Today we are dealing with the Supplementary Estimate for Vote 6 - Office of the Chief State Solicitor, referred to this sub-committee by order of the Dáil on 19 November 2015. Pursuant to Standing Orders, we must report back to the Dáil no later than 9 December 2015.
I welcome the Minister of State at the Department of An Taoiseach, Deputy Paul Kehoe, and his officials and invite the Minister to make his opening statement.
I thank the committee for making time available today to consider my request for a Supplementary Estimate for the Office of the Chief State Solicitor. As committee members are no doubt aware, the Office of the Chief State Solicitor is a constituent part of the Office of the Attorney General and provides solicitor services within the Attorney General’s office and to Government Departments and offices. The office has a wide remit including the area of civil litigation in all courts, including the Court of Justice of the European Union in Luxembourg, and the provision of conveyancing, property law and general services for an array of Civil Service clients. Many matters are high profile, sensitive, capable of attracting publicity and sometimes involve emergency applications to court, strict time limits and complex issues of law.
The Supplementary Estimate is sought to cover extra expenditure on fees to counsel in 2015. Expenditure on counsel fees is, to a large extent, dependent on the level of activity in the courts at any time and so is always difficult for the office to forecast. In addition, recent years have seen a marked increase in the complexity of work being handled by the office in areas such as commercial litigation, transactional and procurement work, as well as advisory and litigation work resulting from our membership of the European Union and the implementation of directives in areas such as environmental law, planning, employment and social welfare law. In areas such as judicial review, a faster throughput of cases by the courts has resulted in a marked increase in the number of fee items payable such as brief fees, fees for refreshers, consultations, advice, opinions, submissions and affidavits and a greater involvement of senior counsel.
It should be borne in mind that the Estimate allocation for fees paid to counsel was very much reduced in 2014 due to the ongoing financial situation. The office struggled to remain within the allocation last year and had an overspend of €200,000 which it managed to cover through savings in other areas of the Vote without the need for a Supplementary Estimate.
The management of expenditure on counsel fees is a key activity for the Office of the Chief State Solicitor. These are fees payable to counsel representing Departments and offices in litigation before the Irish courts and other tribunals as well as the European Court of Justice. They also include fees payable for the provision of legal advice for the State, whether sought for the Attorney General’s office or for Departments and offices.
An allocation of €9.6 million was made for expenditure on fees for counsel in 2015, which was the same as 2014. However, due to a number of factors it has not proved possible for the office to remain within that allocation. The office has observed that the issues raised in cases taken against the State are becoming increasingly complex. In late 2014 and into 2015 the office dealt with a major civil action in the High Court which required significant input from counsel over a long period of time. While the fees paid to counsel in this one case were very large, the exposure of the State to damages awarded if the State had lost would have been far greater. The office has also had to deal with a number of challenges to referendums. The area of public procurement has also expanded in recent years and some significant challenges are beginning to arise. This has led to an increase in the requirement to use counsel. The office has seen a 14% increase in the services delivered by counsel in the period January to mid-November compared to the same period last year.
It is estimated that the office will have an overspend of €2.5 million on fees to counsel this year. However the office has made savings of €1 million in other areas of the Vote and is now seeking a Supplementary Estimate of €1.5 million. The office has made savings of €500,000 in its payroll allocation due to difficulties filling vacancies at solicitor level and the retirement of senior staff at the top of their pay scale with replacements commencing at the first point on the scale. Savings of €300,000 have been made in the general administration subheads due to lower than estimated expenditure on IT systems and refurbishment work on the offices. A further €200,000 has been saved in general law expenses as the requirement has proved lower than expected at the start of the year.
Expenditure in the area in 2015 is expected to compare to the level of spend in 2013 and will still be approximately 30% lower than the expenditure in 2008, at the start of the financial crisis. I am pleased to recommend this Supplementary Estimate to the select sub-committee.
I wish to ask one question about State legal fees and fees to barristers. If cases were settled earlier, would it result in lower fees? If one takes the example of the HSE, it regularly issues half hearted apologies seven years after children suffer catastrophic injuries at birth. That seven year period would involve quite a build up of fees. I ask the Minister of State to outline the relationship between the Office of the Chief State Solicitor and the State Claims Agency because on average, if a settlement is made for €1 million, the legal and professional costs add another €0.5 million to the bill. In other words, for every €1 million settlement by the State Claims Agency on behalf of the HSE, by far the biggest area, the add-on for professional and legal fees, is 50% on average. That has been the case for the last number of years. If there are settlements of €60 million in a full year, the legal fees are €30 million. I often feel that if State agencies were a bit more upfront earlier in the process, cases would be settled more quickly. A lot of people who take cases would be happy to settle earlier with an acknowledgement that something went wrong. That would take a lot of the heat out of such cases.
