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COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 2 Jul 2009

Special Report No. 63 of Comptroller and Auditor General: Tribunals of Inquiry.

Mr. John Buckley (An tArd Reachtaire Cúntas agus Ciste) called and examined.

Mr. Seán Aylward (Secretary General, Department of Justice, Equality and Law Reform), Mr. Dermot McCarthy (Secretary General, Department of the Taoiseach), Ms Geraldine Tallon (Secretary General, Department of the Environment, Heritage and Local Government) called and examined.

Arising from views specifically expressed by Dr. Somers of the National Treasury Management Agency at a meeting we had some time ago we decided to write to the Minister for Finance, Deputy Brian Lenihan, to express our view that when drafting legislation for NAMA the Comptroller and Auditor General should have a role in monitoring and examining its activities. We received a letter from the Minister for Finance, dated 1 July, in which he states:

Thank you for your letter ... in which you requested I act on the recommendations of the Committee of Public Accounts that NAMA legislation should provide for NAMA's accounts to be audited by the Comptroller and Auditor General.

While I cannot comment on the actual legislation which is still at the drafting stage, I can inform you that from the outset, my officials have been pursuing an approach that is consistent with the Committee's views. Furthermore, the Government has recently agreed this approach.

Yours sincerely

Brian Lenihan TD

Minister for Finance

The Department's approach is consistent with the committee's views on monitoring.

I draw attention to the fact that while members of the committee enjoy absolute privilege, the same privilege does not apply to witnesses appearing before the committee, and the committee cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses, or an official by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions within Standing Order 158 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister, or the merits of the objectives of such policies.

I welcome Mr. Dermot McCarthy, Secretary General, Department of the Taoiseach and ask him to introduce his officials.

Mr. Dermot McCarthy

I am accompanied by Mr. Philip Hamell, assistant secretary general at the Department of the Taoiseach, Mr. Seán Aylward from the Department of Justice, Equality and Law Reform and Ms Geraldine Tallon from the Department of the Environment, Heritage and Local Government.

Ms Geraldine Tallon

I am accompanied by Mr. Liam Whelan, principal officer in the water and planning division.

Mr. Seán Aylward

I am accompanied by Mr. Brendan MacNamara, principal officer in our law division.

Ms Stephanie O’Donnell

I am Ms Stephanie O'Donnell from the Department of Finance and I am accompanied by Ms Marie McLaughlin.

Mr. Seán Aylward

My colleagues have asked me to start. I have given the committee a copy of my draft remarks but I will kick off by quoting the Chief Justice who said in a ruling of the Supreme Court yesterday that tribunals perform a unique role in Irish public life and derive their authority and existence from resolutions of the Oireachtas. I will focus on the tribunal for which we had primary responsibility and which had most implications for the Department of Justice, Equality and Law Reform, and the justice family of agencies generally. This was the tribunal of inquiry into allegations concerning gardaí of the Donegal division, the Morris tribunal.

The tribunal was established in April 2002 by the Minister for Justice, Equality and Law Reform. The Honourable Mr. Justice Frederick Morris, former President of the High Court, was appointed as chairman and sole member. The terms of reference were focused on allegations of wrongdoing on the part of various members of the force in the Donegal division. These included allegations of false imprisonment, harassment, planting of explosives and firearms and corruption.

The tribunal heard 650 days of oral testimony from over 800 witnesses and produced a total of eight comprehensive reports over the six and a half years of its existence. It uncovered incidents of Garda misbehaviour, negligence and mismanagement in the Donegal division which were deeply disturbing and which called for a strong and effective response. The tribunal was able to draw on and examine a thorough internal Garda inquiry and investigation, the findings of which were substantially vindicated by the subsequent work of the tribunal.

A key element of the State's response to the tremendous work done by the tribunal was the Garda Síochána Act 2005. That Act represents the single biggest reform of the Garda Síochána since its establishment. The reports of the Morris tribunal greatly influenced the reforms in the Garda Síochána Act and related regulations. A number of provisions of the Act were specifically designed to address failures identified, such as: the establishment of an ombudsman commission to replace the Garda Síochána Complaints Board; the establishment of the Garda Inspectorate as a source of independent and expert advice for the Minister; a statutory requirement on members to account for their actions on duty without delay; new streamlined discipline procedures which are now in place; the Garda Commissioner, with the consent of the Government, has a power to dismiss a member of the Garda, sergeant or inspector rank in certain circumstances; the introduction of whistle blowers regulations; a new system of promotions has been put in place to provide for greater input from persons outside the force; greater use of civilian expertise; and the recruitment of members from religious and ethnic minorities.

A feature of the Morris tribunal is that there have been some real and tangible consequences arising from its findings. Of 64 members criticised to differing degrees by the tribunal, six have been dismissed, two have resigned, 35 have retired, one was medically discharged, three have been transferred or disciplined; in seven cases disciplinary proceedings have been initiated; and in a further ten cases it was found that no disciplinary action was warranted.

The Morris tribunal has completed its work and reported on all aspects of its terms of reference. Its documentation has been archived in accordance with the instructions of its chairman, its offices are now closed and arrangements are in place for the redistribution of IT and office equipment. The committee might be interested to note that the public hearing room, with its state-of-the-art facilities, is currently being used by the Courts Service as the venue for a significant large-scale civil case which is expected to run until the autumn.

The cost of the tribunal from April 2002 to end April 2009 was almost €50 million. This is made up of administration costs amounting to €17.1 million, legal fees for the tribunal totalling €10.48 million and third party legal fees paid to date amounting to €22.06 million. These breakdowns are very much in line with the projections in the Comptroller and Auditor General's report.

The final overall cost of the tribunal to the Department is expected to be in the region of €70 million. The remaining expenditure, expected to be about €20 million, all relating to third party costs yet to be claimed, will fall to be paid over the coming two to three years. This overall estimation is slightly less than that projected in the Comptroller and Auditor General's report but the difference can largely be accounted for by the fact that his report also includes the cost of the tribunal to other public bodies, such as the provision of accommodation for the tribunal by the Office of Public Works, which are not borne on the justice, equality and law reform Vote.

I turn now to the Comptroller and Auditor General's report itself, and to those aspects of it directly related to the Morris tribunal. Overall, the report was not critical about the manner in which the administrative affairs were handled. There was a small number of issues identified, but in the context of an operation lasting over six years and costing €50 million so far, those issues are relatively minor in nature and I can provide detailed explanations to the committee as appropriate. Indeed, I take this opportunity to publicly thank Mr. Justice Morris for the efficient and effective manner in which he discharged his function. History will show he did a magnificent job and we are greatly indebted to him for the way he fulfilled his demanding task.

More generally, there are recommendations and suggestions in the Comptroller and Auditor General's report relating to the manner in which tribunals should be established and how they should operate. These recommendations are, for the most part, being provided for in the Tribunals of Inquiry Bill 2005. This Bill, which is now ready for Report and Final Stages in Dáil Éireann, comprehensively reforms the legislation relating to the public investigation of matters of urgent public importance and draws extensively from the Law Reform Commission's 2005 report on the law relating to tribunals. It is worth noting that on this issue, the Law Reform Commission, the Department and the Comptroller and Auditor General effectively came to the same conclusions.

I would like to turn briefly to the main provisions of the tribunals Bill itself and outline some key features of it to the committee and how they address the concerns expressed in the Comptroller and Auditor General's report. It calls for the terms of reference of a tribunal to be tightly drawn and that new lines of inquiry should be limited. The Bill, in sections 6 and 7, clarifies the process for setting and amending terms of reference of a tribunal and section 21 provides that a tribunal shall not inquire into a relevant matter unless it is satisfied that the cost and duration of that inquiry is justified by the importance of the facts likely to be established.

The Comptroller and Auditor General's report suggests that a tribunal should be required to provide a formal public statement of estimated costs, timescales and milestones at all key stages — the Bill provides in section 8 that soon after its establishment, a tribunal will be required to produce a statement of estimated costs, including anticipated third party costs, and duration of the tribunal which must be laid before both Houses of the Oireachtas. Section 9 of the Bill provides that a new statement must be prepared where it becomes clear that the old statement is no longer appropriate.

The Comptroller and Auditor General's report suggests that there is scope for improvement of practice and procedure in the gathering of evidence. The Bill, in sections 22 and 23, provides for a tribunal to establish rules on the receipt of evidence including a provision regarding "reading-in" of evidence already available in written form and not disputed.

A focus of the Comptroller and Auditor General's report is on the question of legal representation and how costs in this area could be curtailed either by joint representation, capping legal fees payable or limiting the extent of oral hearings. The Bill, at sections 28 and 29, clarifies the situation with regard to the granting of legal representation before a tribunal. A relevant person must apply for representation and the tribunal will only grant the application where the person's legal or constitutional rights are likely to be significantly affected by the proceedings. In addition, the tribunal will state its opinion as to the number of representatives to be retained by a person and the modules or parts of its work at which the person should be represented, and it can also provide for persons with similar interests to be represented jointly. I should say that Mr. Justice Morris did that all the way through in his work.

The Comptroller and Auditor General's report states there is a need to clarify the circumstances in which a tribunal may award costs, and where a person contributes to the duration of hearings by the provision of false or misleading information or fails to co-operate, costs should be awarded to the Exchequer against that person. Sections 44 to 51, inclusive, of the Bill provide detailed arrangements for dealing with costs. Co-operation with the tribunal remains the key determinant for an award of costs and a tribunal may also award costs against a person to the benefit of the Exchequer in the circumstances suggested by the Comptroller and Auditor General.

The Comptroller and Auditor General's report suggests there might be scope for economies if much of the work currently done by counsel at tribunals was to be carried out by paralegal, research or other expert staff; if there was a move away from the "exclusive attention" basis of hiring counsel and if there was a scheme of pre-determined fee rates. The Bill, at section 5, provides for tendering for the selection of legal, administrative and support staff, including solicitors and counsel. Section 20 provides for the appointment of experts and research assistants, section 26 provides for the appointment of investigators and section 51 provides for regulations governing the maximum amounts payable to counsel and solicitors. Mr. Justice Morris adopted that approach and hired civilians for specialist tasks rather than using counsel in all of these roles.

These are just some of the key provisions of the Bill which relate to the suggestions contained in the Comptroller and Auditor General's report on tribunals. The Bill broadly addresses the issues raised in the report and its measures will have a positive impact on the effective operation of public inquiries in the future. It is subject to amendment and amendments are in gestation but I cannot comment on them as they have to be approved by Government and will have to be debated in the House. I hope what I have said is of assistance to the committee and responds to the points in the report before us.

May we publish the statement?

Mr. Seán Aylward

Yes, Chairman.

Mr. Dermot McCarthy

I would like to address my remarks to the aspects of the Comptroller and Auditor General's report dealing with the Tribunal of Inquiry into Payments to Politicians and Related Matters, known as the Moriarty tribunal, which was established by order of the Taoiseach in September 1997 following resolutions passed that month by both Houses of the Oireachtas. Funding to the tribunal is channelled through the Department of the Taoiseach and in that respect I act as Accounting Officer.

The role of Departments vis-à-vis tribunals is, as the Comptroller and Auditor General’s report says, more facilitative than supervisory. In all our dealings with the Moriarty tribunal we are conscious that the tribunal was in essence established and given its terms of reference by the Oireachtas and is independent in the performance of its functions. We are acutely aware of our obligation never to act in a way which might even seem to call its independence into question or to jeopardise its operation. This obligation is perhaps especially important in relation to the Moriarty tribunal in which the actions of a Department itself are under scrutiny.

My colleague, Mr. Seán Aylward, has covered the general recommendations in the Comptroller and Auditor General's special report and how they are for the most part dealt with in the Tribunals of Inquiry Bill currently before the Dáil. I am glad to say the special report makes no recommendations about the financial management of the Moriarty tribunal.

The report estimates the potential cost of the Moriarty tribunal could be in the region of €100 million. This includes a range estimate of €39 million to €80 million in respect of third party costs. This range is based on extrapolations from experience with other tribunals. The Moriarty tribunal has made no finding on third party costs. The range is, as the report makes clear, subject to many caveats and contingencies.

An item in the report which has attracted attention is the statement that in 2002 the senior counsel daily refresher fee was notified to the tribunal at €2,500 in error. What happened has already been explained by the Taoiseach to the Dáil. Briefly, after lengthy negotiations, a rate of €2,500 per day was agreed with Moriarty senior counsel and notified to them by letter in June 2002. A few weeks later, in view of the setting of the fee of €2,250 per day for senior counsel at other tribunals, it was realised that the Moriarty rate had been agreed at a higher figure arising from a misunderstanding between my Department and those setting the fees. The Moriarty fee was reviewed again. It was considered that in view of the particular circumstances of that tribunal, the higher fee was appropriate and, following advice from the Attorney General, this rate was sanctioned by the Department of Finance on a personal basis. Tribunal senior counsel were informed by letter in August 2002 that the notification of the higher rate was an error but that, as an exceptional measure, it had been sanctioned to stand on a strictly personal basis.

I should add that the Moriarty legal team is small by comparison with other tribunals. Also, as a consequence of the overall position as regards fees for the tribunal staff as a whole, the cost of the team at Moriarty is almost €600 a day less than if rates paid at other tribunals were to apply to it. All Moriarty legal fees were reduced, along with tribunal legal team fees generally, by 8% with effect from 1 March this year.

With regard to the work and impact of the tribunal, the Comptroller and Auditor General's report quotes the tribunal as noting from the evidence of the Chairman of the Revenue Commissioners that apart from the recovery of specific sums of €8.5 million from individuals directly connected with the tribunal's proceedings, the tribunal's work has contributed to the cultivation of a new climate or culture of disclosure in the financial and fiscal areas.

The Moriarty tribunal has been in existence for nearly 12 years, which is far longer than anyone could have imagined when it was established. Indeed, on many occasions during those 12 years it was thought to be close to finalising its work. It has published a substantial report of well in excess of 600 pages, primarily relating to the parts of its terms of reference pertaining to the late Mr. Haughey.

The Comptroller and Auditor General's report indicates the nature of the events which have contributed to the tribunal's extensive prolongation. These include several sets of legal proceedings and the eight or ten months the tribunal estimates resulted from its consideration of matters that had been the subject of the Ryan investigation into the books and accounts of Ansbacher (Cayman) Limited under the Companies Act 1990.

The committee will be aware the tribunal has recently been holding public sittings. The sole member has indicated to us in recent days that all the evidence taken at recent hearings may give rise to fresh or revised provisional findings and that until submissions have been received on those findings, it will not be open to him to determine that no further evidence ought to be taken. While it is still his view that the hearing of evidence is, on any estimate, nearing completion, he says it is impossible, would be imprudent in light of recent developments and, moreover, procedurally inappropriate for him to be more precise.

