In January, I wrote an article for the Irish Examiner, suggesting that the tracker mortgage scandal might warrant a criminal investigation. This may be on the way.
I am prompted to revisit the tracker mortgage scandal due to the appalling and unconscionable delay by the banks in making full amends to wronged customers. The banks concerned have the facts, files, data, resources, and the means to put matters right, but clearly they don’t have the will, or any compulsion to do so.
In taking this unusual step, for a judge, I am inspired by Louis Brandeis who was an exemplary public interest lawyer and a legendary US Supreme Court judge. Appointed in 1916, he was the first person of Jewish faith to sit on that court.
Commemorating him last year, America: The Jesuit Review, described him thus:
“He was an avowed enemy of those who looked upon the common people with distaste and disdain, even though he was comfortably well off. He placed himself on the side of those who were without power and influence.”
I commend his life and work and writings to readers, and to leaders of this republic. And as a poor scribe , I will draw liberally on his writings in what follows in this piece.
Among the issues of concern to Brandeis, as lawyer and judge, was the abuse of economic power by large corporations to the detriment of ordinary citizens. He challenged and exposed fraudulent insurance companies who cheated customers and workers. He later published a book, Other People’s Money and How Banks Use It, and suggested ways of curbing the power of large banks.
I acknowledge that there is a convention that judges should not involve themselves in political or controversial matters.
But this is a matter of justice and truth. And speaking truth to power.
On this occasion, my duty as a citizen, to my fellow citizens, suffering injustice, and worse, exceeds my obligation to the judicial convention of saying nothing.
Brandeis was revered for defending both the rights of the citizen and freedom of speech in defence of democracy. One of his best-known quotes is: “The most important political office in a democracy is that of the private citizen.”
In his landmark opinion in the US Supreme Court case of Whitney v California in 1927 Brandeis wrote that “If there be time to expose falsehood and fallacies... the remedy to be applied is more speech, not enforced silence.”
So I hope I will be forgiven.
The re-appearances by senior bankers before the Oireachtas finance committee this month was a dispiriting and depressing experience. After all the foot-dragging, they were barefaced and shameless in their insidious stonewalling of public representatives who have had the tenacity and persistence to challenge their banks’ malpractices. To be absolutely fair to all of them, some are in fact performing better than others.
Tracker crusader Padraic Kissane has said AIB are probably the best of them. Glad to hear it, but they are still majority State-owned, and as such they ought to be ethical, and they need to be leading by example, and if not, be directed to do so.
Among the worst of them appearing before the Oireachtas committee was a foreign-owned bank (KBC Bank). The chief executive blithely told the committee it hadn’t even yet ascertained the full extent of its problems in this regard.
Worse still, he informed the committee that his bank would not be filing a report required of it by the Central Bank, within the fixed-time deadline given to his bank.
The response of this bank was an affront to the democratic process and to the people of Ireland.
I wonder would the same CEO tell a parliamentary committee in Belgium that his bank “hadn’t done their homework”, and that it would not be complying with a demand made of it by the Belgian central bank on a matter of urgent interest to customers in distress there?
And do so without any consequences? Unlikely.
The banks are a key, critical part of the economic infrastructure of our society but they have social and moral obligations to the society in which they trade, for profit.
Most senior bankers have survived this dreadful recession very nicely. Through the worst of times they were protected and cosseted, and most never knew a pay cut. How can the same senior bankers truthfully say that they just don’t know fully what they have done wrong, or who they need to compensate? And that justice must wait.
Just as branches and cash transits are protected for good societal reasons, banks are likewise accorded the protection of the law when they seek vindication of their contractual and property rights in courts, in debt recoveries and forced asset sales.
Brandeis observed, if law is to be respected, the law must be made respectable. Similarly, if the banks are to be respected they too must be respectable.
There are two important principles in the law of equity which come to mind in this regard. The first is that he who seeks equity must do equity. The second is that he who seeks vindication of his rights in the courts must come to court with clean hands.
There is a third legal principle, from land law, that he who takes the benefit must also take the burden. If a bank enjoys the privilege of a banking licence from this State, then there is a duty on the bank to conduct all its business ethically.
Leaving customers suffering for years while awaiting restoration of trackers and compensation breaches that duty.
Someone in authority needs to tell the banks that once more, with feeling and with intent. There is an urgent need to defend and vindicate the rights of our citizens against a small number of corporations which at this stage are quite clearly out of control.
Under Article 40.3.1 of the Constitution, the State guarantees to respect and as far as practicable by its laws to defend and vindicate the personal rights of the citizen.
Brandeis said: “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both”. Indeed.
- James McNulty is a District Court judge in West Cork.