Should the proposed reforms contained within the Bill be enacted, the Gardai would be empowered, in future investigations into suspected offences relating to banking and other financial activities, or company law offences, to seek from the District Court an Order that would compel the production of documentation and/or the provision of a statement containing the information sought. Such proposed production powers appear designed to assist Gardai investigations by compelling production in a timely and organised manner. These powers are similar to powers which the Office of the Director of Corporate Enforcement currently has to investigate suspected company law offences.
Whilst the proposed legislative changes are aimed at enhancing the powers of the Gardai with a view to furthering the pursuit of justice and ensuring accountability, such proposals will increase the scrutiny on directors and officers of companies and/or institutions who may be the subject of any prosecutions arising from the investigations. Insurers in the D&O market will need to review their policy wordings should the Bill be enacted to ensure directors and officers policies respond to cover any legal advice required to protect directors in investigation commenced by Gardai. Likewise brokers will need to ensure that their clients are adequately covered.
The proposed legislative changes should result in a greater number, and more detailed investigations of directors and officers, perhaps resulting in a greater number of claims within the D&O market. Legislative reforms can be introduced not only to enhance oversight powers, but also at times to respond to the perceived need for visible action by the State in a particular area. In the wake of the ongoing investigations by the Gardai against former senior personnel at the Anglo Irish Bank plc and Irish Nationwide Building Society entities (now merged, by order of the High Court, with effect from 1 July 2011 and renamed Irish Bank Resolution Corporation Limited) clearly this is a legislative and/or policy area to watch.