Following on from the publication at the end of 2017 of the Government’s White Collar Crime Package, 2018 was a busy year in the corporate crime sphere. Here is a quick round-up of the key legal developments. You can read about other developments of interest here. We will continue to keep you updated on all relevant corporate crime developments in 2019.
The most significant development of the year was the enactment of Ireland’s new anti-corruption legislation. The Criminal Justice (Corruption Offences) Act 2018 provides for a number of corruption related offences that may be committed by both companies and their officers. The enactment of this legislation highlights the importance of having clear and comprehensive anti-corruption policies and procedures in place and ensuring that all personnel adhere to these policies. Read more here.
Staying with corruption-related developments, the end of the year saw the Supreme Court overturn the longest prison sentence ever given for corruption (4 years). The Court found that the trial judge’s direction to the jury as to the burden of proof in the 2012 trial of former Fine Gael town councillor, Fred Forsey was fundamentally wrong and breached his right to a fair trial. The Court also refused an application by the DPP for a retrial.
We also saw the Court of Appeal deliver an important decision on the criminal liability of company managers. The Court clarified that a company ‘manager’ can be prosecuted for company offences where they have functional responsibility for a significant part of the company’s activities and have direct responsibility for the area in issue. It is not necessary that the ‘manager’ be actively involved in every area of the company’s business or have the power to direct its affairs or decide corporate strategy. Read more here.
Other court rulings of note included the conviction of the former chief executive of Anglo Irish Bank David Drumm for conspiracy to defraud and false accounting. Mr Drumm was sentenced to six years imprisonment.
On the regulatory side, the Government published the general scheme of proposed legislation to establish the Office of the Director of Corporate Enforcement (ODCE) as a standalone agency to be called the Corporate Enforcement Authority. The ODCE faced much criticism following serious investigative failings in a 2017 prosecution, which ultimately led to the trial collapsing. These failings and the measures being taken to address them are detailed in a report published by the Department of Business, Enterprise and Innovation in December 2018. The new statutory agency will, when fully established, have more autonomy in terms of recruiting specialist resources and will be better equipped to investigate complex breaches of company law. We will keep you updated on this in 2019.
Continuing with proposed reform, the Law Reform Commission (LRC), in an extensive Report on Regulatory Powers and Corporate Offences, recommended sweeping reforms of the regulation of corporate and financial crime in Ireland. Its 200 recommendations included a recommendation to strengthen and standardise the powers of financial and economic regulators and a recommendation to reform existing corporate offences to combat reckless risk-taking. Read more here.