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Regulators should apply 'judges' rules' in interviews

A recent regulatory investigations and inquiries seminar examined the rights and obligations of regulators when carrying out probes, and the correct procedures for conducting them. 

The Mason Hayes & Curran-hosted seminar heard partner Lisa Joyce say that, generally, the courts do seem to recognise that statutory or regulatory investigations can be much longer and more complex that others types of investigations, based on the Court of Appeal verdict in Michael Fingleton vs Central Bank.

“In that case, the investigation had taken five years to complete, from 2010 to 2015, but the court noted that the Central Bank had said it was the most complex and difficult investigation it had ever carried out. 

“It included multiple suspected contraventions. There were over 200 statutory information requests, and over 21 formal interviews were carried out.

No blameworthy delay 

“The court still found that there was no blameworthy delay on behalf of the Central Bank in the length of that investigation,” Joyce said. 

She suggested that regulators who had the power to appoint their own personnel or external investigators to carry out statutory inquiries on their behalf, should consider going with the external option, based on the Court of Appeal decision.

The Central Bank appointed external agents, and this was unsuccessfully challenged by Michael Fingleton’s lawyers as giving rise to an appearance of bias.

The court found that the appointment of external personnel militated against an appearance of bias.

This is an indication that the appointment of external regulators is the way to go, if that option is available, she said.

On the question of voluntary or compulsory information, senior associate Paul Fitzpatrick pointed out that many regulators had powers of compulsion, but a person could also attend an inquiry on a voluntary basis.

Questions

“There are two points to note,” he said. “If someone attends voluntarily, the regulator can ask them any question for any purpose.

“If they attend under compulsion, the regulator is limited to asking questions, the answers to which are necessary for the regulator to carry out their function.”

So there is more limited scope for questioning when attending under compulsion.

Evidence given to a regulator voluntarily can be used in a criminal investigation, although the privilege against self-incrimination can be asserted. 

“If you do provide incriminating answers, then those can be used against you in future criminal proceedings,” he said. 

“If you give evidence to the regulator on a compelled basis, the fact that you give it under compulsion, means that it can’t actually be used against you. So there is immunity there." 

Witness statements

Fitzpatrick pointed out that that regulators conducting interviews and taking witness statements might come across further breaches or regulations. 

He said that, in those cases, regulators should comply with “judges’ rules”, which are not strict rules of law but are best practice in those situations.

“Those rules suggest that if a regulator is speaking to a witness and they think that person might be suspect, they need to pause the interview, they need to inform them that the witness may have breached a regulation, and they have to caution them in respect of their legal rights, as they would do in respect of suspects,” he said. 

Powers of investigation

MH&C partner Niall Michel said that not all regulators have the same powers of investigation due to their piecemeal and ad hoc development over time.

“More modern schemes have a wider suite of much more sophisticated and effective powers of regulation and investigation, and they have the benefit of best legal practice and current legal developments.”

Privilege

There were four gaps in current regulatory schemes, he said, that could be filled because not all schemes have a mechanism for dealing with contested claims to what is covered by legal professional privilege. 

The Competition and Consumer Protection Act of 2014 contains a provision that allows for the sifting out of privileged material from a bulk of other types of material, he pointed out.

And a provision in the Central Bank Supervision and Enforcement Act 2013 sanitises information provided by people who are the subject of requirements to provide information against breaching any other enactment or rule of law that they might otherwise breach in providing that information.