JOINT COMMITTEE ON TRANSPORT debate -
Thursday, 29 May 2003

Vol. 1 No. 14

Taxi Hardship Panel and Interim Regulator: Presentation.

Chairman

I am delighted to welcome Mr. Jimmy Farrelly, interim taxi regulator, along with Mr. Kevin Bonner and Ms Ann O'Riordan, chairman and member, respectively, of the taxi hardship panel.

I remind everyone about their mobile telephones and I draw attention to the fact that members of this committee have absolute privilege, but this same privilege does not apply to witnesses appearing before the committee. I also wish to remind committee members of the long-standing parliamentary practice that members should not comment on, criticise or make charges against a person outside the House, or an official by name, in such a way as to make him or her identifiable. I ask Mr. Farrelly to start his presentation.

Mr. Jimmy Farrelly

I have already supplied a copy of my script to the committee and I presume it has been circulated, so perhaps I will not read it in detail but touch on it.

Let me set out my role as I see it in relation to the industry. I was appointed by the Minister for Transport, Deputy Brennan, on 14 February 2003, to undertake consultation with the industry and other stakeholders and to progress improvements in standards pending the appointment of a statutory regulator and the putting in place of a regulatory system for the industry. My input is of the order of two days a week and the work period is envisaged as of six months' duration, by which time it is expected that a permanent regulator will be in place. My appointment stems essentially from concern that progress should be made on improvement of standards in advance of the statutory system coming into operation.

I have already met representatives of some 19 bodies and groups, as can be seen from the appendix supplied to the committee. I apologise to Mr. Tom Coffey who is described on the list as being attached to Dublin Chamber of Commerce when in fact he is with the Dublin City Centre Business Association.

On the basis of discussions I have had to date, I see a need to move as quickly as possible to the statutory regulatory system, with a start being made by the early setting up of an advisory council and proceeding with the arrangements for the appointment of the permanent regulator in advance of the enactment of legislation. This is proceeding with some urgency, but I am, to some extent, an outsider looking in rather than an insider.

An issue which is frequently raised in the taxi area is the increase in taxi numbers arising from liberalisation in November 2000. The only thing that I can say on that issue is that it is not up for review or decision by me. A decision was taken in November 1999 to issue 3,100 licences in the Dublin area. That was challenged in the courts and the court decision made clear that thelimitation of taxi licences was not legally sustainable.

That switches the discussion onto the question of standards of service. Since deregulation there has been a very substantial increase in the number of taxi licences, and we are not talking merely of the Dublin area but about the whole country. While that has helped meet demand, which has increased substantially, there is a range of concerns about standards of service. Accordingly, I feel that the emphasis must now switch to the need for qualitative requirements for vehicles and drivers.

The training and education of drivers automatically comes up and has been raised in the various discussions I have had. I see that as necessarily covering many areas, including the ability to find specific locations, delivering a quality customer service, the duties and responsibilities of drivers and the obligations of clients and customers using taxis, specific environments for wheelchair accessible taxis and dealing with the needs of a broad range of people with disabilities. Disability is not just about people in wheelchairs but much wider. I have given quite some time to the issue of training in consultation with various people, groups and bodies. However, it must be put in place. It is important that equal standards are required and that matter is also under consideration.

I will spend a few moments on the taxi hardship panel. The case is also made by taxi interests for taxi licence holders regarding the open market value of licences before liberalisation in November 2000. A taxi hardship panel was set up and has made recommendations on payments for extreme personal hardship arising from liberalisation. It was made clear at the outset that there was no question of payments being made to holders of taxi licences in November 2000 for any perceived loss of value. The question of compensation payments is also the subject of several High Court actions which have yet to be heard. The issue at this stage is the implementation of the report of the taxi hardship panel. I considered that issue, having discussions at ministerial and departmental level. It now boils down to putting in place arrangements for a system for the receipt of applications, their processing and phased payment of the recommended hardship sums.

