Auditors are “watchdogs, not bloodhounds” said the court in Re Kingston Cotton Mill Co. (No. 2) [1896] 2 Ch 279 CA. Even at the time this was a very limited view of what we can expect of auditors or their like. (It was also infelicitous; auditors are not and never were, even metaphorically, like “watchdogs”). Considering that Sherlock Holmes was an available “example” (1880 to 1907), it is surprising the judge did not feel more could be expected of the auditors of his day than he settled for.

The job of an auditor is to ascertain if the accounts provide “a true and fair view” of the company’s financial position. However, the auditor’s judgment on this is not, and should not be, absolute. After all, the auditor should not be the equivalent of an insurer where he pays if there is something wrong and loss accrues. In modern times the profession, as always, determines the liability of auditors. The profession has issued guidelines for auditors. Those guidelines now impose a higher standard on auditors than Re Kingston.

These guidelines were quoted in Moore Stephens (a firm) v Stone & Rolls Limited (in liquidation) [2009] UKHL 39

”Auditing Standard SAS 110 (issued January 1995) deals with fraud and error. It contains statements of auditing standards (SAS) and explanatory text in numbered paragraphs. SAS 110.1 states: “Auditors should plan and perform their audit procedures and evaluate and report the results thereof, recognising that fraud or error may materially affect the financial statements”. SAS 110.10 (para. 50) states that, on becoming aware of a suspected or actual instance of fraud, auditors
“should (a) consider whether the matter may be one that ought to be reported to a proper authority in the public interest; and where this is the case (b) except in the circumstances covered in SAS 110.12, discuss the matter with the board of directors, including any audit committee”.
SAS 110.12 (para. 52) provides that
“When a suspected or actual instance of fraud casts doubt on the integrity of the directors auditors should make a report direct to a proper authority in the public interest without delay and without informing the directors in advance.” “

The fact that the auditors in that case escaped by the skin of their teeth shows life is going to get difficult for the profession.

1. It was (arguably) beyond the remit of the High Court inspector to make exhaustive comment on the giving of legal advice to Mr. Jim Flavin (“Flavin”) on the legality of the sale by Flavin of Fyffes’ shares.

2. However, the advice was wrong, the inspector says. (He could hardly say anything else, given that the Supreme Court effectively said the same thing).

3. Consequently, the question as to whether the solicitor who gave that advice was negligent could arise. Hopefully, the solicitor knew this and qualified the advice with the use of some formulation like “…on the one hand this… on the other hand that…”.

4. But then Flavin would have been in a quandary. He would not have been able to sleep with worry about the possibility that he was about to commit a crime.

5. But what of the solicitor? Is his sleep of no consequence? If he says, positively, that the sale of shares is legal; is not a crime, and is nonetheless wrong, is he not liable to the client? How can he sleep with the worry that his advice will prove to be wrong?

6. Even if he has nerves of steel and a will of iron, what can he say to the client who returns to him after the trauma of even a successful defence of the client’s actions? Did he not advise the client of the possibility, indeed the likelihood of litigation? If he did, surely the client had grounds to doubt the legality of what was proposed and if he did not surely the client, learning of the decision in C. W. Dixey and Sons Ltd. v Parsons [1964]192 E G where the court said;

“In the present circumstances the solicitor owed a duty of care to his client to take reasonable care, not only to protect his client against committing a breach of the law but to protect him against the risk of being involved in litigation… It would not do for him to say that in his view it was all right. There was an obvious danger that a different view might be taken. In the present circumstances the ordinary careful solicitor would have gone to see his clients and advised them not to sign.”

would be rightly aggrieved at the advice the solicitor had given.

7. Of course, there is another way of seeing the situation. There are some things upon which a solicitor should not venture an opinion or advice and clients should not seek such opinion or advice.

There has been general astonishment at the findings of the High Court inspector into the “Fyffes” and “DCC” insider dealing transactions.

The inspector found that, Mr. Jim Flavin, having received legal advice, broke the law as to insider dealing, but, in the light of the advice, did so inadvertently.

Oddly, the judge who appointed the inspector to conduct the investigation said, in making the appointment:

The earlier proceedings were concerned only with the civil law and did not have to address culpability or responsibility of persons who may have advised or planned the transactions.”

How did that interesting idea fall by the wayside, as it appears to have done?

