A court hearing next week to establish whether employees with National Irish Bank (NIB) have the right to refuse to answer questions on the grounds of possible self-incrimination is likely to establish guidelines for all inspectors' inquiries under the 1990 Companies Act.
Although the hearing concerns NIB employees who are to be questioned about allegations of improper charging of interest and fees, the ruling of the court is likely to have implications for all current and future inquiries by inspectors.
The hearing, scheduled for Thursday, may concern itself with one employee as a representative action, with the decision in that case applying to all the other employees involved in the case. However, according to legal sources, it will also apply to NIB staff who were involved in the sale by the bank of Clerical Medical International offshore bonds.
The Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, has already sent an interim report from an authorised officer, Mr Martin Cosgrove, who inquired into the sale of the CMI bonds, to the Director of Public Prosecutions.
The decision of the court is also likely to apply to customers of the bank who the inspectors may wish to interview. The inspectors are investigating allegations that, in some cases, the bonds were used by persons wishing to hide funds from the Revenue Commissioners.
Two weeks ago, Mr Justice Kelly was asked by Mr Justice John Blayney and Mr Tom Grace, two inspectors inquiring into NIB, for directions in relation to issues raised by solicitors acting for more than 80 NIB employees who had been approached by the inspectors in relation to the overcharging allegations. Mr Justice Kelly has been asked to rule on two matters:
whether interviewees, in the context of an investigation being carried out by an inspector appointed under the Companies Act 1990, have the right to refuse to answer questions on grounds of possible self-incrimination;
and what procedures should be followed so as to protect the legitimate rights and entitlements of prospective interviewees?
The NIB staff are looking for the right to advance information on questions from the inspectors, for the right for their solicitors to cross-examine anyone giving evidence concerning their clients, and other such procedural rights. NIB has told its employees it will cover financial costs incurred as a result of the inquiries.
The inspectors told Mr Justice Kelly they had been advised that the privilege against self-incrimination did not apply to investigations of the type they were carrying out.
Reports from inspectors appointed under the Act can be used as evidence in civil proceedings. Facts and opinions contained in such reports may be accepted as findings by the court.
A legal source said the NIB employees whom Mr Justice Blayney and Mr Grace wish to interview may be prepared to go all the way to the European Court of Human Rights in Strasbourg.