I would like to add to the Deputy's point before the Minister of State responds. We are at fault in that regard to some degree because debates have been going on in this House for the last decade or more about a no-fault compensation system and annual rather than lump sum payments. The problem is that annual payments are seen as income whereas lump sum payments are not taxable. We should do something about that as soon as possible. We have a responsibility in this House to get that issue sorted out.
Some of the cases to which we are referring may have a constitutional basis and could not be settled in advance. There are cases where an individual's legal team is encouraged to enter mediation with the State but that does not always happen because some people want their day in court, so to speak, and that is where the expenses begin.
Has the new Court of Appeal which is now up and running become another gravy train for the legal profession? Are there many cases where one State agency is suing another? I am not expecting to get that information now but I ask the Minister of State to provide a report on that as soon as possible. We often hear of cases where a local authority is being sued by the Inland Fisheries Board, for example. State agencies often have competing briefs. If we want to do something on a river, for example, the Inland Fisheries Board might have one view on it, while the Environmental Protection Agency, EPA, or a local authority might have a different view.
Sometimes in such cases, State agencies end up facing each other in court at the taxpayer's expense. If the Minister of State does not have any information on that question now, I ask that he would send on a note to the committee. That is the sort of thing that drives people bonkers, when the taxpayer is being caught for the costs on both sides.
I will ask my officials to prepare a note on that. I am certainly aware of plenty of cases where one arm of the State is up against another arm. That does happen and is quite normal.
I mean no disrespect when I say that this is a fairly arcane area as far as parliamentarians are concerned. We would not really be in a position to evaluate or assess the information we get at Estimate time about the Office of the Chief State Solicitor. It is very difficult to form a view on it. There have been celebrated cases in the past fitting into the first category mentioned by the Minister of State, that is, cases that might be deemed to have a constitutional basis but there have also been a number of celebrated cases where the advice to the State or to the Minister was the State should not mediate or settle the case because that would mean the end of civilisation as we know it. The advice was that there would be terrible knock-on effects and so forth but I have been around long enough to know that once or twice we had to suck it and see. After all of the delays and so forth, the outcomes were embarrassing but the house of cards did not come tumbling down. That may well not be a matter that the Chief State Solicitor's office decides upon but it is an issue nonetheless.
In terms of the delays to which Deputy Fleming quite properly drew attention, is the Minister of State in a position to clarify the impact of the Court of Appeal? Will that court facilitate speedier resolution of cases? How much of this relates to how the system works, namely that lawyers determine the speed with which these cases are disposed of? At the end of a number of years, lawyers can decide that they want to mediate, negotiate and settle but those options were out of the question earlier on. The costs mount up and we are not really competent to say that the fees paid out are fair. I presume the Minister of State will say that they are market prices but to the man or woman on the street, the market prices are almost incomprehensible. Is the Minister of State in a position to say how the last eight years of recession have impacted on fees? Have the fees dispensed come down appreciably? Is that evident in the sense that the recession affected every other section of the community? Have fees come down in the case of lawyers?
Approximately 100 cases from the Supreme Court backlog are being dealt with by the Court of Appeal. I can understand people's frustration when they see the exorbitant fees that some people are getting. That said, they do not get the rates of pay that some senior counsel might enjoy because they are appointed by the Attorney General.
Is it anticipated that the Court of Appeal will abbreviate the time it takes to crystallise a case?
My officials inform me that there is a five year wait for the Supreme Court at the moment. Some cases will transfer to the Court of Appeal ---
The assumption then is that the Supreme Court waiting time will be greatly foreshortened under the new arrangement.
Yes.
Has the staffing level at the office changed over the last seven years?
There are approximately 230 staff working in the Chief State Solicitor's office at the moment. To be exact, the figure is 225, out of a complement of 243. There is a difficulty with appointing solicitors to the office at the moment. The office is trying to deal with that and to hold on to its young solicitors who can get far higher salaries in the private sector.
I thank the Minister of State and his officials for assisting this committee in its consideration of this Supplementary Estimate.
