Judge cuts insurance administrator’s €480 hourly fee amid ‘disquiet’

The president of the High Court has cut the €480 per hour fees sought by the administrator of insurance company Icarom plc and also cut the average €330 hourly fees for his staff after noting “a great deal of public disquiet at the level of fees charged for this type of work”.

Icarom was formerly the Insurance Corporation of Ireland plc, which collapsed in the 1980s, leading to an insurance levy being imposed. The administration has lasted almost 30 years and is expected to conclude shortly. Last year, €10m was paid back to the State’s insurance compensation fund out of the administration.

Donal O’Connor was appointed administrator in 1990 and, after he retired in 2008 as a partner in accountancy firm PricewaterhouseCoopers, the Department of Finance agreed he would continue in that role with the assistance of PwC staff.

Yesterday, Mr Justice Nicholas Kearns said that because he must be satisfied the fees sought were not in excess of the norm approved by the court, he would not approve these fees and was cutting them by 25%.

In addition to the €480 fee claimed by Mr O’Connor, he was told the average hourly fee of other staff of PWC involved in the administration was €330. That average, the judge noted, took into account the lower rates of “foot soldiers”.

The court heard the hourly rate of partners in PwC was €580 but Mr O’Connor was not seeking that and was instead seeking €480 an hour.

In calculating the hourly rates, Mr O’Connor said in an affidavit he applied the same method of charging and basis of charging used by PwC for any other commercial client. The rates charged for PwC staff in the period Jan-Dec 2011 ranged downwards from €580 for a partner, €390-€470 for directors, €355-€480 for senior managers and €105-€148 for assistants.

The judge approved without alteration the fees sought by Deloitte as auditors to Icaram, which he was told averaged at €180 an hour. The firm will receive almost €50,000 for its work for Icarom in 2010 and the judge reappointed it to audit the company for the years 2011 and 2012.

The Central Bank had indicated in a letter to solicitors for the administrator this week it had no objection to yesterday’s fees application.

ICI was placed in administration in 1985 when William McCann was appointed administrator.