Wards of Court: Discussion

I thank the Deputies and Senators for their attendance. I am sure others will join us. I ask everyone present to switch off all mobile phones, please, as they interfere with the sound recording system in the committee rooms.

The purpose of today's meeting is to discuss the wards of court system in Ireland. I welcome Ms Mary Farrell, the representative of the Justice for Wards Group.

Ms Farrell is joined in the Visitors Gallery by Ms Sarah Lennon, Ms Yvonne O'Sullivan, Mr. Niall Lennon, Ms Noelle Curtis, Mr. Jim Curtis, Mr. Terence O'Grady, Ms Eilis Laughton, Ms Stella Meaney, Mr. Jim Meaney, Ms Anne O'Sullivan, Mr. Chris O'Sullivan, Mr. Stephen Kirwan and Mr. Patrick Farrell. I hope I have mentioned all of the names. I apologise if I have left anybody out. We also have the representatives of the Court Service with us in the Visitors Gallery and I will acknowledge each of them in the second session.

The format of the meeting is Ms Farrell will be invited to make an opening statement which will be followed by a question and answer session with committee members. Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable.

Members are reminded that under the salient rulings of the Chair they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I invite Ms Farrell to make her opening statement.

Ms Mary Farrell

On behalf of Justice for Wards, I thank the joint committee for giving us the opportunity to make a presentation. I particularly thank those members who have petitioned on our behalf. I am accompanied by members of Justice for Wards who are in the Visitors Gallery with other supporters. We are here to address the matter of wards of court and, in particular, their investments. The average person would know little about the wards of court system, unless he or she worked in the area, was affected by it or involved in some other way.

Wards of court are among the most vulnerable in the State. They are deemed to lack the capacity to manage their affairs. The Office of Wards of Court is governed by the archaic 1871 lunacy regulations which are in violation of the UN Convention on Human Rights and the UN Convention on the Rights of Persons with Disabilities. Under the current system all wards are deemed to lack capacity. There are no degrees of capacity. For example, wards of court cannot marry or leave the country without permission, or make decisions about medical treatments. When a person becomes a ward of court, his or her property is taken under the care of the court and all major decisions will be made by the Office of Wards of Court or the President of the High Court who has responsibility for wards. This may happen for many reasons, including that the person concerned may have old age related dementia, neurological disabilities, mental health disabilities, brain injuries and so on. There are 20,000 beneficiaries in the system, including 2,800 wards of court with funds of €5.65 billion held by the Courts Service on their behalf. There has been much discussion and debate in the past ten years about changing this system, but it is only now that a process has begun with the recent appointment of the director of the decision support service under the Mental Health Commission. We welcome this long-awaited development, but we are told that it will be some time before all processes are in place to allow wards of court to be discharged from wardship into the decision support service. In the new system capacity is assumed and varying levels of supports will be provided. However, the Government has not ratified the UN Convention on the Rights of Persons with Disabilities.

We are here to discuss the current system of wards of court and, more specifically, the role of the Courts Service in the investment and management of wards’ funds. Wards of court will have a committee appointed to look after their every day needs under the supervision of the Office of Wards of Court. Parents may be the committee for their child's person and estate. A husband, wife or partner may be the committee for their wife's, husband's or partner's person and estate. This can be an onerous task, depending on the needs of the ward and the extent of the work involved in his or her care and so on. Some wards come within the remit of the Office of the General Solicitor which acts as the committee for their estate or property for various reasons which will be discussed during the debate. If this happens, the family loses all control over how funds are spent and cannot obtain the information they need. They are virtually cut off.

We are unaware of how many wards come within the remit of the Office of the General Solicitor. In 2001 the figure was 40% of wards, but today the figure is unknown to us. Generally, it appears that this happens when a ward does not have a family member to take responsibility for his or her financial affairs, but it also happens for other reasons which are not clear. I hope they will become clear during the debate. As neither the ward nor his or her family has any control over the money once it is taken under the control of the Courts Service, families rely heavily on the expertise of the Courts Service in the investment of the funds. That has become a central issue for many wards since the financial crisis during the years 2007 to 2009, inclusive, when the funds of many wards were seriously depleted, to the point where many of them lost their entire funds. Some of them were left to depend on social welfare payments when their funds were depleted owing to the downturn in their value.

The Courts Service set up a new investment scheme in 2003 after computerisation had been introduced. Prior to that year funds were held in individual accounts and manual ledgers were used. We understand it received advice from the NTMA and Mercer on the type of investments which would meet the needs of this very vulnerable group of citizens. In due course the fund was set up and families received a letter stating this had been done, with an information booklet. One had to assume that with all of the expertise involved, the funds would be well managed and secure. We believe due diligence did not take place, which is why we are here to debate the issues involved. We hope to find solutions to the problems. The committee has been provided with extensive material on these matters, including our written submission, various reports and other relevant documents. It is our contention that some wards have lost considerable amounts of money, that the investments did not meet their needs and were not fit for purpose. It is also our contention that the expertise required to make decisions on these investments and appropriate risk avoidance strategies was not in place. The people in question are not ordinary investors. They are the most vulnerable and cannot be consulted. Their families and-or committees are not consulted on decisions made about investments. The investments cannot be equated with average citizens' investments, people like us who make decisions or take risks and expect a return but lose funds. They did not make any such decision, nor did their families. We hope the meeting will prove fruitful and that this matter can be opened up for further discussion and clarification with a view to resolving the matters under discussion.

We thank Ms Farrell and Justice for Wards for the written submission and documentation which has been referenced. I commissioned a report on this issue from the Oireachtas Library and Research Service and it has also been circulated to members. On my own behalf and that of committee members, I thank the Oireachtas Library and Research Service.

I welcome Ms Farrell and all of the members of the Justice for Wards group. When vulnerable and innocent members of the public have empowered a public entity to manage a fund on their behalf and the fund has been depleted to the detriment of an individual, it has a serious long-term impact on his or her life. I was taken by one of the remarks made by Ms Farrell, that there was no due diligence process carried out by the State entity.

Does Ms Farrell have examples of a lack of diligence or due process in the management of the fund?

Ms Mary Farrell

In the Deputy's documentation, he will find a number of financial statements and documents relating to this matter. He will see from the sample sent to the committee that, month after month over a period of two years, what I describe went on without any intervention. We would not consider that to be due diligence. It appears from more recent information that we are acquiring, which came through the Committee of Public Accounts, that there are issues concerning the investment committee and the expertise on it. That is now a matter for consideration. The risk management was very poor, or non-existent, particularly in one area, which I am sure we will address later. The area in question is the one we are most concerned with. There are four strands of investments, and there was one particular area that lost out heavily. In that case, the entire fund was invested in equities and bonds. There was no cash component on which to draw in times of stress in the market. That has changed. One of the strategies introduced in 2012 was that a cash holding would be provided, but it is like locking the stable door when the horse has bolted. It is a bit late when it has happened. Another risk-avoidance strategy, called a target volatility trigger, has been introduced. It would trigger a reaction in the fund if the value dropped below a certain level. That structure is now in place, but it was not in place during the period we are talking about. Does that answer the Deputy's question?

That deals with the question on due care and diligence. Was there, or is there, any evidence of lost funds or misappropriation? Is it just a matter of a lack of intervention at the appropriate time?

Ms Mary Farrell

There is no suggestion whatsoever of misappropriation, fraud or anything like that. This is completely to do with how the investments were set up and managed.

What does Ms Farrell's group consider to be the resolution? How does she see the matter being rectified from the State's perspective? What would she like to see happen?

Ms Mary Farrell

The wards-of-court area is very wide and, as seen in our submission, it covers so many strands. There are problems in each of those strands. We would have believed that, because of the Courts Service coming on board, we would be going into that earlier and that some of the issues that exist would have been resolved by now, but they are ongoing. To take the funds in isolation would do a disservice to the wards because there are bigger issues associated with the system, based on its being so old. The work is being done within that archaic system. We are looking for a judicial review or inquiry into the overall wards-of-court system.

Would that be the first thing Ms Farrell would like to see?

Ms Mary Farrell

We have explored many avenues, as we have said, and we are further along this road here today. We have made little progress on this. Something has obviously to be done for these people. We can see no way of resolving that other than a judicial inquiry.

I thank Mr. Farrell for her responses.

I apologise to Ms Farrell for being a little late. The rain in Dublin city makes everything grind to a halt. Perhaps some of our questions will be put to the representatives of the Courts Service because Justice for Wards has outlined very clearly the problems facing wards.

On reading the documentation, I was struck by the point that it is unfair to compare the management of the funds with the management of pension funds, for example, because this is a unique situation in which one is dealing with the lifetime needs of wards of court. In that context, the issue around strategy 4 arises. While the delegates would accept the position on exposure in any financial dealings, as implied in the views of the independent assessment commission previously and by the Courts Service, the point they are trying to make is that this is that their funds were subject to full exposure. In that sense, what remedy is being put in place for the delegates' loved ones whose funds are being depleted? Around the time the delegates' money was being invested, or whatever one wants to call it, the system changed and amounts were held in cash. What corrective measures were put in place to deal with the fact that the money of the delegates was not treated like that?

It struck me that the delegates have never or have hardly ever - I am not fully sure which - been given any statements of accounts from the Courts Service over all the years in respect of how the money was handled. They do not get any statements and are not consulted on how the funds are managed.

Ms Mary Farrell

It is not fair to say one could not get information. The problem is that there are over 2,600 wards, many of whom are older people who would not have somebody who would be an active committee member or who would be involved in the day-to-day management. They oversee everything. They would go to the Courts Service in regard to funding they need, consideration of a medical matter or services, for example. With regard to sending out accounts, in our experience over 27 years we have never received a statement we have not sought. That would be the case with the other members also. What I desire has been promised many times along the line. Included in the members' correspondence is a letter dated 2009 that claims that statements would be sent out annually from then on, after the crisis and the discovery that the value of the fund had dropped in 2009. Since then - I cannot remember all the dates but certainly in 2016 - it was promised that all these statements would come out. It was said a new system would be introduced to enable this. We were promised it again by the end of September of this year but the members who would expect to receive statements have not received them. Not in 27 years has that happened.

If one requests information, one gets exactly what one requests. If one just looks for a note on the funds, one may receive the balance. That would be just one single sheet. Unless one seeks more detailed information about the performance of the fund and the folio of the payments and receipts during the year, one will not get it. It is not fair, across the board, that committee members who are very active regarding their ward can get the information simply because they do that sort of thing. Other people would not even know who to write to for the details; that is a fact.

The annual statements, despite their having been promised, have not been furnished.

Ms Mary Farrell

No.

Some of our questions will really be for the Courts Service. Consider the cases highlighted before the Committee of Public Accounts and which were flagged. In one case, it was anticipated the funds would run out in two years. I believe there were six wards at the time in question in respect of whom the funds had fallen below €10,000. Fifteen were identified at that stage as potentially not having enough funds to provide for lifetime needs. What has been done since then that the witnesses know of to provide for the contingencies that were highlighted some years ago?

Ms Mary Farrell

We do not believe anything has been done. On the question what has been happening since the recommendation was made at the Committee of Public Accounts that something would be done to enable the transition, some wards have lost funds because of the financial crisis. Others have lost funds because they had a very meagre fund to start with. There are all kinds of reasons. One might have been using a fund over a very long period. There are all sorts of reasons funds may be running out. Having said that, the structure we envisage is that the Office of Wards of Court would be tracking these accounts, as it were, and would notice if funds were running low, or would run low in a year, say. If one applies for a medical card or for a social welfare payment, it takes an awful long time to get it in place. One has to submit all the relevant documentation, and there is a lot going on. There is no preparation for it so one can suddenly find oneself without funding.

