The Committee today will be dealing with the Office of the Minister for Justice, Equality and Law Reform, Vote 19 (resumed) together with relevant correspondence; Garda Síochána, Vote 20 (resumed); Prisons, Vote 21 (resumed); Land Registry and Registry of Deeds, Vote 23 (resumed); and Courts, Vote 22 (resumed). I welcome the Secretary General of the Department of Justice, Equality and Law Reform, Mr. Tim Dalton, and his officials.
1999 Annual Report of Comptroller and Auditor General and Appropriation Accounts.
Vote 19 - Office of the Minister for Justice, Equality and Law Reform (Resumed).
Vote 20 - Garda Síochána (Resumed).
Vote 21 - Prisons (Resumed).
Vote 23 - Land Registry and Registry of Deeds (Resumed).
Vote 22 - Courts (Resumed).
Mr. T. Dalton (Secretary General, Department of Justice, Equality and Law Reform, Mr. P. J. Fitzpatrick, (Chief Executive, Courts Service) and Ms F. Flanagan, (Director General, Office of the Attorney General) called and examined.
Mr. Dalton
I am accompanied by Ms Sylda Langford of the child care and equality side of the Department; Mr. Seán Murphy who deals with the courts; Mr. Ken Bruton, a finance officer and Mr. David Costello who deals with asylum matters.
You are all very welcome. Mr. P. J. Fitzpatrick, chief executive of the Courts Service, is also in attendance and I welcome him and his officials.
I am accompanied Mr. Seán Quigley, Director of Finance; Ms Nuala McLoughlin, Chief Registrar and Director of Operations for the Supreme and High Courts; Mr. Diarmaid MacDiarmada, Director of Operations for the Circuit and District Courts, and Mr. Peter Mooney, of the finance directorate.
I welcome Ms Finola Flanagan, Director General of the Office of the Attorney General and her officials.
I am accompanied by Mr. Liam O'Daly, Deputy Director General, and Mr. Pat O'Sullivan, Head of Administration.
I welcome the officials from the Department of Finance.
Mr. O’Farrell
I am accompanied by Mr. Michael Errity from the staffing side and Ms Norma Barrett.
We will deal with the question of court funds and court poor boxes. Will the Comptroller and Auditor General outline the subject for the committee?
Mr. Purcell
Thank you, Chairman. I have been concerned about the management and control of court funds for some time. I have expressed that concern to the committee on a number of occasions over the years. The funds in question largely comprise moneys held and administered by the courts on behalf of wards of court and minors, to an estimated value of something like £440 million. Over and above that, there are other funds to a value of £50 million to £60 million, representing the likes of court lodgements with the defence, insurance bonds and such like. The funds are under the control of the President of the High Court. Certainly that is the case for the majority of them, as I understand it. Depending on their nature, these funds are managed on his behalf by the Registrar of the Office of the Wards of Court, or by the Accountant of the Courts of Justice.
My role and that of the committee in relation to accountability for the funds is unclear. The funds are not taxpayers' money, but rather moneys held on behalf of certain persons, mainly on the basis of decisions made by the courts. The traditional view of the courts has been that these funds do not come within the remit of the Office of the Comptroller and Auditor General and by extension, of the Oireachtas.
The inauguration of the Courts Service in 1999, and the interest shown by this committee, have given the impetus to examine how the funds are managed, and to look at the audit and accountability arrangements. Letters to the committee from the Department and the Courts Service suggest that the concerns were well-founded. They relate that in early 2000, the Courts Service commissioned the National Treasury Management Agency to carry out a review of the management of these court funds. The NTMA report contained a number of recommendations, including those dealing with investment policy and audit. This report has been approved by the board of the Courts Service and its recommendations are now being implemented.
I note from the Department's letter that the Rules of the Superior Courts provide that an annual account of court funds should be prepared by the Accountant of the Courts of Justice, and copies forwarded to the Minister for Justice, Equality and Law Reform and the Minister for Finance. The letter states that the Department had no record of receiving such accounts and it was attempting to ascertain whether they had ever been supplied. I am sure the Accounting Officer will be able to update the committee on that matter.
In relation to the accountability and audit of court funds, the Courts Service is introducing plans for an annual financial statement of the court funds. These statements will be audited by external auditors and they will also be made available to me. It will be for me to decide if my office should audit or inspect these accounts. The chief executive officer has assured me that the Courts Service will provide full co-operation and assistance to me, should I decide to audit or inspect these funds. There has been much progress since the committee initially expressed its interest or, perhaps more correctly, revived its interest in this about a year ago.
The committee had concerns about the poor box centring around the fact that the way the system operated may be depriving the Exchequer of fines which should ordinarily be imposed. It could be seen as involving the imposition of an alternative penalty to that provided by law. It may discriminate between persons coming before the courts on the basis of their ability to make a donation to the court poor box.
