Lawyers for PR and lobbying company Red Flag have said they are concerned about issues relating to a USB stick at the centre of legal proceedings taken against them by businessman Denis O'Brien.

Mr O'Brien began his legal action last year. He claimed he received a dossier with defamatory material about him on a USB memory stick sent to him anonymously.

He claims Red Flag and some of its executives are involved in a conspiracy against him.

On 16 October, the High Court ordered that the USB stick be given to Mr O'Brien's solicitors to keep in safe custody.

Lawyers for Red Flag told the High Court today they were very concerned about issues relating to custody of the USB stick.

Senior Counsel Maurice Collins said the USB was with a company in Rotterdam for around ten days after the High Court made its order.

He said Red Flag was concerned there appeared to have been disregard of the court's order.

He said whatever the company, Digipol, was doing with the stick remained completely a mystery to Red Flag.

He said reports received from the other side completely changed the timing relating to when some people had access to the stick. And he said the court had directed there should be no interference with it.

Lawyers for Mr O'Brien said the language being used by Red Flag was outrageous. Senior Counsel Martin Hayden said Digipol had the stick for analysis purposes.

And he said there had been no access to or interference with the encrypted part of the USB stick which contained the dossier.

He said that if Red Flag was claiming the High Court order had been breached, they should bring an application in relation to that.

Mr Justice Colm Mac Eochaidh said his order had said the USB stick should be handed over to Mr O'Brien's solicitors forthwith.

He gave Mr O'Brien's lawyers two weeks to file a comprehensive affidavit addressing the issues raised.

Earlier, the judge heard both sides had reached agreement on the timeline for an exchange of legal documents necessary for a full hearing of the case.