IT HAS always been risky to grant immunity to a reluctant witness before a congressional panel and still expect that he can be convicted in criminal court. In the case of Oliver North, independent counsel Lawrence Walsh's worst fears have now been justified. The U.S. Court of Appeals has overturned Mr. North's Iran-contra conviction on three counts and remanded the case to the trial court for a new set of extensive hearings. The conviction on one of these counts involving the shredding of documents was reversed because the trial judge's charge to the jury was in error in two respects.

The hearings ordered by the appeals court are meant to determine whether any of Mr. North's immunized testimony before the joint committee was used in any way during the criminal proceedings. If tainted testimony was used at the trial, he will be entitled to a new trial. If it was used before the grand jury, the indictment must be dismissed. In conducting the hearing, the appellate court ordered, the trial court "must proceed witness-by-witness; if necessary, it {must} proceed line-by-line and item-by-item," questioning, for example, whether any immunized testimony was used to refresh recollection, to prepare witnesses or to cause them indirectly to alter their earlier statements. The trial judge must further examine not only conversations between witnesses and prosecutors but also the witnesses' own familiarity with immunized testimony from whatever source.

This kind of hearing will be both difficult and tedious. The appeals court concedes that such a proceeding "could consume substantial amounts of time, personnel and money, only to lead to the conclusion that a defendant -- perhaps a guilty defendant -- cannot be prosecuted." But that is the price prosecutors must pay when Congress chooses to get around the Fifth Amendment by using the immunity law.

Mr. Walsh pleaded with congressional leaders at the time of the original hearings to consider the impact of an immunity grant on the anticipated prosecution. But Congress elected to have it both ways: a full hearing, widely publicized, to unravel the scandal and educate the public and then a criminal trial where the defendant was supposed to be protected against self-incrimination. The Court of Appeals decision emphasizes the difficulty of such a course and challenges the government to make a choice -- or at least to understand the consequences of failing to choose.