The response from the Department indicates that the Courts Service Board had considered the issue and felt that it was a matter for the Executive and the Oireachtas rather than the board and that there was considerable force in the Attorney General's view that the present system was open to abuse and misunderstanding and that it should be put on a proper statutory footing. However, the board also stated from an audit point of view, which is where my primary concern would be in these matters, that it was satisfied that no accounting problems had arisen in this particular area.
Thank you. We are dealing with two separate but connected issues here, one of which is the question of court funds. On this, I ask the Secretary General and then the Director General to tell us what are these funds and their scale.
Mr. Dalton
First of all, we very much welcome the committee's revival of interest in this area. The funds are mainly ward of court funds. P. J. Fitzpatrick of the Courts Service will provide more detail about what exactly is in the funds. It is mainly wards of court, minors and lodgements in court. The total amount now is about £575 million. Of this about £500 million is in the High Court.
This is the total at present.
Mr. Dalton
Yes, at the moment. Of this about £500 million is in the High Court, £70 million in the Circuit Court and £5 million in the District Court. The auditor has outlined to the committee the concerns that existed in the past and the fact that there were impediments in regard to the auditing of the accounts by the Comptroller and Auditor General. The 1993 Act precludes the Comptroller and Auditor General from auditing these accounts in that it provides that he should audit the accounts for each financial year of any fund owned or operated or controlled by or held in trust for a Minister of the Government, and it specifically says: "other than a fund under the control of courts". So it was not just a matter of anybody being opposed to it, it is actually enshrined in the law. Whether that should be changed is one of the issues that, I presume, the committee will be looking at.
One of the things that brought about a significant change is the fact that there are now new structures in place. There is a completely new service and a new approach to all of this. However, it would not be right to attribute the changes, which are now taking place in the accountability arrangements, entirely to the fact that there are new structures in place. While it is not easy to be precise about this, there is an underlying change, not just in the structures but also in the approach of the courts themselves. In the past, the underlying thought was that the separation of powers doctrine constituted something of an impediment when it came to any form of oversight by the State. The management of funds is under the control of the courts and they were not and still are not State funds. There was also the view that, so far as wards of court were concerned in particular - and this is a very big part of the funds - the courts were in the position of trustee, which imposed on the president its own requirements and impediments in terms of confidentiality, etc. In other words, it was not simply a matter of the courts taking a dogged view that the State shall stay away from these funds, there was an underlying valid reason for it. However, times change and while there is no change in the concept of separation of powers, the role of trustee etc., the courts do not see quite the same implications in the auditor having some level of access to the funds. What level of access will have to be determined. Perhaps P. J. Fitzpatrick will be able to say a little more about what has happened and what is envisaged.
One further question before I go to Mr. Fitzpatrick, if there were any loss to these funds for whatever reason, would the Exchequer have to compensate?
Mr. Dalton
That is the problem. That is one of the fundamental reasons the auditor considers he should be in a position to audit it. If there is a loss, the State carries that.
So it falls on the Exchequer.
Mr. Dalton
It does.
I will deal with the first issue that you raised when you asked for more information about the funds that are held in the court offices. As Mr. Dalton said, there is £575 million, of which about £500 million is in the High Court, £70 million held by Circuit Courts - the bulk of which would be in Dublin - and £5 million in the District Court. The variance in the amounts in the different courts is directly related to the jurisdiction of the courts. The District Court has a civil jurisdiction of only £5,000 and the money in the Circuit and District Courts would tend to be almost exclusively money being held for minors until they reach 18 years of age. The bulk of the money is in the High Court. The wards of court would account for about £260 million and minors about £195 million. Defence lodgements by parties to court proceedings account for about £45 million. This will disappear due to new arrangements whereby there will not be cash defence lodgements in future and instead there will be bonds or undertakings by defendants. There is about £75 million in equities and other funds, some of which would have been brought into the courts by wards. In other words these would have been equities or funds that were in their ownership. Generally, people are made wards of court because they have property or funds and they are deemed to be unable to look after their own affairs.
I had a discussion with the Comptroller and Auditor General about the establishment of the Courts Service and audit arrangements for the new Courts Service generally. We commissioned the National Treasury Management Agency to review the operation and management of court funds. The National Treasury Management Agency produced a very comprehensive report which addressed several issues, including computerisation systems, investment arrangements etc. That report and the recommendations were approved by the board and considerable progress has been made in implementing it. The NTMA recommended that these accounts be audited on an annual basis. There is a legislative issue to be addressed because even if the Courts Service Board is agreeable to the Comptroller and Auditor General auditing accounts, there is always a danger of challenge by a committee on behalf of a ward of court or somebody acting on behalf of a minor. There is an issue there vis-à-vis the 1993 Act.
