Caroline McCann (37) successfully challenged a threat of a month's imprisonment for failure to pay a debt, and forced the state to change the law last week

The woman whose successful High Court challenge to her imprisonment for failure to pay a debt forced the government to fast-track amending legislation through the Seanad last week, is to sue the state for damages for the stress of her ordeal.

Solicitor Colin Daly of Northside Community Law Centre, who represented Monaghan woman Caroline McCann at the High Court, confirmed last week that he had lodged a claim for damages in the High Court and that the case would be heard in October.

McCann (37), a single, unemployed mother with two young children, was threatened with a month's imprisonment over her failure to pay a court-ordered weekly repayment of €82 to pay off a loan of €18,000 taken out from Monaghan credit union.

McCann, who is reliant on social welfare, did not attend the hearing of the Monaghan district court which ordered her imprisonment nor had she any legal representation at the time.

Last month Justice Mary Laffoy of the High Court agreed that the order to jail McCann was unconstitutional. The judge said that you cannot order the imprisonment of a person who is not in court; that a distinction should be made between somebody who is unable to pay a debt as opposed to someone who wilfully refuses to pay and that McCann should have been given the opportunity to get legal representation. Laffoy said that McCann was a vulnerable woman whose lack of literacy and drink and psychiatric problems undoubtedly meant she could not have dealt with the district court or other cases against her without legal advice.

Consequently, justice minister Dermot Ahern prepared amending legislation to the court-enforcement order which was passed by the Seanad last week. The amendments effectively force the debtor to appear in court but guarantees that they will be offered free legal aid. Most importantly, it puts the burden of proof on the creditor, who must show that the person wilfully avoided paying the debt.

As a result of McCann's victory in the High Court, all imprisonment orders against those who have failed to meet an instalment order were dropped while some already serving sentences were released early.

It is unclear at this stage whether those imprisoned in the past for failing to pay debt will pursue the state for damages in the wake of the McCann case and her subsequent claim for damages.

Junior justice minister John Curran revealed last week that to the end of June 2009, 186 people were imprisoned for an average of 20 days each for failing to pay a debt – up 33% on the 276 imprisoned in 2008. More than 1,000 people have served prison sentences for failing to pay a debt since 2002.