Updated 13.12
INDEPENDENT TD JOAN Collins has lost her appeal over the Irish Government’s issuance of €31 billion in promissory notes in 2010.
Those notes, effectively government IOUs, were issued by then Minister for Finance Brian Lenihan in 2010 in order to provide emergency liquidity assistance to crippled financial institutions including Anglo Irish Bank.
This morning, six Supreme Court judges unanimously dismissed Collins’ appeal. The judgement was delivered by Chief Justice Susan Denham who described the issuance of the notes as a “permissible” response to an exceptional situation.
In the aftermath of the verdict Collins said she was “disappointed but not particularly surprised” at the verdict, which she said showed that the Supreme Court had “sided against the Irish people”.
“Unfortunately, I believe the political and financial concerns which were repeatedly emphasised by the state during the proceedings weighed strongly on the judges’ verdict,” she said.
The strategy in this case was to paint a doomsday scenario to justify the government’s decision to waste huge amounts of public money, particularly on Anglo Irish Bank, without even bringing the issue to the Dáil for a vote.
This judgement means that the 2008 Finance Act will be interpreted by Ministers of Finance as carte blanche to take any action they see fit to stabilise the banking system. Therefore, some of the worst decisions made in response to the recent banking crisis could happen again in the next one, which may not be too far away.
Dublin South Central TD Collins lost her initial High Court challenge to the notes in November 2013.
Her challenge claimed that the legislation behind the deal was unconstitutional because it gave the Minister for Finance open-ended power to approve unlimited payments without Dáil approval.
Although Collins was not successful in her High Court application, the State was ordered to pay 75% of the legal costs after the judge noted the constitutional importance of the case. The remaining 25% of the costs were to be borne by the deputy and her supporters.
Collins subsequently took her appeal to the Supreme Court last April.
She said at the time that it was a “serious decision” to decide on a Supreme Court appeal because it was unclear whether the costs ruling would extend to the fresh challenge.
David Hall, director of the Irish Mortgage Holders Organisation and the first person to bring a legal challenge as to the constitutionality of the promissory notes, said after today’s verdict that it means that “the system is currently not accountable”.
“Paragraph 84 of the judgement states that this judgement cannot be taken as precedent. But as things stand a minister can write blank cheques, and that’s not what we elected people to the Dáil for,” he said.
Hall added that paragraph 38 of the judgement, which asserts that in such a case no importance is attached to who has taken the case, is “helpful”.
“This is an odious debt,” Collins meanwhile said.
Our government made a decision that benefited a handful of well-connected Irish bankers as well as French and German financial institutions which are insulated from the costs of their recklessness by a European framework demanding full repayment of bondholders.
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