That has happened to people we have spoken to including some of those here today.

That is helpful. I thank Ms Farrell.

I thank Ms Farrell for coming before the committee along with her colleagues. Today we are largely dealing with financial issues but it is important to remember that behind every ward of court is a very painful story for the individuals concerned. The committee is very conscious that each case relates to someone who is incapable of looking after themselves for the rest of their lives.

From Ms Farrell's answers to my colleagues, I am aware of her concern about the depletion in the fund, and as Deputy Clare Daly said, we will raise this issue with the courts service. Is it Ms Farrell's contention that the wards and their families should have a greater say in the moneys available and how they are invested?

Ms Mary Farrell

The decisions support service which is coming down the tracks will change everything and that will be the case. That is not the case now. We have come across anomalies in the system where some people have been able to manage their own funds. Recently, newspapers reported a case of a family of a ward of court which was suing a firm of stockbrokers which had gone out of business. Those kinds of anomalies arise in the current system. It is not clear why it would be determined that one family would be better placed to manage a fund than another or what sort of interventions take place to allow that to happen. We contend that these people need their funds to be safe and they need support and a structure, not the office of ward of court structure because that is too archaic, but there was not an alternative.

No one who has been made a ward of court has asked to be made one; they are all wards of court because someone decided they were unable to manage their own affairs, a process was undergone and they ended up in wardship. It is very frustrating for anyone who goes into that system because one knows nothing about it. Unless someone has applied for an older person, for example, one is not told until the day it happens. If one is in court when a settlement is being agreed, it is only then that one will be told that a person is going into wardship. After that, everything is with the courts and one has no further say on the matter. We know of a family that tried to get control of their child's fund last year in order to put it into a trust fund. They went through the court system to try to make that happen because they felt that it was the best way to look after their daughter's fund, which was substantial, but they failed. There is no system other than the Courts Service for people like this.

Is it correct that Ms Farrell wants to see the families having a greater say in the management of the fund?

Ms Mary Farrell

They should have had that. If accounts had been provided to us during the period that we are discussing, 2007 to 2009, we would have been able to see what was happening. We might have been able to intervene and, through the office of wards of court, to ask what was happening and to say "We notice that you have been doing X, Y, or Z". Because we did not have any statements of account we did not know this was happening until it had reached that point. The problem we face now - going into the decision of the Courts Service, whenever it is set up - is that as I mentioned earlier these families will be formally discharged from wardship into the decision support service and those already involved with these wards of court, their families, parents, husbands or wives, will continue to be left with this responsibility at some level unless they are discharged completely from wardship. That means that they will have responsibility for this fund, which is greatly diminished. How are they to be expected to care for someone for the rest of their lives using this diminished fund that will be handed over to them to be their responsibility? They will have to be able to prove that they can manage the fund properly when only part of it is left, or maybe none of it, as the case may be. Families are at the point of having to sell their homes to provide for future care.

I understand the point that Ms Farrell is making. Take the example of a ward of court where a large award is made but it might not be sufficient, for instance there might be a young child with cerebral palsy, and an award is made for €5 million or €6 million when the child is five or six years. There can be no knowledge as to whether that amount will be sufficient to care for the child for the rest of his or her life. Is it correct to say that Ms Farrell believes there should be staged awards whereby people go to court at a certain age and are given an award for a certain period after which they return to the court? Is that a good idea?

Ms Mary Farrell

We are very far behind the United Kingdom in this. It has been known for a long time that the figures being used in awards were not correct, that they were estimating an interest rate which would provide income into the future so that it would not be necessary to touch the fund itself. That all changed, as the income from deposit accounts and so on did not provide the amounts that were needed, which is why this investment system was established. The proposals in place now are going through for the periodic payments, or stage payments; they will come on stream but this will be no use to us because we are already in the system and we cannot go back into court and say that our case was undervalued and we want more. In the UK, if someone had a brain injury, for instance, and developed a further condition related to that later on, such as epilepsy, he or she would be able to return to court. We are very far behind in this whole area, and as members will be aware, we have not yet set up the decisions support service nor is the periodic payments set up. Ireland is way behind on everything. We are stuck here in the old system with the new system coming in; newer people coming into the system will have advantages that this group will not have. We must somehow level the playing field for these people.

I thank Ms Farrell.

I thank Ms Farrell for explaining the situation to the committee and outlining the case. I am in regular contact with a family where a daughter has a severe brain injury. It is not due to poor investment, but the family is dealing with a situation where it looks as though the funds that were made available for her will not be sufficient as she lives beyond her life expectancy. I can see the strain on the family, and the stress and concern, caused by knowing that the money there will not be sufficient to care for her for the rest of her life. This committee has had presentations from the Courts Service, much of it about the fund and its performance over an extended period, but the performance of the fund for 2007 to 2009 does not tell the story of the people who had to realise parts of their fund during that time, and the implications that had for the families.

I want to ask about two elements. We need to ensure that this situation is not repeated and that in future the Courts Service manage the funds in a better and more transparent way, in co-operation with the families but I am conscious that we cannot go back and rectify what happened during that time. What remedies does Ms Farrell feel should be put in place? Would it involve some form of compensation? Ms Farrell referred to a judicial inquiry, but should we consider compensation or a specific package for those affected, or something else on those lines?

More generally on the matter of wards of court, the Law Society has raised the matter of it being difficult for wards of court to access civil legal aid in relation to wardship procedures in some circumstances. Will Ms Farrell comment on that?

We do not want to overload the witness with questions. We will return to Deputy Ó Laoghaire and take those two questions now.

Ms Mary Farrell

There is always the possibility that the fund will run out or be insufficient to meet a ward's needs. This issue arose in one high profile High Court case last year. The judge was very critical of the fact that families would have to put funds into risky investments in order to get the return they needed to provide for the child that was going into wardship.

She insisted that it would be linked not to high-risk investments but to what would be available on the average gilt market. That is where it is at. There is no way that these people can be treated as the new entrants will be treated because all of those things are now known and considered. With this group, the only way to do it is to look at what that fund was like when it went into this system or certainly prior to 2007 and to then look at what the normal transactions on that would have been, as in payments for maintenance and so on and what earnings should have accrued. It must be determined what those funds would have earned since then if they had not been lost and that must be replaced. The amount that was lost and the earnings on that amount should be replaced, at the very least. Families like ourselves have been back and forth to the Courts Service, to various committees, including the Committee of Public Accounts and this committee, are struggling with this. It is very unfair that older people, some of whom are in their 70s, should have to come in here today to fight this battle for their children who are now in late middle age and whose needs are increasing as time goes by. No resolution has been found to date. Indeed, there has been not even been an acceptance of the actual issues involved in that particular investment. Until that is acknowledged and accepted, nothing can be planned going forward. That is the crucial part of this.

What was the second part of the Deputy's question?

The second part was about access to civil legal aid.

Ms Mary Farrell

I cannot speak for individual families but I know that people have gone about taking their children out of wardship on discovering that they are capable of managing their own affairs but found that going through that process in the courts can be quite onerous and expensive. Furthermore, not all solicitors are well informed in this area. It is a niche area, so to speak, and the process is very difficult. As for us doing anything about this in the legal arena, it just would not be feasible. We could not afford it. There is no way of doing this legally; no way of sorting any of this out.

Does the Deputy have a further question?

My last question was a general one on wardship procedures rather than specifically relating to the investment issue. Aside from the investments that are managed by the Courts Service on behalf of wards, does Ms Farrell believe there are other things that the State should be doing for wards of court, in terms of providing for their social, economic or medical needs? Should the State be providing an advanced category of medical card, for example, or specifically tailored home care packages? Are there other things that the State should be doing for wards of court, apart from managing these funds for their future needs?

Ms Mary Farrell

When a person goes into wardship the State takes responsibility for the person and his or her estate. That is huge and means that the State is fully responsible for the person. Some responsibility is then delegated to the person's committee and if the person is lucky, that will be a family member who will be active on his or her behalf.

The report of the Committee of Public Accounts from 2015 made recommendations around exemptions. It recommended, for example, that wards whose funds are running low would be exempted from the normal qualifying criteria when they apply for a medical card or other State benefits. Some groups of people who have received compensation, such as the hepatitis C group, have had the earnings from their funds disregarded when they applied for a medical card or other State benefits. We certainly believe that the wards should be treated in a similar fashion. There is no linkage between the wards of court system and any other services such as health or social welfare. Such a linkage could bring about a change in that regard and help or support wards of court in terms of what they are trying to do.

A ward of court is assigned a case officer. We have had many case officers over the years, having been in the system for 27 years. We found some of the Courts Service personnel to be very courteous and helpful. They came to meetings with the HSE and so forth. We found others who were not helpful at all. One might have to write to the President of the High Court to get a reply to a letter or a response to a query. One could be waiting for a year. Some people are held up.

There is another element to this. Can I digress?

Please do.

Ms Mary Farrell

The Office of the General Solicitor is part of the wards of court system. Many people do not have a committee to act on their behalf so the General Solicitor will act as committee of their estate. Once that happens, from that point onwards the family is excluded. They are provided with no details or information. They do not have phone calls returned or letters answered. Things like applications for medical cards are held up in the system, sometimes forever. We know of one such application that has been held up for over a year. I am sure there are others out there that we do not know about. Our group is small, without funds and operates informally. We were just set up for the purpose of supporting wards of court and trying to move this into a better position.

People coming under the General Solicitor are treated particularly badly and they have no come back at all. These may be families who have fought in the courts for years. One reads about such cases all of the time or hears about them on the news. The story is a familiar one. Afterwards they are interviewed and they say that they have been fighting their case with the HSE for ten years or more and so on. The individual is then taken into wardship and soon after, the General Solicitor, for some dubious reason, takes over committee of the estate. Thereafter, the family does not know how much is in the fund. They are, on the one hand, committee of the person and are trying to manage the person's well-being, their care and to organise all sorts of things in their lives but on the other hand, they do not even know how much money is in the fund. In the middle, there is a service provider who is sending accounts regularly to the Office of the General Solicitor. All of that is happening without any reference to the family or to the person who took the case, usually the parent of the child. This is what is happening. There are very questionable practices in this area. There is a lack of transparency and accountability. Transparency and accountability are problematic across the board, but particularly with regard to the Office of the General Solicitor. There are serious questions to be asked in that regard.

Deputy Wallace is next.

I thank the witness for her presentation. I apologise that I do not know as much as I should about this issue. Ms Farrell has painted a pretty bleak picture of the whole system. On her last point about a lack of transparency and accountability - this will not be of much comfort to her - that seems to be a predominant theme in how we do things in this country. I get the impression from what Ms Farrell has said that from a financial perspective, wards are at the mercy of people who play with their money but who do not take responsibility for it. The wards and their families do not really know what they are doing with the money.

In terms of investing the money, does the Courts Service farm that out to private investors to do as they see fit with it?

If so, who gets the opportunity to invest the money? I get the impression that Ms Farrell has no say in how the money is invested. Am I right in believing she does not find out how it is invested? Is that true?