May we publish your statement?

Mr. Dermot McCarthy

Yes.

Ms Geraldine Tallon

I thank the Chairman and members of the committee for the opportunity to make a brief introductory statement on the matters being addressed. Where a tribunal of inquiry is established by the Oireachtas, it must be appropriately supported and resourced so that it can pursue its investigations in an efficient, timely and cost effective manner. My Department has fulfilled this function with respect to the planning, or Mahon, tribunal since its establishment in 1997, in consultation as necessary with the Office of the Attorney General, the Chief State Solicitor's office and the Department of Finance. Acknowledging that the tribunal is independent in its operations and attracts the powers, privileges and rights of the High Court, my Department's main operational role, other than supporting, as appropriate, any Government consideration of matters affecting the tribunal, relates to the funding arrangements to meet the expenses incurred by the tribunal. These are met through financial provision made by the Dáil in the Department's Vote and on the basis that moneys paid comply with public financial procedures.

The planning tribunal will be the longest of the three tribunals that were examined by the Comptroller and Auditor General in his special report. As things stand, it is anticipated it will complete its final report and recommendations in late 2009. I understand this timescale is dependent on the outcome of a recent High Court challenge to the tribunal's decision not to allow for final submissions by relevant parties on any draft adverse findings. Once the report is completed, the chairman, sitting alone, will adjudicate on applications for award of third party costs. His currently projected finalisation date is April 2010.

Expenditure to date on the planning tribunal amounts to approximately €84 million, while approximately €32.5 million is reported to have been collected by the Revenue Commissioners and €18.7 million by the Criminal Assets Bureau directly or indirectly related to the tribunal. The special report estimates that the overall cost of the tribunal is likely to be between €171 million and €194 million, the key variable being the extent of third party costs that will arise in respect of the period from 2002 to 2008. Based on the pattern of third party costs to date and the experience of other tribunals, it may be several years before such costs are finally determined and settled.

The main factors that determine the duration and costs of a tribunal are the scope of its terms of reference; its procedural arrangements; administrative costs, including the size and remuneration of the tribunal's internal legal team; the extent and outcome of litigation; and the award and ultimate extent of third party costs.

The planning tribunal's terms of reference were specified, and in 1998 extended, by resolutions of the Houses of the Oireachtas. The tribunal subsequently indicated, in its second interim report, that these amended terms of reference were to greatly expand its task. Following the publication of the tribunal's fourth interim report, which indicated that the work of the tribunal could extend to 2014 or 2015, the terms of reference were again amended in 2004 to give the tribunal greater discretion as to the matters it would or would not investigate.

While the special report addresses a number of procedural matters associated, for example, with the engagement of external counsel and the processing of litigation costs, the tribunal is wholly independent in the conduct and organisation of its business. Its administrative costs are largely a reflection of staff numbers and remuneration levels, which were agreed with the Department of Finance.

The report indicates that the tribunal has been involved in 29 legal challenges to end-2007. Since early 2006, the Department refers all fees submitted by counsel engaged by the tribunal to represent it in such litigation to a professional legal costs accountant for recommendations as to an appropriate level of remuneration. Overall, reductions of about 20% have been applied. In more recent litigation, proposed fees of external counsel have been subject to prior departmental approval.

The tribunal has ruled on third party costs in respect of the period from 1998 to 2002. To date, 72 bills have been submitted. Again, these are referred to a legal costs accountant for negotiation and settlement. In all cases, decisions on payment of third party bills are taken by the Department in consultation with the Chief State Solicitor's office, and, where appropriate, with the Attorney General's office and the Department of Finance. Some 63 bills have been settled at a cost of approximately €10 million, a reduction of approximately 26% on the amounts claimed. All further third party bills will be dealt in a similar manner.

The overall cost of the planning tribunal may be mitigated through recovery of costs following successful litigation, disallowance of third party costs where there has been obstruction or lack of co-operation and, possibly, the recovery of costs incurred by the tribunal as a result of non-co-operation by third parties. Subject to the outcome of a pending Supreme Court appeal, these are matters entirely within the discretion of the tribunal.

Overall, I believe this special report clearly demonstrates that my Department has been proactive in addressing tribunal costs, has robust procedures in place for this purpose, has kept these procedures under review, and has achieved significant savings on legal and third party costs. I am happy to respond to any questions the committee may have.

I thank Ms Tallon. Can we publish her statement?

Ms Geraldine Tallon

Yes.

I omitted to ask Mr. Buckley to introduce the Vote at the outset. I apologise and ask him to do that now.

Mr. John Buckley

I do not have much to add because most of the witnesses to date have opened the issues in the report and explained how the current legislation and so on is dealing with each of the recommendations we made. On that basis I will hold any comments until later in the proceedings.

We will start the questioning with Deputy McGrath.

I thank Mr. McCarthy, Ms Tallon and Mr. Aylward for their contributions and welcome them and their colleagues to the meeting. We can all agree that the matters under investigation by these three tribunals are important matters of public interest but the operation of the tribunals has resulted in the expenditure of an incredible amount of public money, and many questions must be asked here about the way that money was spent.

It is clear even from the contributions made thus far that the financial control procedures in place at the establishment of the tribunals were not adequate, to say the least, and many of the issues in the past 12 years will now be addressed in the 2005 Bill currently on Report Stage. However, it has been an extremely costly learning exercise for the taxpayer in terms of the operation of tribunals.

I have a number of questions. I refer to the time the Moriarty and Mahon tribunals were set up initially in 1997. I should say, Chairman, that a number of my questions will overlap the three tribunals and perhaps they should be directed at Mr. McCarthy. I am open to direction on that.

What was the process at the time these tribunals were set up in terms of recruiting the senior and junior counsel? I assume no tendering procedure was invoked. How did the tribunal set about identifying appropriate senior and junior counsel to do the work on behalf of the tribunal? How can Mr. McCarthy show that every member of the legal profession was given a fair and equal opportunity to participate in that process? Can he advise how the per diem rate was set? I understand for a senior counsel it was €1,714 in 1997 and increased to €2,250 in 2002, and for junior counsel it was set at two thirds of that rate. To any lay person they are incredible amounts of money to be paid for a day’s work. We should receive an explanation today as to how those rates were set at that time, what they were benchmarked against and whether they were comparable to the commercial rate, for want of a better phrase, for a day in court if a person hired a senior or junior counsel.

I understand a contract for service was put in place with those members of counsel. Can Mr. McCarthy advise on the terms and conditions that set out the relationship between the tribunal and the counsel in those contracts for service? For the purposes of clarification, on the issue of per diem, was it for every sitting day or every working day of the tribunal? How many days of the year were covered under the per diem arrangement?

Fair questions. I call Mr. McCarthy.

Mr. Dermot McCarthy

I will try to be as helpful as I can. I can only speak with any authority about the Moriarty tribunal and its particular experience. Some of my colleagues might have something further to add.

The general framework for the operation of tribunals is set out in the code of legislation as recalled in the Comptroller and Auditor General's report. In the specific case of the Moriarty tribunal, members may recall that its establishment and the terms of reference set for it by Dáil Éireann followed on from the report of the McCracken tribunal, which had identified a number of issues that merited further inquiry and scrutiny. That, in a sense, was the context in which the scope of the exercise was established. The basis on which counsel were selected was determined by the sole member of the tribunal and, as I understand it, that is the general arrangement in respect of the selection and appointment of counsel to the tribunal. The non-legal staffing of tribunals is a matter that is settled between the tribunal and the sponsoring Department. In the case of the Moriarty tribunal, there is a small team of officials, as set out in the Comptroller and Auditor General's report.

The per diem rate, which was——

Is Mr. McCarthy saying the chairman simply picked his own——

Mr. Dermot McCarthy

In consultation with the Attorney General. That is my understanding.

No procurement procedures were followed.

Mr. Dermot McCarthy

Not in the selection process, no.

How did he go about that? I hope the Chairman does not mind the interjection but I am trying to get the flow of what happened from these questions.

How did the chairman go about identifying appropriate counsel? From a procurement point of view, this has resulted in certain people receiving millions of euro and therefore there must have been some basis for identifying appropriate counsel who would ultimately receive those sums of money. I accept it was not known at the time but, ultimately, that is what they received.

Mr. Dermot McCarthy

The retention of counsel in this instance, as in other cases where the counsel's services are retained for the State, is not approached in the normal procurement process. As Mr. Aylward mentioned earlier, provision is being made for that in the Tribunals of Inquiry Bill currently before the House but the identification, selection and retention of counsel, as in other cases, was a matter of identifying people presumably with the appropriate expertise and availability. Beyond that, I cannot help the committee. The Department was not party to that process.

Surely that is an extremely cavalier approach to the expenditure of public money. It was completely at the discretion of the chairman of the tribunal as to who was hired to take on that work as counsel. That is an incredible statement.

Mr. Dermot McCarthy

It reflects the pattern and basis upon which the selection of counsel for legal duties is typically conducted. There is a basis in the legislation for departing from that but not at that time.

Mr. McCarthy might deal with the per diem rate.

Before we do that, I will refrain from commenting and allow the Deputy to continue.

The Chairman is welcome to interject.

It may have been typical but it was totally against the interests of the taxpayer. What they got was a boarding pass for the greatest gravy train we have seen in Irish history, and one man was able to call the shots. Were the rules the same for the other tribunals?

Mr. Seán Aylward

Yes. The chairperson in each case would have picked the principal counsel for the tribunal. There would be perhaps a degree of discussion with the Attorney General but, ultimately, it was his choice. The doctrine was that the Oireachtas was entrusting him with the responsibility and he was to pick the best and most suitable legal persons available. A Bill is before the House which would create the scope for a tendering process, which would be desirable when one sees the duration of tribunals. That is a reform, but Mr. McCarthy is correct in saying about the legal business in Ireland that if one of us, or our solicitor acting as our agent, were about to embark on a court case, he or she would not be going to tender for it. I know the analogy is slightly weak because tribunals are of such extreme duration and that is why we are making that provision, but it is fair to say that the customs and practices of the legal profession were followed and there was no tendering process in any of the tribunals of which I am aware.

Per diem rates were agreed with the Attorney General and sanctioned by the Minister for Finance, which were based on certain assumptions, all of which are touched on by the Comptroller and Auditor General in his report. I do not want to detain the committee on the point but to confirm, in answer to the Deputy's query, that a similar practice was followed, to the best of my knowledge, regarding the other tribunals of which I am aware.

Ms Geraldine Tallon

I can confirm a similar practice was adopted in the case of the planning tribunal, which was set up to inquire into and report on various planning matters. The counsel would have been selected by the sole member at that time and I understand there would have been consultation at the time with the Office of the Attorney General.

I do not believe that analogy is fair because if an individual is pursuing a case, they are dealing with their own funding and they will make their own judgments, but in this instance no procurement practice was followed when dealing with massive amounts of taxpayers' money. I welcome the fact that there is some element of reform in the Bill, although we will not get into the policy aspect.

There may well have been many other equally competent senior and junior counsel at that time who would have provided their services at far more competitive rates. It is deeply unsatisfactory, to say the least, that this was not pursued. The fact is the tribunals have made millionaires out of many members of the legal profession in Ireland and the approach taken in the appointment of counsel at the time has left the tribunals open to accusations of cronyism, that they form an exclusive club and the appointments were completely at the discretion of the chairman. We have left ourselves open to that allegation because of the deficit in the procedures at the time.

How was the per diem rate set? What does it mean? How many days of the year did it involve? Why was it increased in 2002?

Mr. Dermot McCarthy

My understanding is that the rate established in 1997 was set in consultation between the Office of the Attorney General and the Department of Finance having regard to rates payable for legal services of a similar kind retained by the State. The rate stood until 2002 when a review was undertaken and the increase, to which the Comptroller and Auditor General's report refers, was approved.

The basis of the contract for service covered by the fee was in some cases varied as between exclusive attendance and devotion to the work of the tribunal and in other cases a less exclusive arrangement. In the case of the Moriarty tribunal the basis of payment was in respect of a day or part of a day. In cases where fewer than eight hours of service were given, a lower rate of fee was payable and in fact paid.

In terms of the level of that fee, the Comptroller and Auditor General's report highlights the fact that in respect of the two tribunals where third party costs have been awarded in respect of senior counsel, the rates paid were greater than those paid in respect of tribunal personnel.

Mr. McCarthy mentioned that in the case of the Moriarty tribunal if the number of hours' service were fewer than eight in a day, a lower rate was paid.

Mr. Dermot McCarthy

A half day unit features in the claims submitted for payment.

Half of the rate of €2,250 applied if the duration of the sitting was less than eight hours.

Mr. Dermot McCarthy

The rate of €2,500 applied in the case of the Moriarty tribunal.

If the duration of a sitting was less than eight hours in a working day——

Mr. Dermot McCarthy

If I may clarify, the fees are payable in respect of days irrespective of whether the tribunal is sitting. If counsel is working on work of the tribunal unit on a day that is not a sitting day, the fee is payable.

Why was that basis chosen instead of paying a rate for a sitting day and then paying a researcher a brief fee for the non-sitting days, which I understand would be more the norm in legal practice generally? Why was a flat rate paid, irrespective of it being a sitting or non-sitting day? Is that not unusual?

Mr. Dermot McCarthy

Again, I can only comment in respect of the Moriarty tribunal. The member made clear on a number of occasions in the course of public sittings that the substantial amount of the tribunal's work has been conducted in private, including the interviewing of witnesses or potential witnesses, to minimise the amount of business conducted in public sittings where the representation of third parties gives rise to the exposure to third party costs. It would be wrong to draw a conclusion that work inappropriate to counsel was being undertaken when the tribunal was not engaged in public sittings. The tribunal team includes counsel at junior level and documentary researchers for that type of activity.

Surely the whole concept of having a per diem rate encourages counsel to prolong the work of the tribunal. It is in their interests for the tribunal to continue working for as long as possible. Why was that method chosen rather than agreeing a fee for particular modules or for a service? Is it that the tribunal’s work was so open-ended that at the beginning nobody knew what direction it was going in and how long it was going to take?

