law Reform Commission’s Draft ‘’Mediation and Conciliation Bill’’ will lead to more questions than answers.’ February 11^th, 2012. To be found at; http://www.cpdseminars.ie/mediation-news/the-law-reform-commissions-draft-mediation-and-conciliation-bill-will-lead-to-more-questions-than-answers/

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It is the largest Bill in the history of the State and the printers have had to break it down into three volumes, Volume 1 will deal with Parts 1 to 15 spread over 764 pages and mainly dealing with the new CLS, the company limited by shares that will be at the heart of the new company legislation. Volume 2 will comprise of over 400 pages dealing with Parts 16 to 25 and setting out the rules and regulations for the other entities. 

Volume 3 will deal with the Explanatory Memorandum, which in itself will be a bit of a blockbuster stretching to over 402 pages. The new Bill will be somewhat unique in that it will be bound like a telephone directory and will cost €100 to purchase a copy from Government Publications. The Government Publications office inMolesworth Streethas been closed for some three or four weeks and you will need to order your publication direct from them and receive a copy in the post. 

The new Bill when fully enacted and commenced into law will repeal and consolidate the existing 16 companies acts from 1963 to 2012 in one scoop and hopefully will make things easier for over 500,000 company directors who are getting a new Rule Book in 2014.

The Dail, in rapid quick time, passed novel new legislation that afforded struggling companies to quickly seek court protection from creditors and provide a mechanism for them to restructure their debts through a new process called Examinership. 

Small private companies will soon be able to apply directly to the local Circuit Court to have an examiner appointed, in a move which will make it cheaper and easier for viable businesses to restructure their debts announced by the Minister for Jobs,Enterpriseand Innovation, Richard Bruton TD today. 

The Minister announced his intention to amend the Companies Acts to facilitate the change through a measure to be contained in the new Companies Bill 2012 and this has now been piblished.  

These changes will affect small private companies, meaning companies that satisfy two out of the three following conditions: 

·        Balance sheet not exceeding €4.4million 

·        Turnover not exceeding €8.8million 

·        Number of employees not exceeding 50 

Minister Bruton’s announcement comes as part of the Government’s continuing consideration of measures to help address the issue of SME debt. 

Making the announcement today, Minister Bruton said: 

“Small businesses employ over a third of all people working inIrelandtoday, and a major part of the Government’s Action Plan for Jobs is aimed at supporting the growth of this sector. We are putting in place a streamlined support service for small and micro-businesses through reforms to the CEBs and local authorities…..

 “However we must also recognise that there are many viable businesses in this sector, employing large numbers of people and with the potential to employ many more, which are facing significant difficulties because of legacy debts. That is why we committed to putting in place better structures to enable these businesses to more easily restructure their debts, while giving proper consideration to other businesses and individuals owed money by them. 

“Today’s announcement that small companies will be able to apply to the Circuit Court for examinership will mean that is will be cheaper and easier for businesses to restructure their debts, meaning that more companies will be able to do so. This will mean that more businesses will survive their current difficulties, meaning crucially that more jobs will be saved and more jobs will be created in this hugely important part of the economy”.  

Accordingly, the Minister is using the eligibility threshold figures for audit exemption for small companies. Small companies recently got a lot “Bigger” with new regulations introduced in August of this year, that increase the sales turnover from €7.3 million to €8.8 million. Remember when audit exemption was first introduced in 1999  the turnover figure was capped at £250,000 and balance sheet not exceeding £1.5 million. Then in 2003 the sales figure was increased to €1.5 million and in 2006 jumped to €7.3 million. 

“Examinership Lite” has the potential to offer many of the 160,000 are so private companies that can avail of audit exemption a much more efficient and effective debt restructuring mechanism than is proposed in the new Personal Insolvency Bill 2012. “Examinership Lite” looks like a piece of cake compared to having to deal when all the bureaucracy and procedure attached to the new DRN’s, DSA’s, PIA’s and going through the hoops of satisfying the requirements of the new Approved Intermediary, The Personal Insolvency Practitioner, The Insolvency Service of Ireland and still having to have the application approved by the local Circuit Court or the High Court! 

A successful application in the local circuit court for a typical company with annual sales below nearly €9 million for “Examinership Lite” could be all done and dusted within three months and complete finality brought to the table with regard to debt restructuring. This appears hugely attractive when compared with the other options of official or voluntary liquidation and on the personal side of things with the new bankruptcy discharge periods being reduced from 12 to 3 years and the 3, 5 and 6 year discharge periods for the new DRN’s, DSA’s and PIA. The Personal Insolvency Bill has a raft of applications that disgruntled creditors can make to the Circuit Court but they don’t have the same range of similar options in company law!. 

