I OVERVIEW

Ireland has a robust, well-regulated funds industry. Almost €5 trillion worth of assets are administered in Dublin, which is the largest hedge fund administration centre in the world and Europe's leading hedge fund domicile.

Ireland is a common law jurisdiction. A written Constitution was brought into force in 1937. Legislation must be compatible with the principles laid down by the Constitution, which also sets out the fundamental rights of citizens, including property rights.

The Commercial Court is a division of the High Court that deals with high-value business disputes. Where the value of a dispute exceeds the Court's threshold of €1 million and a party applies for entry to the Commercial Court with sufficient urgency, the Court is likely to exercise its discretion to admit the case and will then fix tight deadlines for the progression of the case. The Court has full jurisdiction to grant such emergency measures as are available under Irish law, including Mareva injunctions.

In the criminal context, there is a unit of the Irish police force dedicated to the investigation of fraud (the Garda Bureau of Fraud Investigation), a statutory agency charged with the recovery of assets representing the proceeds of crime (the Criminal Assets Bureau), and a Director of Corporate Enforcement, which has a role in prosecuting those guilty of criminal breaches of company law, although more serious offences are prosecuted by the Director of Public Prosecutions.

II LEGAL RIGHTS AND REMEDIES

i Civil remedies

Causes of action arising from a fraud may include, inter alia, claims for deceit, negligent misstatement, breach of fiduciary duty, breach of trust, dishonest assistance, knowing receipt, conspiracy and inducement of a breach of contract. Some of these are considered below.

Deceit

To establish the tort of deceit under Irish law, the plaintiff must prove:

  1. a representation consisting of something said, written or done;
  2. that the defendant was the person who made the representation;
  3. that the plaintiff was the person to whom the representation has made;
  4. that the representation was both false and fraudulent;
  5. that the representation was a material inducement to the plaintiff to act on it;
  6. that the plaintiff did in fact alter his or her position on foot of the representation; and
  7. that the plaintiff thereby suffered damage.2

The standard of proof to establish fraud is on the balance of probabilities,3 although the courts have indicated that the degree of probability required should always be proportionate to the nature and gravity of the issue to be investigated,4 which suggests a slightly higher standard of proof than usually applies in civil claims. Fraudulent intent may be inferred from the circumstances.5 Recklessness by the party making the representation as to whether the representation is true or false may be sufficient to establish fraud.6

An innocent principal will be liable in deceit for a representation made by an agent that the agent knows to be false and that was made with actual or ostensible authority. Similarly, an innocent employer will be liable for deceit by a dishonest employee if done within the course of employment where the employee has actual or ostensible authority to act. However, an employer will have no liability for unauthorised statements.7

A defendant who is found guilty of the tort of deceit will be liable to compensate the plaintiff in damages for the plaintiff's losses. The remoteness criterion applied is the 'direct consequences' rule, rather than the more limited 'reasonably foreseeable' rule that applies to actions in negligent misrepresentation.8

In Irish law, it is possible in certain circumstances to pierce the corporate veil and for a director of a company to be held personally liable because of his or her close proximity to a tortious act.9

Breach of fiduciary duty

A fiduciary must account for unauthorised profits generated from his or her fiduciary position, or in circumstances involving a conflict between his or her duty and his or her interest. To establish liability to account, there must be a connection between the fiduciary position and the profit made.10

The Companies Act 2014 regulates the fiduciary duties of company directors. It provides that the duties set out therein are owed to the company alone. Directors' duties include:

  1. a duty to act honestly and responsibly in relation to the conduct of the affairs of the company;
  2. a duty to exercise their powers only for purposes allowed by law;
  3. a duty not to use the company's property, information or opportunities for their own or anyone else's benefit unless expressly permitted; and
  4. a duty to avoid any conflict between their duties to the company and their other (including personal) interests, unless released from their duty to the company in relation to the matter concerned.11

A director who acts in breach of duty shall be liable to account to the company for any gain that he or she makes directly or indirectly from the breach of duty, or to indemnify the company for any loss or damage resulting from that breach, or both.

Regarding untrue statements in a prospectus, in the context of fraud that induces the sale of a company at an inflated price, the Companies Act 2014 provides for the liability of a number of persons to pay compensation to all persons who acquire any securities on the faith of a prospectus for the loss or damage they may have sustained by reason of any untrue statement included therein or any omission of information required by EU prospectus law to be contained in the prospectus. Such persons include the issuer of the securities and every person who is a director of the issuer at the time of the issue of the prospectus.12 Criminal offences are also provided for under the Companies Act 2014.

