The Constitutionality Of The Administrative Sanctions Procedure

Author:Maples And Calder
Profession:Maples and Calder

1 The Draft Inquiry Guidelines and Part IIIC of the Central Bank Act 1942 (As Amended)

1.1 In November 2011, the Central Bank (the "Bank") issued Consultation Paper 57 ("CP 57") on the draft Inquiry Guidelines (the "draft Guidelines") to be prescribed undersection 33BD of the Central Bank Act 1942 (as amended) (the "Act"). The Bank then issued Consultation Paper 65 ("CP 65") on 23 May 2013 having considered the submissions made in respect of CP 57 and undertaken a review of the draft Guidelines.

1.2 Under Part IIIC of the Act (the "Administrative Sanctions Procedure") the Bank can impose sanctions for breaches of regulatory requirements by regulated financial service providers and persons involved in their management. Under this procedure the Bank can, in appropriate cases, convene an inquiry to determine whether or not a prescribed contravention has been or is being committed and determine sanctions. The intention underlying the draft Guidelines is to provide some exposition on the practice and procedure to be adopted during an inquiry1.

1.3 Since the draft Guidelines were first published in 2011, one criticism is that "some or all of Part IIIC of the Central Bank Act 1942 may potentially be unconstitutional in that some or all of Part IIIC may be inconsistent with Article 34(1) of the Constitution and may not fall within the exemption as set out in Article 37(1) of the Constitution"2.

2 Relevant Constitutional Provisions

2.1 Article 34.1 states that "Justice shall be administered in courts established by law by judges appointed in the manner provided by this Constitution, and, save in such special and limited cases as may be prescribed by law, shall be administered in public".

2.2 Article 37.1 states that "Nothing in this Constitution shall operate to invalidate the exercise of limited functions and powers of a judicial nature in matters other than criminal matters, by any person or body of persons duly authorised by law to exercise such functions and powers, notwithstanding that such person or such body of persons is not a judge or a court appointed or establish as such under this Constitution".

2.3 Both Article 34.1 and 37.1 are the subjects of considerable bodies of case law3; neither of which have ever managed to unambiguously define the meaning of the "administration of justice" or "the exercise of limited functions and power of a judicial nature".

3 The Administration of Justice

3.1 In Re Solicitors Act 19544 concerned a dispute as to the constitutionality of the provisions of the Act which authorised the disciplinary committee of the Law Society to conduct inquiries, strike the names of solicitors from the roll and order the payment of restitution. After an extensive consideration of Irish, English and Australian authorities, the Supreme Court stated that the "decisive test" lay in which orders the committee could make5,

3.2 Damages awarded by a court for fraud or negligence are primarily an attempt to produce restitutio in integrum and the court is unable to distinguish the power given to the Committee from the power given to a court, unless it be that the power given the Committee is wider than that a court can exercise. The questions which arise before the Committee are as contentious, as difficult, and as important as the questions which would arise before a court trying a common law action for negligence or fraud. In the opinion of the court a tribunal which may make such an order is properly described as administering justice and such a tribunal unless composed of judges is unconstitutional.

3.3 This standard for the administration of justice has been cited frequently in later cases but the Supreme Court has generally resisted the formulation of a restrictive standard or test; in addition, greater reliance has been placed on clearer definitions in later cases.

3.4 This test is not entirely clear and beyond that, it has the capacity to bring almost every administrative tribunal with the power to make quasi-judicial orders into the remit of the "administration of justice".

3.5 Subsequent attempts by the courts to identify the characteristic features of the "administration of justice" fell out of favour. The definition which would seem to have found the most support6 is that of Kenny J in McDonald v Bord na gCon (No 2)7, wherein he indicated that the five characteristic features of the administration of justice were:

(i) A dispute or controversy as to the existence of legal rights or a violation of the law;

(ii) The determination or ascertainment of the right of parties or the imposition of liabilities or the infliction of...

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