Background

The Supreme Court recently found against former chief executive of Irish Life & Permanent, Denis Casey, upholding his conviction for conspiracy to defraud, on the basis that the legal objection known as 'officially induced error' was not open to him on the evidence advanced. The essence of the conspiracy concerned the misstatement of multiple transactions which accumulatively created an inaccurate impression in company accounts of Anglo Irish Bank in 2008. Mr Casey sought to rely on the purported tolerance by the Financial Regulator arguing that this amounted to official authorisation by reason of its lack of objection to the form of deceitful accounting arrangements.

This plea was rejected by the trial judge, the plea was never put to the jury and Mr Casey was convicted. Leave to appeal to the Supreme Court was granted on the basis that the accused raised a point of law that was of public importance and Charleton J. for the Supreme Court describes this decision as 'implicitly' clarifying the existing law.

'Officially Induced Error'

An assertion of 'officially induced error' is an exception to the rule that ignorance or mistake as to the law cannot condone criminal charges. It arises due to a possible injustice set against the backdrop of the constitutional administration of justice demanding criminal offences to be tried "in due course of law". The plea of 'officially induced error' amounts to an application to block criminal prosecution rather than influencing the substantive elements of an offence. It may be pleaded where an accused has committed an unlawful act upon reliance on an official's advice who indicated that such conduct would be lawful. A plea of 'officially induced error' does not equate to vindication for the commission of a crime in the conventional sense of a defence, rather it is a procedural issue heard by the judiciary requesting that the law be redirected from its ordinary course in not permitting a trial to proceed.

The burden of proving each of the elements on the balance of probabilities of 'officially induced error' as set out in the judgment of the Supreme Court lies on the accused, as follows:

  • that the accused went in good faith to seek legal advice from a person with authority;
  • that a reasonable person would believe the authority possessed ostensible authority to advise on the lawfulness of the conduct in question;
  • the advice sought was specific covering the situation in question;
  • the advice was given in an unequivocal manner authorising the specific conduct as a matter of law;
  • the accused was not put on notice to make further enquiries; and
  • the advice was accepted honestly such that a reasonable person would be likely to act on it.

Should the above elements be proven the criminal proceedings will then be discontinued, however, in this case the Supreme Court found that there was nothing in the evidence to allow such a plea to succeed.

Commentary

The decision of the Supreme Court provides helpful clarity to the parameters of 'officially induced error' as a legal objection to a criminal prosecution. In addition, the factual context of the decision reinforces the necessity and fundamental legal obligation for company accounts to give a fair and true picture of the financial health of the company together with the associated obligations placed on the officials in control to prepare accurate accounts. It is apparent that 'officially induced error' will not act as an unlimited licence to evade responsibility given that an accused must still describe and admit to the offence in question. Furthermore, the parameters set by the decision undoubtedly demonstrate that it will only be in exceptional cases that the courts will intervene to prohibit a trial on the grounds of 'officially induced error'.