Dishonest assistance

A party who dishonestly assists in a breach of trust or fiduciary obligation will be liable in equity to make good the loss to the beneficiary. To establish the assister's liability, the state of mind of the trustee is not required to be proven to be dishonest.13

Conspiracy

The tort of conspiracy under Irish law occurs where two or more people act together with the predominant purpose of damaging another, even if the act done to the injured party would be lawful if done by an individual (lawful means conspiracy), or where two or more persons agree or combine to carry out a lawful purpose by unlawful means (unlawful means conspiracy).14 The plaintiff must suffer loss as a result of the conspiracy to succeed in an action.

Inducement of breach of contract

An accessory to a fraud may be liable for the tort of inducement of breach of contract. The defendant must have some knowledge of – or be wilfully blind as to – the existence and terms of the contract and some level of subjective intent to bring about the breach. Inducement involves active persuasion or enticement of the contracting party to break the contract (i.e., more than information or advice).15

Knowing receipt

Liability for knowing receipt of the proceeds of fraud may be established where the recipient had actual or constructive knowledge of the breach of trust. The position in this regard is therefore different from the current position under English law, which requires an element of unconscionability on the part of the recipient to be demonstrated for liability to attach.

A person in receipt of money or property can be obliged to effect restitution to another where it would be unjust for him or her to retain it.16

Tracing

In addition to the various remedies that may follow a finding of liability in cases of tort or breach of contract, such as damages, injunctive relief and specific performance, there are additional remedies that may be ordered in favour of the victim of a fraud to enable that party to recover his or her property.

The process of tracing has long been accepted by the Irish courts as a means of identifying assets that have been transferred by one party to another for the purpose of making a proprietary claim to those assets even where mixed with other assets, such as in a bank account. It is necessary that the person received the money as trustee or as a person occupying a fiduciary relation to another.17 A person who is entitled to any equitable interest in any property, real or personal, will be entitled to trace the property, for so long as it continues to exist and even though it may have been mixed with other property, into the hands of anyone in a fiduciary relationship with him or her and into the hands of any third party, except a bona fide purchaser for value without notice of the fiduciary relationship.18 The entitlement to trace into an overdrawn bank account has not yet been considered by the Irish courts.

Constructive trust

The Irish courts will, in appropriate circumstances, impose the remedy of a constructive trust to satisfy the demands of justice and good conscience, preventing the trustee from acting in breach of good faith19 and enabling the plaintiff to claim a proprietary interest in the property. If the imposition of such a trust is likely to prejudice other innocent parties, for example, other creditors in the liquidation of a company, it may be necessary for the plaintiff to prove fraud on the part of the defendant.20

ii Criminal remedies

The most relevant offences under Irish law in the context of fraud are those provided for by the Criminal Justice (Theft and Fraud Offences) Act 2001, as amended, and include theft, making a gain or causing loss by deception, false accounting and forgery.

Where property has been stolen and a person is convicted of an offence relating to the theft, the court convicting the person may make the following orders:

  1. an order requiring anyone having possession or control of the property to restore it to any person entitled to recover it from the convicted person. This includes property in a state that is a designated state for the purposes of the Criminal Justice (Mutual Assistance) Act 2008;
  2. on the application of a person entitled to recover from the convicted person any other property directly or indirectly representing the stolen property, an order that other property to be delivered or transferred to the applicant; or
  3. an order that a sum not exceeding the value of the stolen property shall be paid, out of any money of the convicted person that was taken out of his or her possession when arrested, to any person who, if that property were in the possession of the convicted person, would be entitled to recover it from him or her.21

Defences to fraud claims

The limitation period for claims in contract and tort is generally six years from the date of accrual of the cause of action.22 A lack of knowledge will not postpone the limitation period: the date of the plaintiff's knowledge of his or her cause of action is only relevant to personal injuries claims. However, where the action is based on the fraud of the defendant or his or her agent, or the cause of action has been concealed by fraud, the period of limitation will not begin to run until the fraud has been discovered or could, with reasonable diligence, have been discovered.23

No period of limitation under the statute of limitations applies to an action against a trustee or any person claiming through him or her where the claim is founded on fraud or a fraudulent breach of trust to which the trustee was party, or the claim is to recover trust property or the proceeds thereof still retained by the trustee, or previously received by the trustee and converted to his or her own use.24 However, the equitable defences of laches and acquiescence may be raised as defences to such an action.

