The Government of Saint Lucia, on Monday, 16th September 2024, presented the Insolvency Bill for debate in the House of Assembly. The Bill, which was introduced by Attorney General, Leslie Mondesir, was taken through all its stages. Insolvency occurs when an individual or company can no longer meet their debt obligations. For a business, this means that its liabilities exceed the value of its assets and income. The Attorney General expounded on the merits of the bill:
“This bill offers many advantages to consumers and provides a level of protection for them. These advantages include:
1. Permitting a borrower to negotiate a partial or total wipe-off of their debts.
2. Establishing a low-cost out-of-court restructuring process where borrowers can work with creditors to negotiate a mutually beneficial solution.
3. Giving borrowers the power to stop creditors from pursuing them.
4. Allowing borrowers to halt the sale of their assets while they resolve debt payments.
And most importantly, Mr. Speaker, the one that is most significant to the Member for Castries East, the Hon. Prime Minister, is the protection of the homestead. This bill allows for the protection of the primary residence of a debtor, where a certain amount of a debtor’s equity in their primary residence is exempt from creditors.”
Former Prime Minister and Member of Parliament for Vieux Fort South, Hon. Kenny D. Anthony, stressed the importance of explaining to the general public the implications and transformation this legislation seeks to create.
“This bill will require massive public education to explain the purpose, provisions, and implications of the bill,” Anthony said.
Minister for Agriculture and Member of Parliament for Dennery South, Hon. Alfred Prospere, highlighted the importance of the insolvency legislation for fishers and farmers.
“This bill we are passing today is not a bill to take possession of your home if you cannot pay the bank for a few months. So, the fishermen and farmers who might have a mortgage and find themselves in difficulty after a hurricane, unable to sell their provisions, will be able to sit down, engage with the banks, and have a discussion.”
Prime Minister of Saint Lucia, Hon. Philip J. Pierre, emphasised that this legislation will modernise not only the credit sector in Saint Lucia but also the relationship between creditors and debtors.
Said Pierre, “This legislation, Mr. Speaker, will modernise the entire environment. When someone-whether a business or an individual-is under financial pressure, they will be able to approach their creditor and say, ‘I am under pressure; let’s talk.’”
Drafting of the Insolvency Legislation began in 2014 and has undergone many iterations and stakeholder engagements.
“This legislation, Mr. Speaker, is necessary because it will shape our relationship with financial institutions, both locally and globally-World Bank, CDB, IMF,” Pierre said.
The Prime Minister also praised the National Competitiveness and Productivity Council (NCPC) for spearheading the drafting of the Insolvency Legislation.
“We need to congratulate and thank the people at the NCPC for the work they have done on this legislation,” he said.
The NCPC will also lead an education campaign to inform the public about the provisions and benefits of the Insolvency Legislation.