I discussed with the Comptroller and Auditor General an option for the interim whereby the Courts Service would make arrangements to have these audited privately, following public tender, the same way a company would do so, and those audited accounts would be made available to the Comptroller and Auditor General for inspection when he is doing the ordinary audit. This could be done in the event of there being a legislative difficulty. There is no objection to having the accounts audited. We have just accepted a tender to have a governance practice review carried out in the major offices and have just prepared annual financial statements for High Court offices for the year ended September 2000 which have been submitted to the Minister for Justice, Equality and Law Reform and the Minister for Finance. The intention is to have the governance practice review carried out in coming months and have a full audit carried out for the accounts for the year ending 30 September 2001. We have just received tenders to computerise the whole operation, which is done manually at present. There are 34,000 individual accounts in total. We hope to commence the computerisation of the funds and the accountancy functions generally in the middle of this year. The tenders are being evaluated. The new system will significantly improve the information available to us and assist the arrangements to be put in place on the investment file as recommended by the National Treasury Management Agency.
There is an issue to be resolved, as the Comptroller and Auditor General has acknowledged, on whether there is a legal or constitutional obstacle involved. However, the board of the Courts Service has agreed that the funds should be audited and that will be done.
Is there any objection by the board of the Courts Service, on which there is a majority of judges, to this being done by the Comptroller and Auditor General, if the law is changed?
I would have to discuss it with the board, but I do not think so.
Why do you think there is a difference between the Courts Service, per se, being audited and the present arrangement whereby you account to the committee annually for the administration of the courts, and why should there be no accountability for extraordinarily high sums of money involving a major risk to the Exchequer?
Therein lies another issue. While I am the Accounting Officer for the voted moneys, I am not the Accounting Officer, under the Courts Service Act, for these funds. We have a function under the legislation to support the Judiciary. The fact is that this money is taken into court by order of a judge. In the case of wards of court, they are supervised and movements of money as well as decisions in relation to the money or funds are subject to approval by the President of the High Court at all times. Similarly, payments of money to minors or wards of court are made on foot of an order of a judge. While everybody is anxious that there would be a proper audit, there are issues to be resolved.
We have been assisting the accountant's office in the High Court, which deals with the bulk of the money and is now aligned with the finance directorate. We have a number of professionally qualified accountants in the finance directorate who have been working with the accountant's office in pursuing the implementation of the recommendations of the NTMA. However, there is that second issue as to who is the Accounting Officer for the funds.
Do I understand correctly that you are not the relevant Accounting Officer and the money is not under your control? Is it under the control of the court accountant?
It is under the control of the court. The officers of the court act on directions given to them by a judge, normally the President of the High Court, in relation to the bulk of the money we are discussing.
What expertise do judges have in this regard? I have been told that the courts made a complete mess of their affairs and that, in certain cases, people have been at a loss due to ill-advised and unprofessional decisions where the appropriate expertise was not available to the courts. The danger, from the committee's point of view, is that the liability will fall on the Exchequer, for which we are guardians.
There are limits to the discretion which can be exercised. In practice, unless the amounts are very large or the committee for the ward of court seeks to have money invested in a particular way, the President of the High Court delegates to the Registrar of the Wards of Court office and the accountant in the High Court responsibility for the investment of the money. They are not free to speculate with it. It must be invested in line with the trustees - authorised investments - legislation which, until recently, was quite restrictive and mainly related to Government gilts and certain bank shares. Quite a lot of the money is invested in managed funds and advice is taken from financial institutions. The NTMA recommended that the service should seek independent advice. That is being pursued as the board has agreed to do so.
It has been presented to me - with some backup - that much of the £575 million has been invested in low yield funds, when there were much higher yield funds available. Is there any evidence of that happening?
I certainly have no such evidence. It would be unfair to the staff who have been managing quite large amounts of money——
It would be unfair if it is untrue, but how can we get to the truth of the matter?
We have no such evidence. Minor errors may occur from time to time, but nothing of a major scale. We have carried out internal audits in 21 offices throughout the country, involving approximately 8,000 accounts in which difficulties arose in only about three. The amounts involved were very small. The matter has to be put in context. I have no evidence that it is not being——
I am reinforced in my suspicions when I hear of 34,000 accounts being operated manually. How could the courts possibly keep track of 34,000 manual accounts relating to a total of £575 million? That kind of approach is a throwback to the olden days. Comparable decisions by investment bankers are now made on the basis of observing trends by the minute, not by the decade.
Undoubtedly the dependance on manual systems is a major problem for staff in the office and those managing the accounts. That is the reason the installation of a computerised system is one of our priorities in order that the work will be much easier and less time consuming. The number of transactions on the accounts can be very substantial. For example, a ward of court, living in a nursing home, might have an income from a rented house, thus involving monthly payments into and out of the account. There are various other transactions such as income from land lettings. It is not just about investing money, although that is a big element. There is a great deal of other activity on these accounts. Computerisation is, undoubtedly, essential.
Why was it not done before now?
There is very limited computerisation in the courts system in general. A programme was initiated about three years ago. A criminal case tracking system has been installed in Dublin and Limerick. We are now putting a courts accounting system in place. Overall, however, there is a very low level of computerisation in the courts.