As matters stand under Irish law, the limitation period for claims against parties guilty of knowing receipt or dishonest assistance is not clear.25

III SEIZURE AND EVIDENCE

i Securing assets and proceeds

Mareva injunctions and freezing orders

Irish courts will grant a freezing order, a Mareva injunction, or both, in appropriate circumstances to prevent the disposal of assets and to require their preservation.

Such orders are often sought on an ex parte, interim basis, meaning that a high degree of disclosure of material facts is required on the part of the plaintiff.

A Mareva injunction may be granted before or after judgment where it is feared that the defendant will attempt to remove, conceal or dissipate assets prior to enforcement of a judgment.

If the plaintiff contends that he or she is the owner of assets held by the defendant, the courts may grant freezing orders prohibiting the defendant from disposing of the asset pending trial and preventing anyone on notice of the order from dealing with it.

The court has the power to make such ancillary orders as may be required to ensure that an injunction that it has granted is effective.26 Such ancillary orders may in appropriate circumstances be made on an ex parte basis and may include restraining reporting of the injunction, discovery of documents, disclosure by the defendant of his or her assets, cross-examination of defendants, tracing orders, the appointment of a receiver over assets and an order requiring a bank to disclose details of bank accounts to facilitate a tracing order in cases of fraud.

Where warranted by the facts, the court will grant an injunction to restrain the dissipation by the defendant of extraterritorial assets.27 An application for recognition of such an injunction may be required in the local jurisdiction.

The granting of a Mareva injunction is at the discretion of the court. There are a number of matters to be proven by the plaintiff:28

  1. the plaintiff has a substantive cause of action;
  2. he or she has a good arguable case;
  3. the defendant has assets;
  4. there is a risk that the defendant will dissipate assets to evade his or her obligations to the plaintiff. The intention of the defendant is key in Irish law. As direct evidence of a defendant's intention to move assets out of the jurisdiction will rarely be available at the interlocutory stage, the court will consider the circumstances, such as the nature of the alleged wrongdoing, the defendant's experience of moving assets and the type of assets (liquid or otherwise); and
  5. the balance of convenience favours the grant of the injunction.

In addition, the behaviour of the parties will be a factor considered by the court.

As with any interim or interlocutory injunction, the plaintiff must give an undertaking to pay damages to the defendant should it transpire at trial that the injunction should not have been granted and that the defendant suffered loss as a result of the injunction. The plaintiff will also be required to pay the reasonable costs and expenses of third parties in complying with the order.

As an injunction is an equitable remedy, the application may be refused if any of the equitable maxims apply. So, for instance, if there has been delay on the part of the plaintiff, or if the plaintiff comes to court with unclean hands, the court may exercise its discretion to refuse the injunction.

The Companies Act 2014 provides for the granting of an order restraining a director or other officer of a company, or the company, from removing his or her, or the company's, assets from the state, or reducing the assets below a specified amount. Creditors are among the parties who have standing to seek such an order.29

After judgment has been obtained, a creditor may be able to obtain a garnishee order in respect of a debt owed by a third party to the defendant, and may also be entitled to appoint a receiver to property in which the defendant has an interest.

The High Court has power under the Proceeds of Crime Act 1996, as amended, to make orders for the preservation or disposal of property deemed to be proceeds of crime. As applications for such orders may only be made by the Irish police, the Revenue Commissioners or the Criminal Assets Bureau, this legislation may not be of assistance to a party seeking urgent pretrial relief and wishing to have some control over the timing and manner of the application. Instead, such a party would be advised to make its application for interim relief pursuant to the inherent jurisdiction of the court, or under the Companies Act 2014, or both, if appropriate.

ii Obtaining evidence

Discovery

In Irish civil litigation procedure, the parties are entitled to seek disclosure from each other of all documents relevant to the issues in dispute (the process known as discovery). In certain circumstances, discovery may also be sought from parties who are not involved in the proceedings. Typically, discovery takes place after the pleadings have been exchanged. Therefore, a party requiring urgent disclosure of documents, or who is concerned that documents or other evidence may be at risk of being destroyed, should consider one of the orders described below, which are only available in exceptional cases and which are subject to strict requirements.

Search order (Anton Piller order)

In exceptional cases, the court will grant an order known as an Anton Piller order permitting a plaintiff to take evidence from a defendant's premises to preserve it. The plaintiff will not be permitted by this order to forcibly enter premises. He or she requires the defendant's consent to enter the premises, which, if refused, may constitute contempt of court by the defendant.