Mr. Seán Aylward

It has been my experience of tribunals that the chairman is very much in control and, generally speaking, is anxious to press on with business. However, the doctrine has been followed of "Follow the truth wherever it leads you". In some instances, this has led to the uncovering of things that were not anticipated when the tribunal was charged with its mission by the Oireachtas. To be absolutely fair to the chairpersons of tribunals, in each case that I know of, I believe they would have been anxious to press on with the business and do it as expeditiously as possible. Without referring to any individual, I do not believe the people concerned were of a character which would indulge deliberate time-wasting by any member of their team for pecuniary reasons. The nature of the tribunals is such that all authority and organisational responsibility is vested in the sole member who in each instance was on the daily rate of a serving judge and would have had no vested interest whatsoever in prolonging the process. I do not believe that in any instance any tribunal can be said to have been led by people who had a vested interest in prolonging its deliberations. That is not really the way they have worked, in my honest opinion.

I am not accusing them of that either, I just made the point and asked a question. As regards the Government decision in July 2004 on the new fee structure, why was that not applied to the remaining work of the three tribunals at that time? I understand that the fee structure was changed so that for senior counsel it was linked to the annual salary of a High Court judge. Based on 220 days per annum, it would have resulted in a daily rate of €969, down from €2,250 in the case of two tribunals and €2,500 in the case of another. It would therefore have been a reduction of over 50%. Why was that not applied?

Mr. Dermot McCarthy

The question implies interpreting a Government decision. I will have a stab at giving the context, however, which was that following that decision the Government asked that the relevant tribunals would specify a date when they expected to be finished with public sittings. Having given a reasonable estimate of that time, they would be told that beyond those dates the reduced rate of fee would come into play. In the case of the Moriarty tribunal, as events unfolded, the envisaged date was extended on two occasions. The strong concern was that the imposition of the reduced rate could lead to the departure of counsel to the jeopardy of the money already expended on the work of the tribunal. In those circumstances, while the reduced rate applied in new appointments in new inquiries, it was not applied as a matter of policy in terms of the existing tribunals.

Who initiated the review in 2002 where the per diem rate went up from €1,700 to €2,250?

Mr. Dermot McCarthy

As I understand it, the counsel engaged by the tribunals in each case sought a review of the fee that had been set in 1997 in a context where no one concerned, I suspect, including themselves, anticipated that the work would continue as it did and, indeed, as it has subsequently. The review was a function of specific proposals and representations made by the individual counsel and, separately, a review conducted by the Department of Finance and the Office of the Attorney General about appropriate rates at that time.

I will read an extract from the Comptroller and Auditor General's report on the new fee arrangements which were agreed in 2004:

The new arrangements envisage that where the timescale of an inquiry was extended the reduced fees would be payable for the remaining element. This did not occur. The new fee structure has never come into effect for inquiries in existence at the time of the decision. The timescale of all inquiries being examined has been extended by Government on a number of occasions without altering the existing fee rates.

Is the Comptroller and Auditor General incorrect in his assertion that the new rates were to be applied in the event that the timescale for the tribunals was extended? That occurred, and they were extended in each case, yet the rates were not applied.

Mr. Dermot McCarthy

By a decision of the Government, yes. In other words, the Deputy is correct in saying, as the Comptroller and Auditor General's report notes, that the Government decided that lower rates should apply, but it subsequently decided not to implement that decision.

That was a Government decision?

Mr. Dermot McCarthy

Yes.

I have a few more points. I wish to move on to third party costs which, according to the Comptroller and Auditor General's estimate of the overall cost of the three tribunals, are likely to be 50% or more of the total cost. The Comptroller and Auditor General's report estimates that the total cost across the three tribunals is likely to be between €336 million and €366 million. May we have a comment on that figure, first? The Comptroller and Auditor General's report is now seven or eight months old so is that still the contemporary estimate of the overall cost of the three tribunals or have matters moved on since then?

It seems that third party costs are a big black hole and nobody knows what the final liability will be. Even in this morning's contributions, it was noted that it could be some years before the final costs are agreed. It is an unknown liability and it seems to be an unusual way of doing business. The Comptroller and Auditor General's report notes that a number of other countries he examined did not have a system which dealt with those costs retrospectively. They were dealt with on an up-front basis and if legal representation were granted the fees were dealt with at that stage. There also seems to be an inconsistency in that when legal representation is granted it does not confer an automatic entitlement to fees granted. In other cases, even where legal representation was refused, the fees were awarded by the judge so there seems to be an inconsistency there. Perhaps the departmental representatives could talk us through the process whereby a solicitor submits the third party costs bill or estimate. What is the process through the legal cost accountant and so forth? From reading the Comptroller and Auditor General's report the ultimate amounts which were paid were 25% to 30% less than the bills that were submitted so clearly the legal profession was chancing its arm with a lot of the bills that were submitted. In how many cases have the negotiations gone as far as the Taxing Master for ultimate decision?

Mr. Seán Aylward

I could be of assistance on this question, Chairman. What I say touches on the Morris tribunal, but applies with equal force to the other tribunals. The question put might be implied as a criticism of the manner in which parties have been granted representation before tribunals and the level of representation allowed in subsequent cost orders. The position is that parties who feel that their good name is threatened or likely to be threatened in any way during the course of a tribunal's inquiries are entitled, in natural justice, to apply to be legally represented before it.

Regarding the Morris tribunal, the chairman's ruling on those applications in July 2002 clearly indicated he was very much aware of the need to keep such representation to a minimum. Mr. Justice Morris refused a number of parties such representation and granted other requests, but limited them to specific modules and sub-modules of the tribunal's work. He also granted other requests on the basis that multiple parties be represented by the same solicitor and counsel, for example, different branches of Garda organisations, including the Association of Garda Sergeants and Inspectors.

Having been given the right to representation, it is then a matter for individual parties to exercise that right when hearings relevant to their interests are taking place. At the end of a particular module, the parties must then apply to the chairman to have the cost of their representation covered. Regarding rulings on costs, it is very clear that the chairman of the Morris tribunal regarded the execution of his powers on costs as a most significant weapon in his armoury in his search for truth. He regarded co-operation with the tribunal——

That is not what Deputy McGrath asked.

Mr. Seán Aylward

I think Deputy McGrath asked why the costs were not agreed in advance. My point is that the chairman retained the right to award costs or not, depending on the truthfulness and co-operation of the witness.

Deputy McGrath asked about the bargaining that took place, that is, the horse fair element of it.

There are two issues. The second is where bills were ultimately submitted and the final amounts paid were significantly different.

Mr. Seán Aylward

Yes, it concerns the taxation of costs. I may have misheard the Deputy's question. I understood we were asked why the costs were not agreed in advance and I explained there was a process where the chairman used costs as leverage.

Regarding the taxation of costs, the State and the chairman took a very vigorous approach to it, retained legal cost accountants and fought the claims and raised the prospect of bringing them before the Taxing Master in every case. In most instances, but not all, the costs were settled at a reduced figure, in some cases a highly significant reduced figure.

In one case the bill amounted to €1.8 million, which was fought. A settlement could not be achieved and eventually the Taxing Master awarded €1.437 million, a reduction of €363,853 on the initially submitted bill. I also note that the chairman, in the case of some witnesses, awarded zero costs because of a failure to co-operate or be truthful in the case of the witnesses, who were under hazard because they retained their legal representation. In other cases he made awards of 50% or 75% of costs. On the point of third party costs, hardball was played.

The essential point is that in many cases the bills submitted were excessive and people were chancing their arm. The ultimate amount paid was up to one third less than they had submitted.

Mr. Seán Aylward

I do not want to subscribe to the Deputy's——

It is my phrase.

Mr. Seán Aylward

Exactly. I do not want to subscribe to a phrase like that. Perhaps it is a traditional civil servant's caution.

Mr. Seán Aylward

Invoices were submitted for work which was not deemed to have been essential or for which the State should not take liability. I want to uphold the integrity of the process and say these claims were fought very carefully and not simply yielded to on the basis of the invoices received. Professional, independent legal cost accountants were retained, who did an excellent job in the tribunals.

Will the taxpayer end up picking up the tab for the costs of legal representation for persons who were the subject of the tribunal's investigations, even those who had adverse findings reported against them by the tribunal?

Mr. Seán Aylward

In each instance it is open to the member or members of the tribunal concerned to make an adjudication.

Are costs being denied?

Mr. Seán Aylward

People, even if they are the subject of a tribunal or criminal case, are entitled to representation under our Constitution. When one considers the duration of some tribunals, it would be beyond the means of most people to retain representation for the duration if they are the direct subject of it. In each instance, the truthfulness and co-operation of the witness is a weapon in the hands of a tribunal and is the pivotal point, which gives massive leverage to it in exacting people's co-operation. It is a fact that the bills of people who fail to co-operate or were dilatory in their co-operation were not met or were met to a very reduced degree.

Ms Geraldine Tallon

The Deputy may wish to be made aware that the right of a tribunal to refuse to award costs is currently the subject of legal challenge. There is an outstanding challenge by the GMAC Group regarding the Mahon tribunal, which is currently being appealed to the Supreme Court, with the hearing scheduled for later this month. It has implications in terms of the right of a tribunal on the award or refusal of third party costs, and ultimately has implications for the total quantity of costs to be faced.

For the record, where a tribunal makes an adverse finding against a person who is the subject of an inquiry, his or her legal costs should not be covered by the tribunal. I hope that is the ultimate outcome when the matter comes through the system in the next number of years.

I know other people want to contribute. Where litigation was taken regarding matters concerning the tribunal, I understand in 16 cases decided by the courts the tribunals were entitled to recoup the costs incurred, and the total court costs incurred by the tribunals in these cases was €2.26 million, excluding solicitor costs. The Comptroller and Auditor General notes that to date, less than €0.5 million has been recovered in cases where tribunals have been awarded costs. How can that be explained?

Mr. Dermot McCarthy

With regard to the Moriarty tribunal, all of the costs awarded have been recovered, including a significant payment received subsequent to the Comptroller and Auditor General's report.

Mr. Seán Aylward

In at least one case, the matter of costs was finally settled in the Supreme Court yesterday. Therefore, while a case is under appeal, costs could not be recovered because the Supreme Court could, in theory, have found against the tribunal. That may account for some of the money not yet received. Where there were findings of the High Court in support of the tribunal and the case was appealed to the Supreme Court, the cost recovery process was stopped in its tracks. Yesterday was one instance of that. The matter was only addressed yesterday.

Do we have a commitment that the tribunals will pursue the recovery of all of those costs in each case?

Mr. Seán Aylward

I have no doubt but that the costs will follow the event, to use the legal phrase.

I thank Mr. Aylward.

Ms Geraldine Tallon

In terms of the Mahon tribunal, the Comptroller and Auditor General indicated in his report that to the end of 2007, the tribunal was entitled to recover costs in nine successful cases and had done so in three cases. Since the report was published the tribunal has made further cost recoveries of €1.26 million. In the remaining cases, there are currently court challenges regarding costs.

My final question concerns the global position across the three tribunals. The Comptroller and Auditor General estimated the total costs at €336 million to €366 million. As of today, what it the estimate of the final liability?

Mr. Dermot McCarthy

In respect of the Moriarty tribunal, the largest element of the Comptroller and Auditor General's estimate of the likely final costs is in respect of third party costs. That in turn reflects a wide range of estimation. The position is therefore effectively unchanged. However, because of the holding of public hearings by the tribunal in recent times and the implications that may have, as the sole member communicated to us and as mentioned in my opening statement, the cost of the tribunal itself will probably be somewhat higher than the Comptroller and Auditor General estimated, but that is a relatively minor element of the total potential cost.

What about the costs for the other two?

Mr. Seán Aylward

In my opening remarks I stated that our expectation was the costs would be in the region of €70 million, which is close to what the Comptroller and Auditor General has suggested. His figure is slightly less but within the same ballpark range.

Ms Geraldine Tallon

It is difficult to say what the costs for the Mahon tribunal will be. In giving the figure he gave in his report, the Comptroller and Auditor General explained there were a number of caveats with regard to that figure. In the case of the Mahon tribunal, third party costs make up a large proportion of the overall costs. The chairman has ruled on third party costs for the period from 1997 to 2002, but not on third party costs over the subsequent period. They will be ruled on following completion of the Mahon report. There have been 400 witnesses in the period since 2002 and we can anticipate, therefore, that significant third party costs will emerge in due course.

This will be fought out in the courts for years to come, resulting in even more legal fees.

In response to a question earlier about the review of the fees in 2002, Mr. McCarthy said the review was initiated by the counsel for the tribunals in each case. Were those same counsel involved since the commencement of the tribunals and what fees had they collected up to the date they requested the review?

Mr. Dermot McCarthy

In the case of the Moriarty tribunal, counsel was the original counsel. A sum of approximately €3.5 million was paid to three people or senior personnel over that period of four and a half years.

They got a 30% increase.

Mr. Dermot McCarthy

That was the outcome.

I find it incredible that anybody would have the neck even to look for an increase having garnered that amount in such a short period, or that the increase was conceded.

Mr. Dermot McCarthy

I would make a small clarification. They are gross figures, inclusive of VAT.

I welcome the Accounting Officers, their staff and those from the Department of Finance. I declare a small interest. I appeared before the Flood-Mahon tribunal as a witness for Mr. James Gogarty and my name appears on the list of third party costs awarded by Mr. Justice Flood before 2002, which is available here.

It is fair to say, and the Accounting Officer from the Department of Justice, Equality and Law Reform made the point in his submission, that the Morris tribunal has had a very positive impact despite the length of time it took. It provided the background for important legislation on the reform of the Garda Síochána. The public, certainly those I represent, would also feel that what we found out through the Moriarty and Flood-Mahon tribunals has been important for the political system and the deterrence of corruption among politicians and public officials. Therefore, much good work has been done by the tribunals.

What we are here today to discover is whether this is the best way we can do this work or whether it could be done more efficiently in terms of the significant costs to the State. In that regard, I have a question for the three Accounting Officers. How many counsel and legal representatives have become millionaires through the tribunals related to their Departments and what are the figures for the top five earners for each of the three tribunals, beginning with the Moriarty tribunal?

Mr. Dermot McCarthy

In the period since the tribunal began, or in one case shortly afterwards, a number of people received in aggregate in excess of €1 million. However, that was over a period of 12 years. In two cases the sum paid amounted to approximately €8.5 million.

Was that each?

Mr. Dermot McCarthy

Yes, each. In another case €5.8 million was paid, just under €2 million in a fourth case and €1.3 million in two other cases.

How many people in total earned more than €1 million for their work on the Moriarty tribunal?

Mr. Dermot McCarthy

Six people.

I put the same question on the Flood-Mahon tribunal.

Ms Geraldine Tallon

I apologise but I have not brought the individual figures with me and will have to provide a written statement. I will do that. At the moment, I can only provide a global figure for the cost of the tribunal's internal legal team to date, which is €47.5 million.

