Major report on business and law proposes new Cab-type agency

Special white-collar crime unit should be set up within DPP’s office, report says

A corporate crime agency, similar to the Criminal Assets Bureau (Cab), is one of the key recommendations of a major report on business and the law published on Tuesday.

The report also recommends that a special white-collar crime unit should be set up within the office of the Director of Public Prosecutions (DPP) to work closely with the new agency.

Extensive changes to the regulatory regimes for a wide range of sectors in the economy, including competition and consumer issues, health products and telecommunications, are also recommended.

The report supports the move from the discredited so-called light-touch regulatory regime to a new model designed to better identify problems before they develop into full-blown catastrophes.


The 800-page report from the Law Reform Commission is the response of the State's primary legal reform body to the banking collapse, but is not restricted to the banking sector.

It is also the commission’s response to the perceived problem with prosecuting white-collar crime.

Among other matters covered is the 2015 call by the former governor of the Central Bank Patrick Honohan for changes to the law to deal with "egregiously reckless risk-taking".

Financial sanctions

The more than 200 recommendations in the report include new powers for regulatory bodies to impose significant financial sanctions and to make enforcement agreements that include consumer redress schemes.

Such powers are already held by the Central Bank, which used them in the tracker mortgage scandal, but are not available to regulators in other areas such as the competition, communications and health products sectors.

The new powers would include the right to impose sanctions of up to €10 million on companies, and/or 10 per cent of turnover, as well as sanctions on individuals of up to €1 million.

In relation to the suggestion made by Prof Honohan, the commission has suggested that the law on fraud be changed so that conscious recklessness by a person would amount to fraud under, for example, the offence of false accounting.

However, a new law on reckless trading is not being recommended, lest it work against beneficial risk-taking by business.

Companies can be convicted of any crime, including murder and fraud, but such convictions never happen because of the need to prove intent.

The commission says this issue is one that "may have contributed to a lack of prosecutions in Ireland of corporate bodies" for offences such as theft, fraud and bribery.

As matters stand the system requires the identification of a person high within the managerial structure of a corporate entity who is taken as having acted as the corporate body in committing the offence.

The establishment of a new white-collar crime agency has already been suggested in a Government paper published last year

The system has been criticised as working best where it is needed the least – with smaller firms – and worst where it is needed the most – with larger organisations. The problem has been dubbed the “paradox of size”.

The commission has suggested changes that take into account the reality of modern corporate bodies, which often delegate authority to managers and agents to implement their policies.

The report mentions the collapsed trial of the former Anglo Irish Bank chairman Seán FitzPatrick, which was the longest criminal trial in the history of the State.

The prosecution’ s legal costs, the report reveals, were €3 million. Mr FitzPatrick’s legal costs were also met by the State, as he was on free legal aid, and were probably equal to, or greater than, the prosecution costs.

The bulk of the 126-day hearing was taken up with legal argument and in the end Judge John Aylmer directed the jury to acquit Mr FitzPatrick.

The clear failings in the prosecution case raised questions as to whether the legal system was capable of taking effective action when dealing with serious corporate offending, according to the commission report.

‘Important convictions’

It said it was appropriate to note that other cases connected with the activities of Anglo Irish Bank had led to “important convictions”.

But even in the Anglo cases where convictions had been secured, the report said, “the commission is aware from its consultations that experienced prosecuting counsel became involved in the case after much of the preparatory work had been completed”.

The personnel in the suggested new corporate crime agency should have a mix of skills in the way the Cab has, the report recommends.

The establishment of a new white-collar crime agency has already been suggested in a Government paper published last year.

The commission said the Circuit Criminal Court had shown it is capable of dealing with complex corporate crime and does not recommend moving such cases to the Central Criminal Court.

The commission's extensive report, Regulatory Powers and Corporate Offences, is available on the commission website.

Colm Keena

Colm Keena

Colm Keena is an Irish Times journalist. He was previously legal-affairs correspondent and public-affairs correspondent