Ms Mary Farrell

No. I will explain how it worked. The courts became the Courts Service in the period 1999 to 2000. A lot was changing around that time and, apparently, it came to light that no accounts had been sent in from the Courts Service overall for over a decade. We had been in the system even at that point. There was a Committee of Public Accounts meeting about that, and there was a lot going on. In the end, it was agreed that the whole system would be computerised and that the National Treasury Management Agency would be involved in advising how these funds should be invested. Mercer was involved initially as well. The computerisation was set up and they advertised for financial investors to take on the investment of these funds. That is re-advertised I believe every five years but State Street Global Advisors are the people who manage it. They are the fund managers.

The Deputy will find all the Courts Service financial statements online and they will tell him much more than I can tell him but there is an investment committee which is comprised of judges and various people from the Courts Service, the Office of Wards of Court and so on. The last time it was mentioned in the Committee of Public Accounts was on 13 July last and questions were asked about the expertise of the investment committee. It is my recollection that it transpired that only nine of the 11 people on that investment committee had any expertise in this area of investments. That is a sorry story.

The Courts Service says it has independent experts on the investment committee as well. That was discussed and it was asked how it acquired this person. It was said that the position rotated. The expert was named and the position rotated but when we looked at our records we could see that this person has been in situ since 2008, and this is 2017, so I do not know where the rotation is occurring or how it is occurring. All kinds of questions like that arise.

As I said earlier, if one looks for the information one will get it if one knows what to look for. That means information about the investments, how they performed over the year, the folio statement showing what came in and what went out, and what is currently in the fund. They would be the three documents I would look for, but we have to remember that very few people are able to do that. That is a fact. It is very difficult to say this but there are very few people who can keep up with the care of this ward. Some people are caring for them at home, in institutions or in various situations but the care is still there. It does not matter whether someone is caring for them on a daily basis. They are still involved, still a committee, still engaged and still working on their behalf. As the members can see here today, they are doing various things on their behalf and the last thing they want to be doing is chasing up investments.

When we come down to the actual investments, they are not explained very well. The Deputy would have to look at the report online to find out the detail of that. He would not get it anywhere else. If one were to track those reports from year to year one would see how they have changed over the years and become more transparent in that they give more information every year, but it is interesting that they say that the Wards of Court Office acts in place of a prudent parent. I do know any prudent parents who behaves like this, but what would I know? One would have to go to a lot of trouble to find out the information Deputy Wallace is discussing. It is not always open to people to get that information or to understand it. It is not provided in a format.

As for auditing, they will say they have external and internal auditors and that all these things are well managed, yet there is a proviso that states they may not get everything right in their online report. We have to wonder if everything is all right and who is checking it. There is no external scrutiny.

In 2000, it was proposed that the Comptroller and Auditor General would audit these funds and it seemed to us that that was an agreement, that there was no impediment to that happening and that documentation had been sent to the committee, yet that never happened. We were presuming this was happening and that everything was going according to plan but it never happened, and it is still not happening. There is no external public scrutiny of these funds in that the Oireachtas cannot question them. It does not come under the remit of the Committee of Public Accounts even though it has looked at it because of that difficulty with the Comptroller and Auditor General not auditing these funds, and the Comptroller and Auditor General is still not able to audit them. There are impediments to that and the reply from the Department of Justice and Equality is in the documentation as to why that is the case.

Would I be right in thinking that Ms Farrell believes there is a very strong case for an independent oversight body to examine the way financial matters are dealt with or would she see it as another bureaucratic layer?

Ms Mary Farrell

I think it should come under the role of the Comptroller and Auditor General. I do not see why it should not be the case; it should be done like that. There should be public accountability and scrutiny. The people involved are public servants. They are paid as public servants to do their job. We agree these funds are a separate matter, but where is the accountability and transparency? That is what we are concerned about.

Are they challenging the fact that the Committee of Public Accounts has not been engaged in this area?

Ms Mary Farrell

Can the Deputy repeat that question, please?

Has the Committee of Public Accounts challenged the fact that the Comptroller and Auditor General has not been engaged in this area?

Ms Mary Farrell

Yes. It has asked about it on a number of occasions. The Committee of Public Accounts asked for a response on this because there had been discussions about it between the Department of Justice and Equality and the Courts Service; there were others involved anyway. The response is in the correspondence. Apparently, that is the final word on that and it cannot happen for the reasons outlined in that correspondence, which I have here but it would take me ages to find it.

Given our experience with the Comptroller and Auditor General around his workings with the NAMA issues, we have found him to be very good. We can progress it from our end as much as we can as to why he has not being engaged because it looks to me as if it would be very helpful.

Ms Mary Farrell

One would imagine that when it was discovered in 2000 that no reports or accounts had been sent in for over ten years, although I think it was 20, a look-back audit would have been done at that point to see what was going on during that previous ten years. However, that did not happen. It would need to be retrospective, not just looking forward.

I thank Ms Farrell.

I will make a small point that might shed a little light on this. The Comptroller and Auditor General's role is in regard to the expenditure of public moneys. These are private moneys and we have got to try to find a way to overcome that obstacle that is part of the difficulty.

The Comptroller and Auditor General is, of course, working very closely with the Committee of Public Accounts. It is an impediment in terms of it addressing this matter.

The NAMA legislation is somewhat vague. NAMA claims a certain private status in its work, yet everything it has done can be scrutinised by the Comptroller and Auditor General despite that fact. It is one of the reasons it felt no obligation to provide a social dividend.

It is a precedent which we could address and try to build on.

I thank Ms Farrell for attending the committee meeting today and for her presentation. I agree with my colleague, Deputy Wallace, regarding the lack of accountability and transparency being a common thread throughout many matters that come before us.

I am not a legal person. I have a problem with the term "ward of court" and people being called that. It seems a somewhat inhumane term. The term does not afford people the respect and dignity they deserve. It seems as if all their human rights have been taken from them. I wish a different term was used.

Ms Farrell referred to the UK model and said it was way ahead of us in Ireland. Would its system be the perfect scenario? Is it something she would like to see introduced here? I ask her to provide more detail on that and the comparison between the two jurisdictions.

Ms Farrell mentioned the ratification of the UN convention. Does she think that would help the situation in some way? How would it help? I do not know how Ms Farrell feels about the term "ward of court".

Ms Mary Farrell

I try to-----

I work with family members who are dealing with the trauma of addiction. They are in very traumatic situations. I heard what Ms Farrell said about the requirement for scrutiny and the need to look for certain things. It is very hard to do all that when people are firefighting as a family. It is very hard to have a clear head. What Ms Farrell is doing is fantastic. I thank her for the great work she is doing.

Ms Mary Farrell

As we said, the ward of court system is governed by the 1871 legislation. It is old English legislation. Successive Governments have known that the UK system was going to change and it was ahead of ours. It has introduced a court of protection. We did not change anything.

In fact, even though the structures and plans are in place, nothing has changed because wards have not transferred into the decision support service. People will no longer be referred to as "wards of court". We do not know when that will happen. A director was recently appointed, but a lot of work needs to be done and it may be some years before the wards transfer out of the system.

As far as we understand it, until that time they will continue to be referred to as "wards of court" and there is no other term we can use. We are stuck with the term, and none of us is mad about that. That is the current situation.

I would not hold up any particular system as being a perfect model. In Ireland we researched all of the models and what was happening elsewhere, and picked the bits that best suited our situation. That work has been done and the pieces are in place, and we are happy that changes will be introduced.

We thought the decision support service would be established as a separate entity, but it will come under the auspices of the Mental Health Commission. We have high hopes. What was the Senator's other question?

I asked about the ratification of the UN convention.

Ms Mary Farrell

That is part of the same thing because until all of this is in place, the UN convention will not be ratified. It has been signed, but we have been waiting years for it to be ratified. People demonstrated outside the Houses yesterday about that. We have all protested about that and have said it is disgraceful that it has not been ratified. We are all disappointed. Ratification is very important to the people we care about and to us.

I refer to families who are firefighting and trying to keep going on a daily basis. Does Ms Farrell feel that because people have mental health issues or are very sick, perhaps they do not receive as much care or thought as others? They cannot have a voice and are not challenging anything because they are in a very traumatic place. Does Ms Farrell think that is part of the problem?

Ms Mary Farrell

One report outlined the different categories of people coming into wardship. Some are older people with dementia and others are in more traumatic situations. Some children have been injured at birth, some people sustained brain injuries following accidents and others have neurological disabilities. We deal with a wide range of people. Not all are in the same situation, but they have one thing in common which has brought them into wardship, namely, the lack of ability to make decisions about their affairs.

Having said that, the current system is peculiar in that a ward can apply to be discharged from wardship, but if one lacks capacity or needs support to do so, one will not have it and will not apply. It is a chicken-and-egg situation and people go around in circles.

Most people feel these people need some protection. They are very vulnerable. They are exposed to all sorts of situations. One could be in any setting with them and find they are vulnerable to exploitation, coercion or any other form of abuse. This can happen in settings where one would not expect, such as those involving professionals. It can be very difficult for families to keep track of all that. As Senator Black said, families are firefighting and taking care of people physically, ensuring they have the services they need and fighting with the HSE or other bodies to get services. It is a constant struggle.

Just because people are wards of court does not mean they will get anything more. In fact, there is an assumption that because a person is a ward of court, he or she has a lot of money and can afford to pay for all sorts of things. That may be the case in some of the higher awards. The situation is also very different for those receiving periodic payments.

Courts can be very frustrating for those who do not have access to a lot of funds. Sometimes accounts have to be shown to demonstrate that money is not available to pay for something. It is a constant loop of fighting an overall battle about funds, caring for people or being caught up in a situation which has occurred through a person's vulnerability. It is a constant struggle.

The concern for older parents is that when they are gone, the system will not have been set up properly. It is very difficult for us to pass information on and make plans for the future in the current circumstances, given that the wards of courts office still exists, the decision support service is not in place and funds are running out.

All of those factors make it impossible for us to plan for our child's future.

My understanding is that the officer corresponding to the Comptroller and Auditor General in this jurisdiction, north of the Border and in England and Wales does have that oversight power.

Ms Mary Farrell

Yes.

I was going to make the Chairman's point.

I do not want to rob the Senator's moment. He can repeat it.

There is enough here for me to cover so I appreciate it. Many of the questions I was going to ask have been covered and I will not engage in repetition. It has been a long session for Ms Farrell on her own.

Ms Mary Farrell

I am not alone.

Ms Mary Farrell

I have a lot of support.

I was going to say this is one of the best attended meetings I have seen. While this is a very complex issue and I appreciate the opportunity to hear and learn some of the situations and instances this morning it will take us a while to appreciate its complexity.

My mother cares full-time for her brother. The notion that she would have to deal with some of the issues Ms Farrell is outlining today is phenomenal. It says a terrible thing about a society that it lays responsibility for these issues with the Courts Service. The legislation is not just archaic, it is repressive and punitive. If I am right what we are hearing is that money is being gambled in investments and people are not getting the right information. That is regressive. It is a bit of a shock to hear what Ms Farrell has told us and to see some of the correspondence she sent us in advance.

Senator Black touched on the culture or psychology that thinks the courts are the appropriate place for this. That could be contested. Not to engage with other statutory agencies and organisations to create the oversight and accountability which is very important in dealing with this type of issue is worse. What is Ms Farrell asking this committee to do to assist in this situation? Does she want us to lobby politically for a change in the system or a change in the 1871 Act which is reminiscent of a penal law? It has the feel of penal legislation.

