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You are here: BAILII >> Databases >> Irish Law Reform Commission Papers and Reports >> Public Inquiries Including Tribunals Of Inquiry, Report on (LRC 73-2005) [2005] IELRC 73(7) (May 2005) URL: http://www.bailii.org/ie/other/IELRC/2005/3(7).html Cite as: [2005] IELRC 73(7) |
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7. CHAPTER 7 COSTS
A Introduction
7.02 Since the publication of the Consultation Paper, the latest estimate puts the ongoing costs associated with the various recent tribunals at €200 million.[1] It is perhaps unfortunate that the bulk of public and media attention has focused on the costs of the tribunals. In the midst of this focus it is important not to lose sight of the purpose behind tribunals and to acknowledge what they have actually achieved. The objective of a tribunal is to ascertain, in accordance with its terms of reference, the facts in relation to some matter of public importance and to make recommendations aimed at ensuring that the matter under investigation is less likely to occur again in the future.
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extent to which the facts highlighted during the various inquiries have assisted the Revenue Commissioners in its investigation of serious and systematic tax evasion. To date approximately €50 million has been collected on behalf of the Exchequer as a result of Revenue investigations of matters which could be said to have arisen directly or indirectly from issues highlighted at the tribunals. To a certain extent this extra revenue can be said to off-set part of the costs associated with the tribunals.
7.04 The high cost of public enquiries has also been experienced in other jurisdictions. In England it has been mooted that the recent UK Inquiries Act 2005 was introduced partly as a result of the vast cost and length of the Saville inquiry.[2] The Regulatory Impact Assessment issued with the Bill indicated concerns about the costs of inquiries.[3] It noted that: "Inquiries are funded by the taxpayer, through the sponsoring Government Department, and can result in substantial costs to others involved, within both the public and private sector. The costs of inquiries should be proportionate to the problems that are being addressed."
7.05 The total costs of any tribunal will depend on a number of factors such as:
?? the legislative provisions governing the costs of tribunals;
?? the exercise of the chairperson's discretion and the role of the tribunal in relation to the awarding of costs;
?? the tribunal's terms of reference;
?? the complexity and duration of the inquiry;
?? the extent of the legal representation allowed to parties appearing before the tribunal;
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?? legal costs and the basis used for calculating lawyers' fees;
?? general costs.[4]
B Legislative Provisions
(1) Jurisdiction to award costs
(a) of any person appearing before the tribunal by counsel or solicitor, as taxed by a Taxing Master of the High Court, shall be paid to the person by any other person named in the order;
(b) incurred by the tribunal, as taxed as aforesaid, shall be paid to the Minister for Finance by any other person named in the order.
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(1A) The person who for the time being is the sole member of a tribunal or is the chairperson of a tribunal consisting of more than one member:-
(a) may make an order under subsection (1) in relation to any costs referred to in that subsection that were incurred before his or her appointment as sole member or chairperson and that have not already been determined in accordance with that subsection, and
(b) shall, for that purpose, have regard to any report of the tribunal relating to its proceedings in the period before his or her appointment. (1B) Paragraph (b) of subsection (1A) shall not be taken to limit the matters to which regard is to be had under subsection (1).'' Subsections (1A) and (1B) were inserted by the 2004 Act to deal with an issue of concern which arose following the resignation in June 2003 of Mr Justice Flood as chairperson and as a member of the Tribunal to Inquire into certain Planning Matters and Payments. Subsection (1A) provides that the person who is the sole member of a tribunal or is the chairperson may make an order in relation to any costs that were incurred before his or her appointment and that have not already been determined. In exercising this power, the sole member or chairperson shall have regard to any report of the tribunal relating to its proceedings in the period before his or her appointment.
7.07 The jurisdiction to award costs is therefore discretionary in nature. A tribunal may award costs in full or in part or refuse costs to parties appearing before it. It also has power to order a party to pay all or part of the costs of the tribunal or of any other party. The Consultation Paper contained a detailed discussion of who may be ordered to pay the costs of a tribunal. Having reviewed the relevant case law and legislative provisions the Commission concluded that the present legislative policy and the judicial discretion regarding the award of costs should be retained.[5]
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possible misinterpretation of its terms.[6] The Commission's concern centred around the danger that the section might be interpreted as meaning that the only basis upon which a non-State party may be required even to pay its own costs would be if the party had obstructed the tribunal in its inquiry. It was considered that section 6 (as amended) enabled the tribunal when exercising its discretion in relation to costs to have regard to its findings on the substantive issues.[7]
7.09 The Commission was also of the view that the phrase 'equitable to do so' probably implicitly includes consideration of the means of a party. The Commission considered that it was only fair indeed and realistic that, among the factors to be taken into account in awarding costs, the means of a party should be stated explicitly.[8]
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amended) has been the subject of consideration both by the courts and the chairpersons of the tribunals.