Would it be possible to get the figures for the top earners for the Flood-Mahon tribunal?

Ms Geraldine Tallon

Yes.

I put the same question with regard to the Morris tribunal.

I apologise for interrupting, but can Ms Tallon get that information for members during the course of this meeting?

Ms Geraldine Tallon

We will see if we can do that.

What are the figures for the Morris tribunal?

Mr. Seán Aylward

I do not have the individual breakdown but a total of €10.48 million was paid over the six years in legal fees. There were two senior counsel, one junior counsel, one counsel for research and one part-time researcher for the tribunal over that time. I will try to get a breakdown on the figures for each individual before we conclude this meeting.

Try to get figures for even the top five or six.

Mr. Seán Aylward

I will try to get the information within the next half an hour. The total paid over the six years was €10.48 million.

Working on the tribunals has created many millionaires. The old adage about the Four Courts being four gold mines in the case of tribunals has been borne out. This brings us back to some of the issues raised by my colleague about the recruitment of counsel and other tribunal staff. Have the Departments, either previous or subsequent to the report being carried out by the Comptroller and Auditor General, investigated any other methods of recruitment? Have they looked at the recruitment system for legal personnel for the State? Recently, a famous solicitor said there was nothing to stop a tendering process being used and that the State could have used a tender process for these three tribunals. The best legal expertise could then have been made publicly available.

Mr. Dermot McCarthy

As a matter of policy, the Bill before the House currently provides for that. Therefore, tendering is an option. On a broader basis, the question of the selection of counsel to act for the State is something that is kept under close review by the Office of the Attorney General. Briefing of counsel also arises in prosecutions initiated by the Director of Public Prosecutions. There is therefore a range of legal activity where the selection of counsel arises.

I am aware that in this broad approach, the question of having both access to appropriate expertise, economy and in a sense, ensuring that there is a reasonable spread of engagement on behalf of the State, is taken into account. In the specific context of tribunals of inquiry, there is the issue referred to earlier by Mr. Aylward and that is the position of the sole members, where there is a strong personal responsibility entrusted to them by the Oireachtas to reach their own conclusions about matters which are by definition urgent and important. In that context, the willingness of individuals, even members of the Judiciary, to take on those responsibilities, is to a very large extent a function of their confidence that the support arrangements available to them will be adequate. That is not to say that more economical measures to secure legal services are not compatible with that but it has been the context out of which the present system arose.

A point worth making — it is made in the report of the Comptroller and Auditor General — is that the primary policy response to the cost of tribunals, including the third party cost element which is the largest, has been the practice not to establish tribunals in more recent times but to adopt the commission of investigation route which is both more focused and more economical, and more timely in its operation. It is clearly a matter of the will of the Oireachtas but one would imagine that tribunals in the future would be a rather rare occurrence or if established, will be on a much narrower basis than heretofore.

Would the Secretary General accept that the comparison the Comptroller and Auditor General draws with the neighbouring common law jurisdiction, the UK, with regard to the costs of tribunal counsel is stark? The Hamill tribunal paid counsel something like £250 and £125 sterling per day. We have a rate that is ten times more compared to a tribunal across the Border. There seems to be an outrageous difference between UK legal costs or else our Government was much more lax in monitoring legal costs than is the case in the UK.

Mr. Dermot McCarthy

That comparison is made and it is not unique to legal services. In other areas of activity the comparisons of unit cost with the neighbouring jurisdiction are not entirely comforting. I would repeat the point I made earlier that the rate paid must be seen, at least in part, in the context of the rates approved in respect of third party costs which were, for the most part, higher. If there is a role for better procurement and tighter focusing there is also an issue about the general level of legal fees in our system.

There is an arcane cost structure in the courts system and this permeated the tribunals. I refer to the wonderful phrases as mentioned by my colleague such as, per diem, and ”a daily refresher“. Many of us would love to be on a daily refresher. The loveliest phrase of all is, ”viaticum”. We would all like to have a little piece of that viaticum which ended up in producing millionaires. Where are the timesheets? In respect of the three tribunals which the Secretary General has overseen there are no timesheets, no hourly rates, no type of contract. Mr. Justice Morris noted the comings and goings of people at his tribunal. These practices would not be tolerated in the Department nor in the Oireachtas. Lawyers seem to be able to come and go as they please. The basic requirements for the administration of any kind of an efficient system were missing. What is being done about this?

Mr. Dermot McCarthy

In respect of the Moriarty tribunal, the claims for fees that are submitted and ultimately paid are certified both by the sole member and by the registrar of the tribunal in respect of attendance on specific days, including as I mentioned earlier, the fact that payments in respect of half-days and so on, are logged. If we had an hourly rate at the same level as the per diem, I suspect we would probably be paying more because it is my strong belief that the daily commitment of the tribunal counsel would on average be in excess of eight hours. I take the point that there is a case for having a more robust arrangement in respect of how payment is set generally.

If I may ask about the €1 million mistake with regard to the Moriarty tribunal when it is alleged that some typing error allowed counsel to secure an extra €250 a day. Was it not outrageous that this was effectively adhered to rather than recovered? The Comptroller and Auditor General and others would have made the point that we are overpaid. If a person on social welfare benefit is overpaid, this is clawed back. The mistake in the Moriarty tribunal was not clawed back and the recipients were left with the money.

Mr. Dermot McCarthy

The context was a little more complex than simply a typing error. The fee which was payable to the counsel in the Moriarty tribunal had been under review for some time. The review had been sought from 2001. Extensive discussions took place both with our Department and the Office of the Attorney General. Material was submitted in support of their case and it appeared to arise from that, including material which they commissioned from independent sources that an increase was appropriate and that a case had been established for a rate of €2,500 a day. Furthermore, it was a matter of some concern at the time to the tribunal that in the absence of a satisfactory outcome from that review, the services of the counsel might be lost. In that context, a rate of €2,500 was seen as being appropriate.

The mistake to which the Deputy refers was a misunderstanding between my Department and those setting the fees generally in the Office of the Attorney General that this was also the rate which was going to be approved for other tribunals. In that context, the €2,500 was agreed with counsel and notified to them. Subsequently, it became evident that the fee being established for the others was €2,250 but it was not on the basis of an error having been made that the fee was sustained. We reviewed the question of whether that was an appropriate level of fee in all the circumstances of the tribunal. We consulted the Attorney General and his advice was that in all the circumstances, the rate should stand on a personal basis and this was sanctioned by the Department of Finance. It was not a matter of a typing error that was not corrected.

In the current pain we are all enduring, who decided on the 8% cut to payments to individual counsel and has it been implemented across the tribunals?

Mr. Dermot McCarthy

The 8% was decided by Government and provided for in the relevant legislation that the Dáil passed in the context of the exceptional economic circumstances. It has been applied to all the legal team at the Moriarty tribunal and my understanding is also in respect of the other tribunals.

Could I ask the Department of Finance officials to give the committee the reason the Department approved retrospectively the increased fee for the Moriarty tribunal counsel?

Ms Stephanie O'Donnell

The Department of Finance has gone on the record in that regard. Under the freedom of information legislation, we released a letter saying that we did not really see the case for the increased fee. However, we decided that in the circumstances — in light of the advice that had been given and the complexity of the situation — we were prepared to sanction the increase on an individual basis. The rate we believed should apply to all tribunals is €2,250. As Mr. McCarthy has explained, the particular circumstances of this case were more complex.

He has not explained them. What were the circumstances that caused a different rate to be applied?

Mr. Dermot McCarthy

The original decision that €2,500 was reasonable was based on the fact that the legal team in question was smaller than the teams working on other tribunals. In addition, the team had engaged in significant private work, outside public sittings, to prepare the way for what the sole member of the tribunal regarded as the pivotal element of his work as set out in the terms of reference — that relating to the late Mr. Haughey. Further, the continuity of the team's service to the tribunal was in question at that time and the tribunal's counsel had submitted certain material in support of the case for an increase, including an assessment from independent consultants about what might be reasonable.

The over-riding policy concern was to secure the continuity of the tribunal, which was dealing with significant and sensitive issues at a particularly sensitive juncture. The Department decided, having regard to all the factors I have mentioned, that it was appropriate to retain the payment at the €2,500 level. I remind the committee that the structure of the overall fees established for the tribunal, across all the legal grades, is such that the rate works out at €600 a day less than the rates that apply to other tribunals.

Can we get a copy of the memorandum that went from the Department of the Taoiseach to the Department of Finance in support of the increase, or the differential? Is it simply a question of blackmail on the part of somebody who threatened to walk if he or she did not get the increase?

Mr. Dermot McCarthy

The need to secure continuity of service was a major consideration, but it was not the only consideration.

Will the Department supply the memorandum?

Mr. Dermot McCarthy

Yes, of course.

I would like to reiterate a point about the Moriarty tribunal that has been made by one of my colleagues. Is it not a dangerous situation for the State that we still do not have any third party orders? In fact, the third party issue has not even commenced. As the Secretary General of the Department of the Taoiseach, is Mr. McCarthy happy that we are entering another possible round without knowing what the third party situation is?

Mr. Dermot McCarthy

The manner in which all aspects of a tribunal are conducted, including the assessment of claims for third party costs, is entirely a matter for that tribunal. It would not be appropriate for me to comment, regardless of the view I might have formed. It is unambiguously a matter for the tribunal.

It is extraordinary, given that it is now 2009, that the 2005 Bill has not yet been passed. If it is ever passed, will some prior notice have to be given of the entire spectrum of costs of running a tribunal, including third party costs?

Mr. Dermot McCarthy

I will ask my colleague, Mr. Aylward, to comment on the Bill in question.

Mr. Seán Aylward

The Bill is still in gestation. We are open to amendments that might nail some issues down. As I said in my introductory remarks, section 8 of the Tribunals of Inquiry Bill 2005, as it now stands, deals with statements of estimated costs. It states:

(1) A tribunal shall, in consultation with the responsible Minister, and not later than 30 days after the date of the appointment of the member or members of the tribunal or such longer period not exceeding 60 days after that date as the responsible Minister permits, prepare a statement containing---

(a) an estimate of all the costs (including third party legal costs) likely to be incurred in consequence of the inquiry, and

(b) an estimate of the time frame for the submission of the final report to the responsible Minister.

(2) A statement prepared under subsection (1) shall be laid before both Houses of the Oireachtas by the responsible Minister as soon as may be after it has been prepared.

I would like to mention that in the case of the Morris tribunal, Mr. Justice Morris certified the attendance of his counsel at all times.

He did not say how long they were there for.

Mr. Seán Aylward

He did. The bills of costs for third parties were scrutinised by our legal cost accountants, who checked solicitors' attendance records and timesheets, etc., against the solicitors' files. The issue was raised——

Mr. Seán Aylward

I will be very quick. I do not want to detain the committee. An issue was raised by the Department's cost accountant in one case. He demanded to see the timesheets because he was not satisfied. There was a degree of forensic analysis in that instance.

Why did Mr. Aylward agree to the payment of one third of the daily rate when people were not present but were simply reading?

Mr. Seán Aylward

I did not negotiate or agree that arrangement.

Mr. Seán Aylward

I assume the Deputy is referring to one of the tribunals. I am not aware of the fractional rate to which he refers.

I am referring to the Morris tribunal. One third of the daily rate was paid to people who were not at the tribunal.

Mr. Seán Aylward

I am quite satisfied that the judge would not have certified attendance that did not take place. It would not be the judge's style. If he certified that the person was there for a third of the day, I am quite sure that was what happened.

According to the Comptroller and Auditor General's report on the Morris tribunal, one third of the rate was paid when the person was not present.

Mr. Seán Aylward

I may be misreading the matter. Perhaps I will check that specific point and revert to the Deputy on it.

I would like to conclude by asking about the recovery of costs in cases of the obstruction of tribunals. I am sure my colleagues would like to ask questions about some of the vast areas covered in the report. The Comptroller and Auditor General's report queried why a central cost recovery officer is not deployed in one of the Departments concerned to pursue the recovery of costs. The Secretary General of the Department of the Environment, Heritage and Local Government, Ms Tallon, has told the committee how much money has been recovered. It is a fraction of the costs that were awarded to the State. We seem to be lackadaisical in pursuing these costs.

Ms Stephanie O'Donnell

I can respond to that.

I have to leave it at that because I am required to vote elsewhere. Deputy Jim O'Keeffe will take over from me because he does not have to vote.

We will try to keep the business rolling.

We have to keep the House going as well.

Ms Stephanie O'Donnell

As far as I understand it, the tribunal is supposed to recover costs. The costs recovery section in the Office of the Chief State Solicitor can assist in that process. It was asked whether there is any institutional arrangement for the recovery of costs. I understand there is a costs recovery section in the Office of the Chief State Solicitor. I do not know what costs it recovers, but I assume it assists the tribunal.

I thank the Chairman. I welcome the opportunity to discuss the Comptroller and Auditor General's report on the tribunals of inquiry. I wish to mention that I have been a witness on various occasions at the Mahon, Flood and Moriarty tribunals. I have attended in private session and I have been involved in correspondence. I probably have an extra perspective on how they operate. I wanted to put that on the public record.

I welcome the statement in paragraph 2.21 that it will be necessary to update the findings on an ongoing basis. Perhaps the committee could receive a short update in late 2009 or early 2010 given that the report was done towards the end of last year.

On the costs of the tribunal, considerable negotiation takes place between, on the one hand, the relevant Departments and, on the other, the tribunals and their respective legal teams. The Taxing Master has a significant input into setting the costs, especially third party costs. I am aware that several matters were referred to the Office of the Taxing Master in respect of the Mahon and Morris tribunals, although none has been referred from the Moriarty tribunal. I understand the Moriarty tribunal intends to leave the matter of costs entirely to the Taxing Master. I ask the Chairman to arrange a public meeting with the Taxing Master in respect of commitments and arrangements he will put in place. It appears he will have the biggest say in determining the final costs of some of the tribunals. While members are pleased to speak to Accounting Officers, key players who have an instrumental role in this matter are not present today. While they may have a legal difficulty with my proposal, we should invite them to appear before us. We could then see how they respond to the question I raise in this regard.

Paragraph 2.50 sets out the views of the legal costs working group established by the Minister in 2005. It decided to establish a new legal costs assessment office to replace the Office of the Taxing Master. In the view of the group, the taxation process lacks transparency. The Comptroller and Auditor General and the Department of Justice, Equality and Law Reform are also of the view that the Taxing Master process lacks transparency and should be replaced in its entirety with a new legal costs assessment office.

