We have a few of our old friends from the Department of Finance, Mr. Jim O'Farrell, Mr. Howard and Ms Hogan. They are all welcome.
Paragraph 20 of the Report of the Comptroller and Auditor General reads:
Compensation
In June 1998 the High Court at a sitting in Ennis awarded £796,654 plus costs, against the State in special and general damages on foot of a personal injuries case brought by a former prison office following an accident at work in 1995. At the opening of the trial, the plaintiff made an offer to settle on £300,000, plus costs. However, despite the repeated advice of its senior counsel to accept this offer, the Department refused to concede liability and, on the advice of the Attorney General, responded with its own offer of less than £200,000. The offer was rejected by the plaintiff and the Department conceded liability on the third day of the trial. Following the High Court award the Department and the Attorney General considered an appeal to the Supreme Court but following negotiations between the plaintiff and the Attorney General a settlement of £550,000, plus plaintiff's costs of £150,182, was agreed in July 1998. As the State costs came to £37,790 the overall cost of this case was £737,972.
The following matters were noted during audit review of the case. The senior counsel for the State had advised on every occasion that he was consulted before and during the trial that, on the basis of the evidence available to him, the court was very likely to find in favour of the plaintiff, damages were likely to be substantial and settlement on the best terms should be considered.
There were no defence witnesses in court who could contradict the plaintiff's statements on the circumstances of the accident, nor was there any evidence to contradict the charge of negligence on the part of the State. The defence evidence which was available tended to support the plaintiff's case.
There was no medical evidence available to the defence which could challenge the plaintiff's evidence in relation to injuries suffered as a result of the accident, or which could challenge his claim for damages. The medical expert retained on behalf of the defence was not present in court. The defence rehabilitation expert, who was present, advised that he could not contradict the plaintiff's claim that he would never be employed again in any capacity.
Counsel's initial damages estimate of £150,000 was revised to £300,000 days before trial, but was qualified by his statement that he still did not have any proper information on the plaintiff's loss of income to date, what he would be earning if still employed, or the capital value of his loss of earnings into the future. He reiterated his advice that the State was likely to lose the case and warned that the Department's termination of the plaintiff's employment some nine months previously on grounds of permanent ill health, of which he had just been informed, would have a disastrous effect on damages, particularly his claim for loss of earnings into the future.
The plaintiff's claim for special damages was based on an actuarial report on loss of income, which, together with the evidence of the plaintiff's actuary, was accepted by the court as providing the basis for the special damages award of £496,654. An actuarial report was provided for the State just before trial but, according to the senior counsel, it did not differ in any significant way from that of the plaintiff. The defence actuary was not present in court. The senior counsel advised that he did not have and was not given any instruction, information, material or witnesses which would have enabled him to present any challenge in court to the plaintiff's claim.
The senior counsel concluded that the true extent of the plaintiff's condition was not appreciated by the Department and the Attorney General's office.
As it appeared that the failure to prepare adequately for the case, to assess its full implications and to disregard its senior counsel's repeated advice to settle the case when the opportunity to do so was available resulted in significant additional costs for the State, I sought the views of the Accounting Officers of the Department and of the Attorney General's office.