The granting of an Anton Piller order is at the court's discretion. A number of matters must be proven before the court will consider granting such an order, as follows:

  1. the plaintiff has a substantive cause of action;
  2. he or she has a strong case;
  3. there must be clear evidence that the defendant has incriminating documents or materials in its possession and that there is a real possibility that these will be disposed of or destroyed; and
  4. actual or potential damage, for which damages would not be an adequate remedy.30

The party seeking an Anton Piller order will be required to give a number of undertakings, including an undertaking as to damages, and to explain the meaning of the order to the party on whom it is served. The defendant will be entitled to obtain legal advice on an urgent basis and may seek to withhold documents that incriminate him or her.

Disclosure order (Norwich Pharmacal order)

A party wishing to ascertain the identity of a wrongdoer may be able to obtain a Norwich Pharmacal order requiring a third party to disclose that information. Such an order might, for example, be made against an internet service provider to disclose the owner of an IP address.

Schedule of assets

As an ancillary order to assist in giving effect to Mareva relief, a defendant can be compelled to disclose a schedule of his or her assets in an affidavit.

Disclosure by banks

Under the Bankers' Books Evidence Acts, a party to proceedings may obtain an order that he or she may inspect and take copies of entries in a banker's book for the purposes of the proceedings. Such an order can be made at the interlocutory stage where the plaintiff can show wrongdoing. As with any of the exceptional orders discussed in this section, the court will exercise great caution in deciding whether to grant this type of order, particularly if the account belongs to a person who is not a party to the proceedings.

Travel restrictions (Bayer order)

If there is a concern that a defendant will leave the country with the intention of frustrating the administration of justice or an order of the court (e.g., a Mareva injunction), the court may, in extremely exceptional circumstances, grant an order restraining a party from leaving the country and compelling him or her to deliver up his or her passport.

IV FRAUD IN SPECIFIC CONTEXTS

i Banking and money laundering

Cheques: banks' liability to customers

Where a cheque is payable to a person who endorsed it to a customer of the paying bank and the bank ought to have raised concerns regarding the cheque, the paying bank may be liable for negligence if it did not make appropriate enquiries.

However, a paying bank that in good faith pays on a cheque to a person not entitled to the payment can avail of a number of statutory defences, for example under the Bills of Exchange Act 1882. However, these defences are not available where the cheque has been forged or altered without authorisation. In that event, the bank has no valid mandate from its customer and may be liable to its customer for a payment on foot of the forged cheque. The bank may have a right of action against the payee to recover the payment because of a mistake of fact. In Irish law, if the payee is insolvent, where monies are paid by mistake into the account of a company, the monies do not form part of the assets of that company at the date of its liquidation and there may be a right to trace those monies.31

A collecting bank may be liable to the true owner of a cheque in the tort of conversion or to account for money had and received where it collects the proceeds of a cheque for someone other than the true owner. In such cases, the bank can avail itself of a statutory defence if it has acted in good faith and without negligence, judged by the standard of the reasonable and careful banker. A failure by the bank to meet its obligations in respect of opening accounts and knowing its customers32 may deprive the bank of this statutory defence.

When holding items deposited with it for safe custody, a bank also owes a duty to its customers that the items are not released to the wrong person.

Payment orders: banks' liabilities to customers

Banks are expected to comply strictly with their customers' payment orders by issuing corresponding payment orders that precisely match that of their customer. In limited circumstances where a bank is permitted to refuse a payment order, the bank must inform the customer at the earliest opportunity that it is refusing the payment order and provide an explanation, to the extent possible. Banks are also entitled to reject a payment order where the customer has breached the agreed terms and conditions governing the account, or where making the payment would be considered unlawful, for example, in the case of suspected fraud. In general, a bank must refrain from executing a payment instruction where it believes (acting reasonably) that the instruction is an attempt to misappropriate funds.

The Payment Services Regulations (PSRs) provide that a payment transaction is authorised only if the customer has consented to its execution and where the consent is in a form agreed between the customer and the bank. If a third party obtains a customer's details or payment device and sends a payment instruction to the bank, the obligation on the bank to assess whether it had the consent to process the transaction would be dependent on the terms of the contract between the parties.

Where fraudulent payment instructions are given to a bank and a bank acts in accordance with those instructions, recent cases have held that a customer's bank will not be liable for facilitating the defrauding of its customers, so long as it follows established banking practice.33 The courts also recognise that where a bank is dealing with a huge number of daily transactions, it could not be expected to easily spot signs of fraudulent activity.34 While many of the cases in this regard are English cases, they are likely to have a persuasive effect in the Irish courts. Banks are generally liable to customers for frauds that do not involve the customer authorising payment, for example, where a card is stolen or the customer is the subject of a payment scam.

