Fingleton faces ‘serious risk of unfair trial’ if Irish Nationwide case proceeds, court hears

Former Irish Nationwide Building Society (INBS) chief executive Michael Fingleton faces the “serious risk of an unfair trial” over alleged negligent mismanagement of the failed lender, as he is incapacitated and unable to contribute to his defence, his lawyer said on Monday.

Micheál P O’Higgins SC also told the Court of Appeal that the pursuit of the 84-year-old former banker by Irish Bank Resolution Corporation (IBRC), which took over Irish Nationwide in 2011, over the society’s €6 billion losses is less about recovering the amount claimed and more about securing a “legacy pronouncement” that he be “recorded in history as the person who collapsed the building society”.

He claimed the IBRC proceedings appear to have the purpose of locking a “sick, elderly” man into “something of a medieval stocks”.

IBRC initiated its case in 2012. The High Court last year rejected a challenge by Mr Fingleton aimed at stopping a civil trial going ahead. The Court of Appeal is now hearing an appeal taken by the former Irish Nationwide chief executive against that ruling, which has since been taken over by his wife and son, after they secured enduring powers of attorney due to Mr Fingeton’s ill-health.

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Mr Fingleton was diagnosed with skin cancer in 2017, and was hospitalised with a “severe depressive episode” a year later, the court heard. In 2019, he suffered a “devastating stroke” that has left him confined to a wheelchair, Mr O’Higgins told the court. He added that cognitive tests carried out on Mr Fingleton “put him the typical range” of someone with Alzheimer’s disease.

“We know Mr Fingleton’s short-term memory is virtually gone,” he said, adding that the former society head is now relying on 24-hour care. “It is agreed between the parties [on both sides of the case], and established, that he will not be in a position to provide any evidence at the trial or to provide instructions to his solicitors.”

Michael Fingleton jnr, who with his mother Eileen was registered earlier this year as holding enduring power of attorney in relation to his father, was in court on Monday for this first day of an expected day and a half of hearings.

Mr O’Higgins said that his client, who turns 85 next month, “is very clearly prejudiced” in his inability to defend himself against evidence that would be put against him in a trial. The trial is currently set to take more than six months, the court heard.

The barrister questioned why the statement of claim is laying blame at the feet of Mr Fingleton for the €6 billion of losses racked up by the building society after the property crash, given that the total value of loans referenced specifically in the IBRC claim against him totals about €552 million – or just over 9 per cent of the total.

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He added that because it is agreed that the “paucity of official records” at the society and many documents on loans containing “illegible” handwritten notes, “this is a case that is going to be won or lost on oral evidence”.

Mr O’Higgins also said that if the case is being pursued with the idea of getting hold of funds in a “vast pension pot”, that would appear to be “misplaced”, as Mr Fingleton previously agreed to “cash in his pension” and sell property to pay down Ulster Bank borrowings on foot of a court order.

The lawyer also argued that the facts that INBS removed Mr Fingleton in 2011 from an insurance policy indemnifying directors and that he represented himself during a previous Central Bank of Ireland investigation means that “it’s a reasonable inference he is unable to pay” for his defence during a long trial.

Ms Justice Caroline Costello, of the three judges presiding over the appeal hearing, said this claim was being made without evidence. “We don’t know his financial circumstances,” she said.

The court heard, however, that Mr Fingleton’s side would be willing to submit an affidavit on the man’s means. Ms Justice Costello said the judges will decide tomorrow morning whether that will be necessary.

Lawyers for IBRC are set to respond on Tuesday to Mr Fingleton’s appeal case.