The Accounting Officer of the Department of Justice, Equality and Law Reform informed me that though the senior counsel had advised at an early stage that a court was very likely to find in favour of the plaintiff, this was not accepted by the Department as there were areas of concern in relation to some aspects of the case, principally regarding the circumstances of the accident; the attendance by and reports of expert witness were a matter for the Office of the Chief State Solicitor - CSSO; on Thursday,18 June 1998 the Attorney General requested the Chief State Solicitor to obtain a settlement figure from counsel and to see about settling the case. On Monday, 22 June 1998, the Department was advised by the CSSO that counsel said that plaintiff's counsel was looking for £500,000 but might settle for £300,000. The CSSO also said that the Attorney General was not in favour of settling for £300,000. In the absence of the agreement of the Attorney General it was not open to the Department to agree a settlement; the State's senior counsel contacted the Department directly on Tuesday, 23 June 1998, the first day of the trial. He said that due to the plaintiff's condition he would get well in excess of £300,000, possibly £400,000 and that there might be contributory negligence of 25%, but he was not sure. Counsel said that the State would definitely fail on liability. With the agreement of the Attorney General's office an offer to settle up to £200,000 was made on Wednesday, 24 June 1998. The Attorney General advised, via the CSSO, later that day to concede liability, in order to prevent an escalation of legal costs, thus leaving it to the court to assess damages. At all stages the advice of the CSSO and the Attorney General's office was followed; it should be noted that the award of the court was considerably in excess of the highest estimate from the State's counsel. In addition, the counsel's views on the question of an appeal were not accepted by the Attorney General. By following the advice of the Attorney General a reduction of £246,654 was achieved on the High Court award of £796,654, whereas the counsel's advice was that a reduction of less than £150,000 was likely.
The Accounting Officer of the Office of the Attorney General stated that: the information about the termination of the plaintiff's employment on medical grounds and the actuarial and medical reports on the case were only received by his office just before the case commenced. The rehabilitation evidence and the prison governor's report on the plaintiff and the veracity of his claim only became available on the day of the hearing. The last minute provision of information and the lack of communication from the local State solicitor on how the case was faringmeant that those in a position to sanction a settlement were not up to date with the dramatic escalation in the value put on the case; liability is kept as an issue in a case for tactical reasons. It is the recollection of the Attorney General's office that it advised the Department via the CSSO on the day before the trial - 22 June 1998 - that liability should be conceded. The advice was given at the same time that an offer of £180,000 was suggested; the time available to settle the case for a sum of £300,000 was brief. The late delivery of information and the lack of communication meant that the Department had only a short time to obtain sanction. This also meant that those responsible for sanctioning a settlement were not aware of the impact the plaintiff's evidence was having in court. There was no appreciation of why the settlement figure could move so dramatically from £200,000 to £450,000 in the same day; the two areas of difficulty, the late delivery of information by the Department and the failure of the local State solicitor to communicate information, were discussed at a meeting held in the wake of this case which was attended by representatives from the Office of the Attorney General and the CSSO. Proposals were discussed as to how procedures in these two areas could be improved. However, the proposal to establish a claims agency has since been developed.
The deficiencies identified by this case will need to be tackled by the new agency. In particular the agency will need someone with the authority to sanction settlement available at pre-trial consultations and during the hearing of the case to give a speedy response to any settlement proposal. He also stated that: neither the defendants nor the plaintiff in this case appreciated how great an award the judge was prepared to make; the award was based on the favourable impact which the plaintiff made on the court in giving evidence. The impact of a witness in a case is unpredictable and can only be taken into account as the case progresses. In general there is nothing to suggest that a settlement is always more favourable to a defendant than a judge's evaluation in a case; the medical expert retained on behalf of the State was not present in court and senior counsel did not, as in the opinion of the Office of the Attorney General he should have done, seek instructions as to whether to proceed or to seek an adjournment of the case. The view of the senior counsel on the medical evidence is not shared by the Attorney General's office; senior counsel's advice on the offer which should be made was couched in very vague terms which were difficult to act on. Nor was it clear from his advice what new information or evidence had changed so as to alter counsel's original advice which set a figure of £150,000 as the full value of the case. The difficulty could have been remedied by having someone on the ground at pre-trial consultations who would be aware of all the last minute detail emerging. This is the function of the local State solicitor. Because of the Department's failure to have someone present in Ennis court and the failure of the local State solicitor to make contact with officials in Dublin it may be understandable why these officials did not understand why the figures were changing so rapidly; it is the opinion of the Office of the Attorney General that the amount in fact awarded by the judge was excessive. This is borne out by the fact the case was settled for much less before the Supreme Court appeal.