Minister Dermot Ahern, Minister for Justice etc., please vigourously, without fear or favour, (asked or given), defend the interests of the following Persons (while,it must be said, doing your potential 2011 Presidential candidacy chances no harm);

Isis; Marduk; Aphrodite; Quetzallcoatl; Selene; Kibuka; Zeus; Hermes; Tekkeitserto; Mader-Akka; Ops; Nanook; Yhi; Ghidjja; Odin; Jupiter; Acuecucyoticihuati;

When you are finished, you may, at your discretion, help Michael O’Leary how to plan the operation of his pay toilets on Ryanair flights, assuming he is still engaged in that project when you are finished yours, if ever.

The law relating to the arrest of suspects is complex.

Every arrest must be in accordance with law. Members of the Garda Síochána have extensive powers of arrest, but do not have a right to arrest on a whim, or for a wrongful purpose.

Members of the public have a power of arrest in some circumstances, but this post does not deal with that.

It is a criminal offence to resist a lawful arrest, but not an unlawful arrest. Some unlawful arrests are plainly that; more often than not they are seen to be unlawful with hindsight.

Therefore, as a practical matter, even if a person believes that his/her arrest is unlawful, it is wiser to submit and challenge the arrest and its consequences later. (See Section 18 (6) Non-Fatal Offences against the Person Act 1997).

The general purpose of an arrest is to charge the suspect with a crime and bring him/her before the courts.

In Ireland, there are exceptions to this. (Strictly, these exceptions should be thought of as “detention” rather than “arrest”).

Under Section 30 of the Offences against the State Act 1939 (as amended), a Garda may arrest a suspect (whom it is suspected has committed one or more of certain offences) and take him/her to a Garda Station for questioning.

Likewise, under Section 4 of the Criminal Justice Act 1984 and Section 2 of the Criminal Justice (Drug Trafficking) Act 1996 a Garda may arrest a suspect and take him/her to a Garda station.

These detentions are subject to rules and regulations. Commonly, suspects are released without charge after such detentions; but equally commonly the suspect is charged with an offence and brought before a court.

The charging document may be a charge sheet or it may be a summons. The charge sheet will be delivered to the suspect at the Garda station whereas the summons will be delivered later when it issues from the District court.

A person charged on a charge sheet needs bail; no bail is needed on a summons.

The Gardaí may give bail or the court may determine the bail when the accused appears there.

(This bail will be a personal bail; a promise to pay a sum of money if default in appearance in court occurs, or it may be that AND a similar promise from a third party). The Irish bail system is unlike the system in the USA.

Equally unlike the USA, in Ireland we do not have “the Perp Walk”.

I mentioned HERE the likelihood of CPD courses on the Criminal Justice (Surveillance) Bill 2009.

The Bill has been heavily marketed as a method of securing convictions for “organised crime”. This idea of organised crime (as an offence) is to be found in the Criminal Justice Act 2006. There have been no convictions under Section 72 of that Act, to date. It reads:

72.— (1) A person who, for the purpose of enhancing the ability of a criminal organisation to commit or facilitate—

(a) a serious offence in the State, or

(b) in a place outside the State, a serious offence under the law of that place where the act constituting the offence would, if done in the State, constitute a serious offence,

knowingly, by act—

(i) in a case to which paragraph (a) applies, whether done in or outside the State, and

(ii) in a case to which paragraph (b) applies, done in the State, on board an Irish ship or on an aircraft registered in the State,

participates in or contributes to any activity of the organisation is guilty of an offence.”

If nothing further were to be done it would be impossible to get a conviction under Section 72. The burden of proof under the Section would be formidable. The prosecutor, in terms of the Section, would have to prove;

A) The accused committed an act;

B) The accused “knowingly” so acted “for the purpose of enhancing the ability…”;

C) The act of the accused “participates in or contributes to…”

D) “any activity…” directed towards committing or facilitating…;

E) a “serious offence…”

In addition, the prosecutor would have to prove that all of this was connected with the activities of a “criminal organisation”. That’s defined as:

“ criminal organisation ” means a structured group, however organised, that—

(a) is composed of 3 or more persons acting in concert,

(b) is established over a period of time,

(c) has as its main purpose or main activity the commission or facilitation of one or more serious offences in order to obtain, directly or indirectly, a financial or other material benefit;”

The mind boggles at the difficulties this throws up, not to speak of the ironies to be unfolded from it. However, to make life easier for prosecutors Section 72 goes on in sub-section (2);

“(2) In proceedings for an offence under subsection (1) , it shall not be necessary for the prosecution to prove that—

(a) the criminal organisation concerned actually committed a serious offence in the State or a serious offence under the law of a place outside the State where the act constituting the offence would, if done in the State, constitute a serious offence, as the case may be,

(b) the participation or contribution of the person concerned actually enhanced the ability of the criminal organisation concerned to commit or facilitate the offence concerned, or

(c) the person concerned knew the specific nature of any offence that may have been committed or facilitated by the criminal organisation concerned.”

