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Chief Justice states jailing of debtors is not the norm

Sending people to jail for debt is “an exceptional occurrence”, the Island's top judge said yesterday.

Chief Justice Ian Kawaley said existing laws contained “a general prohibition on imprisonment for debt.”

Although a section of the same 1973 law allows courts to commit a debtor to prison for failure to pay a judgment debt — that power cannot be used where the reason for non-payment is that debtor cannot afford to pay.

Imprisonment is only used where a debtor has deliberately failed to comply with a court order requiring the debtor to pay a sum the court has determined the debtor is able to pay.

“Bermudian civil judges are fully conversant with the long-standing legislative policy that no debtor should be imprisoned solely because of genuine inability to pay,” Mr Justice Kawaley said.

“We are also sympathetic to persons who, due to economic conditions beyond their control, find it difficult to pay their debts as they fall due.

“The courts will continue to ensure that imprisonment in civil cases is an exceptional occurrence reserved for debtors who are deliberately flouting orders of the court.

“Civil judges must balance the need for justice for both creditors and debtors, mindful of the fact that the availability of credit in Bermuda requires those extending it to have confidence in the debt-collecting efficacy of the courts.”

Mr Justice Kawaley spoke out after PLP MP Wayne Furbert last week tabled a bill aimed at outlawing the practice of jailing debtors.

Mr Furbert said taxpayers had to foot the bill for imprisoned debtors, for what was often a private debt. And he said it was up to creditors to pursue their debts, rather than Government.

He was backed by Sheelagh Cooper, of the Coalition for the Protection of Children, who said prison was often used as a threat by creditors.

She added that Mr Justice Kawaley's statement of the legal position was “true — if the law were interpreted in the way it was written and how it was probably meant, we wouldn't be locking people up who cannot afford to pay. Unfortunately, we are and have been doing it regularly.

“There are two problems — one is that the constituency of people we are dealing with are largely poor single mothers who have incurred debt mostly through medical bills.

“One hundred percent of them are unrepresented in court and the onus is on the debtor to prove they can't pay.

“They often will agree when pressured to pay a certain amount a month which is more than they can pay. When they're unable to make these payments, they're in arrears and summoned back to court. Then it becomes an issue of contempt of court and they are incarcerated.

“The Chief Justice is quite correct in that the law does not allow for this, but the truth is this is what happens.”

Ms Cooper added that the Coalition received several calls a week from worried women who had been threatened with jail for debt.

“Even the threat is terrifying for these women and their children — essentially, the courts are being used as an arm of the creditors,” she said.

After Mr Furbert tabled the Opposition bill in the House of Assembly, Ms Cooper told The Royal Gazette that — although people could file for bankruptcy — the route in Bermuda was “so complicated” she had never seen one of her clients declare themselves bankrupt.

And Ms Cooper said that, although existing laws did say that people unable to pay a debt should not be imprisoned, that was “open to interpretation” in court proceedings.

Chief Justice Ian Kawaley (Photo by Mark Tatem)

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Published July 02, 2014 at 9:00 am (Updated July 02, 2014 at 8:27 am)

Chief Justice states jailing of debtors is not the norm

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