I will skip the issue of the taxi ranks. Members have the text and if they wish to ask me about anything in it, I can deal with it. The use of bus lanes by hackneys is also covered in my text. Rather than waste members' time, I will assume that they have read it. If they wish to come back to me, they can do so. I also mentioned the question of fares in my script. Members are open to ask about it also.

Mr. Eoin Bonner

I will begin by listing our terms of reference as the taxi hardship panel and afterwards Ms O'Riordan will detail how we proceeded. I will end with the conclusions of our work.

In the document which I provided, I said that it was important to realise that our terms of reference were:

To examine and report in general terms on the nature and extent of extreme personal financial hardship experienced by individual taxi licence holders arising from loss of income as a direct result of the liberalisation of the taxi licensing regime on 21 November 2000.

We were obviously constrained by that formula. It was made clear to us that there was no question of payment for loss of the value of licences and the courts have decided that there can be no legal duty on the State to compensate licence holders in relation to licence values. We are constrained both legally and by our terms of reference from going beyond what was set down for us. I will hand over to Ms O'Riordan, who will cover the procedures that we adopted in putting together our report.

Ms Ann O’Riordan

After the announcement of the establishment of the panel, advertisements were taken out in all the national newspapers on three occasions. The panel met with the trades unions and FAIR. As a result of those meetings, we recognised that the introduction of a standard form would greatly facilitate us and the individuals making submissions. A copy of the form is attached, showing what information we requested from people submitting applications. In total, over 2,000 forms were sent out. Of the 4,000 taxi-drivers with plates at the time, we got 2,000 submissions. Having sent out the forms, 1,385 were returned and 490 not fully completed.

The completed forms helped us to analyse the submissions received with a view to determining categories under which submissions might be classified on the basis of the most common claims by individuals. It was agreed that nine categories would adequately cover all submissions received. Those nine categories are listed in my paper. The panel spent quite some time reviewing samples from each category on a case by case basis. To clarify the situation and gain some personal perspectives, the panel also met some individuals from the categories mentioned. General submissions were also received from the taxi unions and FAIR and the panel met representatives from both on several occasions.

As a panel, we felt that, through the numerous meetings held with union representatives, FAIR and individual taxi-drivers and widows, in addition to reviewing individual submissions, we had sufficient information to provide an informed report for the Minister, in the context of our terms of reference, on the nature and extent of extreme personal financial hardship which may have been experienced by individual taxi licence holders arising from loss of income as a direct result of the liberalisation of entry into the taxi industry on 21 November 2000. We also had sufficient information to estimate the numbers of individual licence holders involved, the likely financial implications and, in our report which Mr. Bonner will cover, the recommended criteria for the assessment of extreme personal financial hardship under any subsequent proposed response by the Government.

Mr. Bonner

With regard to the nine categories we came up with, we found that, in respect of six, there was extreme personal financial hardship. The first was widows or those separated who had previously rented licences. In the submissions made to us, 3.7% of people were in that category. We found that there was extreme personal hardship because of liberalisation and felt that payments between €10,000 and €15,000 should be made, the first figure being where there were no dependants and the second where there were dependants.

With regard to individuals over the age of 65, we also found that there was extreme personal financial hardship. The numbers were 7.8% of the categorisation and we recommended a payment of €13,000, which would mean an overall cost of €4 million. The third category was those aged between 50 and 65 who had no pension set out. We once again found that those people had suffered extreme personal financial hardship and recommended a payment of €13,000. The estimated numbers were one fifth of the total categorisation, or 21.6%. The maximum cost would be €11 million.

The next category was wheelchair accessible taxis. We found that extra expenditure was incurred by people in this category in regard to wheelchair accessible taxis. We felt that there was extreme personal financial hardship among 15.8% of the numbers involved in this category. We recommended a payment of €3,000 per individual at a maximum cost of €2 million.

