Commentary on Sections Section 6 – Exception: debtor failing to make offer to pay recoverable amount
29.Section 6 contains an exception to the legislation, excluding debts where the debtor does not make an offer to repay the amount which remains recoverable by the creditor under the terms of the Act. This provision does not correspond to an existing element of the Initiative. Its purpose is to increase the creditor’s prospects for recovering the amount to which it remains entitled, and to encourage the debtor to participate in negotiations to agree settlement of the debt rather than oblige the creditor to recover the debt through the courts.
30.This provision will not apply to proceedings to enforce domestic judgments given before the commencement of this legislation (or proceedings to enforce foreign judgments registered before that date, or to enforce arbitration awards where permission has been given before that date for the award to be enforced as if it were a judgment.) In those situations, the reduction will apply to the judgment or award, without the need for the debtor to make an offer.
31.Subsection (2) refers to the net present value of future payments. The discount rate applied in association with the Initiative is the relevant Commercial Interest Reference Rate, as published by the OECD.