The decision to replace the Taxing Master was made in 2005. Subsequent to this decision, as the appendix notes, an implementation group was established on how to implement the finding. I do not know how much progress the group has made. In view of the fundamental criticisms of the current arrangements applying to the Office of the Taxing Master, the office should be replaced by a legal costs assessment office, which would, I presume be more transparent, rather than have the costs of the tribunals dealt with by the Taxing Master. It would be wrong to refer the costs, especially third party costs, of the Moriarty tribunal to a taxing office which everyone in the public service appears to accept lacks transparency and believes should be replaced. We should invite the Taxing Master before the committee given his involvement in setting some of the costs to date.

We will consider the Deputy's request when we review today's proceedings.

Mr. McCarthy, in his opening statement, refers to the fee of €2,500 for senior counsel. He states: "it was realised that the Moriarty rate had been agreed at a higher figure, arising from a misunderstanding between the Department and those setting the fees." Who set the fees?

Mr. Dermot McCarthy

In that instance, it was the Department of Finance and the Office of the Attorney General.

The daily rates appear to have been negotiated to a substantial extent by the Office of the Attorney General or the Attorney General. The second largest element of costs for the tribunals relates to the legal teams and daily rates. I suggest we invite the Attorney General to appear before the committee. I know this would probably be unprecedented. We would not ask him to discuss any legal matter but ask only how he decided to fix rates which will be paid by taxpayers. That is strictly a financial issue. We are entitled to hear from the Attorney General or the staff in his office who conducted the negotiations because the matter has implications for taxpayers. I request that staff in the Office of the Taxing Master and the Office of the Attorney General who were involved in setting the rates come before the committee before we complete our consideration of the matter.

We will make a decision on that matter when we review today's proceedings.

That is my proposal.

Scanning through the report, paragraph 3.21 states:

Prior application for costs to be met by the public purse in the UK is accompanied by vouching regulations. In the Rosemary Nelson Inquiry, for example, legal representatives are required to submit bills on a monthly basis to the inquiry solicitor.

Assuming prior application for costs is a possibility, I suggest the committee make a recommendation in the matter. I ask the Chairman to consider that proposal. Prior application of costs would have helped witnesses. The absence of prior approval of costs would have been an inhibiting factor for some witnesses in providing and engaging legal counsel because they would not have had a commitment at the commencement of the tribunal that they would receive costs. While I know witnesses should not be given an open cheque, a mechanism must be in place to encourage them to give evidence and make every effort to be truthful and co-operate with the tribunal. Witnesses should, therefore, be given some indication on costs.

I have examined the three different chapters. From the perspective of the Department of Finance, which tribunal was the most complex in terms of legal teams and other staff? The Department must have regarded one of the tribunals as very large, another as equally large perhaps and perhaps one as not so large. Clearly, there are major differences in the staffing and cost structures of the tribunals. Each Department will justify the tribunal established under its remit. What was the benchmark for the Department of Finance in deciding whether two, three or five senior counsel should be provided? What benchmarks did it arrive at when approving the staffing and legal teams of the various tribunals?

Ms Stephanie O'Donnell

The individual levels were recommended by the sole member or the tribunal in each case. Each case would have been looked at on its merits. Not being a legal person, I am not in a position to assess, looking at the terms of reference given to each of the tribunals, which was the more complex matter to investigate. The only observation I make is that the terms of reference vary considerably in their length. The Deputy will see that the Mahon tribunal has very extensive terms of reference. However, I do not know if, in itself, that indicates whether it is more complex than the Moriarty tribunal. In the Moriarty case, the Comptroller and Auditor General points out that the time periods for investigation were changed. Several factors were, therefore, at work. I am sorry but I am not in a position to give an overall assessment of which of the three tribunals is more complex.

Perhaps Mr. McCarthy from the Department of the Taoiseach has a perspective on this issue given that his Department has a relationship with the Office of the Chief State Solicitor and the Office of the Attorney General rather than the Departments of Justice, Equality and Law Reform and the Environment, Heritage and Local Government. Mr. McCarthy will know the general question. An entirely different staffing structure is in place for each of the tribunals. The Department and the two agencies within it must have been satisfied. According to figures in the report, the Mahon tribunal has a staff of 50, of whom 21 are legal staff, the Morris tribunal has a staff of 22, of whom five are legal staff and the Moriarty tribunal has a staff of 14, of whom seven are legal staff. The variation is significant. I ask Mr. McCarthy to talk me through that issue.

Mr. Dermot McCarthy

I am not sure that I am in a position to help the committee very much on this. I observe, however, that not only are there differences in, if one likes, the implications of the scope of the matters which are the subject of the terms of reference for each of the tribunals but also their working methods have been somewhat different, in particular, the scope of the business conducted in public session relative to those which were conducted in private. Also, as I understand it, there were differences in the approach to the invitation of submissions in respect of matters covered in public hearings, approaching then the formulation of provisional findings and the like. It is quite difficult to have an approach to a metric that would say that one approach was relatively more effective or cost effective than the other. In the arrangements that have been put in place, each of the tribunals is operating under terms of reference and legislation that require them to have regard to economy in the way the work is pursued. The very different approaches probably reflect more the nature of the items which they are required to consider under their terms of reference. It may be that the committee might be able to get some assistance from others more directly involved in the appraisal of legal processes in reaching a conclusion, but it would be important to take account of differences in working methods as well as the terms of reference.

I note, for comparative purposes, based on the figures in the Comptroller and Auditor General's report that the cost for the 21 legal staff in the Mahon tribunal is estimated at €48 million, which is an average of €2 million per staff member. The Morris tribunal had a legal team consisting of five members. The estimated costs for it are €10 million, which, again, is an average of €2 million per staff member. The Moriarty tribunal had a legal team of seven and estimated legal fees of €28 million, which gives an average payment of €4 million. It is nice to be a member of a legal team. I note Deputy Broughan raised that issue. On average, we are talking about €2 million for each member of the legal staff.

It was €8.5 million for one.

We have heard the higher figure and there are lower figures also. That sum includes solicitors fees. I would like to hear a brief comment from the Comptroller and Auditor General. Did he have a perspective on it in terms of comparing the various tribunals or did he deal with each Department and tribunal as an individual entity? How did they compare overall? The essence of his report is comparing costs and tribunal mechanisms. I invite the Comptroller and Auditor General to make a brief observation.

Mr. John Buckley

My understanding from the work is that staffing was decided, in effect, by the sole member or the chair. The Moriarty tribunal may have made different choices and had a tighter legal team than other tribunals. He represented to us that he did. In effect, we did not question the choice of the sole member or chair. We regarded that as something within his independent prerogative.

We are getting to the nuts and bolts of the tribunals now. We are only dealing with the costs. This has nothing to do with the findings of the tribunal. The Attorney General sets the daily rate for members of the legal profession. I do not know whether the Taxing Master is a solicitor or a senior counsel. I do not know his qualifications. There is another member who is not here. Nobody examines the decisions of the sole member, who is another member of the legal profession. That is possibly one of the reasons tribunals are so expensive. Department of Finance officials are the first to admit they are not legal experts so they cannot question how certain rates are arrived at. There appears to have been a lack of financial management. Nobody seems to challenge the legal profession when one member of the profession approves another member's costs, in terms of staffing numbers or rates. That seems to be the common theme emerging and it is borne out by what everybody has said so far.

To keep it simple, I will go through items in sequential order. I refer to page 49 of the report which deals with the Mahon tribunal, paragraph 4.8. Procedural shortcomings were outlined as one of the reasons that impacts on the timescale. On page 51, reference is made to the fact that a number of court orders by the tribunal were quashed. Perhaps Ms Tallon will deal with procedural shortcomings referred to by the Comptroller and Auditor General. Are there procedural shortcomings other than the quashing of court orders, which meant the judge did not agree with the chairman's decision to make orders? Is Ms Tallon aware of other procedural shortcomings, as outlined by the Comptroller and Auditor General?

Ms Geraldine Tallon

I am not particularly aware of other procedural shortcomings that the Comptroller and Auditor General had in mind. I have not identified in the special report significant criticism of the Department's role in the tribunal. The Comptroller and Auditor General can correct me if I am wrong but the procedural shortcomings he was referring to were those which he has set out in paragraphs 4.20 and 4.21.

Does Mr. Buckley agree with that?

Mr. John Buckley

Yes, if one looks at the structure of it, everything that is in section 4.8 is expanded upon in subsequent sections and they give the totality of what we had in mind in section 4.8.

I can allow for some flexibility but, in general, the only procedural shortcoming in respect of the Mahon tribunal that has been identified was the issuing of orders that were subsequently quashed by the courts. Am I correct in saying that?

Mr. John Buckley

Yes.

I want to know what "procedural shortcomings" entailed. Page 51 intrigues me. I expect paragraph 4.21 on the top of the page would intrigue the public in general. It refers to the inability to hold parallel sessions. Despite the amendment of the tribunal legislation in 2004, which we in the Oireachtas were asked to do at the request of the chairman to allow tribunal members to sit in parallel and hear evidence on more than one module at a time, the tribunal informed the Comptroller and Auditor General that the activation of that provision did not become feasible due to the interlinked nature of its modules of inquiry. Surely that was foreseeable before the tribunal requested the Oireachtas to pass special legislation? I would consider that a procedural shortcoming.

The tribunal asked the Oireachtas to make legal provision for a new procedure. We gave it the power and then it found it was not practicable to use it. I am sure the sponsoring Department, the Department of the Environment, Heritage and Local Government, had to be satisfied that the request for new legislation was reasonable and effective. Will Ms Tallon elaborate on that? The obvious logical outcome when the Department got the legislation and it knew it was not feasible to implement it was just to drop the two extra judges and let Judge Mahon continue on his own because there would only be one hearing. Let me be clear that there is no personal criticism of the judges. It is the procedure I am talking about.

Ms Geraldine Tallon

The request was originally made by the sole member in 2001 for the appointment of additional members. That was justified at the time by reference to the scale and complexity of the matters remaining to be investigated. As Deputy Fleming indicated, legislation was necessary to enable the tribunal members to act in divisions to hear evidence on more than one module at the same time. As I understand it, the tribunal confirmed to the Attorney General at that time that it intended to utilise that power to sit in divisions when it was appropriate and practicable to do so. The legislation was enacted and additional members were appointed, but the chairman found it was not possible to sit in divisions subsequently because the modules were interlinked, had a number of common witnesses or there was cross-reference to evidence already given and it was felt that there would be serious legal and practical difficulties that could attract a multiplicity of judicial review challenges. The chairman felt that there was a small number of modules yet to be heard which could be dealt with in separate divisions. However, there was an indication that there would be significant cost implications associated with operating in separate divisions. Subsequently there was a legal challenge to the status and right of the tribunal to undertake certain anticipated additional modules which were effectively ruled out. It never became practicable or appropriate, within the framework of the tribunal, to sit in separate modules. That opportunity and potential remained over the years following the enactment of the legislation. We understood that potential to exist up to at least 2007.

Given that Ms Tallon stated everything was substantially foreseeable, when it became clear there would be no parallel sittings why were the judges not allowed to return to the work they had been doing, thereby leaving Judge Mahon to continue on his own?

Ms Geraldine Tallon

As I said, the original request was justified by reference to the scale and complexity——

We understand——

Ms Geraldine Tallon

That was why the three members remained——

I understand. We all know it was flawed rationale but that was the rationale at the time. However, when in 2007 it became clear to the tribunal and Department that there would no parallel sitting, why was a decision made not to let the two judges return whence they came, thereby making a saving for the taxpayer? Why was this let go?

Ms Geraldine Tallon

The position was let stand because of the scale and complexity of the overall operation. The additional members had been involved substantially over the period. In the period since 2002, around 60,000 pages of evidence had amounted. There is a huge volume of briefing documentation so the view was that the three-member operation was necessary to bring the huge volume of work to completion in terms of the final report.

They had their feet in the door but it was too difficult to extract them; that may not be what Ms Tallon is saying but it is my interpretation.

Ms Tallon, in her opening statement today, referred to the report of the tribunal. She stated: "Once the report is completed, the chairman, sitting alone, will adjudicate on the applications for award of third party costs". If the process was as complicated as Ms Tallon suggested and all three judges were so intimately involved in the production of the 60,000 pages of documentation, why did she say in her opening statement that the chairman can sit alone dealing with costs? Surely costs are related to the volume of activity on the part of the tribunal in public session. Will the judges be relieved at the stage of awarding costs? Why is the number of judges a moveable feast?

Ms Geraldine Tallon

As I understand it, the view would be that this is a separate and distinct issue following the completion of the report. The issue on the determination of costs will be based on the level of co-operation with the tribunal during its period of operation. The chairman, a sole member, will be in a position, once the report is completed and the findings have been made, to make a determination on the basis of the level of co-operation.

I have completed my questioning but want to contribute later.

Mr. Seán Aylward

I want to respond briefly to a couple of points. The Taxing Master is not a judge but is a quasi-judicial figure appointed by the Government, perhaps a solicitor or barrister. The Attorney General is legal adviser to the Government and it is a question for its advisers to decide whether these people can come in. We were asked a question about our legal team. I misunderstood the question of Deputy Broughan and believed he was referring to members of the tribunal team. No member of the tribunal team, as far as I know, was on any discounted rate.

The Department had a legal team that maintained a watching brief for the duration of the tribunal. It consisted of a senior counsel, junior counsel and a researcher, when required. For the seven years of the work of the tribunal, their total cost was just over €1 million. By negotiation involving the Attorney General, ourselves and the Department of Finance, a special rate was struck in regard to elements of that watching brief whereby the team members would go through the huge transcripts every day. On those days when they were going through the transcripts rather than physically attending the hearings in the courtroom, in Donegal or Clonskeagh, they were on a reduced rate. We negotiated a reduced rate for that work. The team had to stay on top by maintaining a watching brief for the Department throughout the process.

Two figures were paid €8.5 million. Were any of them involved in the review of fees that resulted in a 30% increase?

Mr. Dermot McCarthy

The individuals concerned would have been in situ from the beginning and therefore would have been party to the request for a review in 2001-02. They have been part of the tribunal from the beginning.

Are they two of the people who have drawn down €8.5 million?

Mr. Dermot McCarthy

Yes, Chairman.

Ms Stephanie O'Donnell

On the setting of the fees in 2002, Deputy Fleming stated the representatives of the Attorney General are not here so we do not know what was involved in the process. I know a legal cost accountant was involved in advising on the final fee set at the time, €2,250. An expert was brought in by the Office of the Attorney General. The amount was not just settled by negotiation between the parties. There was a legal cost accountant consulted on what would be a reasonable rate at the time.

