Wednesday 22 October 2014

Labour prepares for battle of the heavyweights

Published 06/01/2013 | 05:00

Former AG to face down current one in €3.1bn prom note case

The Government faces an embarrassing battle of Labour legal heavyweights when a constitutional challenge to Ireland's ongoing payment of the €3.1bn promissory notes begins this month.

The Sunday Independent has learnt that in the case, which will begin on January 22 in the High Court, the business man and New Beginnings advocate David Hall, who is taking the challenge, will be represented by the former Labour Attorney General John Rogers.

This means the case is likely to evolve into a legal war of wits between two Labour legal grandees since the current AG Maire Whelan, who was the nominee of Mr Gilmore, is expected to be the State's chief legal strategist.

One source said "the quality of the personnel involved means this case is no frolic, it is a serious battle of the heavyweights".

Significantly, the source also noted that a "major level of cross-party political support is being expressed for the taking of this case".

Mr Hall has said he is not free to comment but it is believed he will claim the notes are unlawful because of the failure to properly consult the Dail.

Mr Hall is also expected to argue that since the elected members of the Dail never voted to make those promissory notes, never authorised payments on foot of them and that it was the Minister for Finance alone who made the notes and who then made payment on foot of them, the lawfulness of this unprecedented situation should be tested.

The founder member of the New Beginnings group of business people and lawyers who have been leading the response to the mortgage arrears crisis is also expected to claim the Irish people were not consulted and their representatives were bypassed, "in a flagrant breach of the Constitution, with no democratic legitimacy".

And the legislation may have breached Article 15.2 of the Constitution, which says "no other legislative authority" such as the ECB "has power to make laws for the State''.

The case is expected to be profoundly embarrassing for the Government, which may find itself defending a promissory note system that it is trying to simultaneously persuade Europe to either abolish or reform.

It will also occur at a point of acute political danger for Finance Minister Michael Noonan in the wake of a widely reviled Budget and the escalation of doubts about the effectiveness of his negotiating strategy in Europe.

Concern is particularly growing about the minister's approach in the wake of comments by Mario Draghi that appeared to pour cold water on a prospect of a deal on the promissory notes.

Any failure to secure such a deal could plunge the Government into a profound political crisis, which will exacerbate the escalating cabinet tensions over FG's apparent annexation of the deal.

Sunday Independent

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