Ms Mary Farrell

We would like if the committee could speed up the decision support service and have that in place as quickly as possible so that the wards can transfer out of the Wards of Court system into the new service and ratify the UN Convention on the Rights of People with Disabilities. Wards and families need to be supported in resolving this issue rather than our saying this happened and the Courts Service saying no it never happened. It has asked for evidence of funds being lost. The evidence we have are the accounts they sent us. It is there. The committee has copies of it. Does the Courts Service want us to send those back to it? Is that the evidence? I do not understand why it cannot see this. Is it wilfulness? I could not believe that intelligent people, which they are, cannot see this. I do not know whether it is denial or a blind spot but there definitely needs to be that first acknowledgement that there is an issue here before we can move on. Then there is the question of the Comptroller and Auditor General’s role, retrospective and in the future.

When the wards of court leave this system there will be substantial funds left on behalf of minors. While that is not our concern today I want to draw it to the committee's attention because that too will have to be monitored. The investments for minors will possibly be on a safer track than those for wards because it is a longer spread and there will not be the big sums coming in because there will be periodic payments. There will, however, be sums of money coming in that will need to be looked after and having the Comptroller and Auditor General on board is important across the board and retrospectively. It is not possible to undo the damage caused to us. We are dealing with judges on the investment committee and the President of the High Court is responsible for the wards. I do not know at what level we can go in on that except before a committee such as this. We feel the only solution is a judicial review because what else can we ask for at this point?

Thank you. Each of the members have engaged with Ms Farrell. I have no doubt that her colleagues in the Visitors' Gallery will agree that she has been an excellent advocate for Justice for Wards and I commend her on her contribution here today.

We will produce a report. When we suspend for a minute we would like Ms Farrell and her colleagues and the Courts Service to join us for a photograph. We will resume then with the Courts Service.

Ms Farrell has said she would like a judicial review or inquiry, and has mentioned the importance of the Comptroller and Auditor General being able to audit the Courts Service and funds. She mentioned the restoration of lost funds and that adding the potential return if managed properly should be assessed. There is a degree of risk in all investments, most certainly in stocks. Does Ms Farrell take the view that only State-guaranteed investments should be considered the gold star for use and deployment of moneys in the future? The decision support service is provided under the Assisted Decision-Making (Capacity) Act 2015 which was to replace the so-called Lunacy Act.

Ms Mary Farrell

I did not want to call it that.

That is apparently its subtext reference. I concur with Senator Black that some of the language employed in the past was inconsiderate in any quarter, and certainly for us today that would be the case. I recognise that there may be siblings in the group here but most are parents of children who, to all intents and purposes, for whatever reason or event in their lives, are children for the rest of their lives. The concern of any parent as we age is that our children are provided for into the future.

Ms Farrell believes that the certainties the families would have hoped for arising from whatever awards were made are no longer the certainties that were expected. That is a major distress in any parent's life. The Joint Committee on Justice and Equality takes all the points made by Ms Farrell on board and view them as very important. We will make recommendations based on our engagement with Ms Farrell and with the Courts Service.

I offer Ms Farrell the opportunity to make closing remarks or respond to what I have said.

Ms Mary Farrell

I concur with the Chairman's closing statement. I thank the members of the committee for their diligent work and their interest in this area. They asked very relevant questions which allowed us to put forward our case so well. I thank the Chairman.

I thank Ms Farrell and all her colleagues who have travelled from all over the country to be present.

We will suspend the sitting.

Sitting suspended at 10.22 a.m. and resumed at 10.29 a.m.

We have been trying to have the level of heating reduced. For a change, the heat is not generated by heavy debate.

We will continue our discussion on the wards of court system with the witnesses from the Courts Service. I welcome Ms Geraldine Hurley, head of superior courts operations directorate.

She is accompanied by Mr. Seán Quigley, head of resource management and accountant of the Courts of Justice, and Mr. James Finn, registrar for wards of court. They are joined in the Public Gallery by Ms Marie Ryan. We are also joined by two officials from the Department of Justice and Equality, Mr. Conan McKenna, assistant secretary, and Ms Yvonne Walsh, assistant principal officer, who can deal with any issues within the remit of the Department.

The format of the meeting, as I indicated to our first set of witnesses, is that witnesses will be invited to make an opening statement. I understand that Ms Geraldine Hurley will be making that on behalf of the Courts Service. This will be followed by a questions and answers session.

I draw witnesses' attention to the situation relating to privilege. Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I invite Ms Hurley to make her opening statement.

Ms Geraldine Hurley

We thank the Chairman for the invitation to appear before the committee and we look forward to discussing the role of the Courts Service in relation to the wards of court system and the management of funds on behalf of wards of court. This matter has been the subject of consideration by the Committee of Public Accounts since 2001, most recently in July of this year. At all times, the Courts Service has engaged and co-operated with the Committee of Public Accounts and with Members of the Oireachtas in addressing matters raised. We have also responded to queries for information from individual members of the Justice for Wards group, in their capacity as committee for wards of court.

The Office of Wards of Court is an office of the Courts Service attached to the High Court. The Courts Service is responsible for the management and administration of this office. However, as the committee is aware, the administration of justice is a matter for the Judiciary and is outside the scope of the functions of the Courts Service. The committee will appreciate therefore, that in our discussions with it today, we are precluded from commenting on any matter relating to the exercise by a judge of his or her judicial functions or on individual wardship cases. We are also precluded from commenting on matters of Government policy.

The wards of court system allows for substitute decision making. The court, usually the High Court, may make decisions necessary for the protection of both the person and the property of persons who do not have full capacity to manage their affairs. Wardship jurisdiction is vested in the President of the High Court and accordingly he has overall responsibility for the management of the affairs of wards of court. The Office of Wards of Court, headed by the registrar of wards of court, manages the day-to-day administration of wardship cases. A committee, usually a member of the ward’s family, is appointed by the court and is asked to make recommendations in relation to matters such as the ward’s welfare, property and future residence. The General Solicitor for Minors and Wards of Court is also a court official, attached to the High Court, who is appointed by the President of the High Court to act as a committee for a number of wards. This usually occurs where there is no family member who is willing or suitable to act in that capacity. Approximately 25% of cases fall into that category.

Over 2,600 wards of court cases are managed by the Office of Wards of Court and the Office of the Accountant of the Courts of Justice. People may become wards of court as a result of dementia or other age-related illnesses. Approximately 75% of cases fall in this category. Approximately 10% of cases are the result of damages awarded by the courts for catastrophic injuries. In 2016, there were 311 new declarations of wardship. As previously outlined, the legislation governing persons who are wards of court dates back to 1871. It has been recognised for some time that the law in this area needed update and reform. As a consequence, the Assisted Decision-Making (Capacity) Act 2015 was enacted to provide a reformed legislative framework for persons who lack capacity. The Act provides for greater individual autonomy by minimising external intervention in the life and affairs of the relevant persons. From the date of commencement of the Act, no new wards of court will be declared. All existing adult wards will be discharged from wardship within three years by order of the court. After the transitional period of three years, the Office of Wards of Court will no longer have a role in managing the affairs of wards of court, other than minors. During this three-year period, the Office of Wards of Court will continue to exercise its existing functions in respect of persons who are wards of court, while at the same time reviewing the files of all wards and consulting with wards and their committees.

Primary responsibility for implementing these new statutory provisions rests with the Department of Justice and Equality and the Department of Health. Work is ongoing in establishing the new assisted support service which will be responsible for managing the new decision-making regime under the auspices of the Mental Health Commission. The Courts Service is represented on the interdepartmental steering group working on the establishment of the decision support service and is working with the steering group and closely with relevant Departments in the transition to the new system.

On the provision of annual financial statements to each ward, which was mentioned previously, up to now, in all cases where committees request information, comprehensive financial information issues from the Office of Wards of Court or the accountant's office. More recently, in addition, we have now commenced issuing annual statements to committees of all wards of court. Some 120 statements have issued in recent weeks. All committees will receive statements over the coming months and these will issue automatically thereafter. I ask my colleague, Mr. Sean Quigley, head of resource management and accountant of the Courts of Justice, to deal with matters relating to the investment of wards' funds.

Mr. Seán Quigley

For the information of the committee, the Office of the Accountant of the Courts Service manages some €1.8 billion - maybe a higher figure was mentioned earlier, though that is not to say it is an insignificant amount - on behalf of more than 20,000 beneficiaries. Those include the 2,600 or so wards of court. There are currently six investment strategies reflecting the different investment requirements of everyone within the remit of the accountant's office. My main focus will be on the growth fund, because that is where certain wards of court funds are invested.

We are fully aware of the concerns of the Justice for Wards group and indeed individual committees and their families, where there is a possibility that funds related to those they care for are being depleted and could in some cases run out in the years ahead. However, the group's singular focus on the investment performance of the growth fund, as the main factor causing the depletion of funds, is misguided and is not factually correct. I will come back to this point in a moment.

Court funds are invested in line with the provisions of the Trustee (Authorised Investments) Act 1958 and subsequent orders. The funds we invest in through our fund managers are regulated by the Central Bank. When deciding where and how to invest court funds, the overriding objective is the achievement of an optimal total financial return, having regard to the need for liquidity and capital security, taking account of income generation and capital growth requirements. Where there is a requirement to generate a high return to sustain the value of the funds for the longest period possible, such funds will be invested in the growth fund.

I will refer to the governance arrangements which were mentioned earlier. These arrangements were put in place in 2002 following two comprehensive external reviews, one by the National Treasury Management Agency, NTMA, and the other by Mercer Investment Consulting. It may also be of interest to note that, in a completely unsolicited review carried out by Key Capital and PricewaterhouseCoopers, PwC, in 2014, they found that the approach the Courts Service has taken to having a balanced portfolio for wards of court who require protection from inflation associated with long-term care was an example of best practice. I will not go into those governance arrangements in detail but they include the investment committee, independent advisers, fund managers, publication of our annual financial statements and the audit of financial statements.

I will now deal specifically with the growth fund. The investment objective of the growth fund is primarily to achieve capital appreciation over the medium to long term. This is necessary, in certain cases, to provide for expenditure over the projected lifetime of the ward of court. It is claimed that substantial losses have been suffered by wards of court in this fund. As far as we can establish, the only basis for this is an article in a Sunday newspaper, in the immediate aftermath of the financial crisis. We find that article misleading and inaccurate.

We have reviewed all ward cases in the growth fund during the financial crisis. The vast majority of cases actually realised gains when units were sold during this period. This was possible as in the majority of cases sufficient gains had been accumulated since the funds were first invested in the growth fund. In a minority of cases where losses were incurred the amounts were quite small and have to be viewed in the longer term which this fund was designed for.

The Aon Hewitt report of 2016 which was commissioned by the Courts Service in response to the Committee of Public Accounts report of July 2015, found that the Courts Service adopted a “least risk” approach to investment. The level of risk taken was prudent and consistent with ensuring that the value of the funds available for the care of the ward was enhanced to provide for their care over the longest period possible. It also found that the growth fund was an appropriate strategy for those with long-term care needs.

