Dear Gerard,
My apologies for the delay in responding to your email. I'm replying
on list, if I may, despite the fact that I imagine the Irish
transposition of MiFID and related matters are probably a minority
sport, even on a list for the discussion of the law of obligations.
I'm hoping that others who may have something worth adding (whether on
Irish law or otherwise) will be encouraged to do so by my omissions!
Thank you very much for the references you give in your email, which
are extremely helpful.
Irish Legislation Implementing MiFID
Ireland was among the first countries to implement MiFID (a fact
widely advertized by the State) which it saw (and sees) as
advantageous for its quite substantial funds industry. I leave it to
you to judge how well that has worked out, given the profusion of
legislative amendments (the most relevant of which are set out below).
The directive was mainly implemented by way of Statutory Instruments,
which makes amendments more difficult to follow than in the case of
Acts of the Oireachtas (Parliament).
A certain framework was however introduced by way of primary
legislation (an Act of Parliament), presumably for constitutional
reasons.
The relevant legislation is:
The Markets in Financial Instruments and Miscellaneous Provisions Act
2007 (mainly taken up with amendments to other primary legislation,
creation of offences, levying of fees,
http://www.irishstatutebook.ie/eli/2007/act/37/enacted/en/html?q=markets+in+financial+instruments&=&=
S.I. No. 60/2007 - European Communities (Markets in Financial
Instruments) Regulations 2007
http://www.irishstatutebook.ie/2007/en/si/0060.html?q=markets+in+financial+instruments&=&=
S.I. No. 663/2007 - European Communities (Markets in Financial
Instruments) (Amendment) Regulations 2007
(This made fairly substantial amendments to S.I. 60/2007).
http://www.irishstatutebook.ie/eli/2007/si/663/made/en/print?q=markets+in+financial&=&=
S.I. No. 773/2007 — European Communities (Markets in Financial
Instruments) (Amendment) Regulations (No. 2) 2007
http://www.irishstatutebook.ie/eli/2007/si/773/made/en/print?q=markets+in+financial&=&=
(With yet further significant amendments)
S.I. No. 192/2010 - European Communities (Markets In Financial
Instruments) (Amendment) Regulations 2010
(Mercifully brief, making only a single amendment.)
http://www.irishstatutebook.ie/eli/2010/si/192/made/en/print?q=markets+in+financial&=&=
S.I. No. 299/2012 - European Union (Markets in Financial Instruments)
(Amendment) Regulations 2012.
http://www.irishstatutebook.ie/2012/en/si/0299.html?q=markets+in+financial&=&
Part 1 of Schedule 4 of the Central Bank (Supervision and Enforcement)
Act 2013 makes further amendments.
http://www.irishstatutebook.ie/2013/en/act/pub/0026/sched4.html#sched4-part1
The Irish Central Bank (rough equivalent to the FCA) has a long list
of legislation applicable to MiFID firms on this page.
https://www.centralbank.ie/regulation/industry-sectors/investment-firms/mifid-firms/Pages/legislation.aspx
A service called Better Regulation www.betterregulation.com
unofficially consolidates financial services legislation and various
law firms also have their own in house consolidations.
(If there is something specific you are looking for, please feel free
to let me know.)
Equivalent to Section 138(D) FSMA
Several pieces of legislation are relevant here.
Section 44 of the Central Bank (Supervision and Enforcement) Act 2013, provides:
"Actions for damages.
44.— A failure by a regulated financial service provider to comply
with any obligation under financial services legislation is actionable
by any customer of the regulated financial service provider who
suffers loss or damage as a result of such failure."
Section 3(1) provides:
"In this Act ...
“customer”, in relation to a regulated financial service provider, means—
(a) any person to whom the regulated financial service provider
provides or offers financial services, or
(b) any person who requests the provision of financial services from
the regulated financial service provider,
and includes a potential customer and a former customer;
“financial services legislation” means—
(a) the designated enactments,
(b) the designated statutory instruments, and
(c) the Central Bank Acts 1942 to 2013 and statutory instruments made
under those Acts;"
Note that what are designated enactments is set out in Part 1 of
Schedule 2 of the Central Bank Act 1942 (as (very heavily) amended).