“Examinership Lite” looks great on paper, but the key question is when will it be available to struggling companies. The new Companies Bill 2012 will stretch to over 1400 sections of new law, it will be the largest piece of legislation in the history of the State and will totally transform company law. However, unless the Minister can reach some agreement on cross-party consensus it seems a tall order to have this legislation enacted by the end of 2013. It’s crystal clear that the government needs to pull out all the steps like they did back in 1990 when there was an “emergency” that required recalling the Dail and the enactment of the so-called Goodman Act, introducing Examinership. It’s not just one company that needs assistance, its thousands and we are very likely to see a massive increase in the number of circuit court applications from the 50 that were made  last year in the High Court.

However, the Personal Insolvency Bill has now completed Report and Final stage in the Dail. What happens next?. The Minister and his officials have been trial testing the legislation by examining it section by section and seeing how, in practice, it might pan out in different debt scenarios. However, the proposed legislation appears to be throwing up further issues that may need to be addressed and the Minister has indicated that he will do so during the next debate in the Seanad and then bring the issues back to the Dail in December. 

It certainly is very complex legislation which contains many new mechanisms  that are unique to Irish law. It appears that there will be a brand-new Part 5 to replace the current Part 5 of the legislation. It will provide extensive provisions for the regulation by the Insolvency Service of Ireland of the new personal insolvency practitioners. This section will cover regulatory provisions, oversight and provisions to ensure that there are sufficient indemnities in place to guarantee where funds are being dealt with, that those persons using personal insolvency practitioners will be protected. 

We can expect a new Part in the Personal Insolvency Bill providing for the revision of courts legislation which the Minister says is necessary to operate the new insolvency process efficiently and effectively. The new legislation will deal with the transfer of the Office of Official Assignee in Bankruptcy from the Court Service to the new Insolvency Service of Ireland. 

The first debate in the Seanad has been scheduled to commence on Wednesday 21^st  November and the Minister still appears optimistic that the legislation will be enacted before Christmas to allow the Insolvency Service of Ireland to commence operations early in the New Year.

Throughout the debates, the Minister has been at pains to point out that the type of creditors affected by this new legislation will be ordinary business people. 

Pressed by Deputy Niall Collins of Fianna fail who also sought to have the threashold increased, the Minister asked the deputy to consider, for example, if a debt of €50,000 was owed to any one of the 400 so credit unions in the country. The Minister pointed out that this would allow anybody to simply apply for one of the new proposed Debt Relief Notices, the DRN and have a €50,000 debt wiped out. Whilst the application for the Debt Relief Notice is not all plain sailing and there is a sting in the tail and some pain to be borne by the debtor over the three years supervisory period but in essence it allows for a complete write-off of a debt without making any payments. 

Slow progress was made on the first Report Stage hearing in the Dail and this is expected to conclude by Thursday 8th November bearing in mind that there are nearly 200 amendments it may not be finalised and may need more Dail time before it is finally passed by the Dail during the next week or so and then sent to the Seanad for consideration by the senators and if they make any amendments it needs to go back to the Dail again before enactment which is likely to happen in early December. Thereafter, we can expect significant changes to the Rules of the Superior Courts and the rules of the Circuit Court, new practice directions and guidelines for the new personal insolvency practitioners and how they will be regulated in future.

 In order to be admitted to the Commercial Court, a plaintiff has to have High Court proceedings already in being and provided they fulfil the criteria for entry into the commercial court and do so on time, the matter comes up for mention first thing in the list at 11am on Monday morning. It’s an interesting outing to the Round Hall of the Four Courts and you will very quickly see the presiding judge deal with the future administration of these cases. 

Mr Justice Peter Kelly urged the parties involved in an “extraordinary bitter” dispute involving the Dublin Cinema Group, DCG, who are the operators of theSavoyand Screen cinemas inDublincity centre. 

The judge agreed to transfer over from the High Court, what’s known as a derivative action, a type of section 205 of the Companies Acts 1963 action taken by a plaintiff against an alleged wrongdoer that the plaintiff and or the company has suffered damages and or a loss and is seeking a remedy. Ordinarily, the plaintiff is required to prove exceptions to the rule in Foss and Harbottle and generally these type of actions are very hardfought and can prove very expensive for both sides. 

The judge said that this was an extraordinary bitter dispute and he was of the opinion that instead of battling it out in court, the parties should review their options of engaging in a Mediation Conference. 

New rules introduced in 2010 now require a plaintiff to first bring an application before the High Court for  leave to bring the derivative action and this now serves as a type of filtering process allowing the plaintiff to move on to the second stage of the legal proceedings.