The decision to focus on investment performance as the sole factor that could contribute to the depletion of funds, and within that the narrow period of the financial crisis in 2008, ignores a range of other factors that actually have contributed to the depletion of funds. There also appears to be a presumption that the compensation awarded by the courts is intended to provide for all of the ward's care needs for his or her lifetime. This may not be possible in all cases. Factors such as contributory negligence or the nature in which the award is determined can result in an amount that will not meet the lifetime care needs of the ward. Furthermore, awards made 30 or more years ago may well prove to be inadequate. It can be quite difficult to predict what will happen over an extended life period. The person may live longer, or there may have been unforeseen expenses such as medical inflation. The shortcomings in that system have been recognised by the Law Reform Commission, which has produced a number of reports, including recommendations about the introduction of periodic payments. Legislation is awaited to deal with this matter. However, as has been recognised, this will not be applied retrospectively.

It should also be noted that the Courts Service has no input whatsoever into the judicial process which determines the amount of damages awarded. It has to deal with the outcome of the court case and, taking all circumstances into account, make investment decisions that seek to prolong the value of the sum awarded in the best interests of the ward. The level of expenditure, very often requested by the committee or family, and incurred to care for the ward, will obviously reduce the available funds over time. However, what we can say is that the investment performance of the growth fund has not been a contributory factor to the depletion of court funds. In fact the opposite is the case. We have never denied that the growth fund, which has an equity element, experienced a drop in value as a result of the financial crisis during 2008. However, just because there was a drop in value in the unit price does not mean that an actual monetary loss arose. That would only arise if units were sold at that time at a price below which they were purchased. It is also necessary to take account of the performance of cases invested in the growth fund over the longer term, and not solely focus on the period of the financial crisis in 2008.

Appendix A shows that there has been a cumulative growth in that fund of almost 90%, which is an average return of 6.5% over the past 14 years. This includes the impact of the financial crisis. It shows that when the fund dropped in 2008 it was still 22% or 23% up on what it was when it was established. This explains why losses would not have been realised in a number of cases. The performance, even at the lowest point, was above the performance of other funds which might have been regarded as less risky. That has to be taken into account. The recovery of the unit price since 2009 has been quite extensive. The drop in value in 2008 was fully recovered long ago.

The implication in some of the points raised by the Justice for Wards group is that wards of court funds, which have been invested in the growth fund, should not have been exposed to the type of fluctuations experienced by the growth fund. The alternative would have been to place the ward's fund in a fund made up of a combination of cash and bonds, perhaps with a much lower level of equity. We have funds like that, and over the equivalent period the performance would have yielded approximately 35%. There is a significant gap between the growth fund and another fund that might have been regarded as less risky. If the money had gone into the less risky fund we would have achieved 35% over the past 14 years as opposed to 90%. That has to be a relevant factor as well. We have looked at a number of cases, and if the money had been invested in the lower risk and lower return fund the funds probably would have been depleted long ago. By placing the funds in the growth fund the growth achieved has extended the purchasing power of those funds.

The Justice for Wards Group has claimed that a number of individuals have suffered very significant losses. We have looked at all the cases, and we can find no evidence of very significant losses. There were a small number of cases where there were small amounts of loss. It has been mentioned that there are statements available that support the significant loss. We have not seen those. We are happy to provide individual statements to the committee, if the members are happy for us to do that, that prove over the longer period how well this fund has performed.

Thank you for listening and we are happy to take any questions.

The Dáíl schedule changed as a result of Liam Cosgrave's death last week, which meant that there are items for discussion in the Chamber which are clashing with this. That should not have happened, and I am going to have to exit fairly soon. I will leave some questions for others and make a couple of very quick points. Our key task is the formulation of our report. The Committee of Public Accounts which looked at this issue already, was strongly of the view that there needed to be a contingency plan for the individuals that had been flagged as being in the danger zone or at risk of running out. It said that the plan should contain steps that would be taken by the State agencies to assist wards of court before they become total dependants. The first step of that was for the Office of the Wards of Court to identify the cases at risk and throw up a plan in respect of this category to cover health care and accommodation. It also possibly included legislative change. What have the Department of Justice and Equality and the agencies done to bring about change since then?

The funds are audited by the Comptroller and Auditor General. The Committee of Public Accounts recommended that the new office of the public guardian should be audited by the Comptroller and Auditor General and that there was a potential role there. This will require legislative change. Has the witness been involved in any discussions on that?

Can the witness deal with the issue that was highlighted by Ms Farrell in the earlier session - which I found quite shocking - that despite the commitment given that there would be regular annual statements about the financial transactions of the funds no such statements have been furnished, and that the families or committees of wards have to ask a particular question. My heart went out to them; it was like Deputies asking a Minister a question and only getting back a limited answer. Why is that? Are there any plans to change that? It is completely unacceptable. Would the witness accept the points made by Justice for Wards, and indeed Ms Justice Mary Irvine when she said that a seriously injured child cannot be equated with an ordinary investor for the purposes of deciding what is a prudent investment? Decisions like putting everything in strategy four into equities was actually wrong. I am not saying that anybody should be blamed but it was wrong, and the fact that the policy changed afterwards would indicate that should not have happened. There does not seem to be a comparative corrective action for the families that were affected.

I want to indicate, before the witness answers, that if the representatives from the Department would like to come in on any particular point raised they can indicate to me and we will follow on from the Courts Service respondent.

Mr. Seán Quigley

The Courts Service was before the Committee of Public Accounts in 2001, and we accepted at that point that the Comptroller and Auditor General would audit these funds. The problem is that there is a legislative barrier in that the Comptroller and Auditor General (Amendment) Act 1993 specifically precludes it. The legislation has to be changed. That is not something that we control. We do not control changing that legislation. My colleague from the Department of Justice and Equality may want to elaborate on that.

On the issue of lower risk and the comments by Ms Justice Mary Irvine, a feature of a number of cases is that the courts have taken a significantly different approach to determining the levels of awards, and a much lower rate of return has been applied. That has been the case only in recent years, and it is predicated on the requirement to introduce legislation for periodic payments. That is a position that has been taken relatively recently in determining awards but that was not the situation prior to 2015, I believe, when the Gill Russell case established the practice.

What about the contingency plan and the commitment given to identifying the cases at risk?

Mr. James Finn

I will take that question. We have identified cases. With regard to the question that came from the Committee of Public Accounts, we identified as many cases as we could where the funds are being depleted. These consisted of a range of cases, including cases that were 30 and 40 years old, not necessarily cases where serious personal injuries had occurred. We tried to identify every ward of court. We have identified those. Our position, however, is that a change of legislation is a policy matter. We will engage with that but it is not primarily a matter for us to engage in.

I was asked about statements. We have recognised that we were never satisfied ourselves that we were not in a position to give them. We have always been willing to engage. Any questions that were asked were always answered as thoroughly as possible. We have started. One hundred and twenty statements went out with explanatory material, including fact sheets, in addition to a letter stating how people should take the next step if they want more detailed statements. They will all be sent out to all committees over the next few months.

Ms Justice Mary Irvine of the Court of Appeal was quoted. To clarify, that was not a comment looking back on investment performance or the investment policy of the Courts Service. The case was essentially a game-changer in regard to persons who suffer catastrophic injuries. In fact, it was an appeal of a High Court decision that did examine the manner in which wards of court funds were managed. It was not the job of the court to pass judgment but, in so far as the performance and policy of the Courts Service was concerned, there was no criticism. What the courts have said in that case is not that the Courts Service should not have been treating the sufferers of catastrophic injuries as prudent investors. What they were saying is that, in the future, they should not be treated as prudent investors but as persons whose investments should be as risk-free as is reasonably achievable.

Before coming back to Deputy Daly, would the representatives of the Department of Justice and Equality like to pick up on the point on the Comptroller and Auditor General and legislation?

Mr. Conan McKenna

The audit by the Comptroller and Auditor General is a very live issue with the Committee of Public Accounts. As members will probably know, the Comptroller and Auditor General legislation specifically bars the Comptroller and Auditor General from auditing court funds in this particular area. All I can say about that at the moment is that we have brought together the stakeholders, including the Courts Service, the offices of the Attorney General and the Comptroller and Auditor General and the Department of Public Expenditure and Reform. While there seems to be no serious policy objection around the table in regard to the Comptroller and Auditor General becoming an auditor for these funds, there are logistical matters that the Office of the Comptroller and Auditor General itself will have to examine, but we are awaiting a view from the Attorney General as to whether the Comptroller and Auditor General can constitutionally and legally become involved in this area. As the Chairman mentioned, the Comptroller and Auditor General's remit is very specifically rooted in the Constitution and relates to oversight of funds and moneys that are the subject of Oireachtas Votes. The funds in question are private funds held in trust by the High Court on behalf of the wards. Nobody is saying that what was suggested cannot be done, but we cannot move forward until we get a definitive view from the Attorney General as to whether it is possible. We expect that very soon.

I thank Mr. McKenna. Was there anything else he wanted to mention?

Mr. Conan McKenna

On periodic payments, as mentioned by Mr. Quigley, extensive work has been done on the matter by this committee. That legislation is awaiting Report and Final Stages in the Dáil. It has already gone through the Seanad. We hope it will happen very quickly and that the legislation will be in force in the new year. That will do an awful lot for victims of catastrophic injuries.

This committee is well aware of the changes behind the scenes that are dictating many of these circumstances. Some of the decisions, rulings or opinions expressed in the court reflect the new situation but I do not believe the witnesses should be as defensive as they are. We are making these points not so they can be taken out and shot as a result but to say that the Courts Service has to recognise that, given the new thinking and the fact that there is now recognition of how these things should be treated, we have to take corrective action and recognise that the needs of people who were in the system before and who have had negative experiences need to be taken into account. That is why we are raising this. We know the circumstances have changed.

Mr. Seán Quigley

Taking into account the point on reducing exposure to risk, the courts are giving much bigger awards. One can afford, therefore, to invest those awards in a lower-risk environment whereas in the past this was not the environment in which those awards were determined. Therefore, the Courts Service was left in circumstances in which there was an amount of money that would not last unless it sought to grow it. The only option to do that was to put it into a mix of equities and bonds. The proof is that this has been successful in maximising the value of the funds.

I thank the witnesses for attending. We all appreciate it is a difficult job when one is managing other people's money. If I were managing other people's money, I would be adopting a low-risk approach. I would not like to be exposing their capital award to considerable risk. Ms Mary Farrell gave a number of answers at the end of her presentation. She would like to see the Courts Service speeding up the change to the new system. The witnesses said in their presentation that there is an interdepartmental steering group working on the establishment of the decision support service. When will it be up and running for people such as Ms Farrell and others in the room?

Ms Geraldine Hurley

The Courts Service is working very actively with the two lead Departments that are responsible for implementing the new legislation. We will put additional resources into the office over the coming while to ensure we can do everything possible to assist in the transition to the new system.

When will that happen?

Ms Geraldine Hurley

I will pass that question to the Department.

Mr. Conan McKenna

It has taken longer than anyone would have liked to make significant progress on the decision support service. One of the two items of good news on the service is that the director, Ms Áine Flynn, is now in place. She is a solicitor with some considerable experience in this area. She was recruited by the Public Appointments Service, with the Mental Health Commission as a client. She has been in place for the past couple of weeks. As one will have seen in recent days, the budget has now been confirmed for the service to get it up and running and give it the money it needs for start-up purposes during 2018. In fairness to the new director, who has only got her feet under the table in the past two weeks, she needs to be given a chance to examine everything herself in light of the very substantial budgetary allocation and take a view on exactly when things can happen. It is hoped the service will be up and running at the beginning of 2019 but, as I have implied, there are many things to put in place.

