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Legislation Published to Establish The ‘Corporate Enforcement Authority’ As Stand-Alone Agency
AUTHOR(S): Claire McLoughlin, Karen Reynolds
PRACTICE AREA GROUP: Commercial Litigation and Dispute Resolution, Regulatory and Investigations, Corporate Offences, Fraud and White Collar Crime
The Minister for Business, Enterprise and Innovation, Heather Humphreys TD, announced last week that the Government has approved the General Scheme of the Companies (Corporate Enforcement Authority) Bill 2018 (the “Corporate Enforcement Authority Bill”) for publication. Under the proposed legislation, the Office of the Director of Corporate Enforcement (ODCE) is to be renamed the “Corporate Enforcement Authority” and is to be established as an independent statutory agency. This ‘rebrand’ of the ODCE was first flagged as a key element of the Government’s package of measures aimed at combatting white collar crime in Ireland. In announcing the Corporate Enforcement Authority Bill, the Minister said: “By establishing the ODCE as a stand-alone agency, it will be better equipped to investigate increasingly complex breaches of company law. The new Corporate Enforcement Authority will have more autonomy, particularly in terms of the ability to recruit specialist skills and expertise”. It is planned that the new authority will have up to three full-time commissioners. The Government has set a deadline of the end of Q2 2019 for enacting the Corporate Enforcement Authority Bill.
As well as establishing the Corporate Enforcement Authority, the Corporate Enforcement Authority Bill proposes a number of technical amendments to Irish law to provide clarity in key areas, including in relation to corporate governance. The technical amendments are, largely restoring a number of provisions that were provided for in the Companies Act 1963-2013 and should have been carried across to the Companies Act 2014.
The Corporate Enforcement Authority Bill also reflects recommendations made by the Law Reform Commission in its recently published report* on Regulatory Powers and Corporate Offences (the “LRC Report”). The LRC Report focused primarily on regulatory powers and enforcement and corporate criminal liability and contains a comprehensive review of the law in Ireland and other jurisdictions on these topics. Reform of these areas is a key focus for the government as part of its ongoing response to the 2008 financial crisis.
The press release contained an account of Judge Aylmer’s findings on the ODCE investigation which preceded the trial of DPP v Sean Fitzpatrick. Judge Aylmer directed the acquittal of Fitzpatrick on all charges as a result of what he perceived to be shortcomings in the investigation process. The Government has indicated that the purpose of publishing Judge Aylmer’s account is to highlight the lessons learned in relation to the investigation and trial and to take measures to address them. The account also emphasises the ODCE’s track record on other investigations and prosecutions which have led to successful convictions, some of the measures already taken by the ODCE since this investigation took place and most importantly, identifies what else must be done to ensure that the ODCE is fully equipped to undertake large scale and complex investigations in the future.
These recent measures support the Irish Government’s pledge to crack down on fraud and white collar crime in the State. The faster than anticipated commencement of the Criminal Justice (Corruption Offences) Act 2018 in July this year, the publication of the LRC Report and the announcement of the Corporate Enforcement Bill are clear indications of an increased political focus on ensuring regulatory authorities have fully kitted out toolkits at their disposal. Certainly, it will be interesting to see what further measures are implemented in 2019 to ensure regulators are equipped to tackle white collar crime and to assuage any residual perception that Ireland is a low-rule economy.
* Published on 23 October 2018
This article was co-authored by Ciara Dunny, Senior Associate