RSA Irish Staff Wept Recalling Pressure From Former Boss, Tribunal Hears

Executives at RSA Insurance Group plc’s Irish unit wept as they recalled how their former boss, Philip Smith, pressured them, an employment hearing heard.

“Men were weeping into their hands, crying,” Derek Walsh, RSA’s group counsel, said at an Employment Appeals Tribunal on Thursday in Dublin, in relation to an internal probe into how the company handled the process of setting aside money for large claims.

“Men shaking with fear when they were talking, not about the reserving issue, not about the issue that was going to get them into trouble. But talking about why they had to do it,” he said. They were “talking about Mr. Smith.”

Walsh’s evidence came in the fourth day of Smith’s constructive dismissal case. Smith left RSA in 2013 as the company investigated accounting issues at the Irish unit. Smith told the tribunal earlier this week that an internal company report which effectively accused him of bullying amounted to “character assassination” and didn’t match reality.

During the hearing today, Rory O’Connor, the unit’s former chief financial officer, said Smith had been involved in fixing reserves for some large insurance claims below levels recommended by staff. Smith has said this isn’t true.

O’Connor, who left the company after a probe found that executives had made reports that were “inaccurate and potentially misleading,” said in evidence on Thursday he has also filed an unfair dismissal case with the tribunal.

Charming, Funny

O’Connor said while Smith could “be charming and funny,” he was scared of him.

“He could be emotional and aggressive,” O’Connor said of Smith at the hearing, adding that he had sought counseling while employed at RSA. “I felt that if I had whistle-blown and had been unsuccessful my life could have been made very difficult” in finding another job.

O’Connor told the hearing Thursday that he accepted that the insurer had “aggressive accounting policies and accounting errors” while he was CFO.

RSA is still awaiting the results of an Irish regulatory probe following the episode and a 200 million-pound ($299 million) capital injection in Ireland which also cost former Group CEO Simon Lee his job.

The Irish unit cost RSA another 100 million pounds in 2014, taking its total bill since the accounting irregularities were first reported to about 300 million pounds.

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