(2) McBrearty v Morris
7.12 In McBrearty v Morris[9] the applicant had been granted the right to be legally represented before the tribunal but argued that he was unable to fund legal representation in the absence of being provided with the means to do so. In other words, the right to be legally represented was of no benefit where he could not afford to fund that representation in advance of the hearings. The tribunal pointed out that it was not entitled to grant legal aid under the civil or criminal legal aid scheme or to make a recommendation under the Attorney General's non-statutory Scheme [10]. The tribunal argued that it had no power to adjudicate on the issue of costs, or direct the payment of costs, of any person appearing before the tribunal, prior to reaching any findings on the matters being investigated.
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persons to have their costs paid, provided that they have cooperated."
7.14 This decision (which is currently under appeal to the Supreme Court) affirmed that the intention of section 6 of the 1979 Act that there is not to create a legal entitlement to costs. The question of costs is entirely a discretionary matter for each tribunal. [11]
(3) Mahon Tribunal
7.15 On 30 June 2004, Judge Mahon gave his ruling in relation to the principles to be applied in respect of certain applications for costs arising in relation to the Planning Tribunal.[12] A number of parties submitted that in the exercise of his discretion under section 6 of the 1979 Act, the chairman of the tribunal could not or should not have regard to the findings on the substantive or primary issues reported upon. Judge Mahon, having considered the interpretation suggested by the Law Reform Commission in the Consultation Paper, agreed that the word "findings" in section 6 meant the findings on the substantive issue of corruption. In so holding he emphasised that a finding of corruption did not of itself mean that he must in the exercise of his discretion refuse the costs of a person who was found to have been corrupt. Judge Mahon subsequently made rulings in relation to specific costs applications by certain parties. [13]
(4) Morris Tribunal
7.16 In his ruling on applications for costs concerning a module of the tribunal of inquiry into certain Gardai in Donegal, [14] Morris J considered the meaning of section 6 (as amended) and in particular the words
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"…having regard to the findings of the tribunal and all other relevant matters (including the terms of the resolution passed by each House of the Oireachtas relating to the establishment of the tribunal or failing to co-operate with or provide assistance to, or knowingly giving false or misleading information to the tribunal)". Morris J ultimately did not find it necessary to reach a decision on the correct interpretation of the words "findings of the tribunal" in section 6 (as amended). He proceeded on the basis that a substantive finding of wrongdoing on the part of a person would not necessarily deprive that person of the opportunity to have costs awarded in their favour. He considered whether each applicant had cooperated fully with the tribunal by furnishing it with documents, by furnishing it with all the information in their knowledge or procurement, by telling the whole truth to the tribunal investigators and by telling the whole truth in the witness box. Where an applicant had done so, they were deemed to have cooperated with the tribunal. In such circumstances, Morris J was prepared to grant them their costs irrespective of the finding that may have been made as a result of their cooperation and truthful testimony.
(5) The Consultation Paper
7.17 It seems clear, particularly from the submissions made to the Mahon Tribunal discussed above, that the phrase "findings of the tribunal" in section 6(1) as currently drafted may be misinterpreted. The Commission therefore endorses its recommendation in the Consultation Paper that the section should be redrafted.[15]
(i) the findings of the tribunal in relation to its subjectmatter as indicated in the terms of the resolution passed by each House of the Oireachtas relating to the establishment of the tribunal;
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(ii) and all other relevant matters (including failing to co-operate with or provide assistance to, or knowingly giving false or misleading information to the tribunal and the means of a party), there are sufficient reasons…" The Commission considered that the later part of section 6(1) of the 1979 Act – from the words "there are sufficient reasons rendering it equitable to do so"…to the end – required no change.
