Sunday, May 2, 2010
Caroline McCann’s problems didn’t start with the credit union loan. They had taken root a long time before that.
She suffered from alcoholism and psychiatric issues, and she couldn’t read. She lost a daughter in tragic circumstances, and was forced to take out a loan to cover the cost of her funeral.
It wasn’t long before she began to miss payments. In 2003, her credit union obtained a judgment of €18,000 against her in court .But she kept missing the court-ordered repayment schedule of €82 a week. She didn’t grasp the seriousness of this, and never even sought legal advice until the gardaí turned up at her door. In 2005, the whole awful mess culminated with her being sentenced to jail.
Caroline McCann’s case is not unusual.
In the last five years, more than 1,000 people have spent time in prison for non-payment of debts. The average sentence is 27 days, though some loan defaulters spend as many as 90 days inside.
Most of these cases never make the headlines, unless they somehow manage to have the judgment overturned - as did the mother of four who was sentenced to a month in jail In May last year after failing to pay off €1,500 in debt mounting upon the credit card she had signed up for while in a psychiatric hospital. She was successful in having the sentence quashed.
But in 2008 alone, 276 people did go to jail for failing to pay a debt; by the end of October 2009, this number had dropped to 157.
We have Caroline McCann - in part at least - to thank for that. Last June, McCann succeeded in having the judgment against her overturned.
In her landmark ruling, Justice Mary Laffoy said it was ‘‘inexplicable’’ the state could continue to pursue people under an unconstitutional and ‘‘vague’’ scheme which effectively cost it money.
New legislation introduced in the aftermath of the ruling will make it more difficult for jail sentences to be imposed over failure to pay off a civil debt.
Under the new laws, the state must show that the debtor is guilty of ‘‘wilful refusal’’ or ‘‘culpable neglect’’, and has no goods which could be seized in place of the money owed.
Funny phrase, that: ‘‘culpable neglect’’. Which party, you can’t help wondering, is more guilty of culpable neglect? The credit union that gave a large loan to an illiterate woman who was suffering from psychiatric problems, or the woman who took the money and then failed to pay it back?
The credit card company that decided that an applicant in a psychiatric institution, whose total family income was €464 a week, was a good credit risk, or the woman who spent the money and then got into difficulty trying to pay it back?
Unfortunately, McCann’s victory doesn’t bring any relief for the thousands more jailed for non-payment of court-imposed fines.
In the first ten months of 2009, more than 3,000 people went to prison for failing to pay a fine, compared to 1,089 in 2006.This number includes the 50 or so people who are sent to jail annually for not buying their TV licence.
This issue came to the fore again last week, when the governor of the Dóchas women’s prison announced she was resigning after ten years in the job. Kathleen McMahon said overcrowding in the prison made it ‘‘completely impossible’’ for her to do her job in recent months.
She described how she has had to make space for up to 137women in an institution designed for 85, and said many of the women in her care were so low-risk they should never have been jailed in the first place.
It’s hard to conceive how the same state -which has been so assiduous in pursuing unpaid court fines that it has ended up with a prison service bursting at the seams - chooses to take such a softly-softly approach where other, much larger debts are concerned.
On the day McMahon announced her resignation, newspapers revealed that the government was ‘‘hoping its new relationship framework’’ with Irish Nationwide would ‘‘assist it in recouping’’ the €1million bonus paid to former Irish Nationwide managing director Michael Fingleton.
Fingleton, lest we forget, has cost the state considerably more than a few unpaid TV licences.
He is the former managing director of Irish Nationwide, a building society that has required a €2.7 billion cash injection by taxpayers in order to keep it afloat. Last week, the society reported losses of €2.5 billion.
The €1 million relates to a bonus Fingleton paid himself - along with his €27million pension package - when he retired in 2008, but later agreed to give back. (On the front page of last weekend’s Sunday Independent, he claimed it had been his intention all along to give the €1 million bonus away to charity.)
Then there is the €109 million owed to us by former directors of Anglo Irish Bank, including Seán FitzPatrick and David Drumm, which we apparently ‘‘don’t expect to be repaid’’. FitzPatrick is another one who has cost the state rather more than a few unpaid parking fines.
But he’s not languishing on a mattress on the floor of a shower room in Mountjoy jail with vermin for company.
No, having been arrested and questioned and released without charge, he is free to enjoy the spoils of his generous pension, his €400,000 golden handshake and his frequent trips to Marbella.
Former Anglo chief executive David Drumm went to Cape Cod with his pension entitlements intact and a €659,000 bonus paid by Anglo, and wouldn’t open the door when Charlie Bird came calling - which, it seems, was the best effort the state could make at going after him.
As double standards go, they’re dizzying. Our prisons are coming apart at the seams with people who - because of carelessness or stupidity or old-fashioned poverty - have cost us a few thousand euro in unpaid fines.
We’re prepared to fork out €2,000 a week to keep each one of them in prison. At the same time, a tiny number of well-connected men who have - through carelessness or stupidity or old-fashioned greed - cost the state hundreds of billions are living it up in Marbella and Dublin 4 and Cape Cod, untouched and - so far at least - untouchable.
‘‘Culpable neglect." It’s a funny old phrase, indeed.
This column first appeared in The Sunday Business Post on May 2, 2010
Posted by Jennifer O'Connell at 6:47 PM