It is doubtful that this really helps the prosecutor, particularly where paragraph (c) of sub-section (2) implies the necessity of there having been the actual commission of an offence.

All of this is the context for the introduction of the Criminal Justice (Surveillance) Bill of which there will be more here in due course.

However, what springs to mind, as a contrast to all this, is RICO, one response to “organized crime”.

RICO has the merit of escaping (or not) from its authors’ intentions and is a flexible response to crime at every level of society.

Somehow, one doubts that Part 7 of the Criminal Justice Act 2006 or the Criminal Justice (Surveillance) Bill are directed to suppressing Irish criminal conspiracies per se.

In Ireland, (and the UK) the listener is required to know what is meant in addition to what is said. It is the intention that matters, not the statement.

What has been happening in Ireland, after all in the case of the McCracken, Moriarty, Mahon, and Morris Tribunals, but the investigation of criminal conspiracies?

Will we ever see Part 7 of the Criminal Justice Act 2006 or the Criminal Justice (Surveillance) Bill deployed against conspiracies like those?

Doubtful.

My post on audio recordings in Garda custody is about establishing the grounds for the making of adverse inferences at trial, not about the procedure for interrogation in Garda custody.

Under Section 19A of the Criminal Justice Act 1984 (as inserted by Section 30 of the Criminal Justice Act 2007), it is open to a court to make an adverse inference (of guilt; what else?) arising from …the failure of an accused to mention… [“…any fact relied on in his or her defence in those proceedings, being a fact which in the circumstances existing at the time clearly called for an explanation from him or her when so questioned, charged or informed, as the case may be…]

Consider what this implies; it implies that, after the interrogation is over, the Gardai encounter the articulated defence of the accused and feel (presumably) that it is not credible, given the failure of the accused to refer to that defence during the interrogation. They can only ask the court to effectively, take the same view, if the conditions set out in Section 19A of the Criminal Justice Act 1984 (as inserted) are met. One of those conditions is that the interrogation is recorded electronically, or, with the permission in writing of the accused, recorded other than electronically.

Hence, to lay the ground for asking the court to make the adverse inference the Gardai must get the consent in writing of the suspect/accused to non-electronic recording where that form of recording is not available, or is not being used.

“Continuous Professional Development” (CPD) is an idea with a banal element. It behooves everybody to stay on top of their job, and to express that in jargon is to suggest that the work of some people is beyond accountability; otherwise, why the need to nudge them to competence?

Of course we know the work of some people is beyond accountability, but that is for another day and another subject.

The Government’s new Bill on “Surveillance” is certainly a necessary topic for a CPD seminar, not least in that the Minister for Justice Equality and Law Reform, in announcing it to the media, laconically, but defiantly, remarked that it would cause upset in “human rights quarters” (or words to the same effect).

Now, to whom was he referring? We can only say with confidence that he was not referring to the Government: (the Bill is a collective product of Government, not the work of the Minister).

Implicitly he was referring to the judiciary. Each judge in Ireland is sworn (and has sworn) to defend, protect and vindicate human rights. The Minister has given clear warning that the Government’s Bill is calculated to injure, in some way, human rights in Ireland.

Keeping that in mind, it would be naïve to think that breaches of human rights under this Bill will be confined to some areas of County Limerick. No, we may expect the breaches, of which the Minister warns, to occur across the country.

So, the CPD seminar or seminars will have to cater to professionals in every county in the country. Bring it on.

Hopefully, the Government’s vandalism will run up against systemic opposition; senior Gardai are currently attending countrywide seminars on the application of human rights in policing. Perhaps the things they learn (but there will always be dunces) will permit them to do their jobs correctly and not as the latest political lifebelt dictates.

I have adverted HERE to the provisions of Section 19A of the Criminal Justice Act 1984 (as inserted by Section 30 of the Criminal Justice Act 2007).