(i) the findings of the tribunal in relation to its subjectmatter as indicated in the terms of the resolution passed by each House of the Oireachtas relating to the establishment of the tribunal;
(ii) and all other relevant matters (including failing to co-operate with or provide assistance to, or knowingly giving false or misleading information to the tribunal and the means of a party), there are sufficient reasons…"
C Role of the Tribunal in relation to Costs
(1) United Kingdom
7.20 The UK Inquiries Act 2005 ("the UK 2005 Act") contains a number of provisions designed to reduce the potential for excessive cost and delay. The pre-legislative Regulatory Impact Assessment [16] suggested that the scale of costs of certain inquiries was one of the spurs to the UK 2005 Act. It noted that with no statutory or other cap on expenditure, "inquiries have to rely on the ability of the chairman and the co-operation of parties, rather than the legislation under which they have been established to ensure an effective result".
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7.22 The Explanatory Notes to the Inquiries Bill indicated that: "The purpose of subsection (3) is to ensure that the need to control cost is a valid consideration for the chairman when conducting and planning proceedings. The cost of inquiries will vary according to the complexity of the matters being investigated. The Minister is required, by clause 36(3), to meet expenses reasonably incurred in holding the inquiry. Each decision to admit evidence, to hold oral hearings, or to allow legal representation adds to the cost of the inquiry. The requirement in subsection (3) will strengthen the chairman's ability to defend decisions in which the need to limit costly elements of an inquiry was a factor." [17]
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?? Set out the basis on which costs will be assessed and the circumstances for the inquiry to take into consideration when making assessments. These proposed rules form a good basis for controlling the costs associated with a tribunal.
(2) Recommendation
7.24 The Commission considers that the chairperson of a tribunal has an important role to play in monitoring and controlling the costs of a tribunal. As noted in Chapter 5 tribunals of inquiry have a wide discretion in the area of procedures.[18] The Commission therefore recommends that in the exercise of their discretion chairpersons of tribunals should be expressly required by any amended tribunals legislation to have regard to the issue of costs.
D Minimising Costs
(1) Complexity and Duration
7.26 The duration and therefore the costs of any tribunal will be driven to a large extent by the complexity of the matters to be investigated and the tribunal's terms of reference. If the terms of reference are set too broadly this may result in unnecessary cost and delay. In this regard the recommendations made in Chapter 3 in relation to terms of reference may assist in this respect.[19]
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made in Chapter 5 in relation to the information gathering phase [20] and the grant of legal representation [21] should lead to a significant reduction in costs.
(2) Timetables/Deadlines
7.29 In Government by Inquiry, [22] the House of Commons Public Administration Select Committee (PASC) acknowledged that setting arbitrary deadlines might be counterproductive in a process which is intended to establish the facts, provide public reassurance and in many cases have a healing and cathartic effect. Nonetheless the PASC felt that this was not incompatible with announcing a timescale which would be non-binding and open to being revisited in light of developments.
7.30 In the Government Response to the PASC Report [23] the view was taken that to set an estimated completion time at the outset could place unnecessary pressures and expectations on the inquiry, before the chairman has had the opportunity to assess the scale of the task involved. The most serious consequence of such pressure would be if a deadline caused an inquiry to curtail some its investigations or to act too hastily in assessing evidence. It was felt that public confidence in the inquiry could be undermined if the chairman had to continually return to the Minister seeking an extension, giving the impression of an inquiry proceeding slowly even though the inquiry quite legitimately required further time to fulfil the terms of reference.
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(3) Timetabling and Sequencing
(4) Budget Figures
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(5) Level of legal expertise required by the tribunal
7.37 In the Consultation Paper the Commission highlighted the importance of matching skills to the work to be performed. [24] There are many tasks, particularly at the information gathering and concluding stages, which may be carried out by paralegal teams or administrative staff engaged on a short to medium term contract or on secondment from a Government Department. Multidisciplinary teams comprising administrative, information technology, financial, accounting, research and legal expertise could match core skills to the work involved thereby creating a more efficient and less costly process. Lawyers should only be used if their particular skills and expertise are required to deal with particular issues.
E Level of legal representation allowed to parties appearing before the tribunal
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tribunal. The grant of representation introduces an adversarial element to the inquiry process which tends to lengthen the process considerably. In this regard the recommendations made in Chapter 5 including the possibility of pooled representation should be borne in mind which should impact positively on the overall reduction of costs.