A number of people had taken out large loans in the years prior to liberalisation which meant that they were faced with quite large payments to service their loans. Some 16% of people were in this category. We recommended payments of between €6,000 and €12,000 depending on the size of the loan. The maximum cost involved here would be €6 million.

The final category in which we said there was extreme personal financial hardship was in the case of invalids where we recommended a payment of €13,000. The number of invalids amounted to 3.7% of the numbers and the maximum cost in that regard would be €2 million. Capital claims would amount to 7.7% of the numbers in regard to categories six and eight which also had considerable numbers involved. Category eight in regard to working increased hours amounted to 19.2% of the total. There was also a category in which there was insufficient information.

When one adds all that together, based on the figures which we received from the forms and the people we met on the basis which Ms O'Riordan described, we believe that there was extreme personal hardship in six of the nine cases. The total cost of the figures we got, taking into account the 4,000 people who held taxi licences at the time of liberalisation, amounted to €27 million. Based on the fact that some 4,000 taxi drivers were in operation at the time of liberalisation and we only received submissions from 2,000, we felt that substantial numbers might not qualify. We just took a pot-shot as to what that figure might be and, accordingly, we reduced the €27 million to €16 million. It is a very subjective view of what the cost might be as we are not exactly sure of the outcome. What we have provided is a general idea of the numbers involved, the type of hardship suffered and what we believe to be a common sense view of what would be reasonable compensation to these people in view of the extreme personal and financial hardship they suffered. That is basically what we have provided in our report, in conformity with the very specific terms of reference which we were given.

Chairman

I thank Mr. Bonner. I ask members to be brief in their questions. What is Mr.Bonner's response to the report of the European Union Committee on Petitions?

Deputy Naughten

Will Mr. Farrelly outline his budget level, staffing and resources and the current powers he has as the interim taxi regulator? Will he also outline his role and function in regard to the taxi hardship panel and the status of its report in his office at the moment? I understand that payments will be made through his office so maybe he would update us on that aspect.

The hardship panel stated at the outset that there was no question of payments for the loss of value of licences and the courts upheld that point. Is it not the case that the Revenue Commissioners believe they have a legal case in relation to the value of licences in regard to probate and capital gains tax?

What is the panel's view on the statement by the EU petitions committee that its report was inadequate and arbitrary in regard to the recommendations made in it? What budget was set aside at the commencement of the report to implement the recommendations? The report states that account has been taken of the insecurity and the human cost of overnight deregulation. Will Mr. Bonner elaborate on how that came about?

Some anomalies appear to exist. I would like to hear a definition of what constitutes "extreme personal hardship". As far as the hardship panel is concerned, it is worth a maximum of €15,000, depending on the particular circumstances of individuals. A 50 year old person with no pension will receive a payment of €13,000, yet someone of 49 years of age with no pension and a taxi loan for a sum of €78,000 will only receive a payment of €8,000. There seems to be a huge anomaly in that regard.

Most taxi-drivers are self-employed and in that case they will have been paying their PRSI contributions and would be entitled to a pension, some of them to a pro rata pension which would be small. However, once they receive any type of pension, they are automatically disbarred in regard to compensation payments. Another anomalous situation is the lack of clarity in regard to the number of a widow's dependants. For example, a widow with a large number of dependants should have a higher rate than someone with a lower number.

Deputy Shortall

How does Mr. Farrelly see his role? It is now some two and a half years since overnight deregulation of the taxi industry and it seems to be a complete free-for-all at the moment. There is certainly a marked decrease in standards, both in terms of cars and the calibre of drivers. It is fair to say there is considerable public concern about the question of safety in regard to taxi-drivers. Up to deregulation there was a certain guarantee to passengers travelling in taxis due to the fact that the driver had paid a considerable amount of money and was highly unlikely to jeopardise that investment by any inappropriate behaviour. That sense of safety in taxis is completely gone, as people can now get into the business very cheaply. There is no guarantee of safety or standards. This is an urgent matter with which the Government needs to deal.