Section 19A is one of the Sections in Part 4 of the Criminal Justice Act 2007. Part 4 has had a predecessor (so to speak) in the United Kingdom in Section 34 of the Criminal Justice and Public Order Act 1994.

That section has caused a lot of difficulty in the UK courts.

The UK Court of Appeal in R. v Bresa [2005], stated:

As we made clear in our discussion of the authorities at the commencement of this judgment, Section 34 is a very difficult area. In our view however the criticisms that can be made of this direction are soundly based. The question that remains is whether, having regard to the misdirection, we could conclude that the conviction was safe. There was a very powerful case against the appellant and without an explanation from the solicitor as to the basis on which the appellant was being advised not to comment, there is a powerful case for saying that the jury could be sure that the appellant did not mention self-defence in his interview because he had not at that stage thought of that as his defence. But we cannot be sure what part the direction on Section 34 played in the jury’s decision making. It was a significant aspect of the summing up and for that reason it seems to us that we could not conclude that this conviction was safe.”

What the Court of Appeal were considering was the direction the judge had given to the jury in the “Bresa” case.

They summarised the terms of the direction that the judge was required to give to the jury:

The latest JSB guideline direction, which appears at Archbold 2004 Ed at para 15-427, has taken account of the above authorities and that supports the view that among the key features of a direction under Section 34 are the following. First there needs to be the striking of a fair balance between telling the jury of a defendant’s rights [to remain silent or not to disclose advice], and telling the jury that the defendant has a choice not to rely on those rights. Second there needs to be an accurate identification of the facts which it is alleged a defendant might reasonably have mentioned. Third there needs to be a warning that there must be a case to answer and the jury cannot convict on inference alone. Fourth there must be a direction to the effect that the key question is whether the jury can be sure that the accused remains silent not because of any advice but because he had no satisfactory explanation to give.”

In the UK, the accused is entitled to have his solicitor present with him during his interview with the police. This is not the case in Ireland.

In Ireland, under Seb-section 3 (b) of Section 19A, the Section only applies if the accused was given a reasonable opportunity to consult his solicitor.

Consider what a solicitor might say to an accused; the solicitor is very likely not acquainted with the accused [hence the title to this post}. The solicitor will need time to take full instructions and analyse the facts; in these circumstances the best advice is to advise him to say nothing.

If that is the advice given to the accused, what possible adverse inferences can be drawn if the accused fails to mention a fact he later relies on for his defence?

It should be remembered that the Gardaí will have cautioned the suspect that;

you are not obliged to say anything, but anything you do say will be taken down and may be used in evidence against you”.

It should be further remembered that the advice a solicitor gives to his/her client is privileged; the client is not obliged to divulge what advice he got from his solicitor.

So, the accused is in a position where i) he is not obliged to say anything; ii) his solicitor’s advice is secret (privileged); and iii) he is menaced with an adverse inference if he remains silent.

Under Section 154 of the Planning and Development Act 2000 a planning authority may issue an enforcement notice on an owner or occupier of land in relation to any development.

The matters to be specified in the notice are set out in Section 154. Suffice to say that, pursuant to Section 154 (8), failure to comply with the notice is a criminal offence.

This is very strange.

Firstly, the Planning and Development Act 2000 places no express obligation on the prosecution to prove that the “development” is unauthorised. Development, whether of use or of works, is not unauthorised unless it post-dates 1st October 1964.

Secondly, the Planning and Development Act 2000 makes no express provision for some obvious defences to any requirement that might be made in a notice, such as;

that the “development” is authorised;

that the “development” is not unauthorised;

that the “development” is exempted development:

In short, the offence seems not to be related to planning (sustainable or otherwise), just a failure to follow what may be a caprice of a planning authority official.

If that is true, it raises constitutional issues in any prosecution under Section 154 (8).

“Seems”, in this context is important. It is not inevitable that the offence actually constitute a failure to comply with a notice simpliciter.

The District Court (the offence is triable summarily) is at liberty to interpret the the Section and the evidential burden on the prosecution to avoid working a breach of the constitution. Under the European Convention on Human Rights Act 2003, there is an obligation on Irish courts to interpret legislation to avoid breaches of the European Convention on Human Rights (in this particular instance Article 6 thereof). It is regularly asserted that the Irish constitution already embodies standards equal to if not greater than the European Convention on Human Rights. A prosecution under Section 154 (8) is the ideal occasion to show that this is true.