See Part 1 of Schedule 2 of the 2013 Act where this is specified.
Section 44 gives rise to interesting and difficult questions, including:
1. Are codes of conduct (such as the Consumer Protection Code ("CPC"),
the Code of Conduct on Mortgage Arrears ("CCMA") etc.) drawn up by the
Central Bank Statutory Instruments within part (c) of the definition
of Financial Services Legislation? My own view is that such codes are
Statutory Instruments. They are not cast in the form Statutory
Instruments are usually drafted in but they are expressly made
pursuant to statutory powers and apparently proscribe binding
standards for financial institutions to follow.
2. If such codes are Statutory Instruments, are some of their
provisions 'Financial Services Legislation within the meaning of the
Act above and others not? This difficult issue arises because in
drafting certain of its codes, notably the CPC, the Central Bank has
referred to its powers to make rules under various enactments. Some of
those enactments form part of the Central Bank Acts and some do not.
So the question is whether those parts of the codes which are made
pursuant to other powers (which are not identified by the Central
Bank) are not Financial Services Legislation within the meaning of the
Act, breach of which could give rise to a claim for damages.
Note that the 2013 Act also gives the Central Bank very wide powers to
make directions of financial institutions. It can for example order
redress in favour of customers.
The Act is here.
http://www.irishstatutebook.ie/eli/2013/act/26/enacted/en/print#sec44
The Act was commenced on 1 August 2013, apart from Section 72, which
was commenced in 2015.
See here:
http://www.irishstatutebook.ie/eli/2013/si/287/made/en/print?q=central+bank&search_type=all
Irish financial services law is a speeding train at the moment.
Amendments to Statutes though not to Statutory Instruments can be tracked here.
http://www.irishstatutebook.ie/isbc/chrontables.html
There is an administrative consolidation of the Central Bank Acts up
to 2014 here:
http://www.lawreform.ie/_fileupload/RevisedActs/WithAnnotations/EN_ACT_1942_0022.PDF
We are promised a consolidating statute soon but it has to be said
that promise was made quite some time ago now. You will appreciate I'm
sure that I at least am eager!
The Consumer Protection Act 2007 (which implements the UCP Directive)
should also be mentioned.
Section 74 confers a right to damages, including aggravated and
exemplary damages, on consumers (as defined by the 2007 Act).
It provides:
"74.— (1) In this section, “prohibited act or practice” does not include—
(a) a misleading commercial practice described in section 45 , or
(b) a contravention of section 65 (1) (respecting pyramid promotional schemes).
(2) A consumer who is aggrieved by a prohibited act or practice shall
have a right of action for relief by way of damages, including
exemplary damages, against the following:
(a) any trader who commits or engages in the prohibited act or practice;
(b) if such trader is a body corporate, any director, manager,
secretary or other officer of the trader, or a person who purported to
act in any such capacity, who authorised or consented to the doing of
the act or the engaging in of the practice.
(3) Subject to subsection (4), an action under this section may be
brought in the District Court, the Circuit Court or the High Court and
such a court may, in that action, award such damages as the court
considers appropriate, including exemplary damages.
(4) If the action is brought in the District Court or the Circuit
Court, any relief by way of damages, including exemplary damages,
shall not, except by consent of the necessary parties in such form as
may be provided for by rules of court, be in excess of the limit of
jurisdiction of the District Court or the Circuit Court, as the case
may be, in an action founded on tort.
(5) Where in an action under this section it is proved that the act or
practice complained of was done or engaged in by a body corporate it
shall be presumed, until the contrary is proved, that each (if any)
director of the body and person employed by it whose duties included
making decisions that, to a significant extent, could have affected
the management of the body, and any other person who purported to act
in any such capacity at the material time, consented to the doing of
that act or the engaging in of that practice."