It represents a fundamental switch in how public policy and legislation handles these matters and it must be done very carefully and properly to ensure that all those concerned are properly protected and a proper regime is put in place. The two pieces of good news on this are that the director and the budgets are in place to get it going.

Ms Farrell also raised the matter of when the UN Convention for the Rights of Persons with Disabilities will be ratified. The Minister of State, Deputy McGrath, has been before the committee twice. Does Mr. McKenna have any update on this or can someone tell the committee when it is likely to happen?

Mr. Conan McKenna

It is not my area within the Department. It would be common knowledge that the Government's aim is to ratify the convention this year. As the existing wardship legislation and the old 1871 Act are not compliant with the requirements of the convention in how people's capacity issues are dealt with there is a very strong relationship between the timing of the Government's ratification and the point at which we can say we will have a decisions support service operational. Those issues are being worked out at the moment. We need to get a clear line of sight on the actual establishment of the decisions support service; the relationship between that and the ratification of the convention is slightly difficult and must be worked through. There is also legislation in the form of the Disability (Miscellaneous Provisions) Bill which is going through the Houses, as members will be aware, in which a number of other measures must be introduced to facilitate the application.

I thank Mr. McKenna. My next question is for the Courts Service. There seems to be a complete divergence of opinion between what Ms Mary Farrell and the Justice for Wards group says and what the Courts Service says. This committee is trying to establish what is happening. Ms Farrell has presented as though funds have been lost and the funds have been depleted, whereas the Courts Service, and the graphs it has provided, suggest that is not the case. What does the Court Service think of Justice for Ward's matter of concern? Is the Courts Service report saying that the real issue of concern, which is giving rise to the wards' difficulties, is the original awards not having been big enough and that with the passage of time there is not enough money there to continue to pay out?

Mr. Seán Quigley

It is impossible for me to put myself in their position but the reality is that in most of these cases the money will run out. There is possibly an attempt to look at any and every situation where there may have been a drop in the fund's value or something went wrong. The reality is that looking at the performance of the fund over an appropriate period, as the graph shows, there was a dip in 2008 but looking at it over the period for which the fund was designed, it has extended the value of those funds, accepting that those funds were never going to be adequate in the first place. It is a natural concern for the committee and the families to have, that their moneys will run out but it is quite a complex area. As the Deputy said, if he was managing other people's money, he would take a low risk approach. Most of our money is in low risk investments but they generate low returns. Whenever we look at these cases, and there is a relatively small number of them, it would have been remiss of us to say that we would put it in a low risk investment knowing what the inevitable outcome would be, namely, that the moneys would run out much quicker. There is a balancing act of taking an appropriate level of risk to sustain the value of the funds, within which there will be periods of volatility, but one must look at it over the longer term.

When the Courts Service is deciding how it will invest funds from an award over a period, does it have to calculate the likely life span of the individual concerned? For example, if a 30 year old who was a ward of court received an award of €3 million, on what does the Courts Service base its calculations? Does it say that this person may live to 80 years?

Mr. Seán Quigley

The model that was designed by Mercer investment consulting had a range of inputs, including life expectancy, the level of expenditure, the value of the funds available and inflation, both medical and general. All these factors fed into that. If, in that process, it was deemed that the moneys would run out before the individual's life expectancy, then we had to look at how we might generate a higher return. Where that was not necessary, we did not need to take any more risk, but the only situation where it was incumbent on us as trustees and prudent investors to look at how we could sustain the value of those funds for the longest period possible was where the moneys would run out.

The people here are very genuine. They have raised their concerns and believe there are issues in respect of their funds. Has there been any engagement between the wards of court office and the representatives here to provide them with personal explanations as to why the Court Service says their funds have depleted? Inevitably the fund will be depleted, but the problem here is that the depletion seems to have occurred while the ward of court is still with-----

Mr. Seán Quigley

There has been extensive engagement. I am precluded from discussing individual cases but data has been provided which shows the benefit in individual cases of investments being made in the growth fund, given the level of expenditure incurred. With that level of expenditure in a lower performing fund, the moneys would have been gone long before now. That data has been provided and that is why I say we have no concerns about looking at individual cases. We have provided this data to members of the group, individual committees and family members. We have absolutely no difficulty sitting down on a one-to-one basis with any member of the group, or if they are happy to share that data with this committee.

I thank the representatives for their attendance at the committee. I want to raise some of Ms Farrell's queries with the witnesses. There seems to be an anomaly between some families managing a fund and others not being given the opportunity. Is this correct?

Mr. James Finn

I would not say that. Prior to our current arrangements coming into play at the start of 2003, I am aware of some historical cases where family members, or committees, were not satisfied to adopt the policies or strategies which were then being used by the Courts Service and made individual requests to the President of the High Court. It was a very small number of cases, no more than a handful, and they were given approval at the time to put in place individualised arrangements. That is no longer the case. It was very small numbers. It is not a case of it happening on an ad hoc basis, there is only one strategy now.

Does Mr. Finn feel that the families should have an input or say in the investment strategy?

Mr. James Finn

This was the subject of a High Court decision in recent years where the then President of the High Court felt that overall funds would benefit from the expertise, not least because the sum of the money involved means that we can negotiate a very good price on the fees payable. We are where we are when it comes to current legislation - the new legislation will change things dramatically - but as things stand, the legal responsibility for the investment rests with the President of the High Court and the Courts Service. We engage, and try to engage as much as possible, on the matter of expenditure needs and whether properties are bought or sold, and naturally that feeds into our investment policy.

Ms Farrell referred to what she and her group regard as a lack of transparency and accountability. How would the witnesses respond to those accusations?

Mr. Seán Quigley

We accept that we have not been issuing statements to all 2,600 wards. What we have been doing-----

Mr. Seán Quigley

First, there is a resourcing issue. We work within the constraints of the public sector and both the accountants' office and the wards of court office have been subject to significant reductions in staffing.

The other problem we had was the limitations of our IT systems. There was never any lack of willingness to do this, rather, there were constraints. What we have done, however, is provide comprehensive information where it has been requested. I am not defending it as acceptable not to provide it in all cases, it was just that we were operating within limit-----

When did that mismatch occur, and has it been rectified as of now?

Mr. Seán Quigley

It has been rectified. We have started issuing statements to all-----

Is that to all 2,600?

Mr. Seán Quigley

They have not all gone out yet, but over the course of the coming months they will all be issued.

Okay, but how many have been issued?

Mr. Seán Quigley

I think we have mentioned-----

Ms Geraldine Hurley

Some 120.

Some 120 have been issued.

(Interruptions).

Of the 2,600, 120 have been issued. Would the witnesses accept that a significant number of families are left in a vacuum in terms of information, without any knowledge or know-how about how the fund is being managed? Would they accept that that would give rise to questions?

Ms Geraldine Hurley

We would say that it was less than ideal that statements were not issuing automatically, but any time a committee asked for information, comprehensive financial information was being provided. From here on in, annual statements will issue automatically. We would hope to have the total number done in the next four or five months, and they will issue annually thereafter. If there were requests for follow-up information, or queries on that, we have put information on the fact-sheets going out with the statements on how individuals could follow up if they were looking for additional information.

When did that change of policy occur?

Ms Geraldine Hurley

I suppose it was more a matter of the resourcing necessary to verify the information in both computer systems. There was a degree of background work that needed to be done. It was not a policy shift. It was that we had some additional resources, and additional flexibility as regards resources, after the financial crash, when all Government Departments were under resource constraints, so we put additional resources into completing it.

Did the Department of Justice and Equality receive communication of the concerns with the vacuum that occurred?

Ms Geraldine Hurley

It is true to say that we were aware of the concerns from communication with individual committees, and also from engagements such as the ones that are here as well.

Did the Department receive correspondence from the Courts Service regarding the vacuum in terms of information and the number of statements that were issued? Did it receive communication about the concerns that the Courts Service had about not being able to issue the statements, that obviously reflected the concerns of the group?

Mr. Conan McKenna

The answer to that is that over the years there has been an ongoing relationship between the Department and the Courts Service regarding the courts policy division. The Department is in constant contact with the Courts Service, and these issues arise all the time, including through parliamentary questions, which are regularly put down about wards of courts and these types of issues. Have we had an ongoing resource dialogue with the Courts Service over the years, during the economic downturn? Yes, and every year decisions have to be made about allocation of resources. Every part of the justice sector was in extreme difficulty during the down period, and nobody could get all the resources they needed to do all the things that they wanted, including the Courts Service and the Department itself. We are in a very good situation now, where the Courts Service has the capacity and the delegated authority to appoint staff to help it do these things, and its budgets have been improving in recent years, but I cannot say anything that would give major comfort regarding the years from 2008 onwards, because all across the system we were in absolutely extreme difficulty in terms of resources and prioritising what we had.

I wish to revisit some of the questions about the investment profile. Is the point the witnesses are making that, because the awards were not significant enough, they had to rest those funds at a higher risk profile? Is that the calculation that the Courts Service made?

Mr. Seán Quigley

Yes, and it is not just as simple as that. One would not risk funds if the person had a life expectancy-----

Well, there is always risk, so-----

Mr. Seán Quigley

There is always risk. Even with putting it in cash, it will not match inflation. In fact, cash is yielding negative returns at the moment. Wherever one goes there is a risk, but there was a judgment call, based on the independent investment advice that we had available to us, that if the ward of court had a sufficiently long life expectancy, and we are talking here about five to ten years and beyond that, then it was appropriate to have an exposure to equities. In fact, it would have been the prudent thing to do if one was seeking to grow the value of the investment. As Aon Hewitt identified in its report, our approach has always been a least-risk approach. We only take risk where it is absolutely necessary and in the best interests of the ward of court, and that is what we did.

Mr. Quigley says it is a least-risk approach, but he also said that he has had to engage in slightly higher risks to meet the calculated demands of the treatment profile or the needs of the person. Is there a mismatch or dysfunction within the courts, not necessarily with the Courts Service, where the witnesses are managing a fund that they see as being insufficient, and the Judiciary may not be awarding, or the historic awards do not meet, the demands of the person?

Mr. Seán Quigley

The Courts Service has no input-----

I know that, but obviously Mr. Quigley communicates within the committee structure. Is he party to the committee structure with the various members of the Judiciary?

Mr. Seán Quigley

On the investment committee?

Mr. Seán Quigley

What we are dealing with here is-----

Does the investment committee have a co-ordinated approach?

Mr. Seán Quigley

What we are talking about here are cases that were determined years ago, so there is no option to go back and revisit an award. We are talking about awards that go back maybe 30 years. It is only in recent years, with a particular case that set a precedent, influenced by the lack of progress on the periodic payments, that the courts decided to apply a different metric. Prior to that, there would have been actuaries and consultants in the courtroom saying, "We think this is what is required", while somebody else might say it was something else. A consensus was agreed on the amount that would be awarded. We, then, are given that, and we have to work with it, whether it is adequate or not. Obviously if it is adequate, and that would be the case in some situations, we do not have to expose it to any more risk than is necessary. It is incumbent on us, however, and prudent, and within the trustee legislation, to invest in equities. Even at the height of the crisis, we only had 65% in equities. Pension funds and other funds out there would have had much higher exposure, so it was a measured risk that we were taking.