Last January a number of sexual assaults were carried out by taxi-drivers. At that time the Minister promised a statutory regulator with real teeth by the summer. We still have not seen the legislation to provide for that. Yesterday in the Dáil, the Taoiseach said he was not sure whether the heads of the Bill had been agreed. While I do not wish to blame Mr. Farrelly, is it the case that he does not have any power? He can meet all the people he likes and look at all the issues, but he has no power to do anything to improve standards in the industry. It is fine to come in and raise different issues but unless something is done about them, it is a waste of time. With all due respect, there has been a certain degree of window-dressing in establishing a non-statutory regulator when the Minister knew that person would not have any power. There is an urgent need to have a statutory regulator in place.

I wish to ask Mr. Bonner about his position as a member of the panel. Will he comment on the fact that while he was serving on the panel he took up another appointment as a member of the so-called three wise men group to advise the Government on cutbacks? He is doing that with considerable skill at the moment. Does he feel there is any conflict of interest whereby, on the one hand, he is being asked to examine the question of personal financial hardship on the part of taxi plate holders and, on the other, to advise the Government on cutbacks across a range of services? Perhaps he will explain to us his precise approach to dealing with hardship. Is it not the case that the panel was given a €15 million pot of money which was predetermined and that its job was to divide it among taxi plate holders? He was not really examining the issue of hardship because if that had been the case, he could not possibly have come up with that report.

For example, someone who bought a taxi plate a month before deregulation, taking out a loan worth the equivalent of €100,000, is now faced with monthly repayments of almost €1,000. He did not deal with that situation seriously, and I am sure he does not maintain that he did so. A person in that situation now has huge difficulty making a living, not to mind meeting the loan repayments. The suggestion that the person should get a payment of €15,000 is meaningless because that will do nothing whatsoever to alleviate hardship.

A person who had a valuable asset, for example, a widow, widower or retired person, could let out the taxi plate to generate an income, but suddenly that asset was reduced in value to almost nothing overnight and they had no means of raising an income. How can Mr. Bonner maintain that a payment of €13,000 or €15,000 will deal with that hardship? It might be better if he was straight about what he was doing. The panel was dividing the money rather than dealing with the issue of hardship.

Is there potential for payments to be made to people who did not make claims to the panel? There are other potential claimants out there. People were asked to come forward before a certain date, but I would like Mr. Bonner to confirm that there will be other claimants not included in those numbers.

Deputy P. Power

I welcome the guests. I have specific questions regarding one of the nine categories, namely, the fifth one which covered those with large loan repayments. Briefly, I will describe a case I have come across in Limerick, where a 55 year old taxi-driver had to invest €60,000 in a taxi licence, borrowing the entire sum from Anglo-Irish Bank over a six year loan period. He is paying back over €600 a week. Ultimately, he will pay back over €100,000 over the term of the loan. He has five children, three of whom are going to college - a topical subject - away from Limerick. Before he spends a penny on his household mortgage, which is substantial, sends his children to college, puts petrol in his taxi, insures his car and deals with its maintenance, upkeep or the replacement of plant, he must pay €600 after tax to Anglo-Irish Bank - €100,000 over the next six years. How can the panel justify a payment of between €6,000 and €12,000 to someone in that situation?

My other question is technical. When one adds up all the proposed payments and multiplies them by the number of people who claimed, the total is €27 million, yet Mr. Bonner thinks that only €16 million will be claimed on his formula. How did he work that out? I know that it is something of a "guesstimate".

Mr. Farrelly

The first question raised the general issue of my office, hours, input and support. As I indicated in my text, my appointment is on the basis of an average of two days per week. I am not saying that is all the time I put in, but it is the basis on which I have agreed to take on this job. It was envisaged to be for a period of six months until the permanent regulator was appointed. I am operating with the assistance of a higher executive officer who arranges services and attends meetings for me. That is the extent of my staffing. As the Deputy said, all statutory functions regarding the industry remain with the existing authorities, be they the local authorities, the Garda Síochána, the Department or the Minister.

