Ireland: The International Investigations Review, Ireland 7th Edition

Last Updated: 6 September 2017
Article by Carina Lawlor and Nicola Dunleavy

I INTRODUCTION

There are a number of bodies, regulatory and otherwise, which investigate corporate crime in Ireland. These include An Garda Síochana (the police), the Office of the Director of Corporate Enforcement (ODCE), the Office of the Revenue Commissioners (the Revenue Commissioners), the Competition and Consumer Protection Commission (CCPC) and the Office of the Data Protection Commission (ODPC).

Offences are divided between summary (minor) offences and indictable (serious) offences. In general, regulatory bodies are authorised to prosecute summary offences. However, the Office of the Director of Public Prosecutions (DPP) is the relevant body for the prosecution of criminal offences on indictment. The DPP has no investigative function; the relevant regulatory or investigating body prepare a file and submit it to the DPP for consideration. It is then solely at the discretion of the DPP as to whether a case will be taken in respect of the suspected offence. The Central Bank of Ireland also has investigatory and regulatory powers, including powers of inspection, entry, search and seizure, in respect of financial institutions under the Central Bank Act 1942, as amended.

The detection and investigation of criminal conduct is the core function of the police force. The Garda Bureau of Fraud Investigation (GBFI) is a subdivision of the police that also provides assistance in investigations of serious fraud. The GBFI is governed by the same statutory framework as the police and therefore has no specific investigative powers for the specialised work it carries out. The Criminal Justice Act 2011 granted both bodies a more extensive range of powers in order to adequately deal with the complex nature of corporate crime. The Criminal Assets Bureau (CAB)2 is connected with the police and the GBFI. The primary function of CAB is to carry out investigations into the suspected proceeds of criminal conduct. In carrying out this function, CAB, working alongside the police, is empowered to search and seize any assets suspected of deriving from criminal activity,3 and may arrest any persons obstructing an official investigation.4

Following the introduction of the Companies Act 2014, the ODCE remains the principal corporate enforcer in the state, and is responsible for investigating instances of suspected offences under, and noncompliance with, company law. The ODCE is afforded a wide range of investigative powers under the Companies Act 2014, including powers of entry, search and seizure and the power to compel the production of specific documents that are of material assistance to their investigation. In respect of prosecution, the ODCE has the power to prosecute summary offences and to refer cases to the DPP for prosecution on indictment.5

The Revenue Commissioners is the government agency responsible for the assessment and collection of taxes in Ireland, and also has extensive investigation and prosecution powers. Its investigation and prosecutions division is responsible for the development and implementation of policies, strategies and practices in relation to serious tax evasion and fraud offences. It has a wide range of powers, including the power to conduct civil investigations;6 to conduct investigations into trusts and offshore structures, funds and investments;7 and to obtain High Court orders.8 Of particular significance is the power to obtain information from financial institutions and procure search warrants to this effect.9 Similar to the ODCE, the Revenue Commissioners has the power to prosecute summary offences and to refer cases to the DPP for prosecution on indictment.10

The CCPC, recently established under the Competition and Consumer Protection Act 2014, also holds extensive powers of investigation in relation to suspected breaches of competition law. The CCPC has powers of entry and search and seizure, including the power to search any premises used in connection with a business.11 Its search powers are not confined to a company's offices but extend to the homes of directors or employees.

The ODPC is responsible for enforcing the Data Protection Acts 1988 and 2003, (the Data Protection Acts) and the E-Privacy Regulations 2011.12 This legislation governs the processing and storing of personal data, or data by which an individual can be identified. If the ODPC receives a complaint under the Data Protection Acts, it is obliged to investigate the alleged breach. Additionally, the ODPC may investigate the unlawful processing of personal data and audit data processors of its own accord. The ODPC secures compliance with the Data Protection Acts through the service of enforcement and prohibition notices on the offending parties. Under Section 10 of the Data Protection Acts, any person who, without reasonable excuse, fails or refuses to comply with an enforcement notice shall be guilty of an offence. The ODPC may bring summary legal proceedings for an offence under the Data Protection Acts, but conviction on indictment may only be initiated by the DPP.

The prosecution of corporate crime in Ireland is not influenced by political agendas, as the investigative bodies maintain independence from both the government and each other. The Office of the DPP is created by statute with the specific aim of maintaining prosecutorial independence. Section 6 of the Prosecution of Offences Act 1974 makes it an offence for persons (other than an accused, suspect, victim or person directly involved) to communicate with the DPP with a view to influencing a decision to commence or continue criminal proceedings. However, arguably there is a lack of transparency in relation to the decisions to prosecute, or not prosecute, particular crimes, as the DPP does not publish the reasons for a decision on prosecution. However, the DPP introduced a pilot scheme on 22 October 2008, under which the DPP will publish the reason for their decision not to prosecute in cases where an individual has died as a result of an alleged crime, including manslaughter and workplace deaths. The DPP will only provide reasons for his or her decision if:

  1. the crime was committed on or after 22 October 2008;
  2. a member of the family or household of the victim, or their lawyer, doctor or social worker requests the reasons; and
  3. no injustice would be created by disclosing such reasons.