The Committee of Public Accounts report mentioned one case that will run out in the next two years, that six wards of court were defunded below €10,000, and 15 may not prove sufficient. Is that an accurate current profile of the number of cases?

Mr. James Finn

Yes, it is.

Mr. Finn is saying that 22 cases of the 2,600 are at risk.

Mr. James Finn

That is correct, yes, but some of those cases go back to the 1960s and many go back to the 1970s. We took on the role of looking at all our cases. I refer again to the catastrophic injury awards. The principle behind them, and this is the major reason periodical payments legislation is being introduced, is that the fund is to last for the lifetime of the person, no shorter than that, and no longer than that. The reality is that it is not a science. In fact, we have a significant number of cases where, due to the level of payment, the funds are growing. The idea is not that the fund should grow but it is that the fund should last the lifetime of the person, and that is not a science.

Is Mr. Finn saying that there are only 22 cases that are currently at risk, according to his projections or his analysis?

Mr. James Finn

Yes.

Does that match with what the Justice for Wards group has said? Does Mr. Finn feel their concerns-----

Mr. James Finn

I think the issue for the Justice for Wards group is not the number, but their own individual cases-----

I know that. Thank you, Chairman.

Go raibh maith agat, Deputy Chambers. I call Deputy Donnchadh Ó Laoghaire.

Go raibh maith agat. I thank the witnesses very much for appearing before us. I have one or two brief questions on the investment - a lot of it has been rehearsed already, so I will not cover all the ground - and one or two more general questions on the operation of the wards of court system. The first concerns the spectrum growth fund that has been referred to. Is that growth fund in use currently?

Mr. Seán Quigley

Yes, it is and it is a very similar risk profile in terms of exposure to equities. When in a strategy with a long-term objective, chopping and changing half way does not arise. This is why the approach we set out in 2002 when we engaged investment consultants still remains the approach. We have been consistent.

At the time of the economic crash - obviously the downward trend was over a period of two years - was consideration given to reinvesting part of the fund in more secure items? Obviously equities took a bit of a hit during that period. Was the possibility of adjusting it ever discussed?

Mr. Seán Quigley

Not just during the period of the financial crisis, but on an ongoing basis we review all our strategies. Last night I looked at the financial statements for that period. The investment committee met nine or ten times during that year. There was very proactive review. We need to realise that the collapse in the financial markets happened very quickly. Very few, if any, people anticipated the financial crash to the extent that it happened. Once the markets were down, we had a choice to make as to whether to stick with that. We effectively did that and the recovery has been quite good. The alternative would have been to get out and put it into cash, and cash has been delivering a very poor performance.

We made one change shortly after the financial crisis, which was consistent with reviewing our strategies. For people who had money in growth funds, we decided to hold a small portion in cash. None of us wants to be selling funds or units when the markets are down. The reality is that very few funds had that experience. The natural reaction during a crisis as significant as the financial crisis - the worst since the Great Depression - is to become slightly more risk-averse. That is what we did. It will always be a judgment call at a point in time. The cash we are holding is not generating any return; in fact in line with the ECB monetary policy it is generating a negative return. If that money had been left in the growth fund it would be worth considerably more. It is judgments at points of time. There is no absolute right answer to any of this.

Is it possible that money might have been invested on behalf of a ward of court on a date shortly before the economic crash and the ward of court would have to rely on that fund for expenditure during that period? I do not know if any such cases have come before the Courts Service yet. Is it conceivable that such people could have realised a loss, perhaps their investment in the fund had been around in 2005 or 2006, and then might have incurred significant loss in 2009 or so?

Mr. Seán Quigley

We have looked at these cases. As I said in my opening statement, we have not denied that there may have been a small number of cases. There were a small number of cases that probably came in in the couple of years before 2008. If those cases had to sell units during the financial crisis, they would have incurred a loss. The losses were quite small based on the reviews that we have carried out.

However, the fund was designed for the lifetime of the person over a longer period. The value of those funds has recovered substantially and so they are benefiting from having been there. A person in a long-term fund with a 90% return over the past 13 or 14 years, who likes the 90% but does not like that little bit when there was a dip, should not be in that fund. That person does not want the risk of that dip despite benefiting significantly by being in there for the longer period. The alternative to that is to invest in a much lower-risk strategy, probably cash or bonds. However, even at the lowest point in the financial crisis the growth fund was still outperforming those lower-risk funds. That is what we are up against.

It is difficult for us sitting here to reconcile very legitimate and articulately expressed concerns and views about losses that people experienced and implications for the care of their loved ones with what is being presented here. We will consider it and prepare our report having considered all the documentation. I urge Mr. Quigley to remain open to engagement with the Justice for Wards group and individual wards of court.

My final questions may also be relevant to the Department. The Law Society made a submission expressing concern over Part 6 of the 2015. The submission stated:

However, Part 6 of the 2015 Act does not make the same provision for wards of court as provided in Part 5 for a relevant person. The ward is not being given equal treatment (as required by the UNCRPD) to a relevant person. Part 6 is silent as to whether the ward is to be assisted in court in relation to an application to the court in any such review, whether any person/court friend is entitled to make submissions to the court on the ward’s behalf, and very importantly there is no provision for the ward to avail of legal aid, if he or she requires to do so, in respect of an application to the court for a review of his or her capacity.

It specifically relates to the issue of reviews of capacity. I would like a comment on that. That is relatively technical but still has significant implications for giving voice to the ward in court proceedings.

Mr. Conan McKenna

We are aware of those submissions and the key issue seems to be aligning access to legal aid and things like that between Part 5 and Part 6. We are looking at that in the context of the disability (miscellaneous provisions) Bill, which will introduce a number of amendments to the Assisted Decision-Making (Capacity) Act 2015. We are aware of the issue and we are looking at it.

I asked what else could be done to support wards. One of the points made is that settlements, compensation or funds should perhaps be disregarded for items such as medical cards, payments etc. Has the Department of Justice and Equality had any communication with the Department of Health or the Department of Employment Affairs and Social Protection on that?

Mr. Conan McKenna

Some of those issues were addressed. There was the minute of the Minister of Finance in response to the Committee of Public Accounts 2015 recommendations. The statutory minute of the Minister of Finance provided information to the Committee of Public Accounts. It addressed issues under the then Department of Social Protection and the HSE. I cannot put my hand on it now and I do not think I would bore members of the committee with reading it out to them.

I have just located it and could read it out. Chairman, I am at your disposal. I could either refer to this or we could send on a copy to the committee.

Mr. McKenna might want to make a prescient indication or to send it. Deputy Ó Laoghaire, would you like to-----

If it is brief.

Mr. Conan McKenna

It stated:

In the case of social Insurance payments, such as Invalidity Pension, means are not assessable. As such, this issue only arises in cases where a person is claiming a means-tested scheme. In the case of means-tested payments, claimants are assessed on any cash income, property other than the home, and investments... This means that a Disability Allowance claimant with €50,000 in savings (and no other means) can be assessed as having nil means and, as a result, receive the maximum rate of Disability Allowance.

I think the Department was trying to give some comfort there in cases of wards with depleted funds when coming out of wardship. It further stated that the then Department of Social Protection's view at the time was:

Many of the Department’s customers are vulnerable. From the Department of Social Protections perspective, there is no justification in treating a person who is a Ward of Court differently to others in relation to means assessment.

Regarding the HSE part of it, it states:

The Minister for Public Expenditure and Reform is informed by the Department of Health and the HSE that the HSE can award medical card eligibility where undue hardship arises for a person in arranging health services. In relation to the medical card assessment process where persons have or receive significant income - e.g. pension or redundancy lump sums, compensation awards through court proceedings etc. such funds are not treated as income under the medical card assessment process but as savings, Savings up to €36,000 for an individual and €72,000 for a couple are disregarded and only interest earned on any savings above these thresholds are reckoned for medical card assessment purposes.

It is probably easier to give the material to the committee.

The witness may furnish it to the clerk as that would be helpful.

I thank the witnesses for the presentation. I would not blame them for not anticipating the severity of the crash as I did not do so either. I do not know anybody who did and most of the clever comments came afterwards. I did not hear much of it before the crash.

Ms Mary Farrell made a presentation in the previous session. She was not saying the money could have been invested better but the impression I got was there is a lack of information for her group. The impression I got was that it would be possible for more information to be given to the wards of court group and they could see more clearly exactly what went on. The witnesses made the point about the cash and nobody is arguing with that. I cannot remember the last time cash made money. This is in the interest of accountability and transparency. There will be a change down the road with the new legislation but could a better structure be put in place so these people can be more informed? Ms Farrell was adamant there should be a retrospective examination of what went on and whether more information can be given to these people to achieve more clarity and a bit of satisfaction. When people know what happened and what is happening, it takes much suspicion and doubt from the occasion. What do the witnesses think of that?

Mr. Seán Quigley

I will say a few words before passing over to my colleague. We acknowledged earlier that we could have done more and we want to do it. We are now issuing statements to all wards of court. I acknowledge that where wards of court or their families made contact, comprehensive historical data was provided. We are accepting that we can do better and we are now starting that process of issuing statements. There is no limit with any of the family members with respect to going back to whenever the money is first given into court, and we have done that on occasion. We are happy to share that information. We are open on that front and we have put our hands up to say we could and should have done better over the years. It was not that we were hiding anything but it was purely a resource constraint on our part in how to prioritise what we could do with the limited resources available to us.

Ms Geraldine Hurley

The high-level statements are now issuing to all wards. It is a priority for all wards to receive these over the coming months. We have no doubt this will lead to additional follow-up queries from committees of wards of court when they get information and perhaps some wards did not seek the information before. We will ensure when they come back to us seeking follow-up information, clarification or more detail, it will provided to them on request as well.

Any information they want on what happened in the past will be made available.

Ms Geraldine Hurley

It will be available to the committees of the wards.

It was mentioned in the submission that a completely unsolicited and independent review carried out by Key Capital and PricewaterhouseCoopers in 2014 found things were done properly. Why did they do it if it was completely unsolicited?

Mr. Seán Quigley

We did not even know this review was taking place until somebody contacted one of our investment committee members who happened to know the person involved. They were looking at the charities sector and examining not-for-profit organisations in terms of how they managed funds on behalf of other individuals. They looked at the Courts Service website, annual financial statements, governance structures and investment strategies before noting in their report that it was an example of good practice.

Most would agree the big organisations have a pretty incestuous club and it is very hard to find someone who can take an independent position on most matters in Ireland. Key Capital and PricewaterhouseCoopers are big players with vested interests in many different areas. If in the case of the Comptroller and Auditor General not being given permission by the Attorney General to adopt an oversight role, would the service see merit in some other form of independent oversight in the interests of transparency and accountability?

Mr. Seán Quigley

We have external auditors. They are currently from Grant Thornton and others have done it in the past. We have representation from the National Treasury Management Agency on our investment committee and they would not stand over anything that was not up to scratch. What would go beyond our current action and fill the gap of the Comptroller and Auditor General if there is a constitutional impediment? We are happy to look at that. The main constraint on us is the publication of individual details. Individuals may argue they lost money but we can only provide details to the family. We cannot put that on the website so people can see how funds have performed. We could extend the remit of the auditors to examine a sample of cases but again we should consider where it would go. It is outside their remit now but we could look at it.