Another question was about my role regarding the taxi hardship panel. I was asked to advise on the appropriate procedures to be put in place to implement the findings of the taxi hardship panel. Having examined the issue, it was clear to me that payments are conditional on various requirements or criteria being met. My recommendation some time ago was that a team and resources should be put in place to receive, process and organise the payments. I understand that the Department is looking at that. On the basis of my brief, I do not envisage that being done by me.

Another issue raised was the question of standards for drivers and vehicles and before that was the question of the major increase in numbers. As I said, the increase followed various measures which had been taken, challenges in the courts and decisions by them which gave the Department no alternative to opening up the market at the time.

That is the position and it raises questions about standards for drivers and vehicles. Vetting the suitability of drivers' character is a matter for the Garda, which issues the driving licences. I do not wish in any way to attempt to speak for the Garda, but everyone here would be aware that there is a right of appeal to the courts on its decision in that regard and there have been some high profile cases where those decisions have been challenged and set aside. That is the statutory basis. Having looked into the matter, we must put a system of training in place for drivers covering a very wide area, but the question of character will always be difficult. People will come along and say Jimmy Farrelly is a rogue, a scoundrel or whatever, but in the final analysis, when the matter reaches the court, it will have to be justified on the basis that I have been charged and convicted.

It is a sensitive matter, but to answer the question, I agree that there is a need for improved standards, both for driving and vehicles. I have given some consideration to the question of drivers, having met various groups, but it will take some time to get a system in place. It is essential that we reach the stage of having a system where some form of training is a prerequisite to getting a licence to drive a small public service vehicle. Something must be done about the standards of vehicles. At the same time it will be difficult to reach a consensus following discussions one has had with individual groups in the industry. I do not see a consensus emerging, but the standard will have to be implemented.

Mr. Bonner

The first point I should deal with is the question raised about my own position as a member of the panel.

Chairman

I asked what is Mr. Bonner's response to the European Parliament report.

Mr. Bonner

I have read the report. We had a specific job and the report was based on meetings during a visit here for a short period. It is a political report and ours is purely factual, based on the situation we found having met various categories of people and the research we conducted.

I refer to my position as a member of the panel. I was involved in the expenditure review for 2003 and we completed the job in September. I took up the other job afterwards. There is no conflict of interest. The European Parliament report points out that we were given money to distribute, but that is not correct. We did this on the basis of meeting the people and making up our minds on what we felt was reasonable in the circumstances as an alleviation of extreme personal hardship, where it had occurred, and in keeping with our terms of reference.

Deputy Naughten

Did Mr. Bonner have a blank cheque-book?

Mr. Bonner

I do not know whether one would call it a blank cheque-book but we had the ability to recommend what we felt was right in the circumstances and that is what we did.

Deputy Shortall

It would be interesting to hear Mr. Bonner defend the figures on that basis.

Mr. Bonner

We met the various categories——

Deputy Shortall

Did the Government outline a ball park figure?

Mr. Bonner

No, so we made up our minds on the basis of the people we met. We wanted to recommend a scheme that was workable in terms of administration and, therefore, we adopted a general approach. If the Deputy or anybody else decides they want to double or treble these figures, that is somebody else's responsibility. These were our views, as three people who were asked to do a specific job. We were asked in general terms to give an idea of the moneys that would be involved.

Deputy Shortall

We would like to know the group's reasoning.

Mr. Bonner

Widows were the highest category because they were most in need and suffered most personal financial hardship and that went down the line to wheelchair accessible taxi drivers and those whom we decided not to compensate. That was our view of what was reasonable in the circumstances. In some categories, people were also in receipt of contributory or non-contributory State pensions.

Deputy Shortall

Will Mr. Bonner explain how €15,000 will help the family that took out a €100,000 loan to buy a taxi plate?