Ms Flanagan, I know you are not here to advise the committee, as the Attorney General's office advises the Government, but have you any observations on what constitutional difficulties might arise if, for instance, the Comptroller and Auditor General was, by law, given the role of auditing or supervising these accounts, or ensuring they were supervised in an appropriate manner?
It must be remembered that funds that are in the court are not public money, they are donations that are dealt with by the courts.
Yes, but we have already established that there is a risk to public funds if they have to be compensated for any loss.
Yes. However, the separation of powers that has already been referred to arises. I do not think these funds would necessarily come under Article 33 at the initial stage, as has been authorised and administrated by the Oireachtas. In those circumstances, the commissioner orders the Comptroller and Auditor General to complain. Mr. Fitzpatrick is suggesting that there be some preliminary audit other than by the Comptroller and Auditor General. The Comptroller and Auditor General could then come in to inspect the result of that audit. Practically, that might not be done. We need to see the detail of it in order to identify whether there is a problem, a separation of powers issue. These funds are lodged into court for the purpose of the administration of justice, and they are there for that purpose.
Do we know of any case where the Exchequer was asked to compensate for the loss of court funds?
No.
Mr. Dalton
I am not aware of any case.
In the accounts under review, there is one case where compensation was paid to a minor. The circumstances of that case concerned a committee which had received the money after the minor had reached the age of 18. The guardian picked up the money and did not give it to the minor. The State was sued along with the bank, stockbrokers and others. The case was settled for a total settlement of £50,000 of which the Court Service, or the State at the time, paid about £20,000.
Compensation has been paid in one case, and I know of other possible cases. Are there any other questions?
Are there any rules governing the application of funding for wards of court? My colleagues and I have experienced problems with constituents who look for money to buy things for a child who is a ward of court. It seems to be a long drawn-out process, and nobody seems to know the rules. An application to the court for funds has to be made through a solicitor, but nobody has ever been able to tell me under what headings people can qualify and what moneys they can get for schooling, food, clothing or transport.
What are the rules of the game and where can they be found? I could not find them. It as a mystery which has to be solved in an expensive way, as every time a constituent wants £100, he or she has to hire a solicitor to get it. The length of time the process takes means that the child would not want to be starving, as he would be long since dead by the time money is received. Perhaps now that Mr. Fitzpatrick is in charge of the courts service he might arrange for the committee to be given a copy of the rule book.
We will provide the information sought. Generally speaking, it is not necessary for someone to engage a solicitor. Many wards of court or minors would have had solicitors since the first time their cases were before the court. Generally speaking, if a minor is a ward of court the amount of money involved is high, because otherwise they would not need to be a ward of court. By and large, routine payments such as maintenance payments are paid out regularly by the office, weekly, monthly or whatever and exceptional or very large payments, or requests for a very large payment would have to go back to the president, or in the circuit court, the judge. The judge must protect the interests of the ward or the minor, and has to ensure that enough money is there to meet the ongoing requirements of the minor in whatever stage payments are being made.
It varies from case to case, but we can compile an information sheet, or we may have one already, about the role of the committee. In terms of accountability - and I know it is not public accountability - every ward has a committee, and in 60% of cases the committee is a relative or a solicitor. In 40% of cases it is a general solicitor employed by the Court Service. It is important to note that the committee acts on behalf of the ward at all times.
I endeavoured a couple of times to find out how much money was invested and where it was invested. I asked that question on behalf of one or other parent of a ward of court. I found it impossible to get that information. Surely if money is invested on behalf of a ward of court by the court, there should a public record available to the parents and family without having to go through solicitors and barristers. There should simply be a record of where the money is invested, how much money it is earning per year, how much has been paid out and what the charges are on the account. All the information concerning the moneys awarded to a minor should be available to parents and family. If that information is available, it is a mysterious system that nobody seems to understand.
As I understand it, any parent, guardian or committee is routinely entitled to know where that money is and how much is involved. Tax returns are done as people are treated for tax, so self-assessment tax returns are done, usually by the committee. There is a great deal of interaction, and if a public representative or somebody else acting on behalf of parents sought the information, they would have to produce evidence of authorisation as otherwise we could be accused of breaching confidence. If a public representative approached the office with a letter of authorisation from the parent or guardian, then that is not an issue.
I am glad to have that clarified. I have been in politics for a long time, and I could not ever find that information. We would be grateful to receive a copy of the rules of the game, including what is available to the public and what their rights are under the court rules.
We will provide that.
To amplify the point made by Deputy Bell in my constituency work I have encountered similar cases, where it seems as if an element of transparency is missing. A case stands out in my mind where somebody was looking after an incontinent child with a handicap. The guardian had enormous trouble accessing funds on an ongoing basis for a nappy bill. Under the rules which apply to the wards of court system, it was impossible to give this person money to buy enough nappies. This system should be policed and controlled from the ward's points of view and from the point of view of spending, but it should also be efficient for people trying to access funds so that they do not have to wait a month for money for essentials to come through.
Are we allowed to digress into the area of the poor box?
