The High Court has dismissed a challenge by shareholders to the constitutionality and EU law compatibility of the Credit Institutions (Stabilisation) Act 2010, declining to refer questions to the Court of Justice of the European Union.
In a decision delivered on 13 May 2024, Ms Justice Bolger also refused an application by plaintiff Piotr Skoczylas to represent the fourth plaintiff, Scotchstone Capital Fund Limited. She found the case did not meet the exceptional circumstances required for a person without a right of audience to represent a company, and that there was no clear evidence the company would be prejudiced without his representation.
The proceedings sought 26 declarations, a possible EU court reference and damages. They concerned provisions of the Act that enabled the Minister for Finance to seek court-approved direction orders affecting credit institutions, including changes to share capital and shareholder rights. Most of the Act’s provisions, including those challenged, ceased to have effect on 31 December 2014.
The plaintiffs were shareholders in Irish Life & Permanent Group Holdings plc. In 2011, the Minister decided to recapitalise the group by about €4 billion, diluting existing shareholdings; a second direction order in March 2012 facilitated the sale of Irish Life Assurance. Earlier proceedings challenging those orders were unsuccessful. The present case concerned the Act’s validity, rather than reopening those decisions.
The plaintiffs argued that the Act restricted free movement of capital, improperly delegated legislative power to the Minister, interfered with property rights, and limited fair procedures and access to courts. They also challenged the five-working-day period to apply to set aside a direction order. The State relied in part on earlier decisions concerning the direction orders and the EU court ruling.
Justice Bolger rejected the claims. She held that the Act’s powers were bounded by its stated purposes and safeguards, including consultation requirements and High Court oversight. She found the challenged provisions were justified by the common good during the financial crisis and were proportionate. On access to court, she noted that plaintiffs had pursued extensive litigation and had not identified legal or evidential arguments they were prevented from making.
The court dismissed the proceedings in full and found no reason for an EU court reference. Its costs view was indicative only: Justice Bolger said the State was entitled to its costs, to be adjudicated if the parties could not agree. The matter was listed for final orders, including costs, on 13 June 2024.