Customer's duty of care not to facilitate fraud

A customer also owes its bank a duty of care not to allow fraud, including the duty to refrain from drawing cheques or other payment orders in such a manner as to facilitate fraud or forgery and the duty to inform the bank of any forgery of a cheque as soon as he or she becomes aware of it.

The PSRs provide that a bank's customer would be liable for all losses arising because of an unauthorised payment transaction if the losses were incurred by the customer because of the customer acting fraudulently or by failing, intentionally or by acting with 'gross negligence', to use any payment device in accordance with its terms and to notify the bank without undue delay (and no later than 13 months after the debit date) of the loss, theft, misappropriation or unauthorised use of a payment device, or failing to take reasonable steps to keep the personalised security features of a payment device safe.

Customers' duty to banks

A victim of a fraud should bear in mind his or her duties as a customer to his or her bank. These duties include the duty to inform the bank of any forgery of a cheque purportedly drawn on his or her account as soon as he or she becomes aware of it, a duty to refrain from drawing a cheque in such a manner as may facilitate fraud or forgery, and a duty to keep secure his or her account details,35 as well as any additional duties imposed under the customer's contract with the bank.

Money laundering

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010,36 which implemented the Third Money Laundering Directive, created a range of offences relating to money laundering and imposed extensive duties on banks and their employees in relation to customer due diligence and the reporting of suspicious transactions.

In addition to criminal sanctions, civil liability in the context of money laundering may also arise for a bank on the basis of knowing assistance or knowing receipt. The Irish courts have said that in the context of competing duties of the banker to effect an order and to combat fraud, a banker must refrain from executing an order if and for so long as the banker is put on inquiry in the sense that he or she has reasonable grounds for believing that the order is an attempt to misappropriate a customer's funds.37 The bank may be liable for knowing receipt if it can be proven to have constructive knowledge of the source of the funds or to have acted with a lack of probity in receiving the monies.38

Information systems

The Criminal Justice (Offences Relating to Information Systems) Act 2017 commenced on 12 June 2017. The principal purpose of the Act is to transpose the EU Directive (2013/40/EU) on attacks against information systems. The Act creates five offences:

  1. unauthorised access of information systems (e.g., hacking);
  2. interference with information systems or with data on such systems;
  3. interference with data without lawful authority;
  4. interception of transmission of data to or from information systems; and
  5. the use of tools to facilitate the commission of these offences.

This new legislation, which provides for significant sentences, will also be relevant in the context of electronic-based fraudulent activities.

ii Insolvency

Transaction having the effect of a fraud on creditors

Under Irish law, when a company is insolvent or near insolvency, its assets are held for the benefit of its creditors.

The Companies Act 2014 provides for the reversal of transactions that have the effect of a fraud on the company, its creditors or members. Where either a receiver of the property of a company is appointed, the company is placed into examinership or a liquidator is appointed and it can be shown to the satisfaction of a court that any property of the company was disposed of and that the effect of the disposal was to perpetrate a fraud on the company, its creditors or its members, then a court may order any person who appears to have the use, control or possession of the property or the proceeds of the sale or development of it, to deliver it or pay a sum in respect of it to the receiver, examiner or liquidator, as the case may be. In deciding whether it is just and equitable to make such an order, the court shall have regard to the rights of persons who have bona fide and for value acquired an interest in the property that is the subject of the application.39

The court will not require that a liquidator or creditor challenging a transaction prove intent to defraud creditors, rather, they will only have to show that the effect of the transaction was to perpetrate a fraud. A court is unlikely to regard a transaction as having the effect of a fraud if the transaction was concluded on market terms and not at an undervalue so that the balance sheet of the company was not immediately adversely impacted by the transaction.

Fraudulent and reckless trading

If, during the course of the winding up of a company or while a company is in examinership, it appears that any officer of the company was knowingly a party to reckless trading or intended to defraud the creditors of the company or creditors of any other person or for any fraudulent purpose, the court may – on the application of the liquidator, the examiner of the company, a receiver of property of the company or any creditor – declare that officer to be personally responsible, without any limitation of liability, for the liabilities of the company.40 To have standing to make this application to the court a creditor must have suffered loss or damage as a consequence of the fraudulent or reckless trading. One of the principal challenges for successfully pursuing a fraudulent-trading action is that it requires proof of actual dishonesty involving 'real moral blame'.41