No, we will summarise this and then come back to the poor box. It is related but there are definitions which arise.
I have two criticisms, the first being the amount of payment to be made regularly to the ward of court and how often that payment is reviewed. My experience with wards of court is that the review for increasing payment rarely, if ever, takes place. Those who look after wards experience many difficulties in having the system overhauled and getting the amount of money increased. My second point is that they often complain about the amount of bureaucracy surrounding the system and the level of invoicing to be submitted to have additional payments made.
Is a ward of court a ward of court for life? What system is in place to review individuals in terms of their health and mental faculties, and to give them back the right to account, and to be accountable, for their own money?
This is closely related to the point the Chairman made earlier. One thing that has to be understood is that the offices have to be very careful that these people are not exploited. The only reason these people are in wardship is that they are deemed by a physician to be medically unable to manage their own affairs. They are under the protection of the court, so any payments made must be fully accounted for by the office, otherwise the courts, the State and the office would be open to a claim, perhaps when the person dies and their inheritors examine the payments. Unfortunately invoices are, therefore, essential. There is no other way of proving the money was spent for the purpose it was sought. If there is ongoing maintenance, payments are set up on a weekly or a monthly basis by agreement with the committee or by the people who are looking after the wards. That is routine. Bills for nappies, or other items with an invoice, are paid on demand and the reviews are done——
On a weekly rather than a monthly basis; there is no facility to plan ahead. If there is a clear pattern of regular bills, for instance for nappies, is the person allowed to draw down the money in advance and submit the invoices in retrospect?
Every year the office sits down with the committee and work out a payments schedule. Reviews happen, by and large, on request from the committee. Not that long ago interest rates were significantly higher than they are today, so reviews could be reasonably generous because the interest return was very good. Interest rates are now much tighter and the court has to try to ensure that sufficient capital is protected to maintain the ward.
If someone is declared a ward of the court he or she remains so until such time as the President of the High Court receives a medical report indicating that that person is now able to manage his or her own affairs. Anyone can apply. They have to produce medical evidence and satisfy the President of the High Court of their fitness to manage their own affairs.
There is a general view that it may be in the interests of the person looking after the ward of court never to look for this medical certification. Perhaps it suits certain individuals to have the ward remain a ward of court for life. There would be seldom a call from the ward and very often the people who are managing the money may be loath to produce this medical evidence. If a person does not want to call for further medical examination, how can one guard against that and protect the ward?
It is a fair point and I am not sure you can, in that there is no provision in the legislation for reviews on a periodic basis. The application for the review would have to come from the ward and given that the only reason people are wards of court is that they have substantial property, a relative may have an interest in not encouraging the ward to have a review initiated. I do not have an answer for the Deputy, except to say that as the legislation stands the ward is the only person who can seek the review. It could be argued that if someone is fit not to be a ward he or she should be fit to initiate the review. That argument could be put forward but I am not making it. The wardship legislation is very old.
It depends on the education of the individual and his or her knowledge of the system.
I agree. The legislation on wardship is very old and dates from 1871. It is being reviewed by the Registrar of the Wards of Court office with a view to making suggestions as to how to modernise it. Some aspects have been looked at by the Department of Health and Children in the new mental health legislation. It has been in touch with the registrar. The Deputy's question is a fair one.
Is it the practice to allow the person looking after the ward to spend the money, present the invoices and be paid on a retrospective basis? Is there any provision for a pattern of spending to emerge and for the money to be drawn down in advance so that the person who is in reduced, poorer circumstances is not illiquid at times due to incurring bills from looking after the ward?
A routine regular payments system set up is set up where there are ongoing expenses and that is set up with the office and the committee and the person who is looking after the ward. That could amount to £50 or £100 a week or whatever. If there are exceptional payments - I thought earlier it was to such payments Deputy Lenihan referred - an application would have to be made and an invoice submitted to support it. An example would be if a person was changing a car, one-off payments of that sort. By and large, where there are regular outgoings, there is a payment system established and they are paid weekly or monthly as agreed in advance with the committee.
Inevitably, tensions will arise between the committee and the office, whose role is to protect the ward from exploitation. I am not suggesting that wards are exploited but they are vulnerable to exploitation. Therefore, the office has to be careful to ensure that they are not exploited, perhaps even by a committee.
The courts place themselves above the law. In this case, they appear to have broken their own rules on these accounts. I quote from the letter, 16 October 2000, from the Secretary General to me,
Accountability,
Order 77, Rule 96 of the Superior Courts states that:
"On or before the 31st day of March in each year the accountant shall prepare an account, in such form as may be prescribed by him with the approval of the Chief Justice, showing the total amount of funds paid or transferred into and out of the court in the year ended on the 30th day of September then last year past and the balance of funds in court at the commencement and close of such year. Copies of the said account shall be forwarded to the Minister for Justice and the Minister for Finance."
Those are the courts' rules. The Secretary General goes on to say that "the Department has no record of having received such accounts for many years and is attempting to ascertain when or whether they were ever provided." Secretary General, were they ever provided?
