BBA raises concerns over Debt Settlement Act

The legal fraternity has raised concerns about the constitutionality of a law that allows the government to settle certain court judgments with the payment of bonds.

The Barbados Bar Association (BBA) has brought the matter to light, following “numerous complaints from both litigants and attorneys-at-law on this issue.”

“The State, as a litigant, should not be treated differently from private defendants. Allowing the State to satisfy judgments on different terms creates an unfair legal imbalance and erodes equal access to justice,” Bar President Kaye Williams told Barbados TODAY.

Williams explained the Debt Settlement (Arrears) Act, 2021-32 provides for the issuance of bonds to settle certain obligations of the government. Section 3 of the Act states that the purpose of the Act is to facilitate the creation and issuance of J Bonds for the settlement of government obligations, including those arising from legal claims instituted against the government.

“What that means,” she points out, “is when a claimant receives an award or settlement in a matter against the State, there is no lump sum payment. The payment to the claimant, will be allocated over 42 months from issuance, or in other words, repayment occurs in 42 equal installments monthly over three and half  years. There is no provision for interest rate, so no compensation for the delay in payment.”

The legal practitioners’ spokesperson said the average claimant who has waited years for their court matter to be completed, do not have the benefit of receiving the award in a lump sum.

“For many, this has resulted in further hardship. I say further, because in many cases where personal injury has occurred, they haven’t been able to work, or to work at the same levels as before. As a result, they have suffered loss of income, arrears on loans and mortgages, or simply cannot sustain themselves or their families,” Williams contended.

“By replacing immediate monetary compensation with bonds,” the Bar leader argued, “the BBA is of the view that the Act not only delays justice, but diminishes the effectiveness of court-awarded remedies. It fails to provide ‘full and fair redress’ to claimants, while raising serious constitutional and legal concerns about the enforcement of judicial decisions.”

She said this Act raises “serious” constitutional concerns, particularly in cases where bonds are being used as a substitute for immediate monetary compensation.

Williams referenced authorities from the European Court of Human Rights, who she explained have held that the statutory suspension of the enforcement of an entire category of final judgments — solely due to the magnitude of public debt— is unconstitutional.

The legal fraternity representative highlighted that in such a circumstance, a litigant/claimant may argue that the Act constitutes a prima facie breach of section 16 of the Constitution of Barbados.

She pointed out that a lot of claimants do not know there is also a “Natural Disaster Clause”, so repayments may be suspended or delayed in the event of a declared natural disaster.

The BBA head said that after assessing the issue, her organisation has come up with a list of key concerns for citizens.

She identified one as delayed access to funds, contending that citizens who have already endured long court proceedings, are forced to wait even longer for compensation, without interest. This deprives them of the immediate use and value of their award.

Another primary concern is the inability to pay legal fees, asserting that many citizens rely on their awards to settle attorneys’ fees, which are often deducted from the final sum. The delay in payment places undue financial strain on both claimants and legal practitioners.

An erosion of the value of the award is also troubling to the Bar.  “In cases where damages for personal injury claims have been awarded and include future medical expenses, inflation may significantly increase the cost of treatment. By the time bonds are redeemed, the original award may no longer be adequate to cover medical care, medication, or rehabilitation costs,” Williams declared.

“Violation of the separation of powers: The Act interferes with the judiciary’s authority by effectively delaying or altering court-ordered payments. This undermines judicial independence and may amount to non-compliance with court orders, especially in personal injury cases where interest accrues until full payment,” the bar association president complained.

The Bar association also cited the need for a clear separation of powers as yet another key concern.

The group is  adamant that the executive should not be allowed to “override judicial determinations on the basis of financial convenience.”

“Such actions,” Williams suggested, “blur the lines between the branches of government and threaten the rule of law.”

emmanuejoseph@barbadostoday.bb