It is a bedrock of policing that the gardai remain independent of vested interests, be they their political masters, business interests such as insurance companies . . . or even just their good friends. On the other side, the political, business and legal institutions of this state who work closely with the gardai have a moral, ethical and, in some regards, legal responsibility to respect the force's independence and to do nothing to undermine it.

Yet in 2001, Quinn Direct, the multi-billion euro insurance business built up by Cavan man Sean Quinn, now officially Ireland's wealthiest individual, crossed that line.

Six years ago, when the fledgling company was battling both our ruinous "compo culture" and the established insurance multinationals which dominated the market here, Quinn Direct put into operation a business plan that involved a scandalous subversion of garda independence and infringement of data protection legislation.

A panel of "senior gardai" . . . comprising both recently retired and, beggaring belief, actively serving members . . . was put together to investigate and settle claims against the insurance company.

The result, according to a secret internal memo by Kevin Lunney, currently one of the company's most senior directors, led to impressive savings, with claims costs dramatically falling. The memo reveals these gardai had easy access, either from within the force or, thanks to contacts with still-serving colleagues, to the garda computer system and garda records.

The memo even refers to how well the "negotiation, influencing and persuasive skills in settling claims on the doorsteps of third parties as opposed to the steps of the courthouse" helped to drive down costs. Other sources say retired gardai who work as claims investigators are not averse to visiting accident victims in their hospital beds to "persuade" them to settle claims.

The net result for the insurance giant was that claims were settled quickly, and for less.

Not only that, the cost-cutting programme involved a second and equally unethical scheme of financial inducements for the solicitors of people making claims against Quinn Direct. It gave bonuses if they recommended to their clients that they settle low and early. The company memo records that this was "particularly useful" in claims involving whiplash and soft-tissue injuries.

Although no complaints have been made to the Incorporated Law Society, it has rightly condemned this practice.

Quinn Direct itself was aware of the sensitivity of its scheme and its potentially explosive nature.

Kevin Lunney's memo to claims supervisors and team leaders insisted that details of the scheme be kept secret.

Quinn Direct has denied these charges, but this denial contradicts the company's own internal documentation which we have published today.

The data protection legislation specifically bans the unauthorised accessing of information and the use of information gathered for one purpose by another interested party. It's clear that the new data protection code of practice currently being prepared by the Office of the Data Commissioner with the gardai is urgently needed. The Office of the Data Commissioner must rigorously investigate the claims made in this newspaper today and prosecute if breaches are found to have occurred.

The Garda Inspectorate should also carry out a full investigation into the role of serving and recently retired gardai in insurance investigations. A full account of who took part, what cases they worked on and what settlements they recommended is needed.

Some may argue that retired gardai are now civilians and free to do as they wish . . . but their involvement in such a sensitive area, bringing them into direct contact with current police work and confidential files cannot be acceptable, especially where senior gardai are concerned.

The expertise of retiring senior gardai is, quite rightly, much sought-after and they should be free to take up new careers when they leave the force. But we need a legally enforceable code of ethics covering the appointments taken by them. It should include a time-lapse, or "gardening leave" clause so that there can be no conflict of interest.