Committee Reports > List of Committees > Dáil > 1994 > Committee of Public Accounts > Interim Report No. 02 - Appropriation Accounts 1993

APPENDIX 5

9 May 1994

Ms Una Connolly

Clerk

Committee of Public Accounts

Dear Ms Connolly,

I am directed by the Comptroller and Auditor General to forward to the Committee this Office’s report on the comparative costs of public inquiries in Britain and the USA.

Yours sincerely,

John Purcell

Director of Audit

REPORT ON COMPARATIVE COSTS OF PUBLIC INQUIRIES

INTRODUCTION

In the course of its examination of fees paid to counsel at the Beef Tribunal, the Committee at its meeting on 3 February 1994 requested the Comptroller and Auditor General to ascertain what the practice was in regard to the payment of fees in similar circumstances in Britain and the USA with particular reference to the Scott Inquiry then current in Britain. The following is a summary of the information obtained from our counterparts in Britain (National Audit Office) and the USA (General Accounting Office).

BRITAIN

TRIBUNALS

Tribunals in England and Wales are established as informal, specialist courts to rule on particular types of case where adjudication in the civil courts is thought unnecessary. They deal with a wide range of issues and subjects and their caseload varies considerably.

The operation of tribunals is supervised, and financial control exercised, by the Department responsible for the subject, e.g. the Department of Employment for industrial tribunals. Running costs largely depend, of course, on caseload.

The Council on Tribunals (appointed by the Lord Chancellor’s Department) reviews the constitution and working of tribunals and reports annually to Parliament.

Legal representation is allowed before most tribunals, but it is not encouraged. And since legal aid does not extend to appearances before a tribunal, legal representation tends to be infrequent.

INQUIRIES

Inquiries have specific terms of reference and operating methods are individually determined. The terms of reference for theScott Inquiry are at Appendix A.

The size of the Inquiry’s legal team was determined by the presiding judge, Lord Justice Scott. It consists of one senior counsel and three civil servants, two of whom are barristers and one is a solicitor. Lord Justice Scott determined that witnesses should not have legal representation. However, all witness at the Inquiry had the benefit of legal advice before attending the hearing and this was paid for by the Department of Trade and Industry (DTI). One witness had counsel with him at the hearing but the counsel didn’t speak.

It should be noted that the Royal Commission on Tribunals of Inquiry (1966) recommended, inter alia, that witnesses should be accorded legal representation and that the cost should be reimbursed to them but, although the Government of the day accepted the recommendations, they were not put into effect.

The Scott Inquiry has to date sat for a total of 93 days, received written evidence from 166 witnesses, gathered some 200,000 pages of documentation, sat in closed session for 50 hours, heard 54 witnesses in public and 11 members of the intelligence services in private.

The one senior counsel employed by the Inquiry is paid on a daily basis, and, as at 21 April 1994, had been remunerated for 212 days’ work at a daily rate of £800 plus VAT. There is no distinction for payment purposes between sitting and non-sitting days. The three civil servants who make up the balance of the legal team are paid the usual civil service salary commensurate with their grade.

The direct costs of the Inquiry, as at 21 April 1994, were:

USA

The closest analogy to the Beef Tribunal we could find in the USA is the operation of the Independent Counsel system.

In 1978, the Independent Counsel Law established a process for the appointment of special prosecutors to preserve and promote the accountability and integrity of public officials and of the institutions of the federal government. The law provides for the judicial appointment of temporary, independent prosecutors when the Attorney General determines that reasonable grounds exist to warrant further investigation of high-ranking executive branch officers or presidential campaign officials for certain crimes. A permanent indefinite source of funding was established within the Department of Justice to pay all costs relating to the establishment and operation of independent counsels and their offices. In 1983, the title of these appointees was changed from special prosecutor to independent counsel. The authority to appoint independent counsel expires every five years.

In the period June 1985 - September 1992, nine independent counsels have been appointed and the costs incurred in that period totalled just over $45 million. The most well known (and expensive) independent counsel is Lawrence Walsh who was appointed in December 1986 to investigate the Iran-Contra affair and whose investigation went on for 7 years. The accumulated direct cost of this investigation up to the end of September 1992 was $33,088,000 together with additional associated operating costs of $5,317,000. The direct costs were broken down as follows:

The associated operating costs mainly comprised the estimated expenses of the FBI and Inland Revenue for services provided to the independent counsel.

The cost of this investigation created a political furore in the USA and was the primary cause of the delay in reauthorising the Independent Counsel Law for an additional 5 years. The 1987 law which expired on 15 December 1992 imposed no limits on the number of lawyers and professionals which independent counsel could hire although the remuneration paid to them could not exceed rates determined by reference to civil service salaries and those hired were subject to the travel and subsistence rates applicable to civil servants. The proposed new law, according to the wording as of April 1994, contains amendments which reflect the concerns of Congress regarding the open ended nature of previous investigations of independent counsels. These concerns were perhaps best expressed by Senator Dole during the Senate debate on the new law —

“No prosecutor should be given an unlimited budget, unlimited time and unlimited discretion - all in the name of independence. It is not independent when all that happens.”

As a result the proposed new law focuses on cost controls. The main changes are:

The independent counsel must conduct all activities with due regard for expense and authorise only reasonable and lawful expenditures

The independent counsel shall comply with the established policies of the Department of Justice as regards expenditure

The Administrative Office of the US Courts shall provide administrative support and guidance to each independent counsel

The special court shall determine whether termination is appropriate no later than 2 years after the appointment of an independent counsel or the reported expenditures by such independent counsel have reached $2 million whichever occurs first, and at the end of each succeeding 1-year period

An independent counsel shall request assistance from the Department of Justice in carrying out his functions and the Department shall provide that assistance including the use of the necessary resources and personnel.

