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The Four Courts in Dublin's city centre. Laura Hutton/

'I'm not going anywhere': Lay litigants in uphill battle against banks and vulture funds

There are calls for the Legal Aid Board to relax its merits test so more families in debt can access professional representation.

IT WAS STANDING space only in a stuffy room at the Four Courts last Friday as solicitors and barristers went head-to-head with banking customers, and the Master of the High Court was referee.

The lay litigants (people who are representing themselves in court) were among over a hundred cases on Master Edmund Honohan’s list that morning.

A Ms Tumulty, who was the first lay litigant of the day, told him that she had tried to get her loan restructured in 2007 “when the interest was sky-high”. She claimed that AIB had “refused to engage” with her.

The woman asked that she be given a six month extension, addressing the bank’s barrister and telling him “you have dragged me on a long time”. She was given a date of 2 February.

Another litigant representing himself was John Harley, who went guarantor on a loan from AIB for his brother Paul.

AIB is now pursuing the two brothers for the debt, but Paul, according to his brother, was in Dubai.

Harley apologised several times to the Master for his lack of knowledge about the proceedings or about how to represent himself.

“You’re not expected to know, you’re not a trained lawyer,” Honohan replied.

‘It all happens quickly’

Lay litigants, like those who appeared before the High Court Master last week, are at an obvious disadvantage when they come up against experienced members of the legal profession who represent their lenders.

Free Legal Advice Centre (Flac) policy analyst Paul Joyce said it is a “difficult space for someone to be in court on their own, trying to navigate a system that is difficult to understand”.

There are lots of cases at the one time, it all happens quickly, your case is called and you have to be alert and so on.

“The problem is that traditionally the State legal aid service has been by-and-large focused over the years on family law proceedings, even though there is no exclusion under the Civil Legal Aid Act for these types of cases,” Joyce explained. Only a very small number of debt cases have been approved for legal aid since the system was put in place.

He said applicants to the Legal Aid Board must undergo both means and merits tests. The latter involves assessing whether the State should essentially use up resources in providing a defence for you, and whether it is likely to succeed in the case.

Particularly where we’re talking about a roof over someone’s head, the merits test shouldn’t be as strict as it appears to be. It should be relaxed, particularly in the context of the 32,000 people in mortgage arrears for over two years, the housing shortage and the homelessness crisis.
It doesn’t make an awful lot of sense in terms of public interest for people to lose their homes, if it can be avoided.

‘I’m not going anywhere’

Later in the morning, a Mr Hilliard faced off with counsel for vulture fund Havbell Dac, which bought his loan from Permanent TSB.

The fund claims Hilliard and his wife now owe €1.8 million.

Hilliard said his wife was “not well” and he was there to represent them both. He told the Master that he had suffered from heart problems and “had no money to deal with it”.

He said his property was “sold seven months ago without my consent, 30% lower than the price”. He has four other properties and said he had been a “good landlord” for the last ten years.

Havbell Dac’s counsel told the Master that there is “a very large amount of outstanding money here”. Honohon replied that he found it difficult to accept from any “funding agency that they’re out a million [euro] when the reality is they’re probably only out 300,000″.

He told Hilliard that he needs to submit an affidavit and gave him a new court date of 12 January.

As he walked to the back of the room, Hilliard said: “I tried to negotiate with these people for a long time and they ignored me – but I’m not going anywhere”.

Mark Cashen was also representing himself in a case Permanent TSB had taken against him. The bank’s barrister applied for an adjournment, telling the master they did not have papers.

“You’ve taken them by surprise, they didn’t expect you to turn up today,” Honohan told Cashen.

Legal advice

Flac’s Paul Joyce said there is some assistance available to people in mortgage distress, but it only goes so far.

He referenced the government’s Abhaile scheme which offers vouchers to people in debt so they can seek free legal advice. However, this assistance is limited to a consultation with a solicitor – the person will still have to argue their own defence when they come before a registrar or a judge.

“At each county registrar sitting there should be a duty solicitor from Mabs (Money Advice and Budgeting Service) who people can speak to outside court and who can make observations on someone’s case, but they are not the borrower’s solicitor.

Technically, there may be a limited number of defences in repossession cases. Traditionally, the law would not regard an inability to pay as a defence. There may be instances where there are flaws in the bank’s paperwork, but that is not something a lay litigant would notice.

Joyce said the establishment of a separate court to deal with arrears cases could make all the difference. This court would have the power to look at the terms of the loan, payments made or missed, and the current circumstances of the borrower and rule, if necessary, that a possession order should not be granted based on these criteria.

“At the moment there are three private members bills before the Oireachtas – one that the Master had involvement in - and they are all about keeping people in their homes.

“None of them seem to have progressed far yet. This is all about trying to allow some assessment that balances the rights of lenders with the rights of people to continue living in their homes, and the public interest.”

Read: High Court Master lashes KBC and tells father in arrears to write to Taoiseach>

Read: Affordable housing costing €200,000 per unit sounds good, but there have been problems with it in the past>

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