The pursuit of Beverley

RTÉ broadcast a false report about Beverley Flynn on 19 June 1998. Nevertheless, she lost a libel action taken against the station and is now on the verge of being declared bankrupt because RTÉ is pursuing her for its legal costs in the case.

Beverley Flynn was confident she would win her libel action against RTÉ. She was confident because what RTÉ's Charlie Bird and George Lee had reported in their "exclusive" story broadcast on 19 June 1998 concerning her was simply untrue. She had not advised the retired farmer, James Howard, not to avail of the tax amnesty, nor had she suggested to him to invest the monies in an Isle of Man account that would conceal its existence from the revenue commissioners.

If the libel case had simply been about that issue she would have won handsomely.

She did not know of the legal hazards involved in taking a libel action.

In the course of six broadcasts on RTÉ between 19 June and 1 July 1998, the RTÉ journalists went beyond their initial story to report that Flynn had advised a number of other customers of the bank for which she had worked, National Irish Bank (NIB), to invest their money in the same bank in the Isle of Man, assuring them the revenue commissioners would never find out.

Beverley Flynn had indignantly – and truthfully – denied the original story and it was on that basis that she had instructed solicitors to instigate proceedings against RTÉ. Apparently she was unaware of the consequences of doing that – if a court found she had advised others to do what it was falsely alleged she had advised James Howard to do, her action would fail.

She blazed ahead on the original story, believing its falsehood would be sufficient to win her the case, not realising the follow-up reports would dig RTÉ out of the hole in which the original broadcast had placed them.

Beverley Flynn, through her solicitors, called on RTÉ and James Howard to withdraw the allegations they had made. They refused. Proceedings were then issued claiming damages for libel by the issuing of a plenary summons and what is known as a statement of claim.

In the statement of claim it was asserted that the broadcast meant that she had advised and encouraged James Howard and other unnamed persons to evade tax and that inter alia she was a dishonest person who was not fit to be a member of Dáil Éireann. RTÉ pleaded that what it broadcast was true.

Before the beginning of the trial, RTÉ made it clear it would rely in addition upon the dealings between Beverley Flynn and other customers of NIB.

The trial began before Justice Frederick Morris (now chairman of the Morris tribunal inquiring into the conduct of gardaí in Donegal and elsewhere) and a jury on 6 February, 2001.

In the course of the case, Beverley Flynn and James Howard gave evidence but so, too, did four customers of NIB who said Beverley Flynn had encouraged them to invest in the Isle of Man scheme and had assured them that the existence of the monies invested by them in the scheme would never become known to the revenue commissioners.

One of the controversial features of the case was the production in court of an internal NIB memo dated 30 July 1990, signed by Patrick Cooney, then head of the Financial Advice and Services Division of the bank, the division for which Beverley Flynn then worked. The memo included the following:

"Finally, we have the people who have money invested offshore already or whose money is 'hot'. In this scenario we should almost in all cases direct the monies into our new bond, The Emerald International Portfolio."

In evidence, Beverley Flynn said she never received this memo. Cooney, in evidence, said the memo was never circulated because circumstances changed immediately after he wrote it, arising from the invasion of Kuwait by Saddam Hussein.

He denied the reference to "hot" money was to monies concealed from the revenue commissioners.

He was asked if the letter reflected conversations that were going on anyway within the division at the time. The following exchange took place:

Q: And you say that there would have been meetings in relation to this [memo] anyway?

A: As a unit we would have met most weeks pertaining to investment matters [which did not address the question].

Q: So I can take it then that even though the letter was not sent that the same things would have been said at your meetings as are contained in the letter?

A: On and off, yes. We would have had meetings most Monday mornings, we would have just discussed the way the stock markets were for the particular week, etc.

Q: So the letter would merely reflect what was being said by you to the investment consultants [including Beverley Flynn] anyway?

A: Well the letter was not actually sent.

It appears that this document and these exchanges were a crucial part in the trial. The admissibility of the document in the first place – since there was no evidence that Beverley Flynn ever received it – was controversial and the absence of a clear-cut acknowledgement by Cooney that what was in the document was what was being discussed at division meetings suggested the document might have been considered inadmissible.

Nevertheless, Morris admitted the document in evidence, although warning the jury that Beverley Flynn had never seen it, and the Supreme Court upheld his decision on appeal.