I said in error that the time periods had been extended under Moriarty. I meant what was recorded in page 49, namely, that in Mahon the time period was amended subsequently in July 1998 to make it even broader by eliminating the period from which the tribunal was required to investigate possible acts of corruption. I quoted the wrong tribunal.

I welcome our visitors. In recent times this committee has considered medical consultants and the State's failure to ensure that we obtain value for money in this area. The position on the legal profession is very similar in that, in some way, legal practitioners seem to be regarded as comprising a very privileged group that is untouchable. From the crazy figures we are hearing today in respect of fees paid to the country's leading barristers and solicitors, it seems the legal profession very much requires a kid-glove approach on the part of the State. It seems the normal rules of accountability do not apply to this group as much as to medical consultants. Interestingly, last night on TV3, retired judge Mr. Justice Donal Barrington made the point that the State is a key driver in setting exorbitant legal fees paid in this country because of its failure to address this issue.

Appendix K of the Comptroller and Auditor General's report refers to the recommendations of the legal costs implementation advisory group. Could Mr. McCarthy elaborate on them?

Mr. Seán Aylward

It is actually being dealt with by the Department of Justice, Equality and Law Reform and I am happy to respond to this.

A legal costs Bill, reflecting the analysis of the two reports, is on the Government's legislative programme. Since publication of the second group's report, the matter has been considered further in the Department and by Ministers. There is a reluctance to establish two further State bodies as recommended in the reports. The substantive recommendations of the group regarding the recovery of legal costs are still valid. The aim of a legal costs Bill would be to make changes that would lead to greater efficiency and transparency and greater competition and predictability of legal costs and discourage the incurring of unnecessary costs and recourse to wasteful practices in the conduct of litigation.

We have been working up some ideas on change in this area. However, it is a matter of policy and I am reluctant to stray into policy because of the committee's rules. Suffice to say, we have been examining the structure of the Office of the Taxing Master of the High Court with a view to introducing a more modern legal costs regulatory structure in the Courts Service in which people would be specially recruited for that task and where the principles underpinning the assessment would be set out more fully in statutory form.

In the spirit of the reports, costs would be assessed primarily by reference to work appropriately done where the level of recoverable costs should not be proportionate to the value of the claim or award and should not be the main determinant for the amount of costs recoverable. In other words, it should not be like a percentage of the value of the case. It should be related to the actual work done by reference to earnings in that sector of the profession.

If the Oireachtas saw its way to making legislation in this regard, such a regulator would have regard to all relevant circumstances, including complexity, skill, specialised knowledge and value of the claim or counterclaim. This would be along the line of Order No. 99.37.22 of the rules of court.

What action has been taken on these recommendations since this report came out in 2005?

Mr. Seán Aylward

Our law division has worked up——

Apart from working up some ideas, can Mr. Aylward inform us if any changes have occurred which make a difference to the fees paid to the legal profession?

Mr. Seán Aylward

That would require legislative change. It is in the Government's legislative programme.

I asked what changes have taken place.

Mr. Seán Aylward

The answer is no legislation has been enacted to give effect to them. It would require legislation to do so.

No changes have taken place.

Mr. Seán Aylward

Precisely.

Members referred to the pledge made by the then Minister for Finance, Charlie McCreevy, in 2004 to tackle the problem of exorbitant legal fees. It was a centrepiece announcement at the Fianna Fáil Ard-Fheis. At the time Mr. McCreevy described the fees as astronomical and said this gravy train had gone on long enough. Subsequent to that, in the summer of that year, a new scale of fees was announced which were to come into operation from September 2006, but that did not happen because the Government decided the gravy train could continue, as it does to this day.

I accept it is a policy matter and, as Mr. Dermot McCarthy said, it was a decision taken by the Government to allow the gravy train to continue. However, as Accounting Officers for the respective Departments, charged with responsibility for ensuring the taxpayer gets value for money, what specific actions has each of the Secretaries General taken to ensure the taxpayer gets value for money from the legal fees paid?

Mr. Dermot McCarthy

In respect to the Moriarty tribunal, the potential for the Department to ensure value for money is severely limited by the tribunals of inquiry legislation and the terms of reference in which specific tribunals operate. This in effect amounts to ensuring the regularity and appropriateness of payments made are established. That in turn relates to procedures for establishing that claims for payment are properly made.

The design of the work method and the level of activity and engagement of tribunal legal staff is not within our review. These are matters for the tribunal. In so far as it is open for the Department to establish that expenditure is properly and necessarily incurred, that is done. In the Comptroller and Auditor General's review in this special report and in his annual report, I do not identify any source of dissatisfaction with that.

I am sure Mr. McCarthy will accept there is a high level of dissatisfaction among the public regarding the scandalous level of legal fees paid. That was accepted by the Government in 2004. What has been done to tackle that scandalous level of legal fees?

Mr. Dermot McCarthy

The level of the fee and the decision not to reduce it is an outcome with which we are faced. The non-application of the decision of July 2004 was a matter for the Government.

Yes, I accept that it was a policy decision taken by the Government. Separate to that political decision taken, each of the Secretaries General has a responsibility as Accounting Officer to ensure value for money. At times, that may require one to take firm action with a Minister. What action was taken in that regard?

Mr. Seán Aylward

May I come in?

I want Mr. McCarthy to answer first.

Mr. Dermot McCarthy

In terms of the specific options that might exist in reducing the level of fee or the numbers engaged in the work of the tribunals – the quantity of activity for which the fee was to be paid – there was clear consideration of the options, including the consequences of those options, by the Government in respect of the level of fee, the cost of the tribunal and all the relevant information. In so far as one could, with all of the difficulties referred to in the Comptroller and Auditor General's report in anticipating the total cost, all that information was made available, in this instance to the Taoiseach, in the consideration of the issue by Government. That was the appropriate role of an Accounting Officer.

I do not believe Mr. McCarthy is answering my question. Does he believe his Department got value for money, given the enormous amount that was spent on legal fees in respect of the tribunal? Does he believe there is a problem with the level of legal fees being paid here and that this issue needs to be tackled?

Mr. Dermot McCarthy

There is a basis for concern at the level of legal fees overall, not least——

Mr. Dermot McCarthy

In so far as it is a personal opinion, yes.

Could we have a professional opinion from Mr. McCarthy, as the Accounting Officer, rather than his personal opinion as to whether there is a problem?

Mr. Dermot McCarthy

In terms of structuring the work of legal inquiry, the tribunal model, as it has operated, is flawed.

I am not asking the Secretary General about a tribunal matter but rather about the level of fees that are paid.

Mr. Dermot McCarthy

In terms of the specific fees that are paid, they represent a reasonable outcome from the system in which we operate. It did not seem to me——

Does Mr. McCarthy believe €2,250 is a reasonable fee per day for a senior counsel?

Mr. Dermot McCarthy

In terms of the so-called going rate, I mentioned earlier that the third party costs allowed in respect of counsel at the two tribunals were higher than the rates payable to the tribunal counsel.

Does the Secretary General believe €2,250 per day for a senior counsel is appropriate?

Mr. Dermot McCarthy

In the abstract, no, I do not. In the particular context in which these and higher rates are paid within the legal profession, it may not be——

In the case that Deputy Shortall is talking about, it has gone on over 12 years. Generally, one might refer to a murder trial or whatever, lasting three or four weeks, but this is 12 years.

I shall put it to the Secretary General in a different way. Did he agree with the then Minister for Finance, Mr. Charlie McCreevy, in 2004, when he said that this was a "gravy train" and needed to be tackled?

Mr. Dermot McCarthy

I do not believe I can comment on the policy position.

Did the Secretary General take any action to try to persuade the Government of the day at any time over the past 12 years that action needed to be taken by the Administration to tackle the problem of exorbitant legal fees?

Mr. Dermot McCarthy

Again, Chairman, I do not believe it is appropriate for me to comment.

Mr. Dermot McCarthy

It is not a function I would perform as an Accounting Officer in respect of my accountability to this committee.

I thought the Secretary General's function in respect of ensuring value for money should be the primary concern. It is reasonable for this committee to ask why, after 12 years, no action has been taken to tackle the problem of the very high legal fees payable here.

Mr. Dermot McCarthy

There are two aspects. One is the general question of fees charged for legal services in the country and there have been several initiatives in that regard. This matter was referred to the Competition Authority by the then Minister for Enterprise, Trade and Employment as regards the legal costs recovery issues referred to by Deputies earlier. There is a continuing live agenda in respect of that, as referred to in policy statements by the Government in recent months. That relates to the generic issue of legal fees.

On the specific issue of the appropriateness of fees for counsel working in tribunals or other commissions of inquiry, the position regarding newly established inquiries is as set out in the Government decision of 2004. It is a separate issue as to what should apply in respect of those in existence at that time, and subsequently. In considering what might be done, the Government would not only have taken account of the level of the fees, but the consequences of a decision to reduce them, including the continuity of the work and therefore the value for money of the expenditure already incurred, in some cases over a lengthy period, in the activity of tribunals — should that continuity not be assured.

All right, but it is my firm view that given the Government reversed the 2004 decision to reduce legal fees, there is a responsibility on people working the system at senior level in the Civil Service to take some action on foot of that decision. That is on the basis that such civil servants have an entirely separate responsibility from that of the political system. It is similar to the Revenue Commissioners — in some cases they might prefer to stand idly by while everybody knows that tax evasion is going on. Irrespective of Government policy at the time, there is a separate responsibility on senior civil servants to ensure that — in Mr. McCarthy's case — the taxpayer is getting value for money. There is no indication that any action has been taken in that regard on foot of the Government's decision to reverse the 2004 policy statement.

Perhaps I can move on to Ms Tallon and ask what action, if any, she has taken to try to ensure we get better value for money from legal fees.

Ms Geraldine Tallon

As far as the legal fees are concerned, the situation is as Mr. McCarthy has outlined it as regards the tribunal's internal counsel. On third party costs of the tribunal, once the chairman had ruled on the costs for the period 1997-2002, as he began to do in mid-2004, and bills began to emerge the following year, we, along with the offices of the Chief State Solicitor and the Attorney General, put a system in place on having all the bills referred to legal costs accountants for negotiation and settlement. As I explained in my opening statement, that has resulted in significant levels of reduction in third party costs.

When that system was put in place for bills for third party costs, we also decided to refer external counsel fee notes to the legal costs accountant for agreement and advice as to settlement. We have also achieved measurable reductions in terms of the fees submitted. In ten litigation cases where bills were submitted for 25 counsel fees, the figure came to €936,000, and was referred to the legal costs accountant — and payments of €750,000 were ultimately determined, giving us a reduction of €186,000, or 20%, in relation to those.

Did Ms Tallon at any stage make representation to her Minister or anybody in Government for the legal fees payable to counsel at the Mahon tribunal to be reduced?

Ms Geraldine Tallon

We have abided by Government decision making as far as internal legal fees are concerned. We have a system in place under which there is explicit certification by the chairman of the tribunal and the registrar, in terms of time worked and fees due in particular cases and we rely on this in each case for the purposes of payment of bills.

On Ms Tallon's specific responsibility to ensure value for money as the Accounting Officer for her Department, did she at any stage after 2006, say, in effect, "It is crazy what these guys are being paid"? Did she make representations to her Minister to the effect that something must be done about this?

Ms Geraldine Tallon

I have not made explicit representations about the level of fees, because they are operating within a framework of Government policy.

Did Ms Tallon think there was value for money from the fees that were paid?

Ms Geraldine Tallon

I think I have to operate within the framework of Government policy.

Yes, but there is also a requirement to operate separately from Government decisions. May I ask Mr. Aylward the same questions?

Mr. Seán Aylward

The Morris tribunal was set up in 2002, before I was appointed Secretary General in August 2004. The matter of reducing the rates paid to the legal teams to reflect the July 2004 decision was brought before the Government on three occasions. On each occasion, a decision was taken by the Government that the benefit to be gained through timely completion of the tribunal's work outweighed the cost of paying the legal team the original rate. It is our estimate that had we been allowed to make the reduced payments, we would have saved about €1.5 million in fees. However, I acknowledge that it would have led to people walking off the pitch and the tribunal would have been disrupted and delayed. This would have added to our costs. The Morris tribunal was a fiendishly complex piece of work and counsel would have had to familiarise itself with the very complex relationships between the various actors and events. Nonetheless, we did not feel that there was such complexity with the Barr tribunal. We did not feel that there was such a risk to the public interest and we enforced the reduced rates for counsel in that tribunal. They were and are not happy about that, but we drove through those reductions.

We also worked on the Tribunals of Inquiry Bill that is currently before the Oireachtas. We had a team working on that Bill, which sets out a whole new structure that gives us legal powers to choke back costs in this area, both third party costs and other costs. Where we have had issues of grave public concern on my watch since August 2004, we have been urged and supported by our respective Ministers in going for a far less expensive structure of getting at the truth in these cases. I am thinking of the Dean Lyons case, the Gary Douch inquiry and the Dublin diocesan inquiry. A different approach and structure is being taken in all three cases that lead to fewer public hearings and less of a need for people to brief counsel and defend their good name as the sole member is there to take care of these concerns and there is no press coverage so people's good name is not an issue. Where we have had an opportunity over the past five years to drive down legal costs or constrain the expenses incurred, we have taken it. We have supported the Minister in bringing forward mechanisms to get at the truth while avoiding this kind of expense.

We have set up the Garda Ombudsman Commission, which, at much less expense, can investigate——

I accept that and it has already been welcomed.

Mr. Seán Aylward

This is very important. The commission is looking at many things which would in the past have led to calls for tribunals of inquiry. I do not want to instance them, but people here will be well aware of them and this is a far cheaper way of going about things. I have been asked about what we have done. We have done these things.

I accept fully that a new approach is being taken. The point was made that the tribunals have gone on for much longer than people expected, principally because certain people obstructed them and failed to co-operate. Have guidelines been issued to each of the tribunals in respect of costs for people who fail to co-operate?

Mr. Dermot McCarthy

The parameters within which costs can be denied, and costs incurred as a result of behaviour that can be sought from the individuals concerned, are set out. It is a matter for the tribunals to apply them, exercising their judgment based on their assessment of the behaviour of the individuals concerned.

Where are they set out?

Mr. Dermot McCarthy

Item R in respect of the Moriarty tribunal states that "all costs incurred by reason of the failure of individuals to co-operate fully and expeditiously with the inquiry should, so far as is consistent with the interests of justice, be borne by those individuals." That is the requirement of the tribunal. The exercise of that is a matter for the judgment of the members.

Are there guidelines on it?

Mr. Dermot McCarthy

Not at the moment.

Did the Department ever consider the need for guidelines?