Misapplication of company funds

If, during the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company, or any past or present officer of the company or its holding company, has misapplied or retained or become liable or accountable for any money or property of the company or has been guilty of any misfeasance or other breach of duty or trust in relation to the company, the court may compel that person to repay or restore the money or property or any part of it respectively with interest at such a rate as the court thinks just, or to contribute such a sum to the assets of the company by way of compensation as the court thinks just. This application may be made by the liquidator, any creditor or the Director of Corporate Enforcement.42

Examination

In the context of a liquidation, the High Court has extensive powers to summon before it persons having information about a company's affairs or property. Such persons may be summonsed for examination and required to produce records.43

Inspections

Under Part 13 of the Companies Act 2014, the court may appoint inspectors with wide powers to investigate the affairs of a company. This appointment may be made by the court on the application of a creditor, a director, not less than 10 members or one member holding one-tenth or more of the paid-up share capital of the company or the Director of Corporate Enforcement.

iii Arbitration

The Arbitration Act 2010 (2010 Act) adopted into Irish law the UNCITRAL Model Law on International Commercial Arbitration (the Model Law) for both international and domestic arbitrations.

Interim measures

Under the 2010 Act, the High Court has the same power of issuing interim measures in relation to arbitration proceedings as it has in relation to proceedings before the Irish courts, irrespective of whether their place is in Ireland.

Under the Model Law, unless otherwise agreed, the arbitral tribunal can grant interim measures to include providing a means of preserving assets out of which a subsequent award may be satisfied. These powers under the Model Law may be of less practical use than an application to the Court, particularly if relief is sought against a party that is not a party to the arbitration agreement (e.g., the debtor's bank).

An interim measure shall be recognised in Ireland as binding, and enforced upon application to the High Court, irrespective of the country in which the interim measure was issued. Enforcement may only be refused for the reasons set out in the Model Law (e.g., public policy).

Setting aside an arbitral award on grounds of fraud

Under the 2010 Act and the Model Law, there are limited grounds upon which an arbitral award may be set aside. In the case of fraud, it would be necessary to argue that the award is in conflict with the public policy of the state. A party who wishes the Court to set aside an arbitral award on this ground has 56 days from the date on which the circumstances giving rise to the application became known or ought to have become known to apply to the High Court.44

iv Fraud's effect on evidentiary rules and legal privilege

Legal advice privilege and litigation privilege will not attach to communications if their purpose is to conceal crime or fraud, or if they are in furtherance of the same. This is the position whether the lawyer is aware of the criminal or fraudulent purpose of the communication or advice or not. To persuade a court that privilege does not attach, it will not be sufficient to allege fraud, and some prima facie evidence that the allegation has a basis in fact must be given.45

V INTERNATIONAL ASPECTS

i Conflict of law and choice of law in fraud claims

Jurisdiction under the Brussels Recast Regulation

The basic rule under the Brussels Recast Regulation (the Regulation) is that persons domiciled in a Member State shall be sued in the courts of that Member State and may only be sued in the courts of another Member State under the rules provided in the Regulation.

One such rule is that in matters relating to tort (e.g., deceit), a person domiciled in a Member State may be sued in the courts of the place where the harmful event occurred or may occur. Where there is a claim for damages or restitution based on an act giving rise to criminal proceedings, a person may be sued in the court seised of those proceedings provided that court has jurisdiction under its own law to entertain civil proceedings.

Article 25 of the Regulation provides that if the parties to a dispute have agreed that a court of a Member State is to have jurisdiction to settle the dispute, then regardless of the parties' domicile that court shall have jurisdiction, which shall be exclusive unless the parties have agreed otherwise.

Under the Regulation, an application may be made to the Irish courts for such provisional (including protective) relief as may be available under Irish law, even if the courts of another Member State have jurisdiction over the substance of the dispute. The Regulation also provides for enforcement in one Member State of a judgment given in another Member State ordering a provisional or protective measure.46

The Regulation applies to Irish judgments and orders, such that, for example, a Mareva injunction or freezing order granted by an Irish court should be recognised without special procedure and enforced in a summary manner by the courts of a fellow Member State.

Jurisdiction at common law

Common law principles apply where the defendant is not domiciled in a Member State. Under Irish law, the general principle is that service of process is the foundation of the court's jurisdiction. An individual may be subject to the jurisdiction of the Irish courts even if he or she is only in Ireland for a short time and the claim has no connection with Irish law, provided he or she is properly served while in Ireland. There are a number of exceptions to this.

