TDs criticise ‘shambolic’ third-party legal costs

TRIBUNALS are failing to keep a daily record of third-party legal costs set to spiral into a bill of several hundred million euro, it was revealed yesterday.

TDs branded the situation “shambolic” as the State’s financial watchdog promised to probe the matter.

The practice came to light as Finance Department secretary general David Doyle gave evidence to the Dáil’s Public Accounts Committee (PAC) that two-thirds of tribunal costs went on third-party legal fees.

“I’m not aware that there is a daily record being submitted by people who have been awarded representation to the tribunals saying ‘today the costs were X’. The traditional approach of the tribunals has been that when the proceedings are wrapped up the parties that are awarded costs — and they know who everyone is — then submit their costs through the tribunal and the Taxing Master for adjudication,” Mr Doyle said.

TDs reacted with anger to the news with Fianna Fáil’s Sean Fleming branding the situation a “shambles”.

Labour finance spokesperson and PAC member Joan Burton said the Government needed to get a grip on the costs.

“I think it was astonishing evidence that the cost of third-party representation at the tribunals and discovery of documents could be up to 66% of the total costs of the tribunals.

“It all seems like a little bit of a gentlemen’s club, where people pop down to the tribunal, stay there and the clocks starts to run at a very high cost to the taxpayer. It’s truly amazing the Government has allowed this carryon to go on for 10 years now,” she said.

Mr Doyle said an attempt by the Attorney General’s office to look at curtailing legal fees had floundered due to fears it impinged on the independence of the tribunals.

The Comptroller and Auditor General told the committee he would look at the situation regarding third-party costs, but stressed he was unsure what form such an intervention could take given the nature of the way the tribunals were set up.

Different costs projections at the heart of Tribunals controversy

By Harry McGee Political Editor

Q: Why are Tribunal costs suddenly in the news?

A: On Wednesday, the Dáil debated the Moriarty Report into Charlie Haughey’s finances. None of the Progressive Democrats took part in the debate.

But later that afternoon, Michael McDowell brought up the issue of the costs of the Mahon Tribunal. He suggested it may cost over €1 billion and that there was no clear indication as to when it would end. He said serious questions needed to be asked about if it was worth continuing the Tribunals any further.

Q: What were his reasons for making such outspoken comments?

A: Well, because it came out of the blue, it led to a spate of theories, most of them from the opposition and some in the conspiracy theory category.

Back in 2004, Charlie McCreevy said that the legal costs of Tribunals were astronomical and introduced a reduced fee structure, whereby senior counsel would see their fees drop from 2,500 a day to €900 a day. But faced with resistance from the Moriarty Tribunal, the Government buckled and has allowed Moriarty lawyers retain their higher fees over the past 14 months. It now looks likely to capitulate to the Mahon Tribunal when its lawyers fees are due to be reduced in March.

The first most straightforward theory is that the Government is genuinely concerned over costs. Mahon has racked up costs of €55 million so far. Mr McDowell talked of Mahon alone costing €1 billion.

Q: And so what are the conspiracy theories?

A: There is a political dimension to this. Fianna Fáil politicians and Bertie Ahern have been most in the firing line over planning controversies.

The opposition quickly claimed that the Government was trying to shut down the Tribunals to save Mr Ahern and Fianna Fáil any embarrassment.

Q: How did the row escalate?

A: In the Dáil, the opposition went on the attack. Both the Taoiseach and Tánaiste were absent from the Dáil yesterday morning (they were at social partnership talks). Fine Gael leader Enda Kenny described it as a “contemptuous snub” and demanded a statement from the Government to clarify its position on the Mahon Tribunal.

Later that day, Mr McDowell again entered the fray saying that lawyers fees would be reduced in both Mahon and Moriarty unless there was an “extraordinary reason” not to.

Separately, the Public Accounts Committee heard yesterday that Tribunals do not keep a day-to-day record of the possible bills amassing in relation to third-party legal costs.

But it was the intervention of Judge Alan Mahon yesterday that elevated it into a full-scale crisis.

Q: How did he enter the debate?

A: Judge Mahon wrote a letter to all party leaders yesterday responding to the claims that had been made by the Tánaiste, Taoiseach and Government ministers.

Crucially, he completely rejected the €1 billion estimate of Mr McDowell. He said that the final cost of the Tribunal, even if it failed to recover any costs from non-cooperating parties, will be in the order of €300 million.

He also said that far from being unable to specify a date, the Tribunal estimated that the public hearings will finish in early 2008.

What is really significant about all this is that it informed the Government through Minister Roche about its estimate in relation to time.

And in a clear signal of a gathering political crisis, the Fine Gael leader rowed in last night with cutting comments of the Tánaiste and Justice Minister.

“You cannot believe a word that the Minister for Justice says,” he said. “He will say and do anything to keep his political masters in power.”

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