Criminal Law and the Financial Crisis: The Proceedings Against Iceland’s Former Prime Minister Geir H. Haarde

In October 2008, an economic collapse occurred in Iceland when all three of the country’s biggest banks went bankrupt. One of the measures taken following the collapse was that the Icelandic Parliament commenced an action before the National Court against then Prime Minister for violations committed in his official acts during the period from February to October 2008. This case is the first and only case brought before this court. The article describes the relevant legislation, i.e., Act no. 3/1963 on the National Court and Act no. 4/1963 on Ministerial Responsibility, the indictment, the accused’s defence and the National Court’s conclusion. The majority of the National Court (nine justices) acquitted the accused of the most serious violations with which he was charged. He was convicted for not addressing the banks’ problems or their conceivable effect on the Icelandic State at Government meetings as was his duty under the Constitution. As the accused was acquitted of the most serious violations with which he was charged, he was 61 years old and had not previously been convicted of a crime, he was not sentenced in the case, and all legal costs were paid by the State treasury. The minority of the National Court (six justices) wanted to acquit the accused of all charges.

1. 1.

   Speech by then Prime Minister Geir H. Haarde, in Althingi (the Icelandic Parliament) on January 29th 2008.

2. 2.

   Then Prime Minister Geir H. Haarde’s report on economic affairs in Althingi on September 2nd 2008.

3. 3.

   Many books have been written about the collapse, its lead-up and consequences; see, for example, Guðni Th. Jóhannesson, Hrunið – Ísland á barmi gjaldþrots og upplausnar (The Collapse—Iceland on the Verge of Bankruptcy and Dissolution), 2009 (JPV Publishing, Reykjavik), and Guðrún Johnsen, Bringing down the banking system – Lessons from Iceland, 2014 (Palgrave McMillan US).

4. 4.

   The website of Morgunblaðið, January 4th 2016, see: http://www.mbl.is/vidskipti/frettir/2016/01/04/28_hrunmal_i_skodun_hja_saksoknara/.

5. 5.

   Aðdragandi og orsakir falls íslensku bankanna 2008 og tengdir atburðir (The Prelude to and Causes of the Fall of the Icelandic Banks in 2008 and Related Occurrences), Althingi’s Special Investigative Commission, Reykjavik 2010.

6. 6.

   Report of a parliamentary committee to discuss the report of Althingi’s Special Investigative Commission, 138th session of Althingi 2009-2010, parliamentary document 1501 – 705th Case, see the website: http://www.althingi.is/altext/138/s/1501.html.

7. 7.

   The other three ministers were the Minister of Foreign Affairs, the Minister of Finance and Economic Affairs and the Minister of Commerce. Geir H. Haarde and the Minister of Foreign Affairs were leaders of their parties in Geir H. Haarde’s government, which was a coalition government of two parties. The proposed resolution is at Althingi’s website: http://www.althingi.is/altext/138/s/1502.html.

8. 8.

   Record of Althingi, 83rd Session of Althingi 1962, 3rd case, p. 19. Legislation on general criminal procedure has greatly changed in Iceland since the National Court Act was passed, and in accordance with Art. 52 of the current Act on Criminal Procedure no. 88/2008, investigation of criminal cases is the responsibility of the police.

9. 9.

   Record of Althingi, 83rd Session of Althingi 1962, 4th case, p. 3.

10. 10.

    Record of Althingi, 83rd Session of Althingi 1962, 4th case, pp. 3-4.

11. 11.

    Record of Althingi, 83rd Session of Althingi 1962, 4th case, pp. 5-6.

12. 12.

    Record of Althingi, 83rd Session of Althingi 1961, 3rd case, p. 10.

Authors and Affiliations

1. Faculty of Law, University of Iceland, Sæmundargata 2, 101, Reykjavík, Iceland

   Ragnheiður Bragadóttir

Corresponding author

Correspondence to Ragnheiður Bragadóttir .

Editors and Affiliations

1. Faculty of Law, Ludwig-Maximilians-Universität München, Munich, Germany

   Frank Zimmermann

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