Section 67 provides:
"67.— In this Part “prohibited act or practice” means any of the following:
(a) any unfair, misleading or aggressive commercial practice under Part 3 ;
(b) any contravention of section 48 (3) or 49 (1);
(c) any contravention of section 55 (1) or (3), 59 (2) or 60 (1);
(d) any contravention of section 65 (1);
(e) any contravention of a regulation under section 50 or 57 or an
order referred to in section 92 ;
(f) any contravention of an order under section 62 (1),
but subject to the exclusion of one or more of the foregoing
provisions provided for in section 71 , 73 , 74 or 75 ."
Codes of practice may be taken into account in determining what is a
misleading etc. practice under the Consumer Protection Act 2007.
The Consumer Protection Act 2007 is here.
http://www.irishstatutebook.ie/2007/en/act/pub/0019/index.html?q=consumer+protection+act&=&=
Approach of the Courts to Codes of Conduct
The Irish Courts have given limited legal force to Codes of Practice
promulgated by the Central Bank. In part, it has to be said that this
is because the codes that were in place before the crash (which tend
to be most litigated) were based on a light touch regulation
philosophy and were often woolly at best.
The Central Bank's codes of conduct, both past and present can be found here:
https://www.centralbank.ie/regulation/processes/consumer-protection-code/Pages/codes-of-conduct.aspx
Those which are most litigated are:
1. the Consumer Protection Code ("CPC"). The code applicable before
and during the crash was the 2006 version, a new version was brought
in 2012 and a further code was introduced in 2015]? and
2. The Code of Conduct on Mortgage Arrears ("CCMA").
The Courts have for example declined to imply a term into a contract
between a borrower and his bank that the bank would comply with the
Central Bank's Consumer Protection Code. (See Zurich Bank v Mc Connon
[2011] IEHC 75
http://www.bailii.org/ie/cases/IEHC/2011/H75.html).
That seems regrettable to me. I think the term could and should have
been implied, not by statute but on the basis of the presumed
intention of the parties - had an officious passer by asked the bank
and borrower whether the bank would comply with the CPC, at the time
of the contract, there could have been but one answer to my mind. I
certainly do not think that what the borrower said followed from its
implication (no obligation upon him to repay) followed from the
implication of such a term! Mc Connon may need to be treated with
caution in light of later decisions particularly concerning the CCMA
(and was probably not argued by professional lawyers on both sides)
but it has certainly not been overruled to my knowledge.
However, it is clear that the standards to be expected of a bank or
financial adviser may well be influenced by a code of practice, in an
action in tort.
See McCaughey v Anglo Irish Bank [2011] IEHC 546 (a case concerning
the Code of Conduct for Investment Business, reliance on which was
particularly problematic because of the express terms of the code.)
http://www.supremecourt.ie/Judgments.nsf/1b0757edc371032e802572ea0061450e/f208c356b1843cd280257e460057e798?OpenDocument
A Constitutional justification for limiting the impact of Central Bank
codes was also put forward by Hogan J (a noted public lawyer and
academic in constitutional and administrative law before his
appointment as a judge), in Irish Life and Permanent v Duff [2013]
IEHC 43(see from paragraph 53 onward).
http://www.bailii.org/ie/cases/IEHC/2013/H43.html
Relatively recently, the Supreme Court held that exceptionally, a term
of the Code of Conduct for Mortgage Arrears, which prevents the lender
from seeking possession for a period of time was to be applied by the
Courts, thereby settling the law following conflicting High Court
decisions, in Irish Life and Permanent v Dunne and Dunfey [2015] IESC
46.
