White Collar Crime - Is Enough Being Done?
In the midst of the many calls to a popular afternoon radio show on RTE seeking to ‘burn the bondholders’ (and everyone else however remotely connected to the ‘Celtic Tiger’), the loudest are for “those responsible” to be brought to justice. The recent presidential election highlighted the shift in public focus towards accountability, transparency and most tellingly, honesty. The slightest allegation of a failure to meet exacting standards in these areas has the potential to rapidly influence public sentiment, as some of the candidates discovered.
But what steps are being taken? Does Ireland need a show trial, broadcast on national television, exposing the proponents of corporate crime such as operators of Ponzi schemes, with sentences similar to the 150 years imposed on Bernie Madoff? The perception is that repeated calls to bring alleged wrong-doers swiftly to justice are falling on deaf ears.
Action is being taken and perhaps the issue is how this is being communicated. At the same time that investigations are underway, files are being prepared for the DPP, and work is on-going in the ODCE, the groundwork for future conduct of business in Ireland is being laid. Firstly, public sentiment has certainly shifted, demanding a more open and transparent environment. Secondly, legislation has been introduced recently to support and protect members of the public, in their capacity as employees and otherwise, when reporting theft and fraud or bribery and corruption within companies, and breaches of Irish company and banking law.
Under the Criminal Justice Act 2011 which came into force in August, there is now an obligation to report on any person (member of the public or the most junior employee to the most senior executive) who has information which might be of material assistance in either preventing an offence (i.e. breach of banking law) under the Act or securing the prosecution of another under the Act. Where a person fails to report this information to the Garda Siochána “without reasonable cause” he may be guilty of an offence, punishable by a fine, prison or both.
Protection is specifically given to employees who make disclosures under this 2011 Act. Any “penalisation” whether directly or indirectly by a company in relation to a whistleblowing employee, or any attempt to cover up whistleblowing, could lead to a finding of criminal liability. What of actions by fellow employees against an employee for whistleblowing?
It is interesting to note that a recent Court of Appeal decision in the UK has ruled that employers are not responsible for victimisation by colleagues for whistleblowing and the Court was precluded from reading the necessary words into the legislation to provide such protection to employees. Hopefully, the duty of care which an employer owes at common law and by virtue of the Safety, Health and Welfare at Work Act 2005, to take reasonable care to prevent an employee suffering detriment or illness in the workplace as a result of being harassed by other employees if they knew or ought to have known that such was occurring, will circumvent any deficiencies in our legislation. An employer is already prohibited under the 2011 Act from permitting another person to penalise or threaten penalisation against an employee. It remains to be seen if this is sufficient protection for employees who whistleblow.
Following the many recent public allegations of dishonesty and fraud in Ireland during the ‘Celtic Tiger’ years, the anger of the public at the perceived delay in sanctioning “those responsible” is palpable and understandable. While it may be too late for some it is encouraging that steps are being taken to improve the way in which business will be conducted in Ireland in the future. The risk of criminal liability on the basis of ‘knowledge but inaction’ alone will hopefully act as a deterrent to those considering engaging in corporate fraud in the future. This in turn should impact on standards and reduce the number of expensive and protracted investigations, helping to build Ireland’s reputation as an open and transparent environment in which to do business. It is up to all of us to play our part.
Carol Fawsitt
Partner and Head of Employment
Jeremy Erwin, Trainee Solicitor
cfawsitt@hayes-solicitors.ie