F Basis for calculating lawyers fees
(1) Legal Costs – Current Position
7.41 The legal costs associated with a tribunal comprise:
(1) The costs of the tribunal's own legal team; and
(2) The legal costs payable in respect of parties represented before the tribunal (if the tribunal directs the State to pay all or part of the costs of any such party).
7.43 If a tribunal makes an order for costs in favour of a third party then the State endeavours to agree the level of costs to be paid. In default of agreement the matter is referred to the Taxing Master of the High Court to measure and assess the reasonableness of the level of costs charged. This in turn may give rise to further litigation and consequent legal costs. [25] It appears that the greater proportion of
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legal costs paid by the State relate to the costs of third party representation rather than the tribunal's own legal teams.[26]
7.44 In the Consultation Paper the Commission drew attention to the basis on which the fees of lawyers appearing before tribunals are calculated.[27] Given that legal fees constitute the largest portion of the costs of tribunals it is clear that this is an important issue. The Commission suggested that a means of calculating legal costs and expenses be devised, which is more appropriate to pay for guaranteed employment for several months or years. It was noted that such a formula should take into account the fact that a barrister who has been employed full-time by a tribunal for some time cannot immediately resume private practice at the same level because the solicitors who had briefed the barrister will have become accustomed to briefing other barristers. It was also suggested that a 'scheme' setting fixed costs for specific aspects of work might be appropriate in some instances rather than having a pay structure on the basis of the status of the person involved (although the status of the person doing the work will have some impact on the overall cost).
(2) Proposed new structure for payment of legal fees
7.45 On 19 July 2004, the Minister for Finance announced a new structure for the payment of legal fees at tribunals and other forms of inquiry.[28] The features of the new structure for payment of legal fees to legal personnel hired by tribunals, the State or third parties at tribunals or other forms of inquiry are as follows:
• with effect from 1 September 2004, in the case of tribunals of inquiry or other forms of inquiry established from that date, the costs of all legal representation at the tribunal/inquiry are to be remunerated by reference to a set fee;
• in the case of existing tribunals of inquiry or other forms of inquiries, from a date to be determined by the Government,
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following communication between the Attorney General and the Chairpersons of the existing tribunals, the cost of all legal representation will be remunerated by reference to a set fee for the remainder of the tribunal or other inquiry;
• the set fee is to be based on the current annual salary of a High Court Judge (plus 20% in respect of pension contribution) for a Senior Counsel, with existing relativities for other legal staff retained and paid by reference to this basis;
• the remuneration package proposed with effect from 1 January 2005 is as follows: Senior Counsel €221,708 p.a. or €1,008 per day Junior Counsel €147,806 p.a. or €672 per day (2/3 of Senior Counsel rate) Research Counsel €55,427 or €252 per day (1/4 of Senior Counsel rate) Solicitor €176,000 p.a. or €800 per daily appearance or €100 per hour for work undertaken other than appearing at the tribunal;
• a fee based on the above for preparatory work will be paid to counsel and solicitors subject to a time ceiling to be set on a tribunal-by-tribunal basis;
• other legal personnel will be paid at rates to be determined by reference to the new rates;
• the daily rates indicated above will be paid where legal personnel work less than the full calendar year;
• no brief fee will be paid in respect of legal representation at a new or existing tribunal from 1 September 2004.
• The Clarke Inquiry into events at Lourdes Hospital, Drogheda (31 March 2005)
• The Moriarty Tribunal, investigating payments to Mr. Haughey and Mr Lowry (11 January 2006), and
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• The Morris Tribunal investigating activities by Gardaí in Donegal (30 September 2006).
• The Planning Tribunal (31 March 2007).[29]
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As a result the tribunal may not be in a position to obtain the services of lawyers with the necessary levels of experience and skill required. In fact it seems that one of the main reasons for the staggered introduction of the scale of fees to existing tribunals was the fear of extensive disruption of the tribunals and inquiries by reason of changes in legal representation involved.