Businesses are under no obligation to cooperate with an investigating authority, save where provided for by legislation or in the appropriate court order. In all cases, businesses should seek legal advice as to the extent to which they must cooperate and comply with the investigating authority. Compliance with a request for documents or information on a voluntary basis may impact on the privilege against self-incrimination and any obligations of confidentiality or under the Data Protection Acts to third parties.

II CONDUCT

i Self-reporting

There are a number of legislative provisions that impose a positive obligation on persons (including businesses) to report wrongdoings in certain circumstances:

  1. Section 19 of the Criminal Justice Act 2011 provides that a person is guilty of an offence where he or she fails to report information that they know or believe might be of material assistance in preventing the commission or securing the prosecution of another person of certain listed offences, including many white-collar offences. The disclosure is required to be made as soon as is practicable. Practically speaking, however, the person considering making the report may need to make enquiries in order to be satisfied that a report is justified. The applicable standard for what information meets the threshold of 'material assistance' in preventing the commission of, or securing the prosecution, of an offence has not yet been expanded on or tested before the Irish courts.
  2. Section 38(2)(a) of the Central Bank (Supervision and Enforcement) Act 2013 places an obligation on the senior personnel of a regulated financial services body to disclose to the Central Bank of Ireland as soon as is practicable, information relating to a suspicion of, or the commission of, an offence under financial services legislation.
  3. Section 42(1) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 provides that certain designated persons have an obligation to report any knowledge or suspicion that another person has been or is engaged in an offence of money laundering or terrorist financing to the police and the Revenue Commissioner.
  4. Section 59 of the Criminal Justice (Theft and Fraud Offences) Act 2001 obliges the auditor of a company to disclose to the police information of which the auditor may become aware in the course of his or her duties that suggests the commission by the company or entity of any offences under that Act. This obligation is notwithstanding ions of privilege or confidentiality on the part of the auditor.
  5. The Personal Data Security Breach Code of Practice13 requires all incidents in which personal data has been put at risk to be reported to the Office of the Data Protection Commissioner as soon as the data controller becomes aware of the incident. However, a self-reporting obligation is not triggered where fewer than 100 data subjects are affected, the full extent and consequences of the incident have been reported without delay to those affected and the incident does not involve disclosure of sensitive personal data or personal data of a financial nature.

Although in practice self-reporting may be a mitigating factor in prosecution, immunity or leniency based on this conduct is rarely expressly afforded by legislation. However, the list of sanctioning factors set out in the Central Bank's Administrative Sanction Procedure includes 'how quickly, effectively and completely the regulated entity brought the contravention to the attention of the Central Bank or any other relevant regulatory body.'14

The DPP has a general discretion whether or not to prosecute in any case having regard to the public interest. Within that discretion is the power to grant immunity in any case. Any such grant of immunity will generally be conditioned on the veracity of information provided and an agreement to give evidence in any prosecution against other bodies or individuals. There are no specific guidelines governing the grant of immunity in general. However, in the realm of competition law, the CCPC, in conjunction with the DPP, operates a Cartel Immunity Programme (CIP) in relation to breaches of the Competition Act 2002 (as amended). Applications for immunity under this Programme are made to the CPPC. However, the decision to grant immunity is ultimately at the discretion of the DPP.

A revised CIP came into effect on 22 January 2015, and sets out clearly the criteria for an application for immunity to be successful. A person applying for immunity under the CIP must come forward as soon as possible, and must not alert any remaining members of the cartel to their application for immunity under the programme. Further, the applicant must not have incited any other party to enter or participate in the cartel prior to approaching the CCPC. It is important to note that immunity under the CIP is only available to the first member of a given cartel that satisfies these requirements.

Once an application for conditional immunity has been granted, a positive duty is imposed on the applicant to cooperate fully with the investigation, on a continuing basis, and at no expense to the CCPC. In particular, the applicant must reveal all cartel offences in which they were involved, and provide full disclosures in relation to the same. If the applicant is a company or corporation, the application for immunity must be made by the company in its separate legal capacity. Failure to comply with the requirements set out in the CIP may result in conditional immunity being revoked by the DPP.

ii Internal investigations

There is generally no restriction on a business initiating an internal investigation, particularly in relation to suspected criminal conduct. The company is only under an obligation to share the results of such an investigation with the relevant authorities where it is required under a court order, statute, or a self-reporting obligation (see Section II.i, supra). In considering such e of external legal counsel is usually engaged.

An internal investigation usually makes use of a wide range of evidence – hard-copy and electronic documentation, witness interviews, computer forensics and financial records are open to an internal investigation.

There has been some clarification of issues surrounding fair procedures in recent case law. In Joyce v Board of Management of Colaiste Iognáid, the High Court held that natural justice principles do not apply at the initial stages of an investigation, such as the initial consideration of an issue, but are engaged when formal proceedings from which findings may be drawn commence.15

Where witness interviews are conducted, the employee in question has no statutory right to legal representation. However, if the employee or witness is, or may become, the subject of the investigation, the employer should consider advising the employee or witness to have legal representation in order to ensure that the employee has been afforded their fair procedures rights and to prevent any later legal challenge to the investigation process. However, this should be assessed on a case-by-case basis.