Mr. Dermot McCarthy

Under the terms of reference for the tribunal, these are seen as the responsibility of the sole member.

Is it open to interpretation by the sole member and must the rest of us keep our fingers crossed?

Mr. Dermot McCarthy

I have no doubt that the sole member will follow through on the findings of his report when it comes to the question of costs.

I have one final question for Mr. McCarthy on the Moriarty tribunal. In answer to a recent parliamentary question, the Minister said that the daily cost of the staff being retained by the Moriarty tribunal was almost €10,000. It is difficult to understand why the tribunal needs to retain three senior counsel and other legal people. To what extent has Mr. McCarthy considered the wider use of para-legal staff in doing much of this background work and research? It is difficult to understand how three senior counsel are needed every day. The clock is ticking and this is adding significantly to the overall cost.

Mr. Dermot McCarthy

There is a strong case for the use of para-legal and investigative staff, in addition to or in substitution of legal personnel. That is explicitly provided for in the current Bill. In the particular circumstances of the Moriarty tribunal, much of the material which has been reviewed and the interviews that have taken place outside public sittings have been complex in nature. There has been quite a draw on the expertise of the counsel, as opposed to the support activity by documentary researchers and so on. The tribunal has been anxious to move forward and to minimise the amount of time. It is a source of frustration and disappointment that it has taken so long, often for reasons outside the tribunal's control, as the Comptroller and Auditor General has pointed out.

I accept the Deputy's point that the conduct of the work should be reflected in the profile of the staffing team. We have seen that to a limited extent in the operation of the commissions of inquiry which in more recent years, as Mr. Aylward observed, have tended to be the route by which matters are pursued. However, the Deputy has made a fair point.

Deputy Shortall put the question to each of the Secretaries General, as Accounting Officers for their respective Departments, on their opinion of the value for money being obtained in regard to legal fees. A memo went to Government in July 2004 proposing a reduction in fees. Which Minister took that memo to Government?

Mr. Dermot McCarthy

My recollection is that it was the Minister for Finance.

Did each of the Departments represented offer views on that memo?

Mr. Dermot McCarthy

The Department of the Taoiseach does not provide observations on memos to Government in the normal way.

Did Mr. McCarthy have an opportunity to do so if he wished?

Mr. Dermot McCarthy

The Taoiseach was fully briefed in anticipation of the discussion.

Ms Geraldine Tallon

I am not aware of what the position was and, therefore, I cannot answer the question directly. I am sure the Department would have commented from the perspective of the Mahon tribunal, but I cannot confirm that today. I will get back to the Chairman.

Mr. Seán Aylward

As I was not Secretary General at the time and have no personal recollection, I will have to check the files. We will see what can be done within the rules in terms of what correspondence and so forth we are permitted to give to the committee. The Minister at the time, Mr. Michael McDowell, was very experienced in matters of law and very exercised about keeping costs down. I will say no more because I had neither hand nor part in it, being in charge of the Irish Prison Service at that time.

A decision was taken in 2006 to reverse the 2004 decision. Did this memo also come from the Department of Finance?

Mr. Dermot McCarthy

From memory, the 2006 memo was in respect of an extension of time for the tribunals, and the operation of fees was included as part of that. I understand that memo was also from the Department of Finance, but I will have to check that.

Why was the decision reversed in the space of two years? Did somebody threaten to walk?

Mr. Dermot McCarthy

The Government undoubtedly took account of all factors, including the likely impact on continuity in the event of the implementation of reduced fee rates. For the purposes of our evidence to the committee, we cannot speculate on what was in the Government's mind. The fact is the decision was made.

Was there communication from any of the three tribunals to the Department of Finance in an effort to override the 2004 decision?

Ms Stephanie O'Donnell

I do not know the answer to that. I will have to check that for the Chairman.

The Chairman has covered the ground to a substantial extent. It is clear that the tribunals have developed over the years into huge colanders that are leaking taxpayers' money. In so far as there have been attempts to justify the enormous fees of those years, that is a question of defending the indefensible. Does Mr. McCarthy accept, standing back and looking at what has happened in the past 12 years, that the system for payment of counsel fees is entirely wrong? Looking at these enormous fees, it is clear that I would have been far better off to continue practising law, but that is not the point. It seems fair enough to pay a barrister daily fees for a case that will last for three or four days. However, in the case of an investigation that is likely to go on for years, the system of daily fees was surely the wrong approach to take in respect of the payment to barristers.

Mr. Dermot McCarthy

As we observed earlier, it was clearly not anticipated that any of the tribunals would require the length of time that some of them ultimately required. In response to that, there has been a strong trend to approach matters of inquiry in a very different way, through the commission of inquiry system, which is much less demanding in terms of the number of legal personnel required and the time commitment. The Deputy's point is validated by the fact that there has been a move away from the tribunal option. It remains a necessary piece of armament for the purposes of inquiry but, even apart from the question of daily fees, aspects of that structure are now largely accepted as less than ideal, including the broad-ranging nature of the terms of reference, the requirement to follow the line of evidence as it emerges and the extent to which proceedings are prey to external factors such as litigation.

When it became clear at a fairly early stage that these tribunals, which were originally envisaged to report within six months, would drag on for years, was serious thought given to changing the fee structure for the barristers associated with the tribunals?

Mr. Dermot McCarthy

Reference has been made to the decision in 2004 to approximate a salaried approach by introducing a daily rate which would be set by reference to a High Court judge's salary. To some extent, that concept of payment for an extensive commitment of time on a salary basis was adopted in principle.

A figure of €800 per day was mentioned.

Mr. Dermot McCarthy

It was under €1,000 per day, allowing for payment in lieu of superannuation and so on. We have discovered the grounds upon which that was not applied in these instances, but it would be only fair to recall that much of the extension of time beyond what was expected was related, as documented in the report of the Comptroller and Auditor General, to factors outside the control of the tribunals, including, in the case of the Moriarty tribunal, four significant items of litigation, the illness of a key witness for a significant period and additional reference of material arising from the Ryan inquiry under the Companies Act which was not envisaged in the original terms of reference. In more recent times, there has been the unexpected availability of a witness who was not previously available. The cost factor is undeniable but those circumstances must also be mentioned.

Before the 2004 decision was taken, there had been talk of reducing fees and the then Minister for Finance, Mr. Charlie McCreevy, spoke about ending the gravy train. However, was this the same time that there was actually a substantial percentage increase in the rates paid?

Mr. Dermot McCarthy

The increase was given two years previously, in 2002.

I understand the original figure was €1,350 per day.

Mr. Dermot McCarthy

It was €1,700 per day.

On the question of the daily payment, for which days are payments made to the standing counsel to the various tribunals?

Mr. Dermot McCarthy

Payment is made for days in respect of which they have worked for the tribunal, which may not necessarily be sitting days.

Are they employed on a full-time basis?

Mr. Dermot McCarthy

Not in every instance, as I understand it. In the case of the Moriarty tribunal, the key figures are exclusively contracted, but I am not sure whether that is the case for the other tribunals.

Are they paid on the basis of a five-day week?

Mr. Dermot McCarthy

It is not consistent in that sense. The fees are claimed for and paid in respect of specific scheduled days.

I do not understand. What does Mr. McCarthy mean by scheduled?

Mr. Dermot McCarthy

It is not on a weekly basis but individual days are claimed for and certified by the member of the tribunal and the registrar.

Does that involve a five-day week, every week of the year, in some instances?

Mr. Dermot McCarthy

In some periods, it does.

How many days in the year are we talking about?

Mr. Dermot McCarthy

It is a substantial period of the working year. We can confirm the dates. Perhaps the Comptroller and Auditor General will provide them.

Mr. John Buckley

The figure is 260 days.

They are paid the full whack for a five-day week for the entire year.

In some cases it is more than five days.

That includes holidays.

The rate is €2,250 per day in some instances.

Mr. Dermot McCarthy

In some instances it was six or seven days per week.

Were the famous legal or court terms followed?

Mr. Dermot McCarthy

Perhaps not, regrettably.

Did anyone ever shout stop or say the system was crazy?

Mr. Dermot McCarthy

In the broad sense, the question of whether it was appropriate to continue with this structure and these rates of payment, as opposed to terminating the arrangement, was considered. As Mr. Seán Aylward noted, the outcome was that the public good and the interests of the taxpayer were better served by enabling the tribunals to continue and complete their work rather than by triggering a significant interruption, to put it no stronger, in the event that the payments were radically changed.

Payments were running at the rate of €1 million a year to individuals.

Mr. Dermot McCarthy

Considering the context, I recall the question of whether specific tribunals might be brought to a close one way or other. This was a matter of some controversy, not least in the House. In that context, the Government would have taken the public interest into account in ensuring the work of the tribunals could be brought to a conclusion as expeditiously as possible.

Mr. McCarthy is saying that if questions were asked, barristers would have walked off the job.

Mr. Dermot McCarthy

It was a matter of real concern to the tribunals in a number of respects that their capacity to retain counsel would be severely compromised were radically different conditions of payment to be introduced.

The implication of that is that there are even better gigs than the three tribunals. The tribunals have shown us the level of cost sometimes borne by the State in legal matters. For a barrister long involved in a tribunal, surely there was a more lucrative pitch for him or her to operate his or her services in the legal system. Are we pulling a veil on the massive remuneration of the Irish legal system as it is currently run?

I understand Deputy Broughan's point. As a non-practising member of the legal profession for some time, I could produce many very good lawyers for much less than €1 million a year.

The Office of the Attorney General seemed to have much to do with organising the system. I do not blame those who were being paid. If someone is being paid that amount of money, he or she would be delighted to take it. The system was run and the rates were recommended by the Office of the Attorney General or barristers. Did anyone think this was not a businesslike basis for establishing a cost system involving the payment of barristers?

Mr. Dermot McCarthy

The setting of fees was primarily dealt with by the Department of Finance and the Office of the Attorney General. In the particular instance of the review in 2001 and 2002, this had regard to the independent expert advice from legal cost accountants. This is an issue that arises in respect of the more general question of how the State procures and pays for legal services. The structure of the profession and the way it operates requires the State to engage in the market.

Does Mr. McCarthy accept that he is talking about advice from legal cost accountants, who are very good people but are part of the same system? I use legal cost accountants for the purpose of drawing up bills of costs for court cases that last two or three days. They do this job well but they are part of a system that uses daily rates and short-term payments for short-term arrangements. In this case, it was a continuing situation. There was an absence of a businesslike approach in getting a proper cost system for the tribunals.

Mr. Seán Aylward

With the greatest of respect, I can contribute to the information being gathered by the committee in response to the questions. I am conscious that Deputy O'Keeffe is a member of the legal profession and has instructed counsel in the past. Our information is that senior counsel and, in some instances, specialised junior counsel are getting up to €5,000 a day in civil litigation at present. At intervals in this process, it has been argued that people were asked to send back lucrative briefs and that the chairmen of the tribunals had picked strong performers at the Bar, who were enjoying high levels of remuneration. This went on for years longer than expected and this resulted in the flow of decisions and the Government agonising over the question of whether to face down those who insisted on being paid the previously agreed rate. In response to Deputy O'Keeffe's point, counsel is paid far higher fees in certain cases. Some of those involved in the tribunals were among the highest earners at the Bar.

I accept the counsel engaged are very fine, professional people but I am talking about the system. Do the witnesses accept that if a leading barrister is engaged for a case that lasts for a few days and gets €10,000, it is far different from a leading barrister being paid for 260 days in the year, every year?

Mr. Seán Aylward

We agree. For this reason, we have laboured on the legislation before the Oireachtas. It will permit, encourage and facilitate going to tender for such services. I cited this fact at the outset. This is the way to go. We have also strongly——

I told the Department five years ago that it would be thus. How can it not be aware?

Mr. Seán Aylward

We have worked on the legislation, it is before the Oireachtas and there is an opportunity to introduce a new structure. Equally, the Oireachtas has supported using different mechanisms to get at the truth in complex cases. For example, if something has to do with the Garda, the standing commission is more effective and has in-house expertise. This is a better way to go. The commissions of inquiry approach has been a less expensive way of getting at the truth and has incurred fewer legal fees.

For how much longer will we pay those fees? What is the envisaged timeframe?

That question has been asked.

Is every effort being made to encourage an early conclusion?

Or will we discuss the Moriarty tribunal in two or three years' time?

Mr. Dermot McCarthy

Hopefully not. A member of the tribunal has communicated to us in recent days that he cannot rule out the possible need for further evidence to be heard in public, but he anticipates moving to compile his final report imminently. I hope we will have a report by the end of the year.

That is the Moriarty tribunal. What of the Mahon report?

Ms Geraldine Tallon

We understand the chairman's projection is for the report's completion later this year. However, there is a legal challenge regarding the advance circulation of any draft adverse findings. Depending on the challenge's outcome, the completion date may vary.

I will try to wrap up with a quick round of questions from Deputies Fleming, Shortall and Broughan.

To follow on from Deputy O'Keeffe's topic and according to the report, the Flood-Mahon tribunal has had four senior counsels and five junior counsels, the Morris tribunal has had two senior counsels and one junior counsel and the Moriarty tribunal has had three senior counsels and two junior counsels. The Mahon tribunal was established in 1997 and its chairman, Mr. Flood, resigned, retired or whatever the word is, but the tribunal did not collapse. Someone seems to have caved in on the idea that, if a senior counsel walked off the case, we would have mayhem. However, the chairman, the tribunal's sole member and appointed by the Oireachtas, was able to leave and the tribunal carried on. Someone caved in badly.

If the witnesses have the information available, well and good. If not, I would like it in writing. What are the names of the four senior counsels and five junior counsels appointed to the Mahon tribunal since 1997 and for how long did they remain? To my knowledge, some of the senior counsels working for the tribunals have retired and moved back into private practice over a period of years. Senior counsels have come and gone for their own reasons, yet the tribunals carried on. Perhaps the counsels went to greener pastures or they did not want to be tribunalised or institutionalised at Dublin Castle for the rest of their lives.

Someone claimed that there would be a lack of continuity. It is clear what occurred, in that someone spoke with another member of the legal profession. They are too close, seeing as how this is a small town. As I have stated at every second meeting of this committee for the past two years, this situation involves a lack of commercial competence. The legal people have held their debates.