The new Independent Counsel Law has not yet been enacted, but has passed both the House of Representatives and the Senate, and is awaiting conference between the two bodies. Once differences are resolved, the proposed law will be sent to the President for signature (enactment) which is expected to occur in late June or early July 1994.

Apart from independent counsels, many inquiries are undertaken directly by the Department of Justice. In these cases lawyers are hired by the Attorney General who determines their number, their fees and conditions of engagement and may impose time limits on their investigations. The most recent well known case is the Whitewater Inquiry. Because of public and political demands for a comprehensive and searching inquiry the Attorney General has not so far exercised the right to impose such limitations in this case.

APPENDIX A

Terms of Reference of Scott Inquiry

Having examined the facts in relation to the export from the United Kingdom of defence equipment and dual use goods to Iraq between December 1984 and August 1990 and the decisions reached on the export licence applications for such goods and the basis for them, to report on whether the relevant Departments, Agencies, and the responsible Ministers operated in accordance with the policies of Her Majesty’s Government; to examine and report on decisions taken by the prosecuting authority and by those signing public interest immunity certificates in R v Henderson and any other similar cases that he considers relevant to the issues of the inquiry; and to make recommendations.

COMPARATIVE COSTS OF PUBLIC INQUIRIES IN BRITAIN AND THE USA

1. The Committee at its meeting on 3 February 1994 requested the Comptroller and Auditor General to report on the comparative costs of Public Inquiries in the USA and the UK with particular reference to the Scott Inquiry.

2. The Committee notes the report of the Comptroller and Auditor General (attached) and in particular:

(a) The Scott Tribunal’s legal team comprised one Queen’s Counsel i.e. Senior Counsel, and three Civil Servants, two of whom were barristers and the other a solicitor.

(b) The Senior Counsel at the Scott Inquiry was paid £800 stg per day, irrespective of whether the Inquiry was sitting or not. The Senior Counsel for the Tribunal and the State at the Beef Tribunal were paid IR£1,800 per sitting day and IR£1,000 per non-sitting day.

(c) The presiding judge at the Scott Inquiry determined that witnesses should not have legal representation.

(d) Problems with the Independent Counsel system in the USA (analogous to the Inquiry system in Ireland) involving excessive cost and duration have led to proposed changes in the governing legislation with a view to curbing the excesses in future.

CONCLUSIONS OF THE COMMITTEE

3. Having considered the report and the written and oral evidence given to it the Committee concludes that:-

(a) More economic ways of addressing issues of major concern to the public, other than the setting up of lengthy tribunals of inquiry dominated by the legal profession, should be explored.

(b) If there are to be inquiries, any legal representation which is necessary should be the minimum commensurate with the need. The convention of having a Senior and Junior Counsel instructed by a Solicitor is not necessarily appropriate.

(c) The parameters and duration of inquiries should not be open ended and the rates of legal fees agreed should provide for downward revision at set intervals according to the length of the Inquiry.

(d) While recognising the Constitutional right of all interested parties to be legally represented, the State, if it is to be the ultimate paymaster, must have an important say in the size of the legal teams and in the levels of fees charged.

(e) A lower rate of fee should be negotiated with counsel for non-sitting days to be applicable from Day 1.

(f) The rate of fee negotiated should take cognisance of the public service dimension of the work.

(g) The sponsoring Department, i.e., the Department which will be responsible for paying the costs of any Inquiry, should be involved with the Office of the Attorney General in the negotiation of fees for counsel engaged by the State.

(h) Where possible, Civil Servants with the requisite legal expertise should be used at inquiries rather than hiring barristers at exorbitant rates.

4. The Committee would also refer to the Ballycotton Inquiry where all of the State Agencies - the Minister for the Marine, the Central Fisheries Board, the Southern Fisheries Board and the South Western Fisheries Board - were separately represented by a Senior Counsel, a Junior Counsel and instructing Solicitors. Apart altogether from substantial brief fees in each case, Senior Counsel were paid as much as £2,100 per day and Junior Counsel up to £1,400 per day. The Committee is at a loss to understand why one legal team could not have been engaged to represent all the State Agencies in this case where they had a common interest.

5. The Committee has received intimation from the Department of Finance that guidelines have been drawn up for all Departments concerned with appointments in relation to tribunals and inquiries. These guidelines cover:

(a) the need for prior discussion with appointees regarding conditions and durations of assignments;

(b) the scale of fees and other costs including the agreement of an overall cap;

(c) the duration of inquiries and provision for revision of fees in the event of proceedings lasting longer than was originally estimated;

(d) the need for prior approval of the Department of Finance before fees are settled (including fees or expenses of witnesses and other associated costs).

6. While welcoming the Department’s response, the Committee feels that the guidelines only go part of the way in tackling the problem. The Committee therefore urges that Rules, Procedures and Controls be drawn up to reflect the Committee’s (and, indeed, the public’s) concern that there should be due regard for economy in the operation of inquiries along the lines suggested by the Committee in its conclusions and, if necessary, a proposal be prepared to amend the Tribunals Act, 1921.

7. The Committee believes that the need for costly inquiries in future would be minimised if the relevant Oireachtas Committees were given the necessary statutory backup and resources. In this context, the Committee welcomes the Government’s indication that it will publish the Bill in this session providing for the Compellability and Privilege of Witnesses before Oireachtas Committees.