Circuit Court possession orders may be open to challenge under EU law

Mr Honohan told The Irish Times that there is “a huge amount of ignorance” around the application of EU law.

Under a 1993 directive on unfair contract terms in consumer contracts, the Circuit Court should be assessing whether mortgage contracts are fair before making possession orders, Mr Honohan said.

In 2013, the European Court of Justice ruled on Aziz v Caixa d’Estalvis de Catalunya, in which it said courts are “required to assess of its own motion whether a contractual term falling within the scope of the directive is unfair, compensating in its own way for the imbalance which exists between the consumer or the seller or supplier”.

Mr Honohan said the rules and procedures of the Circuit Court therefore “need to be updated to allow for a hearing with regard to EU legislation on unfair contract terms” in “every possession case”.

A new alliance of barristers, solicitors and academics, supported by the US-based Open Society Justice Initiative, is planning seminars across Ireland in 2017 to brief lawyers on the subject.

Madeleine Thornton, solicitor and founding member of the alliance, told The Irish Times: “I have many clients who have experienced incredible trauma, hardship and injustice because of blatant unfair contract terms.”

She added: “I have clients with young children who have been overcharged by lenders and have lost their family home or who have had to fire-sell their home below its value.

“They have experienced marital break-up and severe ill-health where these families’ human rights were not respected at all.”