Mr. Bonner

It will help to alleviate the repayments for a period and, in many of these cases, the people are still working and earning revenue to pay off the loan. Our terms of reference were not general. The phrase used was "extreme personal financial hardship", which is difficult to define, but which we took to mean something that was extreme, personal and financial hardship. We recommended payments to alleviate extreme personal financial hardship.

Deputy Naughten

Was it believed that the payments would alleviate the extreme financial hardship, for example, for pensioners?

Chairman

The Deputy has already asked a number of questions. Other members want to ask questions.

Deputy Naughten

I want my questions answered.

Mr. Bonner

Yes, in keeping with our terms of reference.

Ms O’Riordan

We met lots of people from every category and also looked at each submission. It was quite difficult as we had to spend a great deal of time saying "what is the median here?" because some of the categories could repay the loans by working extra hours. That was one example because they still have their plates and they are still earning. It was difficult for us because we would meet some people whose income pre-liberalisation was satisfied at 40 hours a week. After liberalisation some said they worked 60 or 120 hours a week. This is the same in each category and we had to listen to each person's story and then take a view. There was no simple, clear case in any of the categories.

Deputy Shortall

Was it established whether the taxi plate holders had taken out recent substantial loans, for example, over the previous five years?

Ms O’Riordan

Yes.

Deputy Shortall

How many people were in that position?

Mr. Bonner

The number falling into that category was 16%. A number of people we met had taken out loans recently.

Deputy M. Brady

I welcome the panel. Other industry representatives have appeared before the committee and they stated that the panel's report was totally unacceptable and inadequate. Every member of the committee agrees. How does the panel propose to redress that situation? Was the issue dealt with on a case by case basis because every case is different? For example, €5,000 was awarded to a widow with dependants. I do not know how the panel arrived at that figure because she could have five or six children.

Mr. Bonner stated that the European Parliament report is political but it was not formulated on the basis that the delegation met a few people here and there. A great deal of research went into the report and FAIR has carried out a great deal of research in this regard. Many of the group's points are valid. Can the panel revisit this issue and arrive at a fair and acceptable report that will be to everybody's satisfaction? The general view is that the panel's report is totally unacceptable.

Mr. Bonner

Before I answer that question, I forgot to answer the question about whether people who did not make submissions to us would be free to make submissions. That is the case. Just because somebody did not return a form to us or did not send information or write to us does not mean they would not be free under whatever regime is set up to implement some other aspect of our report. They would be free to do so.

On the question raised by Deputy Martin Brady, we were asked to do a specific job, which we believe we did within our terms of reference. We delivered the report to the Minister last September and that is the end of our work as far as we are concerned. Our work sets out in general terms the numbers involved, the type of cases involved and an idea of the hardship. We were asked to do this quickly and in general terms, which we did. It sets out the parameters of what a payments system to alleviate extreme personal hardship should look like. Obviously, it is up to the Government to take whatever view of our report it considers fit. Mr. Farrelly has covered what is contained in the report. It is up to the Department to reject our report or to ask us to look at it again or to implement it. That is a matter for the Government and not for us.

Deputy Ellis

Does anyone realistically think that paying out €10,000 to €15,000 against a €90,000 investment is adequate compensation to a widow? If a person was made redundant, the payment he or she would receive would not be in line with that payment. Who set the guidelines? Who was the arbiter who set the amount of financial assistance to be given to the various hardship cases? Who is the actuary in this case? This is the type of situation that needed an actuary who would be in a position to determine the consequential and the individual losses. That is a very small amount of money against a loss of €100,000.

I do not know if this is a matter for the interim regulator or the Minister. Does the delegation consider that the new licence fee is sufficient? Should it not have been set at a much higher level to ensure that those entering had a genuine commitment to being full-time taxi people, rather than the weekend taxi or the Friday night and Saturday night operators, who can get into the business for a low fee? Had it been set at a higher level there may have been more money to create a proper system of compensation.