We come to this knowing we have no concerns and we have nothing to hide. The funds have performed exceptionally well by any benchmark so we would be happy to consider anything that can allay the concerns of the committee and bridge the gap where one might hear one thing and then another. There is a high level of independent scrutiny currently.

I thank the witnesses for the presentation today. I can imagine it must have been very difficult when the service did not have the resources to be able to do the job the witnesses wanted to do to the best of their ability. I am happy to hear that has changed and the service is willing to work with the families here today. It is a positive message being given. One can imagine the circumstances for those families are very difficult, as they live with the heartache of somebody who has been devastated by mental disability or whatever it may be. It is great that the service will work with the families and I ask the witnesses to give them a good understanding and communicate what is going on. That would be great. The witnesses indicated over 100 statements were sent in September but how long will it take to get these to all 2,800 families?

Ms Geraldine Hurley

Our target is within five months. They will issue annually thereafter, starting mid year every year.

Would the service be inclined to communicate in a way that asks the families to come in and speak with its representatives? Does the service wait for the families to make contact?

Ms Geraldine Hurley

An information leaflet, which sets out how people can contact us if they want further follow-up information, is issued with the statements. The leaflet makes it very clear to them how we can be contacted if additional clarification is needed. We leave it to their initiative to follow that up.

If a ward who is in receipt of a court award dies, what happens to the funds that are being controlled for him or her?

Mr. James Finn

Such a case is treated in the same way as the case of any other person.

Is it part of the estate?

Mr. James Finn

Yes.

Okay. I thank Mr. Finn.

I would like to make a couple of points. I recognise Senator Black's closing remarks. Despite some of the welcome utterances from the witnesses who have attended this second session, there is still a bridge to be built and there are still questions to be answered. Ms Hurley mentioned in her opening statement that the process of issuing annual statements is now under way. While this is welcome, it is very late in the day. That has been acknowledged and Ms Hurley has explained why it is the case. I do not know why ructions would not have been raised regarding the under-resourcing of the Courts Service in this regard. If action had been taken, these statements could have been issued years ago. If I was in the same position, I would have been knocking on the door. This is the absolute right of the committees, as Ms Hurley referred to them, and the families and interests of each of the respective wards of court. This is welcome, even if it is late in the day, and I hope it will continue.

Ms Hurley referred to "the provision of annual financial statements to each ward ... in all cases where committees request information". When Ms Farrell spoke during the first session about seeking information in certain situations, as I took notes my sense was that it is almost like having to ask Ministers questions in the Dáil Chamber. Deputy Daly reflected on this too. The common denominator is the receipt of minimalist responses. Ms Hurley suggested in her opening remarks that "comprehensive financial information" is issued in response to requests for information from committees. It is clear that there is a significant gap between the two experiences. Having met Ms Farrell and others previously, I have no doubt that she was reflecting her experience and that of others. I do not think what Ms Hurley has said stands up. Although "comprehensive financial information" may be provided in some cases, that is not the situation that applies across the board and in the experience of all concerned. I suggest it is far from the experience that was represented here this morning.

In the period up to 30 September 2015, approximately 19,500 people were beneficiaries under the Courts Service fund management service. I understand that approximately 2,700 of them were wards of court at that time. There was overall investment of €1.53 billion, with €1.05 billion being the value of funds under the wards of court nest, for want of a better description. The Courts Service has advised that during the period from April 2007 to February 2009, there was an aggregate net realised gain of €554,957 from sales out of the spectrum growth fund. Do those figures sound correct to Mr. Quigley?

Mr. Seán Quigley

Those are the facts, yes.

Sadly, many people ask me whether I have ever regretted the 20 years I have spent here as a Dáil Deputy. I always say "No", but I certainly regret the 12 years I gave to banking before I came into political life. It seems to me from that previous experience that €554,000 is a very low return on over €1 billion in funds over such a period of time. It does not tick the box in any shape or form.

Mr. Seán Quigley

Can I-----

I would like to ask a related question before I invite Mr. Quigley to respond. The figure I have mentioned is the net aggregate realised gain. There has been no mention at all of the actual realised losses that were incurred over the same period. We are not able to get that information. At least, I have not been able to get it. My understanding of the net position is that the aggregate of losses and gains happened to present a very small overall return on the significant moneys that were entrusted. Is information on the realised losses over the same period available? If it were, we could do the maths and work out the exact gains and losses. We have been given the net figure only in the information that has been released.

I have a further point to add to this tranche of questions. I understand very well the difference between "realised" and "unrealised". It is recorded that a temporary and unrealised loss of -34% was recorded in the case of a ward or wards invested in the spectrum growth fund. I know it was not realised. I know the situation has changed. If I were a parent or guardian of somebody, I would be alarmed to learn that such a huge potential loss - I emphasise the word "potential" - could have accrued over that period of time from the moneys entrusted for the maintenance and support of, and provision of services to, my loved one going into the future.

Mr. Seán Quigley

The €554,000 figure, which is quoted in the Aon Hewitt report, does not relate to all funds. According to the report in question, "Based on data provided by the Courts Service there were aggregate net realised gains of €554,957 from sales out of the Spectrum Growth Fund during the period April 2007 to February 2009". This figure relates only to the 63 cases where there were sales out of the funds. Gains were realised in 87% of those cases. Losses were realised in a small percentage of cases. I do not have the figure for the losses. It is relatively small. We can provide it. The €554,000 figure does not reflect the return on the entire fund. It relates to 63 cases out of approximately 20,000 cases, and only to those cases where there were sales. It can be seen that out of 2,600 wards of court, there were only 63 cases in which units had to be sold during the period in question. Even then, gains were realised in 87% of cases. The -34% figure is also taken from the Aon Hewitt report. I would be somewhat reluctant to comment on its work. It is Aon Hewitt's report and not my report. I think it was comparing the state of one fund at the worst point of the financial markets with other funds that had taken a much bigger hit. I think that is the only purpose the -34% figure served. As the Chairman has acknowledged, this was unrealised and did not materialise into an actual monetary loss

The point I am making is that it would cause great concern if it came to the attention of the committee, the family or the loved ones of the case or cases in question. Mr. Quigley has mentioned that 87% of cases realised a higher return, which obviously means that 13% of cases did not.

Mr. Seán Quigley

Yes.

There was a loss factor.

Mr. Seán Quigley

I made the point earlier that the 13% of cases in question were in the fund not for the 18-month period in question but for an extended period of ten or 20 years.

Mr. Seán Quigley

The performance of the fund must be considered over a longer period.

I appreciate that, but this was realised nevertheless.

Mr. Seán Quigley

Absolutely, in that short period of time. The recovery would have been achieved subsequently.

On the remaining balance going forward.

Mr. Seán Quigley

The point here is that the level of risk we took was in the best interests of the beneficiaries.

To take a lower level of risk and not be exposed to equities would have merely guaranteed that the money would have gone a lot quicker because one would be into low-performing cash and bond funds. We would be satisfied that we acted in a fiduciary capacity in the best interest of the beneficiaries. Of course, the risks were higher than one would like but as has been proven by the return on this fund over the longer term, it has been absolutely in the best interest of them.

I have a final question. As far as-----

Ms Geraldine Hurley

Could I just answer?

Yes, please.

Ms Geraldine Hurley

The Chairman mentioned issues about the resourcing of the Courts Service. It is true to say that during the period, from 2008 up to 2014, there was a significant reduction in the staffing of the Courts Service. That was also reflected in the staffing of the wards of court office, as with all offices. Our staffing overall reduced, from over 1,080 down to just over 900. Each area in the Courts Service had to prioritise and in the wards of court cases, ongoing case management of cases was achieved thanks to the commitment of the staff in the various operational areas. It was a very significant reduction in the staff that we were communicating on an ongoing basis to the Department of Justice and Equality, and onwards to the Department of Public Expenditure and Reform. We were not alone in that situation but when one is in an operational area, one very much has to prioritise key tasks and key operational priorities which, as I say, in the case of the wards of courts office, was case management. The registrar of the wards of court and his staff are acutely aware of the importance of them moving on cases and moving on decisions, and moving on payments or purchases that have to be done on a day-to-day basis, and that was prioritised over the desirability of issuing statements to all committees of wards. Mr. Finn was going to add something.

Mr. James Finn

The point about communication was made. We have recognised that improvements had to be made and they are being made.

The point about inconsistency in communication was also made. Maybe I could point out, because Ms Mary Farrell raised the issue, the default position when a person is a made a ward of court is that a family member, if possible, is appointed committee. The committee's role is very important. They are involved in both the affairs - the property - but also, of course, the personal welfare. Where there is no one suitable, where there is no one available or where a potential conflict of interest might arise, or, indeed, in a very small number of cases, where there are concerns about financial abuse, the Solicitor General is appointed as an independent committee. Our communications are always with the committee and sometimes it causes difficulties.

Sometimes we have to make a decision we prefer not to make, which is that our communications are with the committee and not necessarily with the family. The reason for that is a legal one. When a person is an adult, the fact one is a family member does not necessarily give one the right to all information. That is not a feature of wardship. It is also, for example, in the other legal framework that currently pertains - the enduring powers of attorney. In the same way, an attorney - the courts have found this - has no obligation to give information to persons other than, for example, a committee. I would say that the difference arises from the fact that most committees, but not all, are family members.

I thank Mr. Finn for that. Mr. Quigley referenced Aon Hewitt. It carried out the review of the period. Was there a conflict of interest in Aon Hewitt doing this when it is investment adviser to the Courts Service, at one of the same time albeit not over the period under the review which was under Mercer? It struck me as perhaps not the best fit. I wonder would Mr. Quigley like to comment on that.

Mr. Seán Quigley

We do not consider there was a conflict of interest. We did consider, and I discussed this with the President of the High Court.

The background to this was we put this work, both the investment advice and the independent review, out to tender. The reality is that the market in Ireland, in particular, in Dublin, for the level of expertise needed for a fund the size of what we have - €1.8 billion and 20,000 beneficiaries - is quite small. There are only two firms over the years that have consistently applied - Aon Hewitt and Mercer. Aon Hewitt was the only one that responded. If Mercer had responded, it would have been precluded because it was the investment adviser. We were satisfied that they were independent. They are governed by the regulatory authorities themselves and they cannot come along and say what suits us. This was one of the reasons I referenced this other review, which we did not even know was happening, as evidence that here is something completely unsolicited which stated that what we were doing there is good practice. We would be satisfied that there was not a conflict of interest.

On that note, on my own behalf and on behalf of the committee, I thank James, Geraldine and Seán from the Courts Service for their participation and engagement with the committee, and to Conan and Yvonne from the Department of Justice and Equality for their attendance and engagement.

The points I made, in summary, at the conclusion of the first session, still stand as issues of concern and address. We, as a committee, will deliberate on all of that in terms of the construct of our report. It would be fair to say, with the Justice for Wards representatives in the committee room with us as we speak, that we intend as a committee to continue to monitor the issues that we have addressed. Our report will not close our interest going forward and we would like to hear that some of what they have reflected on will be the new experience of the families concerned in the future. It is up to the Courts Service, primarily, and the Department in its role and how it impacts, to help ensure that there is a new day and a new relationship in the future.

I thank everyone for their attendance. We will suspend briefly before going into private session. I appeal to the members not to vacate the committee room as we have some work to conclude.

The joint committee suspended at 11.58 a.m., resumed in private session at 12 noon and adjourned at 12.20 p.m. until 9 a.m. on Wednesday, 18 October 2017.