The Commission of Investigation now has 200,000 pages of documents on many of the key IBRC transactions it has been asked to investigate, including the Siteserv deal. The trouble is that it does not believe it has the legal power to use these to progress its investigation, mainly because it believes the information is confidential to many of the borrowers of the former Anglo Irish Bank.
Commission chairman Mr Justice Brian Cregan believes he does not have powers under the 2004 Commission of Inquiry Act to use the information in his possession to conduct his investigation. His clear legal view is that the information is confidential to the borrowers concerned.
Mr Justice Cregan has ruled that the IBRC Special Liquidators are correct – in other words that the information forwarded to him is confidential and, in some cases, also subject to legal privilege.
Crucially, he has ruled the 2004 legislation does not give him the power to overrule this confidentiality in the public interest.
The Department of Finance argued otherwise in its legal submission – agreeing that the information was confidential, but arguing that the Act did give the Commission the power to overrule this. The former IBRC directors and management took a similar view to the Department.
In a clear assessment in a 77- page determination seen by The Irish Times, Mr Justice Cregan says that the 2004 Act does not give him any express power to rule that the public interest can overrule the right to confidentiality.
He also argues that as a “creature of statute” the Commission has no inherent power to engage in such a “balancing exercise of whether the private duty of confidentiality should be outweighed by a public interest in disclosure,” adding that in his view these were matters “ for the courts” to decide.
He further says that if the Commission were to try to engage in the “balancing exercise” and agree to use some information in its inquiry, he believes it would be subject to an immediate and successful legal challenges.
Perhaps anticipating the Government response, Mr Justice Cregan says that even if the Commission were granted legal power to judge that confidential information could be used if it was in the public interest, legal challenges could still delay its work.
The possibility of legal problems was clear from shortly after the Commission started its work in earnest around the end of July or early August. A number of media reports referred to this. The Irish Times reported on August 22nd that the issues of privacy of information was threatening the work of the Commission.
Legal power
In the background, the Commission pushed ahead and issued formal directions to the IBRC special liquidators and the Department of Finance to provide it with information. It is now in possession of vast lever files of information, but believes it does not have the legal power to use them in its investigations.
The legal determination showed that from the start, the IBRC liquidators claimed that the information was confidential. They forwarded thousands of pages of documents to the Commission, but all were attached with the warning that the legal advice was that the information was confidential. The Special Liquidators felt that the Commission should review the information, but that in its views it should conclude that they are confidential.
The question now is how the Government did not see this coming. As quoted in the legal determination, there is a large amount of case law around the area of banking confidentiality.
It concludes that this can only be overridden in cases of clear public interest. The Commission has now ruled clearly that the information is confidential and that it has no power to rule otherwise. On the face it, there is no easy way out of this one for the Government.