Senator Browne

The line in the petition committee's report that, "The original hasty decision was not a clearly thought out response to the problems which existed in the industry", sums up everything about this fiasco. The petition's committee also queries the methodology of the report and there is much concern about the amount of compensation being paid. I am amazed that the amount set is so low. I agree fully with Deputy Ellis in regard to the example he gave. I have done some research into this matter. We have been told previously that €36 million has been raised in the Dublin area, €2.6 million in Cork, €1.5 million in Limerick and €700,000 in Waterford, amounting to a total of €60 million from the whole country, since the introduction of deregulation. Therefore, there is a large fund and these people should be given funding from that source as part compensation for the deregulation fiasco.

I wish to ask Ms O'Riordan about the level of compensation. In terms of the working time directive, she gave the example of a person who works 120 hours per week. That would not be a normal working week except, perhaps, for politicians.

Deputy Glennon

I join my colleagues in welcoming the delegation. I wish to focus on the phrase on which the representatives appear to be heavily dependent in the terms of reference - "extreme personal hardship". In light of the emphasis on that phrase and on the three words taken individually, can the delegation explain why, in view of the individual nature of any case of extreme personal financial hardship, it decided to categorise in respect of awards? Was it a strict term of reference? Was the delegation happy with it? Is it still of the view that it was the appropriate way to proceed in light of subsequent developments which have brought us here today? If speed was the over-riding factor in the panel's report, surely it was impossible for the members to do a fair job in the circumstances. Would they have been better off seeking new terms of reference?

Ms O’Riordan

In relation to the working directive and information received mainly through interviews with people from the different categories, all submissions made indicated that most people work in excess of 45 hours per week. That is not within the scope of the taxi hardship panel. If this goes forward and the Government decides that each claim will have to be substantiated, we were not in a position to do that. Therefore, I could not say categorically if those hours are being worked or not.

Deputy Shortall

Did Ms O'Riordan estimate whether it is possible to make a reasonable living by working a reasonable number of hours in the Dublin area following deregulation?

Ms O’Riordan

We had to take a view because the scope was so large. I was surprised that some individuals said they had made a good living on 35 hours or 40 hours depending on what time they went out. That was the evidence submitted to us. The next person would say it was impossible to make a living. Therefore, it was difficult for us to form a view because there was strong personal evidence that a good living could be made in a 35 hour week if one did some night time work.

Deputy Shortall

In the best case scenario, is it possible for a taxi-driver in Dublin to make a living and make loan repayments of €950 per month?

Ms O’Riordan

Where there were very large loans and given the increased number of licences, extreme personal hardship was found in that category.

Deputy Shortall

Perhaps the representatives could explain the reasoning behind suggesting a payment of €6,000 to families in that situation?

Mr. Bonner

That amount is for the lowest category of loan going back over a number of years. Obviously, the repayments in that case would have reduced substantially.

Deputy Shortall

What about large loan repayments?

Mr. Bonner

For large loan repayments, we recommend between €6,000 and €12,000.

Deputy Shortall

Even €12,000 does not help a person in that situation.

Mr. Bonner

Certainly it would be a reasonable contribution over a period of years in alleviating any extreme personal hardship that would have resulted from taking out the loan.

Deputy P. Power

That would amount to only one year's repayments. Many of the loans were over a series of years. I had a good deal of experience in a previous practice as a solicitor calculating the financial loss to people in a whole range of circumstances. My personal judgment is that the panel's judgment in calculating this financial loss erred on the incorrect side and did not take account of the actual financial realities families face on a daily basis. My only question to the representatives was based on a particular set of circumstances of a family which is in dire need because of deregulation. When I put it to them that under category 5, at the highest level, the panel would give them a once-off lump sum payment of €12,000, the response was that it was derisory. We submit that the panel's judgment and its recommendations were incorrect in those circumstances. Do the representatives accept that?