Mr. Dalton
We have not traced them. Possibly as a result of the committee's interest, we received last year's accounts yesterday.
Was that the first time?
Mr. Dalton
Yes. That was a break with tradition.
A break with tradition. Is it a fact, Mr. Fitzpatrick, that these reports were not ever made before now?
As far as we can establish, these accounts were not prepared. When we——
So, did the superior courts break their own rules?
Shortly after we were established in November 1999, one of Mr. Quigley's accountants started working with the accountant's office to review the procedures and practices. This is one of the issues that came to light.
Immediately it came to light, we prepared the first such statement for the year ending September in line with the Order 77, Rule 96. As far as we know, that is the first time that such a statement was prepared.
Is that not shocking?
I can only tell the Chairman the factual position.
The courts have to be accountable to someone. I note that the Minister for Justice, Equality and Law Reform this week published proposals for a judicial council, which mirrors the Fine Gael proposals for a judicial board, to deal with this issue. Up to now, the courts resisted any accountability.
There must be a distinction between the courts in their judicial capacity and the courts in their administrative capacity. Here they are breaking their own rules. We are not talking about pocket money but £575 million. A 1% difference in investment equals £5.75 million per year. If one got 1% less that would be the amount one would lose.
These are significant sums of money. There has not been any auditing, accounting, or a report. It is a grievous lapse by the courts.
Who is the person responsible for sending in these reports within the court administration system?
The letter goes on to say,
Accounting and auditing arrangements.
The vast majority of court funds arise from orders made in the high court and are managed by the accountant of the Courts of Justice. Disbursements from court funds are strictly controlled and would be either provided for in the schedule to the court order or specifically authorised by the Registrar of the Office of Wards of Court or another officer of the court independent of the accountant's office. Similar controls apply to the administration of funds arising from the court orders made in the circuit and district courts. The President of the High Court, as the judge exercising jurisdiction in wardship cases, has the legal authority in respect of the lodgement of funds in court. The systems used to manage court funds are all manual.
It is Methuselah's time here - red letter days when people were brought things in cases across town for verification. Everywhere else these things are done electronically. It is an instant decision to save or lose money.
What officer of the court administration is responsible for furnishing these reports? I appreciate that they have not been furnished until yesterday, but technically who had responsibility, or lack of responsibility, for furnishing these administrative financial reports to the Department?
A year ago, the Comptroller and Auditor General brought it to my attention and I began asking questions. Since last May we have been writing letters. We approached it gingerly because of the doctrine of separation from the courts. The doctrine needs clearer definition and there must be a distinction between judicial and administrative matters. The lack of clarity has allowed it to drift. We must make a recommendation on this.
Since I made inquiries, which resulted in extensive correspondence, moves have been made. There were discussions between the Comptroller and Auditor General and the new chief executive of the Courts Service. Perhaps the new arrangements whereby there is a separate vote has facilitated these movements. However, since my inquiries things have happened. Will you answer Deputy Conor Lenihan's question?
Is that letter available to the members?
Yes, it is in the correspondence file dated 16 October 2000.
The need to modernise the accountant's office was identified by the working group on the courts commission which led to the establishment of the Courts Service. On being established, we commissioned the National Treasury Management Agency. It was a high priority for the service because much of its work agenda was determined by the working group on the courts commission.
As I understand it, statements were produced until 20 years ago. Because of administrative resources, the increase in the number of accounts and the fact it was being done manually, the accounts were not done. The accounts were prepared by the accountant's office.
This is an office where the volume of work has increased. I do not think an individual should be singled out. There is a bigger issue here which is the modernisation of the office——
It is a systemic failure then?
Yes. It would be unfair to name or single out an individual because of what happened.
It is not an individual. It is an office and presumably different people——
I am not looking for an individual, but the office holder. Has the person responsible for not reporting for 20 years a title?
The statement was prepared this year by the accountant's office——
Who is the office holder?
There is an office holder——
What is his or her title?
There is the accountant's office in the High Court which handles all court funds, all £500 million pounds.
Who is in charge of that? I want to know who is the chief accountant.
I must draw the attention of the committee and the witnesses to the provisions of Section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997. Those provisions protect individuals who are not present from being named in a way that might damage them.
I just want to know the name of the office holder who is an accountant in charge of the system. It is a basic question. It is like asking who is in charge of the Department.
I am obliged to remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person or an official either by name or in such a way as to make him or her identifiable. At the same time we are entitled to know that there is an office that runs these things.
The official title of the office is The Accountant of the Courts of Justice. We have a new finance director now. The nucleus of the staff we have employed, in particularly the professional staff, would have assisted the accountant of the office in preparing the statement under discussion.
