The Gazette 1982

CIA/E T N

JANUARY/FEBRUARY 1982

Insurance Act 1981 and Bank Guarantees

available for hearing on 38 days - 15.6% of the number of sitting days. In a number of instances, adjournments were sought promptly and granted at the request of a party and with the consent of the other party, both parties being legally represented and the listed date for hearing not being found convenient for one of the representatives. The Tribunal is dependent on the co- operation of representatives as well as the public and, in particular, on the co-operation of the legal profession, if its listing procedure is to function smoothly and adjournments are to be minimised. Efforts are in train to devise an improved listing system, which may lessen the delay caused by adjournments. Representation at Hearings In the 987 cases which came before the Tribunal under the Redundancy Payments Acts and the Minimum Notice and Terms of Employment Act, 798 employees were represented by a Trade Union or legally and 656 employers were represented by an employers' organisation or legally. In the 402 cases under the Unfair Dismissals Act, 390 employees were represented by a trade union or legally and 378 employers were represented by an employer's organisation or legally. Information on Tribunal An information booklet is available free of charge from the Department of Labour. It is issued to all parties to dispute prior to hearing. The register of Decisions and Determinations is always open for inspection in the Department of Labour.

The Insurance Act 1981, which became law on 23rd December 1981 has resolved an uncertainty in statutory interpretation arising from the Insurance (Amendment) Act 1978 ("the 1978 Act"). Section 1 and 2 of the 1978 Act modified the terms of the Insurance Act 1936 to enable persons holding on a banking licence under the Central Bank Act 1971 to enter into bonds or contract of suretyships or guarantees. The Act was originally intended to apply only to the provision of export credit guarantees or construction contract bonds, but in the course of its drafting, upon application from the banks, was extended to cover the guaranteeing by the banks of their customers' obligations to third parties. 2 (1) (a) (ii) (c) of the 1971 Act referred to any contract of suretyship or guarantee which in the course of its banking business was given or entered into by a holder of a licence granted under the Central Bank Act 1971 and was given or made: "To secure the due payment or repayment by a person on foot of a contract of a sum of money (including interest) which is certain or ascertainable (and whether in the currency of the State or in any other currency) the said payment or repayment being the sole (italics added) obligation of the person under the contract". The use of the word"sole' in the above paragraph caused considerable confusion among practitioners and bankers as it was thought that if a loan agreement contained any other obligation other than the obligation to repay the loan, such as covenants or representations and warranties under which the borrower might become liable, then a guarantee given by a bank of the obligation of a borrower to repay money would be unlawful. Section 3 of the Insurance Act 1981 amends the paragraph by substituting the word "primary" for "sole" with the effect that ancillary obligations such as liabilities under covenants in a loan agreement will no longer place in question the lawfulness of any guarantee given by a licenced bank to a lender under that Section in respect of financial obligations of a borrower.

THE TAXES ACT

THE FOURTH SUPPLEMENT to the loose-leaf volumes " The Taxes Ac t " , has now been published. The supplement embodies the amend- ments made by the Finance Act, 1981.

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A new BINDER (Vol. Ill) is also available.

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Supplement

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POSTAGE EXTRA

10