Mr. Bonner

That would be about a year's repayments on the loan and we felt that was a reasonable response to the terms of reference we were given, which was extreme personal hardship.

Deputy Shortall

What would happen the hardship after a year? It will not go away.

Mr. Bonner

In the situation the Deputy is describing, the individual is still working. We were not able to make awards based on the loss of value of the taxi licence.

Deputy P. Power

Nobody is asking Mr. Bonner to calculate compensation but we submit that his judgment as to what was reasonable was wrong. We are saying it is actually unreasonable.

Mr. Bonner

I understand. That was the collective view we took as a reasonable response in the circumstances.

Deputy Ellis

To come back to the question I put to Mr. Bonner, who were the actuaries who advised him on the amount of compensation they felt was reasonable?

Deputy Healy

Furthermore, can we have details of the criteria used by the panel in determining these figures? It is not good enough for Mr. Bonner and Ms O'Riordan to say they are satisfied that these figures are reasonable. How did they come up with these figures? It is not good enough to hear that this was a subjective judgment on the part of the panel. We want to know exactly how the figures were determined and on what basis.

Mr. Bonner

That is exactly what it is, given the information available to us. It is not an actuarial examination because we were asked to look at this in general terms. If we had to do an actuarial examination of it, we would be talking about a much more exhaustive examination than that which we were asked to do, which would take a very long period of time. We would have to bring in each individual and deal with it on a case by case basis and we felt that is the type of thing that might be done after we had drawn up a general format as to how it might be handled.

Chairman

We have a time problem but we also have detailed questions. Could we send those to you and perhaps you would respond to them?

Mr. Bonner

Yes.

Deputy Ellis

Before we conclude, does Mr. Bonner believe that an actuarial system might be the way to resolve this problem once and for all? I understand his position in regard to what he felt might be reasonable, but does he believe the only way of finally resolving this problem will be an actuarial system whereby all the documents will be available to whoever will be making the decision? Mr. Bonner had to make decisions with a limited amount of conflicting information from various individuals rather than dealing with it on an individual basis. Does he believe that the only way of finally resolving this problem is on an individual basis?

Mr. Bonner

What would follow our investigation was to be a case by case examination within the criteria we had set down. The way of implementing this report would be to set up a system whereby any of the 4,000 individuals who were involved at the time could come to a facility, commission, tribunal or whatever to make their case on that basis. We have presented our view as three people who got together to examine it. It is up to the Government to implement that in whatever way it wants. It can reject the report or say that the €12,000 we recommend for large repayments is inadequate and people can double or treble it. What the report does is illustrate how much that will cost and the committee has a general idea of how much it will cost. That was our subjective view and that is what we were asked to do. Our terms of reference were to look at this in general terms and to come up with recommendations within a specific timeframe. It was impossible for us to do anything other than the type of investigation we did within that timeframe.

Chairman

In the cases of suggested payments of €12,000, that was for one year but in a situation where the number of taxis on the street has increased dramatically, obviously the income they can earn has decreased considerably. One year is a short period but if one was to say one would help them over three years, at least we could steady the ship.

Mr. Bonner

The obvious answer is that a person who received €12,000 would be able to make a contribution of €4,000 in each of the three years rather than alleviating loan repayments completely for one year.

Chairman

A vote has been called in the Dáil but we will write to the delegation with our detailed questions and ask that they respond to them.

Mr. Bonner

That is no problem.

Deputy Ellis

Perhaps Mr. Bonner might indicate in those replies whether he believes that the current cost of a licence is too low or too high. That question might fall to Mr. Farrelly.

Mr. Farrelly

I am doubtful that it comes within my terms of reference but send us the question and we will look at it.

Deputy Ellis

Perhaps he might make a recommendation.

Chairman

I thank the delegation for attending. The meeting is adjourned.

The joint committee adjourned at 11 a.m. until 9.30 a.m. on Thursday, 12 June 2003.