The Court explained that the requirement not to seek possession for a
12 month period was legally binding on the lenders as the CCMA was
made under Section 117 of the Central Bank Act 1989 and that the
lenders were therefore not to be permitted to seek possession of
property in breach of their legal obligations, following the test
recently set out by the Court in Quinn v IBRC. Clarke J gave the
judgment of the Court, which is characteristically clear and well
written.
http://www.supremecourt.ie/Judgments.nsf/1b0757edc371032e802572ea0061450e/f208c356b1843cd280257e460057e798?OpenDocument
Financial Services Ombudsman
The Financial Services Ombudsman in this jurisdiction has very wide
powers to award compensation to natural persons and even small
companies with a turnover of 3 million euros or less. He is expressly
enjoined to have regard to codes of conduct promulgated by the Central
Bank.
His website on which can be found his reports, relevant legislation
and decisions is here.
https://www.financialombudsman.ie/
Regrettably in my view, the FSO's decisions are not published, even I
redacted form. It is therefore hard to know how he exercises his very
significant powers. As most disputes by consumers against financial
institutions, say for misselling, go to the FSO, there is a real sense
in which decisions of the FSO could help to develop the law, were they
available.
Resources
The leading books on banking law are John Breslin (3rd ED) Banking Law
in the Republic of Ireland 2013 and Mary Donnelly, The Law of Credit
and Security (I have the 2011 edition, which I believe is the latest -
I'm open to correction on that).
A long awaited new edition of William Johnston's book on Banking Law
is I understand due out this year (the previous edition was really
excellent but is now long out of date).
The only Irish cases I am aware of where MiFID was considered arose
out of the liquidation of Custom House Capital.
In the matter of Custom House Capital Ltd [2011] IEHC 298 (18 July
2011) was the judgment on the Central Bank's ex parte application for
the appointment of inspectors.
In the matter of Custom House Capital Ltd [2011] IEHC 399 (28 October
2011) was the inter partes hearing which followed.
Custom House Capital Ltd (In Liquidation) -v- Companies Acts 1963-2009
[2012] IEHC 382 (09 October 2012) concerned the remuneration of the
liquidator of Custom House Capital, when dealing with assets held by
Custom House Capital subject to the MiFID regime, in QAIFS, PRSAs
(retirement pensions) SPVs controlled by Custom House etc.
http://www.bailii.org/cgi-bin/format.cgi?doc=/ie/cases/IEHC/2012/H382.html&query=%28custom%29+AND+%28house%29+AND+%28capital%29
I am unaware of any detailed commentary on MiFID in an Irish context
but would be most obliged if someone could point me to one.
I hope the above is a reasonable starting point and isn't more
confusing than enlightening.
Kind regards
Ger
On 5/16/16, Gerard McMeel <gerard.mcmeel@guildhallchambers.co.uk> wrote:
> Dear Ger
>
> A very useful survey is:
>
> D Busch, “Agency and Principal Dealing under the Markets in Financial
> Instruments Directive” in Danny Busch, Laura Macgregor and Peter Watts
> (eds), Agency Law in Commercial Practice (2016), 141.
>
> The key European case (on the civil consequences) is the decision of the
> CJEU in
>
> Case No C-604/11, Genil 48 SL v Bankinter SA (30 May 2013).
>
> I would be interested in learning more about the Irish implementation of
> MiFID. Presumably it has been largely copied out. Do you have a provision
> corresponding to UK Financial Services and Markets Act 2000, section 138D
> (ex section 150)? What are the best resources?
>
> Best wishes
>
> Gerard
>
>
> ________________________________________
> From: Gerard Sadlier [gerard.sadlier@gmail.com]
> Sent: 13 May 2016 14:58
> To: obligations@uwo.ca
> Subject: Cases Concerning MiFID from Civil law Systems
>
> Dear all,
>
> I would be really grateful if anyone could point me to cases
> concerning MiFID from outside either England or Ireland and preferably
> to English translations of the judgments in those cases.
>
> Kind regards
>
> Ger
>
>
> Gerard McMeel
> Barrister
>
> Guildhall Chambers
> 23 Broad Street Bristol BS1 2HG
>
> T F 0117 930 3814
> E gerard.mcmeel@guildhallchambers.co.uk
>
>
>
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