If a defendant is not in the state and cannot be served, the proceedings may be so closely connected with Ireland or Irish law that the Irish courts should assume jurisdiction. The Rules of the Superior Courts provide an exhaustive list of the circumstances in which Irish court proceedings may (at the court's discretion) be served on a person who is outside Ireland. One such category is where the action is founded on a tort committed within the jurisdiction. A further category is where any injunction is sought as to anything to be done within the jurisdiction. Such an injunction must, however, be sought as a primary relief and not an ancillary relief. In practice, this means that an Irish court is likely to refuse jurisdiction where Mareva-type relief is sought in respect of assets within Ireland in circumstances where the defendant has no other connection with Ireland.47

ii Collection of evidence in support of proceedings abroad

Criminal context

The Criminal Justice (Mutual Assistance) Act 2008 (the 2008 Act) gave effect to a number of international agreements between the state and other states relating to mutual assistance in criminal matters, including the European Conventions on Mutual Assistance in Criminal Matters of 1959 and 2000 and the EU–US Agreement on Mutual Legal Assistance. The 2008 Act provides for, inter alia, the granting of account information orders and account monitoring orders in respect of bank accounts in financial institutions in Ireland for the purpose of a criminal investigation in another jurisdiction (if that jurisdiction is a designated state).

Civil context

Regulation (EC) No. 1206/2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters has been given effect in Ireland by the European Communities (Evidence in Civil or Commercial Matters) Regulations 2013. These regulations and the associated court rules permit the Circuit Court to issue a witness summons to require attendance of the witness for examination under oath before the Court, and to make any order, where relevant, for the production by any person of any document or object referred to in the order.

The Foreign Tribunals Evidence Act 1856 governs the taking of evidence in Ireland for proceedings in the courts of a state that is not a Member State of the EU, and involves the use of letters rogatory. Ireland is not a signatory to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, and Irish courts therefore do not have jurisdiction to hear applications to take evidence pursuant to this Convention.

iii Seizure of assets or proceeds of fraud in support of the victim of fraud

See Section III.i, in respect of interim relief, and Section V.i, in relation to the international dimension.

In the criminal context, the 2008 Act provides for the recognition and enforcement in Ireland of a provisional order made in criminal proceedings in a designated state preventing the destruction or disposal of property that could be subject to confiscation or evidence in those proceedings.

iv Enforcement of judgments granted abroad in relation to fraud claims

Judgments relating to civil and commercial disputes are enforceable in Ireland. The criteria to be met and procedures to be followed depend on the location of the court in which the judgment was granted. If granted by the courts of a Member State of the EU, recognition and enforcement is governed by the Regulation. The Lugano Convention applies between Iceland, Norway and Switzerland and Member States of the EU. Recognition and enforcement of judgments from non-EU courts is less straightforward and is governed by common law principles.

Pursuant to the 2010 Act, the New York Convention in relation to the enforcement of foreign arbitral awards has the force of law in the state.

v Fraud as a defence to enforcement of judgments granted abroad

One of the limited grounds upon which a judgment from the court of a Member State may be refused recognition and enforcement by an Irish court under the Regulation is where recognition would be manifestly contrary to the public policy of Ireland. The use of the word 'manifestly' in the Regulation is considered to have further narrowed the availability of this ground for non-recognition.48

In cases to which the Regulation does not apply, a foreign judgment is impeachable for fraud on the part of the party in whose favour judgment is given or fraud on the part of the court pronouncing the judgment.49

In the context of arbitration, Article 36 of the Model Law permits the court to refuse recognition or enforcement where this would be contrary to the public policy of the state. Corruption, bribery and fraud are likely to constitute grounds for refusing to recognise a foreign arbitral award.50

VI CURRENT DEVELOPMENTS

It remains to be seen what the implications of Brexit will be for the recognition and enforcement in the United Kingdom of judgments obtained in Ireland, and the assistance that Irish courts can provide in aid of proceedings in the United Kingdom.

The Supreme Court has recently decided that funding of a plaintiff by a professional litigation funder is a breach of the laws prohibiting maintenance and champerty. In light of this finding, litigation funding will not be possible in Ireland until the introduction of appropriate legislation.

Since January 2017, it has been possible in certain cases to apply for a European account preservation order pursuant to Regulation (EU) No. 655/2014. The test for this is broadly similar to the test for a Mareva injunction. An applicant may apply to the courts of one Member State for an order freezing funds of a defendant held in another Member State up to a specified amount without the need for any further order in the latter Member State. Such an order may be granted before proceedings are initiated, as well as after judgment has been obtained.