(2) Criminal Legal Aid
7.52 The Criminal Legal Aid Review Committee in its Final Report[30] examined the merits of contracting for the provision of criminal representation in court. The Committee defined contracting as a system whereby the purchaser of the legal aid service enters into contracts with firms or individual lawyers for the provision of an agreed amount of work at a fixed price, the work and price both usually being agreed on the basis of an accepted tender. The Committee assessed the merits of introducing a system similar to that which exists in the United States and found that:
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"….while it may be possible to operate contract systems which provide an acceptable level of service, we have found no evidence to indicate that this can be achieved at a lesser cost than that which prevailed for assigned counsel and/or public defender systems. The evidence for the US indicates that cost savings are achieved in certain situations where competitive bidding operates but this has a direct adverse effect on the quality of representation provided. We consider, therefore, that the US experience in providing criminal legal aid services by way of contract does not make a sound case for the implementation of such a system in Ireland."
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lawyers bidding or to the quality of service provided. Cost savings may be achieved at the direct expense of quality.
(3) Recommendation
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[BLANK]
Note 1 See The Irish Times 19 May 2005. [Back] Note 2 This inquiry into the events surrounding “Bloody Sunday” concluded its hearings in November 2004 having sat for approximately seven years. The inquiry heard evidence from 921 witnesses and considered a further 1,555 written statements. The cost was estimated at €155 million. [Back] Note 3 Inquiries Bill Regulatory Impact Assessment Department for Constitutional Affairs (2005), available at www.dca.gov.uk/risk/ibria.pdf. [Back] Note 4 Such as the remuneration of the chairperson(s), secretarial staffing costs, IT support, accommodation costs and the costs of producing the report. [Back] Note 5 See the Consultation Paper at paragraph 12.44. [Back] Note 6 See the Consultation Paper at paragraphs 12.45 and 12.46. [Back] Note 9 High Court (Peart J) 13 May 2003. [Back] Note 10 On the Attorney General’s scheme see Collins & O’Reilly Civil Proceedings and the State in Ireland (2nd ed Round Hall, 2004) at paragraphs 3.37-3.41. [Back] Note 11 The decision did not need to address the matters of interpretation of section 6 of the 1979 Act, as amended, as discussed in paragraphs 7.08 and 7.09 above. [Back] Note 12 Tribunal of Inquiry into certain planning matters and payments. [Back] Note 13 See www.flood-tribunal.ie – Decisions and Rulings. [Back] Note 14 Ruling of Mr Justice Morris on application for costs concerning term of reference (e) the explosive module. Tribunal of Inquiry into complaints concerning some gardaí in the Donegal division. Available at www.morristribunal.ie. [Back] Note 15 See the Consultation Paper at paragraph 12.46. [Back] Note 16 Department for Constitutional Affairs Final Regulatory Impact Assessment: Inquiries Bill November 2004 at www.dca.gov.uk. [Back] Note 17 Explanatory Notes to the Inquiries Bill, HL Bill 7-EN at paragraph 28. [Back] Note 18 See paragraphs 5.04 - 5.07 above. [Back] Note 19 See paragraphs 3.19 and 3.21 above [Back] Note 20 See paragraphs 5.59 – 5.64 above. [Back] Note 21 See paragraphs 5.28 – 5.40 above. [Back] Note 22 House of Commons HC 51-1 2005. [Back] Note 24 See the Consultation Paper at paragraph 12.49. [Back] Note 25 The Beef Tribunal has given rise to much litigation in relation to the taxation of costs – see Goodman v Minister for Finance [1999] 3 IR 356; Goodman v Minister for Finance (No. 1) [1999] 3 IR 321; Goodman v Minister for Finance (No. 2) [1999] 3 IR 333; Spring and Desmond v Minister for Finance High Court (Smyth J) 29 May 2000; Minister for Finance v Taxing Master Flynn Costs of Tomás MacGiolla and Patrick Rabbitte High Court (Herbert J) 31 July 2003. [Back] Note 26 For example, it is understood that approximately 70% of the cost of the Beef Tribunal and 80% of the cost of the McCracken Tribunal were attributable to third-party legal fees. [Back] Note 27 See the Consultation Paper at paragraph 12.52. [Back] Note 28 See Department of Finance press release 19 July 2004 at www.finance.gov.ie. [Back] Note 29 See Government press release 5 September 2004 at www.taoiseach.gov.ie. [Back] Note 30 Criminal Legal Aid Review Committee - Final Report, February 2002 available at www.justice.ie. [Back]