The DIRT inquiry being completed by the committee this week arose because of the failure of officialdom to apply the law unknown to the Legislature. This seems to be a similar case. The Superior Court rules which have the force of law are not being enforced by the courts. Vast sums of money are involved. I do not suggest mismanagement here, but we have no way of knowing how they have been managed over the years. We do not know whether they have been managed in a way to maximise interest or whether they have been run in a lax manner. It is a very unsatisfactory situation especially when such huge sums of money are involved.
I propose that we ask the secretary general of the Department of Justice, Equality and Law Reform together with the director general of the court service and the Department of Finance and the Attorney General's office to establish a working group. That group should report back to the committee in perhaps three months on the issues that need to be addressed in this matter. It is now 29 March so it should report before the end of June and should cover the question of whether the legislation on the wardship of courts needs to be updated. The group should examine specifically whether the funds are appropriately managed, whether they could be better managed in this technological era and all matters pertaining to their administration. All matters relating to their auditing should also be examined with a view to ensuring that in so far as the Exchequer is at risk, the committee is satisfied the arrangements to be put in place, whether by changes of the law or otherwise, are adequate and appropriate. Is the committee agreed? Agreed.
I will ask the Secretary General to speak now on the 'poor box' issue.
Mr. Dalton
The practice of a court directing that money be paid into the court poor box in lieu of or in conjunction with another penalty is a practice previous to the foundation of the State. It has its origins in judicial practice rather than a statute. The system operates on the basis that the presiding judge indicates that if a payment is made into the poor box he or she will take a certain course. When the accused makes the payment the judge usually applies the probation act or imposes a suspended sentence. While all the courts of first instance, that is the District, Circuit and High Courts, have used the poor box, it would be used mainly by the District Courts. Receipts in the District Court offices for 1999 amounted to approximately £390,000. The breakdown was £369,000 for the District Court and £21,000 for the Circuit Court. Fundamentally it is a District Court practice.
Was it £390,000 for the year 1999?
Mr. Dalton
That is right.
Have we figures for 2000?
Mr. Dalton
I do not have the 2000 figures. I think it went up a little in 2000 but I will send the figures to the committee.
Does anyone have the figure?
Mr. Dalton
Mr. Fitzpatrick may have it.
In 2000 the poor box paid £428,000 direct into court offices.
How much was paid in other donations?
We can only estimate that because payments can be made in a number of ways. Some are made directly to the court poor box and they are accounted for in the same way as any other money coming in. They are receipted and paid out from the office on foot of an order of the judge. There are other payments made directly to a named charity and that is done by the defendant producing a receipt in court. Those payments are not accounted for because they do not physically come into the office. We estimate that they amount to at least £80,000 plus.
Would a ballpark figure then amount to roughly £500,000 for the year 2000?
Yes, about £500,000 but the £80,000 is a "guesstimate".
I appreciate that. Is there a statutory basis for this?
Mr. Dalton
There is not. It would not be correct either to say that it is a common law matter. It seems to have originated as a practice of judges and we do not know exactly when but it is long-standing. The major concern we would have is that it gives the impression that people can be treated unequally before the law and that somebody who can afford the alternative of paying a fine has an advantage. We are looking at it from that point of view and one of the options being considered by the Department is the total abolition of the poor box. There are some things in its favour. Despite the problem of bias, it represents a way of dealing with cases where a fine and conviction might not be entirely appropriate. However, that could be done without the poor box system. Also in its favour is that many charities benefit from it. A wide spread of charities benefit including the Society of Saint Vincent de Paul which got almost £54,000 in 1999. Victim Support got £17,000, the Simon Community £16,000 and various old folks organisations round the country benefited. It had a beneficial effect but I do not suggest that it should be retained for that reason. There are obviously other ways of funding organisations without it being in the discretion of the local judge.
Is there a full breakdown of the money?
Mr. Dalton
There is. It is a lengthy breakdown as there are about 70 organisations. We will send it to the committee.
Could we have a copy of it now? We could copy it for members.
Mr. Dalton
I can give you a copy now.
Ms Flanagan, from a legal practitioner's point of view, is there a utility in this? It has developed over decades, even before the State was founded, and it is extra statutory. Does that mean it is illegal or is that not provided for in law.
Does it break any legislation?
No, I do not think it necessarily would. There is no statutory basis for it but it has a long history and is a discretionary remedy which may be utilised by the District Court. Judges will always take into account the ability to pay when they impose a fine of any kind, whether it is a fine pursuant to legislation or a poor box payment. It is not clear at all how there would be a perception of inequality.
What about discrimination? Is there not discrimination between the person who has the ability to pay as against the person who does not? In those circumstances under equality legislation would this not seem to be discriminatory?
Well, some of the amounts are very small. I do not think there would necessarily be any inequality——
Well, a sum of £3,000 was paid into the poor box last week.
Surely the same would apply to fines, which can also be applied unequally.
Yes. A fine might be imposed and in default there would be a prison sentence. This difficulty would arise in that case as well.
Is it illegal?
No, I do not think so. It has not been challenged, and we have no reason to believe that it is illegal. It is within the discretion of the judges to do this. It might be put on a statutory footing and there is a certain amount to be said for that.
