Anglo trial : Legal advice as an issue in the case

Shortly before the court broke for lunch on March 6th – Day 19 of the trial — Judge Martin Nolan briefly addressed the jury. He told them that the issue of whether legal advice was obtained by Anglo Irish Bank in relation to the July 2008 transaction was irrelevant to the guilt or innocence of the accused. There was to be no further reference to it in evidence.

This decision was the culmination of three days of drawn-out and at times acrimonious legal argument in the absence of the jury.

By that stage, about a dozen witnesses had given evidence about legal advice. Anglo directors, senior bank employees and some of the Maple 10 had told the court they were assured that advice had been sought and obtained on the lawfulness of the transaction. Many of them said they drew comfort from this.

On Day 14, however, the prosecution moved to have legal advice excluded. "Ignorance of the law is not a defence," said Úna Ní Raifeartaigh SC. What the accused believed as to what was lawful was not relevant.

Ms Ní­ Raifeartaigh argued that the offence with which the three Anglo directors were charged was not an offence requiring proof of knowledge as to lawfulness. If the defence argument was accepted, she told the judge, this would have "far-reaching implications" as it would apply to the whole of the Companies Act. An officer would never be in breach if he/she sought and received positive legal advice.

Brendan Grehan SC, for Pat Whelan, said he didn't have a problem with a ruling that specific legal advice could not be put before the jury, but it would be "inappropriate and wrong" for the court to say legal advice was irrelevant. The idea that you could be found guilty and sentenced to five years in jail "where there is no criminal intent" fell foul of fundamental principles of justice, Grehan said.

Michael O’Higgins SC, for Sean FitzPatrick, argued that the seeking of legal advice was a fact. “It was sought for a purpose. If that purpose was trying to minimise or prevent a breach of the act, then it’s evidence in this case,” he said.

The issue went to the centre of the case, O'Higgins argued, because section 60 offered an "out" if a company director took "all reasonable steps" to prevent a default. FitzPatrick raised "three red flags" on his call with David Drumm on July 9th 2008, O'Higgins said. Could the Maple 10 absorb losses? Was the regulator on board? And had legal advice been sought? For O'Higgins, the prosecution was trying to "bludgeon the court into some sort of fear factor."

Patrick Gageby SC, representing Willie McAteer, agreed. It was "absolutely fair" to say that legal advice was sought to head off a breach. "Is the prosecution trying to take back what has happened already?"

Extensive discussion took place around CC v Ireland, a 2006 "unlawful carnal knowledge" case in which the Supreme Court ruled part of an Act unconstitutional because if did not allow for the defence of honest mistake about the age of the female complainant.

But the prosecution insisted CC related to a mistake as to facts, not the law.

Judge Nolan agreed. In his ruling, he noted that “this issue of good or bad legal advice has been hanging over this case since the very first day.” A “fundamental issue” was that ignorance of the law was not a defence. Allowing legal advice would confuse the jury, and would “distort” the act by bringing in a “good faith” defence.

The judge ruled from that point on there could be no mention of legal advice.

But the matter didn’t end there. By the following morning, the mood had grown tense. All three defence teams said the judge had gone beyond the prosecution’s request by ruling out not just the content of legal advice but all mention of it. According to Gageby, the judge had “radically interpreted” the application and this would have a “radical effect” on other aspects of the case.

To the three defence teams, it seemed the judge had declared the offence one of absolute liability – in other words, that a mistake of fact was not a defence. “We have reached an impossible position,” Michael O’Higgins said, if the judge was closing off any good faith defence.

Another day of argument ensued. “Surely my client is entitled to show he did try to comply with the Companies Act. That’s at the root of this,” Gageby told the judge. “We’re having an event airbrushed out of the case,” said Michael O’Higgins.

Judge Nolan again ruled with the prosecution. The offence of contravening section 60 of the Companies Act was strict or ordinary liability, but the mental element related to facts, not the law. “If I were to accept that there is such a thing as a good faith defence, I would be radically departing from the norms of Irish criminal law,” he said.