In essence the jury found that the original broadcast about Beverley Flynn encouraging James Howard to invest in the Isle of Man scheme was false. But it went on to find that it was true she had encouraged others to invest in the Isle of Man scheme and, given all the circumstances, she had suffered no damage to her reputation by the false report concerning James Howard. The jury awarded no damages to Beverley Flynn and later the judge awarded her to pay the costs of the defendants – RTÉ, the two reporters and James Howard. That is in addition to her own legal costs.

That decision in awarding all the legal costs of the defendants – RTÉ, the journalists and Michael Howard – was controversial. This was because she had won one facet of the case – that which related to the claim that she had advised James Howard to act illegally. This was also appealed to the Supreme Court but again the court found against her.

The taxing master assessed the legal costs of the defendants in the case at ?1.5m. RTÉ has secured a judgement against her, which means that her assets may be seized and she may be declared a bankrupt if the assets seized do not meet the costs. This would have further serious implications for her: under Section 41 of the 1992 Electoral Act, an "undischarged bankrupt" may not hold a Dáil seat.

As a public body RTÉ can hardly agree to absorb costs in the region of ?1m (presuming that James Howard's costs were around ?500,000) without making an attempt to recover such costs.

She is currently in negotiation with RTÉ on a schedule of payments but her previous offer of the value of her house in Castlebar – ?400,000 – and phased payments was not acceptable.

This is the first high-profile instance in which RTÉ pursued a plaintiff who has lost a libel action against the station.

Beverley likely to withstand bankruptcy order

The expectation is that Beverly Flynn will run in the Mayo constituency in the next election as an independent Fianna Fáil candidate. She secured the last (and fifth) seat in the constituency in 2002, defeating her fellow-Fianna Fáil candidate and outgoing TD Tom Mofatt by just 737 votes.

Fine Gael held three seats in the constituency in the previous election in 1997 with Enda Kenny, Michael Ring and Jim Hggins but the latter was defeated narrowly in 2002.

A surprise in the 2002 election was the election of an independent candidate, Jerry Crowley, a local doctor.

In this next election Fine Gael will be hoping to recover the third seat it lost in 2002 but the likelihood is it will fail to do that. Fianna Fáil is certain to take one seat, probably with the sitting TD, John Cart, which leaves the final seat up for grabs between Beverly Flynn and an official Fianna Fáil candidate. It would be astonishing if Fianna Fáil, which secured 42 per cent of the first-preference votes here in 1997 and 40 per cent in 2002, did not take a second seat but Beverley Flynn has impressive competitors.

That is of course if Beverley Flynn is a candidate. Indeed there is a possibility she may have to resign her seat before the election if, in the meantime, she is declared bankrupt.

Section 41 of the Electoral Act 1992 states; "A person who is an undischarged bankrupt under an adjudication by a court of competent jurisdiction in the State, shall not be eligible for election as a member, or, subject to section 42 (3), for membership, of the Dáil."

Section 42 (3) states: "Where a member of the Dáil has been adjudicated bankrupt by a court of competent jurisdiction in the state and within six months of the date of the order of adjudication the said order is not annulled or the person the subject of the order has not obtained a certificate of discharge under section 85 (7) of the Bankruptcy Act, 1988, the Examiner of the High Court shall, as soon as possible after the expiration of the period of six months from the date of the order, notify the Chairman of the Dáil and on receipt of such notification by the Chairman of the Dáil a vacancy shall exist in the membership of the Dáil."

Section 85 of the Bankruptcy Act 1988 states (4): "A bankrupt whose estate has, in the opinion of the Court, been fully realised shall be entitled to a discharge from bankruptcy when provision has been made for payment of the expenses, fees and costs due in the bankruptcy, as well as the preferential payments, and ( a ) his creditors have received 50 pence or more in the pound, or ( b ) he or his friends have paid to his creditors such additional sums as will together with the dividend paid make up 50 pence in the pound."

It therefore seems that Beverley Flynn will not be able to withstand any order for bankruptcy beyond the time of the next election and even then she will still have cards to play against RTÉ, while retaining her Dáil seat.

Flynn's partner is Anthony Gaughan, with whom she has had two children. He is a wealthy builder and, it is assumed, can afford to fund the judgment if necessary.