Finally, the Law Reform Commission is currently examining potential gaps in Irish law on fraud offences. In early 2016, it published an issues paper seeking views on several matters, including whether offences similar to mail fraud and wire fraud offences in the United States should be enacted in Ireland. It is likely to be several years before any legislation that may be recommended by the Commission is enacted.


Footnotes

1 Peter Bredin, Jamie Ensor and Keith Robinson are partners at Dillon Eustace.

2 Harlequin Property (SVG) Limited and Harlequin Hotels and Resorts Limited v. Padraig O'Halloran and Donal O'Halloran [2013] IEHC 362, citing Derry v. Peek [1889] 14 App Cas 337 and Northern Bank Finance v. Charlton [1979] IR 149.

3 Banco Ambrosiano SPA v. Ansbacher & Company Ltd [1987] ILRM 669.

4 Georgopoulus v. Beaumont Hospital Board [1998] 3 IR 132.

5 Michovsky v. Allianz Ireland [2010] IEHC 43.

6 McAleenan v. AIG (Europe) Limited [2010] IEHC 128.

7 Vanguard Auto Finance Limited v. Browne and Others [2014] IEHC 465.

8 Northern Bank Finance v. Charlton [1979] IR 149.

9 Shinkwin v. Quin-Con Ltd & Quinlan [2001] 1 IR 514.

10 Biehler, Equity and the Law of Trusts in Ireland, Round Hall, sixth edition, 2016.

11 Companies Act 2014, Section 228.

12 Companies Act 2014, Section 1349.

13 Royal Brunei Airlines Sdn Bhd v. Tan Kok Ming [1995] 2 AC 378.

14 Iarnrod Eireann v. Holbrooke [2000] IEHC 47.

15 McMahon and Binchy, Law of Torts, Bloomsbury, fourth edition, 2013.

16 Dublin Corporation v. Building and Allied Trade Union (1996) 2 ILRM 547, Supreme Court.

17 Re Shannon Travel Ltd, Unreported, High Court, 8 May 1972.

18 Keane, Equity and the Law of Trusts in the Republic of Ireland (2011), second edition, Bloomsbury Professional.

19 (NA)D v. (T)D [1985] ILRM 153.

20 Re Custom House Capital Ltd [2013] IEHC 559.

21 Criminal Justice (Theft and Fraud Offences) Act 2001, Section 56, as amended.

22 There are exceptions, such as a claim against the estate of a deceased person, for which the limitation period is two years for causes of action accruing prior to death.

23 Statute of Limitations 1957, Section 71.

24 Statute of Limitations 1957, Section 44.

25 Canny, Limitation of Actions, Round Hall, second edition, 2016.

26 Irish Bank Resolution Corporation v. Quinn [2013] IEHC 388.

27 Deutsche Bank AG v. Murtagh [1995] 2 IR 122.

28 As set out by the Supreme Court in Caudron v. Air Zaire [1985] IR 716.

29 Companies Act 2014, Section 798.

30 Kirwan, Injunctions Law and Practice, Round Hall, second edition, 2015.

31 Re Irish Shipping Ltd [1986] ILRM 518, referred to in Breslin, Banking Law, Round Hall, third edition, 2013.

32 Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.

33 Tidal Energy Ltd v. Bank of Scotland plc [2014] EWCA Civ 1107.

34 Singularis Holdings Limited (in official liquidation) v. Daiwa – Capital Markets Europe Limited [2017] EWHC 257 (CH).

35 Banks v. Allied Irish Banks plc, Unreported, Circuit Court, 9 March 1995.

36 As amended by the Criminal Justice Act 2013.

37 Razaq v. Allied Irish Banks plc and Aslam [2009] IEHC 176, approving Steyn J in Barclays Bank plc v. Quincecare Limited [1992] 4 All ER 363.

38 Re Frederick's Inns [1994] 1 ILRM 387 and Moffitt v. Bank of Ireland, Unreported, High Court, 7 November 2000.

39 Companies Act 2014, Sections 443, 557 and 608.

40 Companies Act 2014, Section 610.

41 Maughan J, In Re Patrick & Lyons Limited [1933] Ch 786.

42 Companies Act 2014, Section 612.

43 Companies Act 2014, Section 671.

44 Arbitration Act 2010, Section 12.

45 Murphy v. Kirwan [1993] 2 IR 501.

46 Article 42 of the Regulation.

47 Caudron v. Air Zaire [1985] IR 716.

48 Delany and McGrath, Civil Procedure in the Superior Courts, Round Hall, third edition, 2012.

49 Bussoleno v. Kelly [2011] IEHC 220.

50 Travaux Préparatoire to the Model Law.