Reverting to a previous point, if one hired a ladder from a DIY shop for a day, one would be charged €40. If one hired it for four years, one would not pay €40 per day. A two year old buying a lollipop knows that he or she would get a volume discount if he or she bought 100 lollipops. I want our report to show a lack of commercial competence in the public service when it comes to negotiating large financial transactions. I support Deputy Shortall's comments. We are beginning to see the same lack of commercial competence in the report on the medical consultants. We are seeing it month in, month out. The taxpayer is the victim. We want some type of commercial division. People claim that they are competent, but the facts show that the taxpayer got a raw deal. I am not taking from the quality of work that needed to be acquired, but what are the names of those who moved in and out of the three tribunals' senior and junior counsel positions? We will find that there has been quite a bit of movement, yet the tribunals have carried on. However, someone caved in when that threat was made.

I wish to correct something, although I hope that Deputy Broughan will not mind me doing so. I was surprised when the witnesses did not address the matter when the wrong impression was created. The Deputy mentioned the UK's Hamill and Billy Wright inquiries and a figure of £250. I did not want to interrupt him at the time, but page 41, paragraph 3.20 of the report states that this was an hourly rate, not a daily rate. This impression was left unchallenged for hours today. The rate applies up to 40 hours per week, which equates to £10,000 per week or £2,000 per day. In the Canadian inquiry mentioned in the same paragraph, the fees were up to $1,800——

Those are much shorter inquiries. That is the point. They operate under different rules and procedures.

I am only correcting the Deputy's point. The figure of £250 for a senior counsel participating in the inquiries in Northern Ireland was mentioned as a daily rate. I am just clarifying that it was an hourly rate, as stated in the report. A discussion pursued in which it was asked how we could be paying ten times vis-à-vis the price in the North. The response from this side was that many things are cheaper in the North. The debate flowed from a wrong assumption, as the rate was an hourly one and we were not comparing like with like. I want to correct the record in case people believed it.

Two other issues arise. Page 118 in the appendices is interesting, as it outlines that 36 State bodies incurred quantifiable costs in responding. The Mahon tribunal accounts for 18, the Morris tribunal accounts for six and the Moriarty tribunal accounts for 12. Will the Department's officials provide the committee with information on how many third party witnesses, private individuals, were granted representation at each of the tribunals? We have the figure on the cost to public bodies, but we are missing important information. That people were granted representation does not necessarily mean that they will get their costs, as it depends on whether they co-operated and were truthful. If the committee is to have a feel for the total cost and assess how matters stand, we can only do so by knowing the number of people granted representation at each tribunal. How many of those people have submitted and had their costs concluded, meaning that they are no longer involved, and how many have not yet submitted costs? The committee cannot reach conclusions unless it knows these figures.

My last point relates to Mr. McCarthy's opening statement. There is a cost implication in the fact that the Moriarty tribunal recently re-entered public session after drafting a report. Mr. McCarthy is the Accounting Officer who must authorise the payment and must have it voted through the Dáil. Will he explain how he is satisfied that it was necessary in the taxpayers' interest to open up public hearings again? Could the issues that led to this not have been given to the tribunal at a much earlier date? It has cost implications and the Accounting Officer must have a view on that.

Mr. Dermot McCarthy

I cannot comment in response to the Deputy's question. It is the activity of the tribunal.

It is a matter for the tribunal.

It is also an issue for the Committee of Public Accounts. If the costs are based on the level of co-operation, and information is provided by an individual or a Department at this stage when it could have been provided earlier, I interpret that as a lack of co-operation at the earlier date. That has potentially led to an extension of the Moriarty tribunal. Mr. McCarthy may not want to comment on that, but information appearing at this late stage in the game, 11 years after the tribunal was set up, will lead to extra costs, and the reason that happened is a matter for us because it affects the cost of the tribunal.

Mr. Dermot McCarthy

I cannot comment in substance other than to point out that my understanding of the issue is that the information or the documentation in question was in the possession of the tribunal for some time. I think the Deputy is referring to the waiving of legal privilege and I cannot comment on that.

It is important to reiterate that a large part of the €2.4 billion recouped by the Revenue Commissioners through special investigations arose because of discoveries made through various tribunals. Overall, there was a good return to the State. The question of legal fees is a separate matter and probably warrants further investigation by the committee. The taxpayer would be pleased if we did further work in the area.

I agree with Deputy Fleming that commercial competence in the Civil Service is a significant issue. There is also an absence of sufficient bottle to take on what is part of the golden circle. That is a matter of concern. Particular responsibility falls on senior civil servants to deal with that, irrespective of the political hue of their masters.

Mr. McCarthy referred to the Competition Authority report on the legal profession. The Department of Enterprise, Trade and Employment is responsible for ensuring the implementation of those recommendations, which has been very slow. The committee might consider getting a report from that Department. Does Mr. McCarthy have any role in the implementation of those recommendations? Has he taken steps to ensure their early implementation?

Mr. Dermot McCarthy

It does not come within the remit of my Department. There has been some follow through on some recommendations but I am not in a position to comment with authority. My colleague from the Department of Justice, Equality and Law Reform may have some observations on it. Competition in professional and business services in the interests of the economy is of concern at present. Government statements refer to the need to pursue and revisit a number of issues from the series of reports on professional services produced by the Competition Authority.

There was a particular timeframe for the implementation of the recommendations on the closed shop nature of the legal profession and hardly any of these has been met. As the senior people in their Departments, have Mr. Aylward and Mr. McCarthy taken action to seek the implementation of these recommendations?

Mr. Dermot McCarthy

They are live issues in a policy context. The committee may wish to adopt Deputy Shortall's suggestion to talk to the Departments more directly involved.

They are also live issues in respect of value for money. It is not just policy that is involved. The Secretary General has separate legal responsibility in respect of value for money. Is he not involved in pursuing these recommendations?

Mr. Dermot McCarthy

Many issues impinge on our responsibilities. In our respective roles, we contribute to their development as we have the opportunity. In respect of policy and execution, that is not in my area of responsibility.

The costs in the two major tribunals here were a multiple of the costs for tribunals such as Hamill and Saville in Northern Ireland. I accept the point made by Deputy Fleming in that regard. We have three leaders of the public service before us and the situation they are pursuing is difficult. The tribunals are investigating possible illegal behaviour by very senior politicians. The last prime minister featured there. This is part of the difficulty of the tribunal system. When legislation is published, people are very wary of attempts to close down a tribunal because some people do not want certain facts to come out.

I have a high regard for the Roman civil law system in Europe where there is an investigating prosecutor under the civil law system. It is working in Italy, investigating the current prime minister. A similar system was used to investigate the President of France and in Germany. We have the common law tradition and that is a different system. There are admirable features in the former system.

If the Flood-Mahon and Moriarty tribunals are ever over, will there be a review? Mr. Aylward reviewed the Morris tribunal and considered the lessons learned. Lessons have been learned from the Morris tribunal vis-à-vis the Flood-Mahon and Moriarty tribunals. Could we review everything, starting with costs? I refer to the disastrous errors made in respect of the Fitzwilton module of the Flood-Mahon tribunal. It made a grave legal error and could not investigate the Fitzwilton allegations. It had to abandon that aspect. Will there be a major review of what has been learned pursuant to that?

I found the report of the Comptroller and Auditor General to be cogent and lucid. It is helpful to the committee and the public. Is the Tribunals of Inquiry (Evidence) Act 1921 now infirm, to use the legal term? A couple of months ago, the House passed a resolution changing the conclusion of a tribunal of inquiry, namely, the Stardust tribunal. Is it incumbent on us to have the new legislation or operate the commission of inquiry legislation henceforth because the ancient legislation, which has operated so badly in many respects, is effectively gone?

Mr. Seán Aylward

The Tribunals of Inquiry Bill is before the Oireachtas and it reflects much of what has been learned in recent years. Amendments are in gestation which reflect ongoing issues and concerns. I cannot anticipate them because the Government has not signed off on them yet. This is part of the stocktake which the Deputy seeks. The report before the committee points out and calls for much which is reflected in the legislation or is contemplated in amendments to it. The last thing we want is an inquiry into inquiries and I state that only semi-facetiously. We cannot wait until everything is finished before we mend our hand for the future and we are not waiting.

The Morris tribunal is more or less wrapped.

Mr. Seán Aylward

Yes, it is, absolutely. In defence of Mr. Justice Morris and his team, they ran a tight ship. People were not paid for their holidays. They drove through much work——

On page 71, it states that Department counsel were paid one third of the per diem fee when they were not present.

Mr. Seán Aylward

I will clarify that. That was a negotiated arrangement to reduce our costs. We wanted counsel to track what was happening every day and we came to an arrangement whereby we would have the transcript given to him rather then having him attend every day to watch the other people. It was a cost-saving——

It was nice money for reading a transcript.

Mr. Seán Aylward

If I may say so, as someone who had to study the transcripts each day, they were very considerable and we had to have someone track it. It was much cheaper than having to pay appearance money every day and it was done to save money. I misconstrued Deputy Broughan's question. I thought he meant counsel to the tribunal, and I knew the judge had not signed off on any arrangement, but we had. It predated me but I reviewed the papers in the past hour and it is quite clear that it was done by us as a cost-saving measure. Counsel was not paid to sit and do nothing. His job was to track every day whether any reference was made to the Department or to legal policy and to keep us abreast of it. Where people appeared for or on behalf of the Department or about its role, they had to be on the spot. It was done to save money and contain costs, and it had that effect.

Do we intend to have a look back if they ever end?

Mr. Dermot McCarthy

It would be a sensible thing to do. As was mentioned in a number of respects, the experience has been taken on board in the Bill before the House and in the commissions of investigation legislation and practice which has proven to be a far more focused and cost-effective mechanism. The big picture lessons have already been drawn from the experience. There are other facets of impact and learning and Mr. Aylward mentioned the relevance of the Garda Síochána Ombudsman Commission for some issues which might otherwise require a different form of inquiry. Similarly, following and in anticipation of the first report of the Moriarty tribunal, changes were made to standards in public office legislation, outside appointments procedures and controls and a number of other issues which it is hoped have made a structural change to the specific issues that were being reviewed. The Deputy's general point is a good one.

Is there anyone present from the section of the legal cost accountant? Is it based in the Attorney General's office? Is there any scope for us to speak to the legal cost accountant service in the Attorney General's office to pursue the issues which Deputies raised today?

We will not sign off on this report today. We will meet in private next week and review the evidence we heard today. Two issues were raised by Deputy Fleming on the Taxing Master and the Attorney General——

It is the same point as the Deputy raised.

We will have to take advice on those. There is one outstanding issue. Ms Tallon was to come back with information on individual earnings at the tribunal.

Ms Geraldine Tallon

The highest earnings range from €1.8 million to €5.3 million. The figures at January 2009 were €5.3 million, €4.9 million, €4 million, €3.7 million, €3.5 million——

Will Ms Tallon name the counsel?

Ms Geraldine Tallon

I do not have the names with me but I can provide the Deputy with that information.

Mr. Seán Aylward

I undertook to provide the committee with this information and I have just received it and will read it into the record if the Chairman so wishes.

Please.

Mr. Seán Aylward

The figures are for a seven-year period from 2002 to 2009 and are as follows: Peter Charleton, SC, was paid €2.238 million; Paul Anthony McDermott, SC, was paid €3.194 million; Tony Barr, SC, who began as junior counsel and became senior counsel, was paid €2.526 million; and Kathleen Leader, BL, initially research counsel and then junior counsel, was paid €815,000. This is the information I undertook to provide.

For completeness, as the iar-Taoiseach used to say, what are the names from the Moriarty tribunal?

We have the number of people and I ask Mr. Aylward to go through these for each tribunal to tally what is in the Comptroller and Auditor General's report. In the current report, the Morris tribunal had two senior counsel and one junior counsel. How many names did Mr. Aylward read?

Mr. Seán Aylward

I read out four names but I should explain that Mr. Charleton, SC, became a High Court judge and was replaced. People moved up one step which ensured continuity and that was important to us.

Will Mr. Aylward provide us with the same information for the other tribunals? The tribunal did not collapse when Mr. Charleton left and Mr. Aylward understands the point I made earlier.

Mr. Seán Aylward

He was there for five of the six reports.

I appreciate that.

We had a few big winners in the Moriarty tribunal.

Mr. Dermot McCarthy

With regard to the Moriarty tribunal from 1998, John Coughlan, SC, has been paid €8.5 million; Jeremiah Healy, has been paid €8.5 million; Jacqueline O'Brien, initially junior counsel and now senior counsel, has been paid €5.8 million; Maire Moriarty, junior counsel who joined in 1998 as opposed to 1997, has been paid €1.9 million; Stuart Brady has been paid €1.3 million from 2005 to date; and Stephen McCullough has been paid €1.3 million from 2002 to date. These are gross figures inclusive of VAT.

Prior to wrapping up I call on the Comptroller and Auditor General to make his concluding remarks.

Mr. John Buckley

Earlier I mentioned 261 as the number of days for which people were potentially payable but a more accurate figure is the figure of 220 used and recorded in footnote No. 17 to our report, which was used by the Department of Finance for estimation purposes. The purpose of the report we produced was to quantify the cost of the tribunals at this point in time, taking account of the available information. It is possible, as Deputy Fleming pointed out, that it needs to be updated, perhaps at two-yearly intervals. It is hoped only one two-yearly interval will be involved. The reason I must caveat the figures very heavily is that the chairman of the tribunal can award costs and some of those awards have yet to be made. To some extent, in the course of making those awards the chairman can take into account the degree of co-operation. That could potentially reduce the overall cost. However, while a proportion of third party settlements has been made to date, there is always a risk that future settlements will not reflect current patterns. That was a primary assumption in the course of our estimation work. The risk also arises that later modules will be more complex and that the extended duration will itself impact on costs. There could be countervailing factors in those two respects, therefore.

Duration also impacts on expense in the sense that direct tribunal costs accumulate with time whereas third party costs tend to be episodic in nature. A wider consequence of delayed reporting is a diminution in tribunals' value as an instrument of systems change. Many structural and systemic adjustments have been made without awaiting the results of the tribunals' deliberations.

The challenge for the future is to take account of the rights of citizens as taxpayers and to ensure inquiries are as cost-effective and timely as possible. In this respect, the measures set out in the legislation currently before the Oireachtas and the associated debate are to be welcomed.

I thank Ms Tallon, Mr. McCarthy, Ms O'Donnell and their colleagues for attending the committee and for the manner in which they answered the questions raised, some of which were very difficult. The view is shared among members that we will not dispose of the report today because we will have to consider what we have heard and the suggestions put forward by Deputy Fleming. We will keep the witnesses informed on our progress, however.

Next week the committee will consider special report No. 64 of the Comptroller and Auditor General on drug addiction treatment and rehabilitation.

The witnesses withdrew.

The committee adjourned at 1.55 p.m. until 10 a.m. on Thursday, 9 July 2009.
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