If it were to be prohibited by law, and this is one avenue being explored by the Department of Justice, Equality and Law Reform, what would be the consequence? Would it introduce a degree of inflexibility? I am trying to tease out if there is a practical and sensible purpose for this.
The judges would think that there is, and use it to such an extent that they must regard it as a suitable method of allowing a certain course to be taken. It allows a suspended sentence or the Probation Act to be applied along with a financial contribution.
So the distinction here is that if a person gets fined for a criminal purpose, he or she will then have a criminal record, but if the Probation Act is applied, this is not the case.
There is no conviction recorded.
The payment in lieu of fine is a way of avoiding a criminal record.
That is the way it seems, yes.
It also means that the Exchequer loses out if a fine is not imposed.
If a fine is not imposed the Exchequer does not get the money. I suppose one might ask whether a fine might be imposed if there was not a poor box system.
Are there any guidelines for judges as to how this money might be disbursed or to whom it might be given?
There are no guidelines because this is part of the judicial function. Judges are independent in the discharge of their judicial functions. The practice appears to stem from their common law jurisdiction and it pre-dates the foundation of the State. There are no guidelines nor could there be.
There should be some rudimentary research into how this works. My biggest concern is that by giving judges this form of discretion, it helps people who are socially or otherwise well-connected to avoid acquiring a criminal record. That would be my principal worry about the equality of citizens before the law. In allowing this element of discretion in the system without guidelines or accountability of any kind, those who may enjoy social connections of one kind or another may be at an advantage relative to people who do not have social connections. Has there been any research done, by judges or lawyers or even by an enterprising law student? Is there any analysis of the people who came before the courts and the type of charges they faced? Do people charged with being drunk and disorderly tend to get the benefit of the poor box, or people who inadvertently crash the car? I am keen to find out.
The committee has the information provided by the Courts Service and that is the extent of the information I have in relation to it. I am not aware of other research on the issue.
Perhaps there is anecdotal or actual evidence of a trend as to how people availed of it?
The information we have has been provided by the Courts Service and I think there is a certain amount there that could be looked at.
I would have thought, Chairman, that the Courts Service should conduct an analysis of the categories of offence that are in the poor box category. Even forgetting about people who may have connections of one kind or another, if there is a discrimination even as between types of offence, that would be injurious to the rights of citizens. A certain type of offence might be treated by the courts as one which would allow for a contribution to the poor box and another equally serious offence might be treated differently.
I am anxious that we do not stray into an area that is not pertinent to the committee, but when it comes to money, it is pertinent.
This was considered by the board of the Courts Service, which is chaired by the Chief Justice and includes the presidents of all the courts and four other judges. It was considered in response to a request from the Minister for Justice, Equality and Law Reform. The view of the board was that the poor box system was open to misunderstanding and that it should be put on a legislative footing if it is to be retained. That was conveyed by the chairman of the board, the Chief Justice, to the Minister.
Was that recently?
That was last September.
I am glad of that reaction to our initial inquiries. Is it being considered to put it on a statutory basis?
Mr. Dalton
Yes it is, Chairman. It is being considered as part of a wider issue and that is dealing with cases which are minor in nature where a penalty in the form of a conviction might not be appropriate. One option would be to widen the circumstances in which the Probation Act can be applied for situations where technically an offence may involve a conviction but where the sensible handling of the case might require some lesser penalty without recording a conviction. If that system were to be instituted then instead of judges having discretion about the distribution of this money, the penalty money would not be a fine and would become Exchequer money. There would not then be a loss to the Exchequer. It would not come in the form of fines but could be in the form of a penalty to be distributed.
The committee is not necessarily going that far nor does it oppose that, but I would suggest that if it is to remain a court fund to be discharged to charities, and there may be a case for helping people who are the victims of crime, then it would be more appropriate to be part of a trust with trustees who would operate according to set criteria, rather than be at the discretion of individual judges.
We have a list of in excess of 300 charities that have benefited from the court poor box and I am delighted to see such a large spread. One item on the second page, the sixth item is a payment of £1,500, to Dublin North Central. Was that to a political party or to the Society of St. Vincent de Paul?
Mr. Dalton
I sincerely hope it was not to a political party, Chairman. We will look at that.
I think this has been a useful discussion and this committee is anxious that these matters be regularised. We have already made a decision on the court funds and we will have a report back from the working group and the Secretary General of the Department of Justice, Equality and Law Reform on the options. This committee will have the report by 29 June 2001. The Secretary General might at that time tell us the result of the further consideration by the Department of future arrangements for the court box, including what legislative changes are proposed. The Comptroller and Auditor General should have some role in these funds, especially where there is any risk to the Exchequer that we would have to compensate for loss. Is that agreed? Agreed.
Are there any other questions on any of these Votes? We will note all the Votes and we will discharge the witnesses.
The witnesses withdrew.
The Committee adjourned at 1 p.m until2.15 p.m. on Tuesday, 3 April 2001.