Any requirement to disclose documents obtained through an internal investigation to the authorities is qualified by legal professional privilege. In Ireland, documentation may attract legal professional privilege, either in the form of legal advice privilege or litigation privilege. Legal-advice privilege arises in communications between a lawyer and their client where there is no actual or potential litigation, but the client is seeking advice and not merely legal assistance. Litigation privilege applies to communications between a lawyer and a client made in the context of contemplated or existing litigation. It is the broader form of legal professional privilege and also covers communications with third parties, such as experts.

Privilege over any document is a right of the client, which he or she may choose to waive. In general, the disclosure of a privileged document to a third party will waive privilege. Following the decision in Fyffes v. DCC,16 the courts will allow disclosure of an otherwise privileged document to a third party for a limited and specified purpose without privilege being waived. In such circumstances it is essential that the entity making the disclosure seeks assurances by way of a confidentiality agreement that the recipient will not disclose the privileged documents and will use them only for the specified and limited purpose for which they have been disclosed.

Therefore, in the context of regulatory investigations, legal professional privilege is relevant when considering the power of regulatory authorities to inspect documentation and compel the production of documents.

iii Whistle-blowers

The Protected Disclosures Act 2014 (the Protected Disclosures Act) is the key piece of Irish legislation in relation to reporting suspicions of illegal activity. It was enacted on 15 July 2014, and is the first comprehensive piece of legislation governing whistle-blowing, where previously only piecemeal provisions existed. Public sector bodies must now put in place whistle-blowing policies that meet the requirements of the Protected Disclosures Act; and where private sector businesses have policies in place, they must review them to ensure they are aligned to the provisions of that Act.

Part 3 of the Protected Disclosures Act sets out the protections offered to those who make protected disclosures.. Where a worker makes a protected disclosure, the employer in question is prevented from dismissing or penalising the worker; bringing an action for damages or an action arising under criminal law; or disclosing any information that might identify the person who made the disclosure. Further, the Act makes provision for a cause of action in tort for the worker for detriment suffered as a result of making a protected disclosure.

Section 5 of the Protected Disclosures Act defines a 'protected disclosure' as a disclosure of information, made by a worker, which, in their reasonable belief, shows a 'relevant wrongdoing' and which came to their attention in the course of their employment. Section 5(3) of the Protected Disclosures Act defines a 'relevant wrongdoing' as relating to the commission of an offence; non-compliance with a legal obligation (except one arising under the worker's employment contract); a miscarriage of justice; endangerment of health and safety; damage to the environment; misuse of public funds; mismanagement by a public body; or concealing or destroying information relating to any of the above. The definition of 'worker' in Section 3 of the Protected Disclosures Act is also quite broad in its scope, and covers employees (including temporary and former employees), interns, trainees, contractors, agency staff, and consultants.

The Protected Disclosures Act also sets out a procedure for redress for a worker who makes a protected disclosure. If the matter is part of an unfair dismissals claim by the worker and a Rights Commissioner of the Labour Relations Commission finds in favour of the worker, it can require the employer to take a specified course of action or require the employer to pay compensation of up to 260 weeks remuneration to the worker.17

It is worth noting that although the motivation for making a disclosure is irrelevant, the protections as set out above are not available to those who deliberately make false disclosures as these are not considered to meet the test for having a reasonable belief that a wrongdoing has occurred. This provision aims to protect businesses from malicious and ill-founded claims. The Protected Disclosures Act closely reflects, and brings Ireland in line with, international best practice in the area. In achieving its principal aim of protecting those who make a protected disclosure from reprisal from their employers, the Protected Disclosures Act places a significant burden on employers in all sectors to ensure they have adequate policies in place and conform to its requirements.

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Footnotes

1 Carina Lawlor and Nicola Dunleavy are partners at Matheson.

2 Established by the Criminal Assets Bureau Act 1996 (as amended).

3 Section 14 of the Criminal Assets Bureau Act 1996.

4 Ibid, Section 16.

5 Section 949(c) and (d) of the Companies Act 2014.

6 Section 899 of the Taxes Consolidation Act 1997.

7 Ibid, Section 895.

8 Ibid, Sections 902A and 908.

9 Ibid, Section 908C.

10 Ibid, Section 903.

11 Section 36 of the Competition and Consumer Protection Act 2014.

12 The European Communities (Electronic Communications Networks and Services) (Privacy and Electronic Communications) Regulations 2011, SI 336 of 2011.

13 Approved by the Data Protection Commissioner under Section 13(2)(b) of the Data Protection Acts.

14 'Outline of Administrative Sanctions Procedure', published by the Central Bank of Ireland in 2014.

15 [2015] IEHC 809

16 (2005) IESC 3.

17 Sections 11 and 12 of the Protected Disclosures Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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