Arthur Cox in Dublin was asked last Wednesday to comment on how it managed the apparent conflict of interest in the liquidation of Irish Bank Resolution Corporation, where on the one hand it was an unsecured creditor of IBRC having provided a range of legal services in 2012, and on the other hand it was the only provider of external legal advice on the drafting of the IBRC Act 2013, the Act which liquidated IBRC and placed unsecured creditors in a very precarious position, with reports that one law firm, McCann Fitzgerald faces an €8m loss, though that has been disputed by McCann Fitzgerald. At time of writing today, there has been no response from Arthur Cox to the request for comment.
A quick review of the Court Service website shows that IBRC has been very active indeed in our courts. And thanks to the Court Service website we can see that IBRC uses a range of law firms, and one is top-tier Dublin firm Arthur Cox. IBRC used a wide range of solicitors in 2012, and Arthur Cox was just one of many firms used during the year.
However in 2013, of the total of nine cases initiated by IBRC in the High Court, in not one single case was Arthur Cox the solicitor on record for IBRC. Wasn’t that lucky? Because, as an unsecured creditor, it would now face a severe bad debt on its legal fees, after the IBRC liquidation.
On 27th February, 2013, we found out that Arthur Cox was the only third party used by the Government in drafting the IBRC Act 2013. This was revealed in a parliamentary question asked by the Sinn Fein finance spokesperson Pearse Doherty to the Minister for Finance Michael Noonan.
So, on one hand, Arthur Cox was advising the Government on the IBRC Act which would liquidate IBRC and place unsecured creditors in a poor position as regards payment of outstanding bills. And on the other hand, we had Arthur Cox – in 2012, if not in 2013 – providing legal services on, what would usually be an unsecured creditor basis.
If Arthur Cox were to comment, it would probably refer to Chinese Walls, but what sort of money was at stake here?
Well, on 5th March 2013, Deputy Doherty sought to find out and he asked Minister Noonan about billings from Arthur Cox to IBRC in 2012 and 2013, and also payments made by IBRC to Arthur Cox. Despite NAMA providing superb detail on the breakdown of its legal fees, Minister Noonan says that in the case of IBRC, this information cannot be provided “due to commercial confidentiality and sensitivities, and also solicitor/client confidentiality”
So, not only is Arthur Cox lucky not to have appeared as the solicitor on record for any of the nine IBRC applications in 2013, but their Chinese Walls must be constructed to an almost-unbelievably high standard, though thanks to Minister Noonan, we don’t know just HOW lucky Arthur Cox is.
The full parliamentary questions and responses are below.
Deputy Pearse Doherty: To ask the Minister for Finance if he will identify all non-Government parties which contribute to the drafting of the Irish Bank Resolution Corporation Bill 2013.
Minister for Finance, Michael Noonan: The Irish Bank Resolution Corporation Bill 2013 (the “Bill”) was drafted by the Office of the Attorney General. The formulation of the legislation was primarily conducted by the Department of Finance. However advices were received from Arthur Cox Solicitors and in connection with the preparation of the legislation. In addition the National Treasury Management Agency, the National Asset management Agency and the Central Bank of Ireland were consulted in respect of the preparation of the legislation. Those agencies may have also obtained their own external legal advices. The Special Liquidators were also provided with the opportunity to review and comment on the draft Bill.
Deputy Pearse Doherty: To ask the Minister for Finance if he will outline the involvement of a law firm (details supplied) in the drafting of any part of the Irish bank Resolution Corporation Bill 2013.
Minister for Finance, Michael Noonan: The company referred to in the question provided legal advices in connection with the formulation and preparation of the Irish Bank Resolution Corporation Bill, which was drafted by the Office of the Attorney General. The substance of those advices are subject to legal professional privilege.
Deputy Pearse Doherty: To ask the Minister for Finance if he will provide the quantum of gross legal fees billed to Irish Bank Resolution Corporation as a result of the direct engagement of a law firm (details supplied) for both calendar year 2012 and for 2013 between 1 January and 6 February 2013..
Deputy Pearse Doherty: To ask the Minister for Finance if he will provide the quantum of payments made by Irish Bank Resolution Corporation to a law firm (details supplied) for both calendar year in 2012 and for 2013 between 1 January and 6 February 2013..
Minister for Finance, Michael Noonan: Due to commercial confidentiality and sensitivities, and also solicitor/client confidentiality, the Special Liquidators do not propose to provide details relating to amounts due and paid to Arthur Cox for both the calendar year 2012 and for 2013 between 1 January and 6 February 2013.
UPDATE: 11th March, 2013. It is worth stating that we previously learned that the IBRC Bill had been signed off by the Attorney General at the end of 2012.
NAMA Wine Lake 